MEMORANDUM

TO: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

FROM: Walter Robson, Capital Projects Division

Jeff Sinz, Finance Director

DATE: December 26, 2002

SUBJECT: Ordinance 2002-19-30, Seward Middle School Consultant Services for the General Obligation Bond Application

The attached Ordinance requests appropriation of $50,000 for additional consultant work on the Seward Middle School General Obligation Bond application program. This work is required for inclusion on the Alaska Department of Education & Early Development's ("DEED") approved 70% debt reimbursement list. With passage of both KPB Proposition #3 in October 8, 2002 and the passage of State Ballot Proposition C, as certified on November 27, additional application submittal and DEED review is now necessary to qualify for 70% reimbursement by the state.

HB 2002 allows for a 60%/40%(AK/KPB)reimbursement rate for the purpose of paying the cost of design, construction, and major maintenance of educational facilities. These additional requirements for 70% reimbursement require that the project meet statutory size and use criteria.

The extra consultant services required by DEED to be submitted for consideration of reimbursement at the 70% rate include: three options on reconstruction and/or new construction, life cycle cost analysis and site plans for each option, as well as descriptive dialogue and details on each significant change.

Financial Impact

This expenditure for preparation and submittal of additional qualifying data to the DEED, with intent to secure approval of 70% debt reimbursement, could allow an extra $1.4M to be reimbursed to the borough, provided it is approved by the DEED.

Thank you for your time and consideration.