M E M O R A N D U M

LEGAL DEPARTMENT

144 N. Binkley

Soldotna, AK 99669

Phone: (907) 262-8609

To: Ronald Wm. Drathman, Assembly President

Members, Kenai Peninsula Borough Assembly

From: Colette Thompson, Borough Attorney

Date: February 18, 1999

Subject: Ordinance 99-14

Economic development procedures, criteria and guidelines.

This ordinance was prepared at the request of the sponsoring assembly members and pursuant to the committee established by resolution 98-011 to develop guidelines for exercising economic development powers. If enacted, it would implement the recommendations contained in the report submitted by the committee to the assembly on February 16, 1999.

To summarize, the ordinance establishes criteria and processes for borough support of economic development projects. It is anticipated that most support would be indirect using policies and regulations, and through the use of external organizations such as the Economic Development District ("EDD"). Forms of direct support could include the use of borough lands, tax incentives, tax exempt bond financing, and other mechanisms.

The ordinance also establishes a process for considering direct borough support of certain major projects. An external agency such as the EDD will screen applicants for the borough. To be considered for direct borough support, in addition to meeting certain preliminary criteria, the business plan must show

1. Either a $10 million increase in the property tax base or the addition of 25 full-time permanent jobs; and

2. The business will either reduce imports or increase exports; and

3. It will not take market share from existing businesses in the borough.

Businesses meeting the necessary criteria will be referred to the mayor's office, where an external review committee of three will review the project and make a recommendation to the assembly within 60 days of receipt by the mayor's office.

The ordinance as written would take effect at the beginning of the next fiscal year, July 1, 1999.