MEMORANDUM

TO: Timothy Navarre, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Mayor

FROM: Colette Thompson, Borough Attorney

Bob Bright, Planning Director

Max Best, Borough Surveyor

DATE: October 25, 2001

SUBJECT: Ordinance 2001-36, authorizing the conveyance of property to Cook Inlet Aquaculture Association for less than fair market value

Upon further review of this ordinance and further discussions with Cook Inlet Aquaculture Association (CIAA), the administration requests that the assembly amend the above described ordinance to prohibit CIAA from placing liens upon the subject property unless the association purchases the property for fair market value. The purpose of this is to protect the borough's reversionary interest in this property. If liens are placed upon the property, and the property is not used for CIAA purposes and public purposes, the borough's remedy of receiving back the property would be inadequate. This was discussed with the CIAA Executive Director, who indicated this will not pose a problem. The administration recommends the following amendment:

Amend Section 5 as follows:

SECTION 5. That applicable provisions of KPB 17.10.240 and KPB 17.10.130 shall govern this sale, and, accordingly, CIAA shall be responsible for all fees including recording fees, closing fees, collection fees, surveying and platting fees if applicable, and other fees associated with this sale. A restriction shall be placed on the deed or other appropriate document prohibiting the placement of liens, mortgages, or other similar encumbrances upon the property at any time.

Enclosed for your information are the incorporation papers of Cook Inlet Aquaculture Association. Its 2000 annual report is available for review in the borough clerk's office.