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 firstname.lastname@example.org.