MEMORANDUM

KENAI PENINSULA BOROUGH

FINANCE DEPARTMENT

To: Timothy Navarre, Assembly President

Members, Kenai Borough Assembly

Thru: Dale Bagley, Mayor

From: Jeffrey Sinz, Finance Director

Cathy Mayer, Solid Waste Director

Date: November 24, 2001

Subject: Ordinance 2001-19-26, Supplemental Appropriation to Purchase a New Replacement Dozer for the Solid Waste Department

The Solid Waste Department currently owns and operates a 1989 John Deere 850B Dozer at the Homer Landfill. The dozer is twelve years old and has recently experienced a significant increase in repair and maintenance costs. In addition to the repair costs, rental costs for a temporary replacement dozer while the John Deere 850B is down for repair is $10,000 per month.

The borough Equipment Replacement Fund had previously planned to propose the purchase of a new replacement dozer for the Solid Waste Department in next year's budget, FY2003. Because of higher than expected current year equipment costs, the Solid Waste Department is requesting that the Equipment Replacement Fund accelerate purchase of the new replacement dozer to the current year. A new dozer is expected to cost approximately $280,000 and have a ten-year useful life resulting in a $2,333.33 per month rental charge to the Solid Waste Department. Solid Waste expects to pay the current year rental fees with savings from decreased repair and operating costs.

The attached ordinance if approved would provide supplemental funding for the Equipment Replacement Fund and allow it to purchase a new replacement dozer for the Solid Waste Department. Sufficient fund balance is available within the Equipment Replacement Fund to support this action.

Attachment