MEMORANDUM

TO: Pete Sprague, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

FROM: Jeffrey Sinz, Finance Director

DATE: April 3, 2003

SUBJECT: Solid Waste Bond Sale Resolution

The attached resolution authorizes the issuance of $7,040,000 in general obligation solid waste bonds through the Alaska Municipal Bond Bank Authority. A majority of borough residents voting in the October 1, 2002 general election approved issuance of up to $12,000,000 in general obligation solid waste bonds. As described in the proposition, the total amount authorized was to be used to fund development of the first two phases of landfill development. Each cell is expected to have a useful life of approximately five years. The $4,960,000 authorized but unissued balance remaining after this initial bond sale is expected to be issued in four to five years, or as necessary to support development of the second landfill cell.

The sale of the bonds is expected to occur on or about May 22, 2003. The resolution authorizes the borough Mayor, Finance Director and Clerk to execute the documents and agreements necessary to complete the sale of the bonds. The resolution limits the term of the bonds to ten years and the interest rate to no more than 5%. Based on current interest rates for tax-exempt municipal debt, it is anticipated that the true interest rate of the bonds will be 3.5 and 4.0%. The actual rate of interest is subject to market conditions as of the actual sale date.

A draft of the "loan agreement" referenced in the resolution is attached for your information.

I will keep the assembly informed as we progress through the bond issuance process.