MEMORANDUM

To: Timothy Navarre, Assembly President

Members, Kenai Borough Assembly

Thru: Dale Bagley, Mayor

From: Jeffrey Sinz, Finance Director

Date: July 9, 2001

Subject: Revised budget for the Kachemak Emergency Service Area

The attached ordinance if approved would revise the FY2001-2002 Kachemak Emergency Service Area (KESA) budget by increasing it to $189,287. In addition, it would provide an increase of $110,750 to the borough's Equipment Replacement Fund for one new Brush Truck that would be leased back to the KESA.

On June 5, 2001 the assembly amended the mayor's proposed FY2001-2002 budget by decreasing the appropriation for the Kachemak Emergency Service Area to $50,000 and requesting a work session with the Service Area Board on July 9, 2001 to discuss the service area operating plan and a revised budget. Since then, the KESA board has approved a contract with the city of Homer to provide service for the first six months of the borough's fiscal year. It is anticipated that a second agreement covering the second half of the year will be negotiated in November or December.

The revised budget will provide $106,227 to fund the contract, $1,500 to repay the borough general fund for funds advanced during FY2000-2001, $10,000 to start building an equipment replacement reserve fund, $28,000 to equip and maintain two used ambulances, $19,960 for volunteer supplies and equipment, $7,000 for a partial year lease payment, $2,400 to transport three water holding tanks, $5,000 for contingencies and $9,200 for miscellaneous operating costs. An additional budget revision will be forwarded to the assembly when more information, including the cost a second contract with the city of Homer, are known.