While the budget’s first draft shows higher costs for employee wages, benefits and utilities, those rises were offset by a slowdown in spending on big new projects.
“Overall, I think we were successful in holding the line,” said city manager Aimee Kniaziowski.
Saturday’s presentation is the start of a busy two months for the city council, which must pass a budget before fiscal year 2014 begins July 1. The council meets at 7:30 p.m. tonight for a regular work session, followed by a meeting at 7:30 p.m. Thursday. It will be the last meeting before budget talks start in earnest.
For the past two years, councilors have debated the role of the city’s unofficial reserve fund, its fund balance, in balancing the city’s books each year.
Last year, Munk told the council that without a change in city policy, the fund balance could reach unsafe levels within the decade. In response, the council raised Kodiak’s sales tax rate to 7 percent.
The results of that raise are not yet clear, but Munk has forecast that sales tax revenue will rise from $10.8 million to $11.6 million, a prediction she admits is “conservative.”
Countering that rise are decreases in state and federal revenue sharing programs and rises in the cost of hiring employees.
“Many of the cost increases are tied to non-discretionary spending,” Kniaziowski said.
That category includes things like employee health insurance, which will rise 12.2 percent next year.
The city’s new wage structure will also cost more, about $504,000 next year when compared to the old wage table.
Despite those increases, the citywide budget will use only $5.7 million in fund balance — down from $8.5 million in fiscal year 2013. The biggest driver in that decrease is what is officially labeled “other transfers,” and in reality means the city’s allocation of money from its operating budget to capital projects like new buildings. That category is budgeted to drop from $8.2 million to $4.4 million.
Within that $4.4 million are some big-ticket items: $500,000 for demolition of the old Kodiak police station, $450,000 for a new fire engine, $275,000 for a new 911 system, a new ambulance and road paving.
Contact Mirror editor James Brooks at email@example.com.