Kenai proposes $1.55 million for street work, pay raises in 2027 budget

Kenai will spend $1.55 million on street maintenance and raise pay for paramedics and police officers under the fiscal 2027 budget presented to the city council May 2.

City Manager Terry Eubank said the budget includes a 2 percent cost-of-living raise for all staff. Paramedic certification pay would jump from 5 percent to 15 percent of salary to match neighboring fire departments. Police certification pay would shift from a fixed dollar amount to a percentage of salary.

The budget adds six months of funding for a temporary police officer position to cover anticipated retirements. Police Chief David Ross said the timing aligns with Alaska Police Standards Council academy schedules in January and July.

Street maintenance

Public Works Director Lee Frey said crack-sealing funding will rise from $50,000 to $125,000 annually based on a 2025 street assessment. The assessment found that maintaining the city's pavement condition index of 76 to 78 requires sustained investment. Beaver Loop Road and neighborhoods north of Lawton will be prioritized this summer.

The budget also includes $300,000 for public safety building design work. Eubank said the city aims to place a bond measure for the building on the November 2027 ballot.

Revenue and fund balance

Finance Director Dave Swarner said sales tax revenue has increased for 34 consecutive quarters. The most recent quarter was up 7.28 percent year over year. The budget projects a 2.75 percent sales tax increase for fiscal 2027.

Property values have also risen, generating additional revenue without a mill rate increase, Eubank said.

The general fund is projected to operate at a $317,000 deficit, driven by $2.18 million in capital projects. Swarner said the deficit is sustainable because the fund balance has remained at the upper end of policy requirements.

Fire and airport

Fire Chief Ross Teagle said the department's survivability rate for cardiac arrest patients is approximately 50 percent, five times the national average of 10 percent. He attributed the rate to paramedic staffing and advanced life-saving interventions.

Airport Manager Mary said the airport is pursuing a federal grant to attract jet service. A third carrier, Fox Air, will begin service June 1 with six daily flights using a nine-seat Caravan.

Utilities

The budget proposes a 4 percent increase to water and sewer utility rates to address inflationary costs and build reserves for a potential wastewater treatment plant overhaul in fiscal 2029.