MEMORANDUM
TO: Pete Sprague, Assembly President
Members, Kenai Peninsula Borough Assembly
THRU: Dale Bagley, Mayor
FROM: Colette Thompson, Borough Attorney
Max Best, Planning Director
Paul Ostrander, Land Management Officer
Marcus Mueller, Land Management Agent
DATE: May 20, 2004
SUBJECT: Ordinance 2004-20, An Ordinance extending the deadline in Ordinance 2001-16 regarding certain grazing leases
The assembly adopted Ordinance 2001-16 on June 19, 2001, which authorized the mayor to renew or extend for 27.5 years seven grazing leases in the southern area of the Kenai Peninsula. The State of Alaska originally issued these leases under a program designed to encourage grazing use of state lands. The Kenai Peninsula Borough selected the lands subject to these grazing leases several years ago pursuant to the Municipal Land Grant program.
These leases were for an initial term of 27.5 years and provided lessees with an option to apply for a renewal lease upon certain terms and conditions for an additional period of 27.5 years. The initial 27.5 years expired in July 2001, and all of the subject lessees applied for the 27.5-year renewal with the borough.
Ordinance 2001-16 required the administration to complete three items by July 11, 2003:
1. Lessee shall prepare a development plan in cooperation with the Soil and Water Conservation District which shall be approved by the borough mayor, and which shall provide for reasonable use and development of the grazing lease property and shall be attached and incorporated by reference to the grazing lease.
2. The mayor shall determine the survey status of each lease and may, in the best interests of the borough, either conduct, or require the lessee to conduct; a survey if reasonably necessary to establish boundaries;
3. Pursuant to KPB 17.10.100(I) authorizing negotiated leases, the mayor shall charge an annual fee for the lease based either upon animal unit months or other recognized industry standards, or an appraisal done either by the assessing department or by a fee appraiser to determine the current fair market value of the lease, with rate adjustments to be made every five years based upon reappraisals or other relevant information; and
obtain completed development plans from the lessees
The assembly granted a one-year extension of time to complete these tasks in ordinance 2003-26. The administration has completed tasks two and three above. It has determined that surveys are not needed to establish the boundaries, and appraisals of the leases were completed establishing fair market value.
Regarding task one, the administration has provided the lessees with packets containing draft lease agreements and instructions for developing development plans. However, only one lessee has responded directly, and the attorney for several of the remaining lessees has responded with a request for additional information.
In the event that task one is not completed before the hearing date, an additional six months is respectfully requested to enable the administration to finalize this process and renew these leases in an appropriate manner. While it is expected that these requirements and leases will be formally completed in less than six months, that amount of time is requested in the event that unanticipated problems arise.