Story last updated at 3:30 p.m. Thursday, June 27, 2002

City finances in order
by Carey James
Staff Writer

The city of Homer got a thumbs up Monday night from its auditors, who said the city had increased its equity significantly for the third year in a row.

John Bost, accountant with Mikunda, Contrell and Co., of Anchorage, said the city had increased its equity by $1.9 million in 2001, with the greatest influx coming from the Port and Harbor fund.

"You really had a good year," Bost said. "Overall, the city did very well."

While the numbers look good, part of the $1.1 million increase in the Port and Harbor fund can be attributed to money earmarked for the completion of the Pioneer Dock on the Homer Spit.

City Finance Director Dean Baugh said around $1 million of the Port and Harbor fund's increase for 2001 can be attributed to the dock project. Once that funding is removed at the end of the project, the city's revenues are likely to fall back to their typical increase of around $900,000, which is where the city was in 1999, Baugh said.

However, Baugh said, the newly annexed area may contribute positively to the budget next year. At this point, however, it is hard to tell what the final numbers will look like because taxes have been reduced as well, he said.

Bost did recommend that the city change the way it handles grant money awarded on the condition of a matching grant. Baugh said the city typically puts the grant in one account, while the matching funding remains in the department's operating budget. Bost suggested the city clarify its accounting by moving the matching funding into a separate account.

Bost gave the city high marks for preparing for the implementation of Governmental Accounting Standards Board (GASB) 34, which will require the city to begin funding depreciation on its general fund assets and infrastructure. According to Bost, the city has begun that process, and is covering all costs plus more than the city's share of depreciation.

The city's general fund did show a loss this year, but only around half the loss the city had budgeted for. The general fund dropped from $2.3 million in 2000 to $2.08 million in 2001, a loss of around $221,000.

The city's capital projects fund increased equity by $400,000 last year, while the water fund increased $235,000 and the sewer fund jumped $549,000.

In other news, the city held a public hearing on the Hillside Acres Sewer Improvement and Assessment District.

Greg Martin, a landowner in that district, testified that he and his wife were all for bringing sewer to the area until a recent application was made to the Planning Commission for a trailer park in the neighborhood.

Martin said his family is now objecting to the sewer improvement because if there is no sewer to the area, the Hillside Acres area will be a less likable place to develop a trailer park.

"Clearly the neighborhood is not in favor of a trailer park," Martin said.

The council did not take any action on the Hillside Acres improvement, and the landowners have until Aug. 23 to make objections. The council did not comment on the trailer park development, since the issue is still being worked on by the Planning Commission.

Mayor Jack Cushing reported that several Southern Peninsula projects received funding from the Coastal Policy Council's Coastal Impact Assistance grants. According to Cushing, the city's Beach Policy Task Force received $75,000 for the implementation of its beach policies.

Also receiving funds were the Kenai Peninsula Borough's bluff-mapping program, Cook Inlet Keeper, the Kachemak Bay Research Reserve, the Center for Alaska Coastal Studies and the Caribou Hills Cabin Hoppers.

Cushing said the funds will be available next year.