The Kenai Peninsula Borough Assembly has approved a final budget for the fiscal year beginning this summer, clocking in at $87,787,866 in the general fund.
But there are still several pieces of the budget that are anything but final.
One of the biggest unknowns is how the borough can spend its share of the latest COVID-19 relief package. Finance Director Brandi Harbaugh said the borough is getting over $11 million from the federal American Rescue Plan Act. But it’s still learning what it can do with that money.
“We need to wait until we have additional guidance so we can verify eligibility in many cases," she said.
It’s receiving those funds in installments, not all at once.
Sales tax revenue is also a question mark. The pandemic has affected revenue, although not as severely as the borough initially thought.
“The June returns will be in the beginning of August, and when we receive those, we’ll know a little bit more," Harbaugh said.
Harbaugh said economists are estimating a 70 percent recovery of sales tax revenue, based on how things have shaken out in the Lower 48. Sales tax in the borough funds the Kenai Peninsula Borough School District.
Even without having all the pieces of the budget puzzle, Assemblyman Tyson Cox is optimistic. He said the borough will be out of the hole in 2022.
“It’s looking a little bit better than we had thought," he said.
Over half of the borough’s budget goes to the school district. Borough administration and the school board have gone back and forth for months on school district funding but both parties eventually agreed on $48 million. Last year, the borough funded the district at $50 million.
Soldotna teacher Nathan Erfurth is the president-elect of the district’s teachers’ association. He said he’s happy with where they landed.
“I am very appreciative of the amount of money they have assigned to the school district, in light of everything that’s happened," he said. "I know we got a lot of money from the feds as well, and that’s going to be used for maintaining staffing that we otherwise would lose, that children definitely benefit from. And a number of other learning gap tools and programs that we’re going to use to assess that kind of stuff.”
There’s about $16 million built into the budget for capital projects. The borough also included a one-time payment of $4.4 million to clean up leachate, or wastewater, at the dump.
The borough increased the mill rates for two service areas. The rate for the new Western Emergency Service area, which includes Anchor Point and Ninilchik, is now 2.95, up from 2.85.
For Kachemak Emergency Services Area, which covers a large swath of the southern peninsula over to the Caribou Hills, it’s 3.1 up from 2.6.
Milli Martin is on the Kachemak Emergency Services Area board of directors. She said that extra revenue is essential for the service area, as it receives more calls and has fewer volunteers.
“We recognize it is an increase but it’s something we’ve been looking for for quite a while,” she said.
Mill rates go into their own fund to support the service areas. This year, the borough’s adding almost two dozen new service area positions, including at the new Nikiski fire station and Central Emergency Services. Assemblymember Jesse Bjorkman suggested taking funding for those positions out of the budget, citing a lack of public process. But money for the positions passed anyway.
