Pierce outlines budget proposals in Kenai

Feb 7, 2018

 

Mayor Charlie Pierce is proposing to fill most of the borough's $4 million budget gap with savings from the borough Land Trust Fund.

Borough mayor Charlie Pierce is rolling out some specific details on how to close the borough’s four million dollar budget gap. He spoke at a joint meeting of the Kenai and Soldotna Chambers of Commerce Wednesday.

 


Charlie Pierce ran on a platform of finding a way to erase the borough’s current budget deficit without raising taxes. After almost three months in office, he’s got some ideas. For starters, retiring borough employees aren’t being replaced right away.

“Under my leadership, I didn’t go in there with the mindset that anybody would have to leave. In fact, I said everybody gets to stay. You’re all valuable, you all make a contribution. Every one of you that work in the borough make a contribution every day. There have been a number retirements. As these retirements have occurred, we have worked very hard to try to not refill these positions. We’ve tried to implement some consolidation, if you will, and will continue to do that.”

In terms of specific numbers, Pierce wants to bring back a fee for service areas. The borough does all kinds of administrative stuff for, say, the Nikiski Recreation Service Area, just for an example. That fee had been waived for several years, but with money tight, Pierce is recommending a 2.5 percent fee.

“In prior budgets, we had charged as much as six percent to the various service areas for the administrative fee. Two and a half percent is what we’re shooting for. It helps to bring the budget in line.”

While that represents money potentially going into the borough’s coffers, other possibilities go in the other direction. The so-called non-departmental funding, which was recently recategorized as economic development funding, would be cut by $115,000. He says working with different department directors, they’ve found more than $800,000 to trim from the budget.

“We’ve met with the directors twice now. We gave them their budgets and said ‘look at your numbers with us’. We sat at the table and we worked with them one on one, together, to come up with some ideas about perhaps we don’t need that (particular) expenditure. And that’s how we came up with these savings.”

The school district will also face a de facto cut in the mayor’s budget. Pierce has proposed flat funding for the district, with one exception. Five hundred thousand dollars are put toward the district’s maintenance fund each year. That balance has built up, and so that half a million for the next fiscal year will stay in the borough’s general fund.

 

“We’ve worked very closely with the district and we want to help them do a better job. The one percent cut comes from some in-kind dollars that we put into a maintenance fund for taking care of the needs of the schools. There’s about $1.5 million in there now and what we’d like to do is not make that deposit this year. And it’s not only a single year that we’re planning for. We’re looking at 2020 and 2021 as well. We’re doing some long range, long term forecasting.”

All those cuts and a little additional revenue from the service areas adds up, but it doesn’t get you to four million dollars to close the budget gap. For that, Mayor Pierce has proposed dipping into the borough’s land trust fund, which currently has about $7.5 million dollars. Borough code says money in that fund can be used for whatever the Assembly approves, as much as half of it.

“This is the way you fix the budget. This is the way you fix the problem for the next two to three fiscal years; you transfer $3 million dollars from the land trust fund. And it will help us get back on track. It will allow us to have some time to talk about how we come up with new revenue sources going forward. It gives you some breathing room.”

Pierce noted, of course, that these are all estimates and subject to change. The final decision will be hammered out by the Assembly in the coming months.