To: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

Thru: Dale Bagley, Mayor

Thru: Scott Holt, Finance Director

From: Gary Davis, Road Service Area Director

Date: March 4, 2004

Re: Ordinance 2004-____, Authorizing amendments to the 2004 RSA Capital Improvement Program

The fiscal year 2004 budget process was the first year the road service area ("RSA") was required to identify the specific roads that were to be part of the upcoming capital improvement program. This process also required the RSA to establish an amount to be spent on each project.

This process is cumbersome for the RSA due to several factors:

1. The projects are not engineered prior to completing the budget process, so the amount allocated to each project cannot be accurate.

2. The projects may have survey problems, right-of-way problems, or may face further problems associated with unknown nearby private development.

3. Property owners along the proposed projects may have specific requests unknown during the budget process.

We currently face several of these issues during this first year of the detailed CIP budget requirement. This ordinance amends the project costs to more accurately reflect estimated costs.

We also have determined that two of the bridges we anticipated re-decking need to be completely rebuilt, and additional road upgrades are required. A transfer of $275,000 from the RSA fund balance, together with other unexpended CIP funds, will allow the bridge construction and road upgrade projects to go forward. Our fund balance is significantly above the minimum fund balance policy guidelines, and the remaining fund balance after this transfer will remain within those guidelines.