Kodiak's projected deficit shrinks to about $94,000 at year end

The City of Kodiak ended fiscal year 2026 with a general fund shortfall of about $94,000, Interim City Manager Tim Putney told the Kodiak City Council at a work session Thursday, Oct. 8. The figure is unaudited, and Putney said the city expects some changes.

A couple of months ago, it looked like the shortfall would be "a couple million," Putney said. "So it's looking a lot better than it was a couple of months ago."

At the council's Sept. 8 work session, Putney said the city had projected a $3 million deficit after sales tax allocations but expected to land closer to $1.3 million to $1.5 million, leaving an unassigned fund balance near $9 million, roughly four months of operating expenses.

What closed most of the gap was a $1.14 million transfer from the investment earnings of the city's enhancement fund. Finance Director Julie Lu said city code required it. Each year, staff compare the fund's investment earnings with an inflation-proofing amount based on the last five years of inflation. This year, earnings came in higher, and with a general fund deficit expected, the city moved the difference into the general fund. The remaining $94,587 shortfall was covered with fund reserves, according to the work session packet.

Asked by the mayor whether more tax money was still coming in, Lu said no. "Can't squeeze that lemon anymore," she said. June-quarter sales tax is due at the end of July, and staff wait for late payments that trickle in during August. The totals include tax the city collects directly and tax collected by the Remote Sellers Sales Tax Commission. The packet lists $16.7 million in sales tax received for the year.

The work session took no formal action. Putney said last month the city is preparing for its fiscal 2026 audit in October, which will set the final number.