MEMORANDUM

TO: Gary Superman, Assembly President

Members of the Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

Scott Holt, Finance Director

Bonnie L. Golden, Grants Manager

FROM: Gary Davis, Road Service Director

DATE: January 6, 2005

SUBJECT: Ordinance No. 2004-19-34: An Ordinance Accepting $909,700 from the State of Alaska for Keystone Drive Road Improvements and Appropriating the Grant to a Road Service Area Capital Project Account

Over the past several years, the residents and users of Keystone Drive have expressed their desire for a paved road. Through their efforts, a total of $2.5 million in federal funding has been earmarked for this project. An additional $500,000 has been earmarked for Keystone Drive under the federal FY04-05 budget, but has not yet been received by the State. This would bring the total federal funding up to $3 million. The first $1 million is currently available for Keystone Drive.

The initial federal funding requires a local match of $90,300 for the first $1 million, and the Alaska Department of Transportation and Public Facilities will provide the remaining $909,700. Matching funds for STIP projects were appropriated to the Road Service Area in the Borough's 2003-04 budget (Ordinance 2003-19). Prior to use of the local matching funds for a specific STIP project, the Assembly must approve the expenditure. Through adoption of KPB Resolution 2004-067, the Assembly approved the expenditure of the $90,300 in matching funds from the Road Service Area's capital improvement fund. Enactment of the attached ordinance will provide the remaining funds for the first phase of the project.

The Borough prefers, and DOT&PF has agreed, that the Borough manage this project. This will ensure that the road is designed and constructed in accordance with Borough road standards. (See letter to DOT&PF dated September 22, 2004.)

Additional federal funds have been earmarked for this project, but have not been "awarded" to the Borough. It is anticipated the remaining funds will be made available to the Borough in the near future.

Attachments: Ordinance, DOT&PF letter dated 9-22-04