City faces $1 million shortfall next year

Starting at the Sept. 14 Homer City Council meeting, the city’s 2016 budget will dominate its discussions. The biggest question will be how to fill a probable $1 million budget gap in a general-fund budget of about $12 million. 

“That’s the shortfall I’m looking at,” said City Manager Katie Koester. “The truth is, $1 million is a lot to come up with.”

Unlike the state of Alaska, Homer’s fiscal year is the calendar year, starting Jan. 1. The budget has to be passed at the Dec. 14 meeting. In a memorandum at the Aug. 24 meeting, Koester released this proposed schedule for discussing and passing the 2016 budget:

• 4 p.m., 5 p.m., Sept. 14: City Council Work Session and Committee of the Whole meetings. City staff will present information on projected revenue and revenue options;

• 5:30 p.m., Sept. 23: Town hall meeting on revenue sources for the general fund;

• 6 p.m., Sept. 28, City Council meeting: City staff present preliminary budget assumptions with council;

• 4 p.m., 5 p.m., Oct. 12: Work Session on revenue sources, Committee of the Whole meeting to discuss budget, introduction of Budget A (no cuts in service with assumption of new revenues) or Budget B (bare bones budget with significant reductions in services);

• 6 p.m., Oct. 26: Budget ordinance and fee tariff resolutions introduced, revenue ordinance introduced 

and budget amendments from council members considered;

• Time to be announced, Nov. 2: Town hall meeting to get input on Budgets A and B;

• 5 p.m., Nov. 23: Committee of the Whole on budget; 6 p.m., Council meeting and public hearing on budget, and

• 6 p.m., Dec. 14: Council meeting and public hearing on budget; council passes either Budget A or Budget B; amendments considered; resolution approving a special election if necessary.

All meetings are in the Cowles Council Chambers, City Hall.

Closing the $1 million gap could come from either increasing revenues to the general fund or cuts to the budget — Budget A or Budget B. By Sept. 28, Koester said she will have a better idea of second quarter or March 1-June 30 sales tax revenues. The first quarter sales tax revenues for 2015 were down compared to previous years, but the second quarter — the beginning of the busy fishing, construction and tourist seasons — looks more hopeful, Koester said.

“I will have more information and it will be more fine tuned,” she said.

Still, increased sales tax revenues alone won’t be enough to close the budget gap, Koester said. Utility savings from converting to natural gas in city buildings helped close the budget in 2015 and will help in 2016, but that’s already been accounted for, too, Koester said. Conversion costs were paid for out of reserve funds. The city already cut 3.5 positions for the 2015 budget. Those cuts will remain in 2016, Koester said.

“What I’m telling people when I’m having these conversations is the city has to have some cuts, too,” she said. “Even if we have the revenue at this point, I’m not proposing reinstating them because of the uncertain nature of the revenue source.”

Koester said the Oct. 12 meeting is the one that keeps her up at night. That will be when she presents the two draft budgets to the council, one that stays the course but assuming new revenue and a bare-bones budget with significant reductions in services.

New revenue source proposals include increasing the sales tax, increasing the property tax or a bed tax. Some revenue proposals might require a public vote and a special election next year. That possibility is part of the logistics Koester said city staff are working on as part of the budget process. If the council passes a revenue source that requires a public vote, there would be an interim budget to fund the city up to when that vote happens. If voters reject that revenue, then the council would have to pass some form of Budget B, the bare bones budget.

Aside from the formal public hearings on budget ordinances and resolutions, the public can weigh in at any council meeting either at the “public comments upon matters already on the agenda” at the start of the meeting or in public comments at the end. Since some resolutions or ordinances will be on the agenda regarding revenue, as a practical matter it’s probable one budget item or the other will be on the agenda through Dec. 14. 

Michael Armstrong can be reached at

More in News

Alaska State Troopers logo.
Anchor Point house fire leaves one dead, one in serious condition

The cause of the fire is under investigation.

Snow and debris from an avalanche can be seen near Mile 45 on the Seward Highway on Monday, March 29, 2021. (Photo courtesy Goldie Shealy)
Center promotes avalanche awareness

The Chugach Avalanche Center in Girdwood will begin its daily forecasts Saturday.

Commercial fishing and other boats are moored in the Homer Harbor in this file photo. (Photo by Michael Armstrong/Homer News)
Seawatch: Historic sockeye run predicted for Bristol Bay

ADF&G says 2022 run could break this year’s record

The entrance to the Mendenhall Glacier Recreation Area in the Tongass National Forest was covered in snow on Friday, Nov. 19, 2021, a day after federal authorities announced the next step in restoring the 2001 Roadless Rule on the forest. (Peter Segall / Juneau Empire)
Feds put freeze on Roadless Rule rollback

On the Roadless Rule again.

Alaska man pleads not guilty to threatening 2 US senators

If convicted, he could face a maximum sentence of 50 years in prison.

Commercial fishing vessels are seen here on the Kenai River on July 10, 2020. (Photo by Brian Mazurek/Peninsula Clarion)
Fishing industry takes a hit during pandemic

Overall fish harvesting jobs in Alaska dropped by the widest margin since 2000 — 14.1% — in 2020.

FILE - The Olympic rings stand atop a sign at the entrance to the Squaw Valley Ski Resort in Olympic Valley, Calif., on July 8, 2020. U.S. Interior Secretary Deb Haaland on Friday, Nov. 19, 2021, declared "squaw" to be a derogatory term and said she is taking steps to remove the term from federal government use and to replace other derogatory place names. The popular California ski resort changed its name to Palisades Tahoe earlier this year. (AP Photo/Haven Daley, File)
Interior secretary seeks to rid U.S. of derogatory place names

ALBUQUERQUE, N.M. — U.S. Interior Secretary Deb Haaland on Friday formally declared… Continue reading

Most Read