Story last updated at 2:33 p.m. Thursday, December 12, 2002

Council approves $16.2 million budget

Depreciation reserves cut, nonprofits' funding increases

by Carey James
Staff Writer

In the 11th-hour debate over Homer's city budget Monday night, funding for nonprofits was increased while money earmarked for facility and equipment depreciation was cut.

At the start of the night, the budget, which totaled $16.2 million, was out of kilter due to a $72,000 cut in the general fund budget. The cut was made by the council earlier in the budget process in an effort to hold back on port and harbor user-fee increases.

Based on the administration's budget recommendation, the port and harbor users would have seen significant fee increases, such as a 15 percent increase in moorage fees. The Homer City Council decided early in the budget review process that the increases were too steep, and moved $72,000 in lease revenues from Homer Spit property to the port and harbor fund to reduce the fee increases.

That left the general fund with a $72,000 hole to fill. Administration recommended filling the gap from a variety of sources, including chunks from 12 departments. The council agreed with all the cuts except the last one, an $18,000 decrease to the Homer Foundation's funding, which in turn passes on funds to many of Homer's nonprofits.

The administration had initially budgeted $100,000 for nonprofits, split up evenly between the foundation and the Pratt Museum, which became a separate budget item earlier in the year. Key in the debate was how much should go to the museum, how much should go to the foundation to be invested in a long-term fund, and how much should be passed on to nonprofits.

"I think it's totally inappropriate to cut funding to public works and police and increase it for nonprofits," said Councilman John Fenske during the council meeting of the whole.

Fenske advocated for putting as much money as possible toward the Homer Foundation endowment fund for nonprofits, even if that meant cutting the amount of funding passed through to nonprofits this year.

During the city council meeting, several people spoke on behalf of continued funding for nonprofits, noting the contribution the nonprofits make to the community and the leverage city dollars create for organizations seeking grants.

The majority of the council eventually agreed on appropriating $80,000 for the Pratt Museum, $20,000 for the foundation endowment fund and $20,000 for appropriation to nonprofits this year by the foundation.

Councilman Mike Yourkowski said that level of funding is consistent with the level of funding from the city in the past, and reflects continued commitment from the city in support of the nonprofits.

Mayor Jack Cushing asked city Finance Director Dean Baugh to search for the deductions in the depreciation reserve budgets of various department budgets. The reserves, which were increased $150,000 over last year's reserve allocation, aim to spread out the cost of facility and equipment repairs or replacement over a long span of time. An effort has been made by the city in recent years to contribute more to these accounts as the 2004 deadline for adoption of new national financial standards near.

Baugh presented the council with a list of cuts, but noted that the council may just be putting off expenses it will have to cover next year when a formal audit determines how much depreciation funding the city needs.

Councilman Ladd said that while he understood the administration's desire to cover depreciation as much as possible, he felt comfortable with the contribution the council was making to that end, while still funding nonprofits properly.

Ladd said that while he is usually oriented toward seeing people find funding independent of government, he sees the contributions to the nonprofits as an investment in programs that bring more people and money into Homer.

The city also earmarked $5,000 from the Parks and Recreation reserve fund for stocking fish in the Homer Spit fishing hole.

The general fund of the budget rose by $546,000 from last year, much of which was attributed to a substantial increase in the cost of insuring city facilities, which rose as much as 300 percent, and an increase in pay to city staff through a 2 percent cost of living increase.

The budget passed unanimously.

Carey James can be reached at cjames@homer