2013 Annual Report
2013 proved to be another rewarding and successful year for the City of Homer. However, there were many challenges as well, some new and some that are recurring. The fiscal challenges included uncertainty about future revenues, budget and staffing constraints, rapidly increasing health care costs, and maintaining a competitive employee compensation package. The disconnect between what residents want from government and what they are willing to pay for continues to dominate public discourse. The City has been very successful in obtaining funding for capital projects however, the revenues and resources needed to maintain and operate this expanding infrastructure is a topic that needs further consideration. Other challenges include a need for strategic planning, an aging workforce and transition planning, disagreement over what constitutes the core functions of the City, economic development and job creation, and resolving the use and disposition of the HERC property.
Despite this, the City government remains in a fiscally sound and stable position overall. According to the FY 2013 Audit, the fund balance in the General Fund was a healthy $6,047,784 which is approximately fifty percent of the annual budget. Revenues exceeded budget projections by $386,047 and the excess of revenues over expenditures was $837,102. General Fund expenditures in 2013 were $11,065,711. The General Fund debt obligation is low however, the City assumed $12 Million in new debt in the form of a loan from the Kenai Peninsula Borough to finance the city-wide natural gas distribution system. The loan will be repaid through property tax assessments. The Water and Sewer Utility Fund will require attention going forward because total expenditures ($4,911,930) exceeded total revenues by $75,764 and a new model and fee structure was implemented for 2014. The ending fund balance is $3,012,653. In the utility operations section of the Fund, user fees generated enough revenues to cover maintenance and operations. Revenues ($3,583,455) exceeded operating expenses by $88,118. The Fund carries a significant debt load and annual debt service is approximately $1 Million. This debt is repaid through a combination of sales taxes and property assessments. The Port and Harbor Enterprise Fund is generating enough operating revenue ($4,451,839) to cover operating expenses and required transfers into bond reserves. As always, more funds should be transferred into depreciation accounts. In 2013 the Enterprise Fund assumed $3.7 Million in debt through the sale of revenue bonds. Port and harbor fees were increased to cover bond payments. The Health Insurance Fund was stabilized after a transfer in of $800,000.
In 2013 the City began made substantial progress on a number of large capital projects that will improve infrastructure and stimulate the economy. These projects include improvements for cruise ship passengers and tourists, park improvements, energy efficiency upgrades, construction of a natural gas pipeline to bring gas to Homer and construction of Phase I of the city-wide gas distribution system. Work began on a number of Port and Harbor projects including the replacement of Ramp 3 and several float systems in the harbor, rehabilitation of the Load and Launch Ramp, and construction of a new Port and Harbor administration building.
The City of Homer strives to be as efficient, productive, and responsive to the needs of its residents as possible. The City staff continue to look for ways to operate more efficiently and to do more with less. I am proud of the work, the professionalism, and the high level of service that is provided to the public by all City departments. The Library, the Port and Harbor, Public Works, Police, Fire, Finance, Planning, the Clerk’s Office, Administration, and Community Recreation all had major achievements and successes in 2013. The City’s overall success in 2013 was due in large part to the diligence and hard work of the Mayor, the City Council, the Boards and Commissions, citizen volunteers, and dedicated public employees. I believe that a review of this year’s annual report will confirm that the City government is functioning at a high level, that its fiscal policies are sound, and that Homer continues to be a very attractive place to live and conduct business. I believe the future for Homer continues to be bright.