MEMORANDUM

KENAI PENINSULA BOROUGH

FINANCE DEPARTMENT

To: Timothy Navarre, Assembly President

Members, Kenai Borough Assembly

Thru: Dale Bagley, Mayor

From: Jeffrey Sinz, Finance Director

Date: August 8, 2001

Subject: Substitute Ordinance 2001-24, General Obligation Bonds

Attached is a substitute for ordinance 2001-24. The original ordinance asked voters to approve up to $5 million in general obligation bonds for the project, but it did indicate that the total estimated cost for the project is $7,500,000. Under KPB 5.04.110, voter approval is required for the entire cost of the project.

As indicated in the memorandum dated June 28, 2001, the proposed capital improvement project includes renovation of the Borough Administration Building (BAB) and construction of approximately 20,000 square feet of additional office space. The project is expected to be funded through a combination of $5 million in general obligation bonds and $2.5 million in general fund balance. If borough voters approve the project, sale of the bonds, appropriation of the bond proceeds and appropriation of the necessary fund balance will be subject to subsequent approval by the assembly.

Bond counsel has recommended that the assembly postpone action on the substitute ordinance until the August 21, 2001 meeting. This will ensure that adequate public notice is given regarding the proposed amendments.