MEMORANDUM

TO: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

FROM: Scott Holt, Finance Director

Catherine Mayer, Solid Waste Director

DATE: September 29, 2004

SUBJECT: Ordinance 2004-19-21 Appropriating $275,000 from the Equipment Replacement Fund for heavy equipment for the Central Peninsula Landfill

The Borough currently operates an Equipment Replacement Internal Service Fund to provide capital for the timely purchase and replacement of Borough vehicles and equipment on behalf of general government departments. Ownership of all equipment purchased is retained by the fund, and the user departments pay an annual rental fee typically equal to the original cost of the equipment divided by the expected useful life.

The Solid Waste Department is requesting authorization from the assembly by separate resolution to operate the Central Peninsula Landfill with Borough employees, If the resolution passes, equipment will be necessary to conduct landfill maintenance and operations. If the resolution does not pass, this ordinance will not be necessary.

The attached ordinance would appropriate $275,000 from the Equipment Replacement Fund to purchase a loader in the estimated amount of $145,000, and roll-off truck in the estimated amount of $130,000.

The Central Peninsula Landfill operating budget will pay an annual rental fee to the Equipment Replacement Fund in the estimated amount $27,500 over a ten-year period. The Central Peninsula Landfill FY2005 budget has funds available to pay the current rental fee.

Sufficient fund balance is available within the Equipment Replacement Fund to support this action. The Borough administration recommends approval of the attached ordinance.