MEMORANDUM

TO: Pete Sprague, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale L. Bagley, Mayor

THRU: Max Best, Planning Director

Paul Ostrander, Land Management Officer

FROM: Roy E. Dudley, Land Management Agent

DATE: June 23, 2003

SUBJECT: Ordinance 2003-28 An Ordinance Authorizing the Negotiated Sale at Fair Market Value of a 6-Acre� Parcel Located in the Beluga Area to UNOCAL

Union Oil Company of California (UNOCAL) has submitted an application for the negotiated sale at fair market value of a 5.9l7 acre parcel described as Tract D2, Beluga Terrace Subdivision, Addition No. 3, KPB Preliminary Plat No. 2003-130. Water-based muds and cuttings from five gas wells drilled in the early 1970's have been stored in a then-authorized unlined reserve pit called the Ivan River Reserve Pit.  This pit is located in the mudflats of the Susitna Flats State Game Refuge, adjacent to the Ivan River gas production pad now operated by Unocal Alaska.  When cuttings in the Reserve Pit were field tested by the Alaska Department of Environmental Conservation (ADEC) they released a small amount of diesel sheen.  The Alaska State Department of Fish and Game has requested that the contents of the Ivan River Reserve Pit be removed from the Game Refuge.  Therefore Unocal is interested in the purchase of land outside of the State Game Refuge to construct a lined, state-of-the-art monofill designed to hold this type of material. Tract D2, Beluga Terrace Subdivision, Addition No. 3, KPB Preliminary Plat No. 2003-130 will meet this need.

The subject parcel is relatively flat with no ravines and it is significantly inland from the edge of the Inlet.  In addition, immediately adjacent to this parcel is a parcel of land that is currently in identical use as a monofill for drilling waste.  Unocal has discussed the siting of this monofill with Judd Peterson and Bob Blankenburg of the Alaska Department of Environmental Conservation and ADEC recommends this course of action. In addition, the parcel is large enough to accommodate a limited number of possible future lined cells to contain additional muds and cuttings from potential future West Side exploration projects.

Unocal has discussed the use of this site with the immediately adjacent property owners who have an identical use of their parcel and they are not opposed to the use.  There is an existing access road which will facilitate entry to the parcel.  The completed lined monofill will be capped with an impermeable liner and covered with dirt and revegetated.  There will be no odor associated with the completed monofill.

The fair market value will be supplied to the assembly when the appraisal is complete.

Attachments

� Negotiated Sale Application

� KPB Preliminary Plat No. 2003-130

� Aerial Photo

� Ownership Map

� Land Use Map