Council tackles budget Monday
Several council members propose budget amendments
Editor’s note: This story has been corrected to note how the city provides health insurance and that council member Tom Stroozas' proposed cut to the library is for the personnel budget. It also has been updated to include information on proposed amendments by council members to the budget that were made public on Thursday:
The Homer City Council on Monday will make probably its most important decision of the year: how much to spend on city services and how to fund them.
Starting at 6 p.m. in the Cowles Council Chambers, Homer City Hall, the Dec. 5 meeting also will be the council’s last meeting of 2016. The city operates on a calendar-year fiscal cycle, meaning the new budget takes effect Jan. 1, 2017.
At the Oct. 24 meeting, City Manager Katie Koester submitted a draft budget. Since then, citizens have had a chance to comment on two budget items, Ordinance 16-54, the budget itself, and Resolution 16-109, amending the city’s fee schedule and making such changes as increasing camping fees. People can comment one last time in a public hearing on those two items.
The $21.6 million budget breaks down like this:
• $12.2 million for the general fund;
• $2 million for the water fund;
• $1.7 million for the sewer fund;
• $4.7 million for the port/harbor fund;
• $871,000 for capital projects; and
• $1.9 million for internal service funds — for example, the health insurance fund.
As in 2016, the 2017 budget is partially funded by a voter-approved, 3-year suspension of a 0.75-percent sales tax that went into the Homer Accelerated Roads and Trails fund. In 2016, those sales-tax revenues went into the general fund and helped fill a $1.2 million shortfall in the budget.
“Twenty-seventeen marks the beginning of year two of the suspension of HART, leaving the community of Homer just one more year to find a permanent solution to city budget shortfalls,” Koester said in her budget message to the council.
The Port/Harbor Fund is an enterprise fund, meaning it is funded from port and harbor fees.
Council members can make further budget amendments at the Dec. 5 meeting. In the packet released on Thursday, council members introduced these proposed budget amendments:
• Council member Tom Stroozas proposed a $65,443 or 10 percent cut to the Homer Public Library personnel budget, with the savings going into the general fund;
• Stroozas proposed increasing the employee health insurance payment so that employees would pay half the increase in health insurance payments;
• Stroozas proposed cutting overtime by $87,197, and putting that money into the general fund;
• Council member Catriona Reynolds proposed cutting overtime by $52,318 and using that savings to increase by $6,000 an appropriation to the Homer Foundation and putting the balance into the City Hall reserve fund;
• Council member Heath Smith and Stroozas proposed eliminating a 1.5-percent cost-of-living adjustment pay increase, resulting in a $130,636 savings that would go to the general fund, and also imposing a hiring freeze for all departments except police and fire;
• Smith proposed eliminating merit pay increases, a $102,931 savings.
• Smith proposed eliminating a $16,000 part-time Public Works general maintenance position and keeping a city manager administrative assistant position at part time, a $21,000 savings;
• Mayor Bryan Zak proposed a $3,410 appropriation to buy new iPads for council members, with that money coming from City Hall reserves; and
• Council member Shelly Erickson proposed cutting $10,000 for parks signage and using that savings to fund replacement trucks for Public Works.
Homer Public Library Director Ann Dixon said that if the library personnel budget is cut 10 percent, that would mean laying off two part-time workers, closing the library on Monday and shortening library hours by an hour on three days. Other library programs would be affected such as children’s programs so librarians can cover the front desk due to reduced staff.
With the HART suspension and an anticipated increase in sales tax revenues, Koester said general fund revenues would increase 4.8 percent over 2016, or a modest $561,000. Sales tax revenues are anticipated to bring in $331,540 more in 2017. Third-quarter sales-tax revenue numbers released at the Nov. 21 meeting affirmed that projection. August, September and October revenues were up, and the highest they had been since 2012. Revenues for August showed a huge spike of about $1.4 million, $400,000 more than for 2015.
In her draft budget, Koester projected a 20-percent increase in employee health insurance costs. At the Nov. 21 meeting, the city got some more good news.
“Luckily, after negotiations, the increase came down to 10.4 percent,” Koester said.
The city had formerly been self insured, but since 2014 the city has been insured through Premera Blue Cross for employee health care. In the 2017 budget, the city allocates $1,250 per employee to help fund health insurance — a $50 per-employee increase over the 2016 budget. The city also budgeted $200,000 for its health insurance fund as a buffer against possible health insurance increases. With the reduced increase in health insurance costs, the city saved about $160,000, Koester said. That savings could go into the health insurance fund or be used for other budget items.
The city also saved another $44,000 when its lobbyist, Linda Anderson of the Anderson Group, told the city she would be withdrawing a lobbying proposal for 2017. The council took out that money from the proposed budget and reallocated it in these budget amendments passed at the Nov. 21 meeting:
• Increased by $2,500 a $66,500 appropriation to support the Pratt Museum;
• Added $3,000 to the council travel budget, mainly for visits to Juneau to lobby for city interests; and
• Put the balance into City Hall reserves.
The council also passed a budget amendment for $25,000 to fund an Americans with Disabilities Act transition study, a study council member Donna Aderhold argued was necessary to make sure the city met ADA standards.
The 2016 budget included cuts to 6.5 employee positions. Koester proposed two personnel increases: making the city manager administrative assistant position full time and hiring a part-time building maintenance tech. The new Animal Control contract is a $50,000 increase. The draft budget also adds $20,000 for emergency ventilators for the fire department, $10,000 in signage to implement and educate the public about parks policy changes, new Public Works vehicles and two new police patrol vehicles. It also funds 25 new public-use computers at the Homer Public Library and adds $12,723 for library books.
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