TO: Pete Sprague, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale Bagley, Borough Mayor

THRU: Shane Horan, Director of Assessing

FROM: Clyde Johnson, Special Assessment Coordinator

DATE: June 24, 2004

SUBJECT: Resolution 2004-063

Tustumena Terrace Subdivision USAD - Resolution of Necessity

INTRODUCTION:

A petition has been received for the purpose of forming a Utility Special Assessment District (USAD) in the Tustumena Terrace Subdivision area located south of the Kasilof River and west of the Sterling Highway. This proposal allocates 100 percent of the costs to the 107 benefited parcels involved in the formation of the District. Three (3) of the 107 parcels are borough owned and therefore abstained from the voting process, leaving 104 voting parcels. The first petition signature was dated May 10, 2004. All signatures were received by May 25, 2004, thereby meeting the 30-day circulation requirement of regulation D of Resolution 92-54. A separate signature page for each property owner was issued along with a map of the benefited parcels (exhibit 4 to the resolution); a petition information sheet (exhibit 5 to the resolution); and a commitment letter from ENSTAR (exhibit 6 to the resolution). Signatures of owners for 73 parcels were needed to meet the more than 70 percent approval requirement of KPB 5.35.050; validated signatures for 86 parcels, or 82.7 percent were obtained (exhibit 1 to the resolution, Clerk's certification).

PROJECT BACKGROUND:

1. The project cost is estimated at $217,975 (TWO HUNDRED SEVENTEEN THOUSAND NINE HUNDRED SEVENTY-FIVE DOLLARS).

2. The proposed method of allocating the cost is by equal allocation of the assessment among all benefited parcels, i.e., dividing the cost by the number of benefited parcels. The per-parcel cost is estimated to be $2,037.15. KPB 5.35.090 requires the assembly to determine that an equal allocation of costs to each lot is reasonable where the lots are of disparate size (where one or more parcels are more than three times the size of the typical lot). Equal allocation is reasonable because the immediate benefit of being able to connect a service line to the main line is the same for all parcels.

3. As required by KPB 5.35.070(C), no lien for this project may exceed 21 percent of the fair market value of the property, after giving effect to the estimated benefit from the improvement. Within this proposed project there are thirty-three (33) lots that exceed the 21% limitation. In order to reduce the liens to the allowable level an amount of $5,837.49 must be submitted prior to the adoption of the resolution to proceed with the construction of the improvement.

4. Pursuant to KPB 5.35.070(D), a special assessment district may not be approved where properties that will bear more than ten percent (10%) of the estimated costs of the improvement are delinquent in payment of borough property taxes from the immediately preceding year. For this project the immediately preceding tax year is 2003. As of today's date, June 24, 2004, two (2) lots within the proposed district, or 1.86%, are delinquent in payment of their 2003 property tax.

5. The following list of exhibits to the resolution support and are incorporated by reference in the Resolution of Necessity:

A. The Clerk's certification of the petition, dated June 10, 2004;

B. A profile information sheet for the proposed USAD containing the tax parcel identification, the assessed value before and after the proposed improvement, the name of each parcel owner, the value-to-cost ratio (which may not exceed 21%), maximum assessment and any prepayment needed, whether the property owners have approved the proposed district and tax delinquencies. The profile sheet further specifies the total costs for the proposed USAD, the number of lots and cost of the improvement per lot;

C. The estimated assessment roll including the tax parcel identification number, legal description, estimated assessment per parcel, assessed value, owners name and mailing address;

D. A map of the proposed district showing the benefited parcels, which benefited parcels are improved, and the proposed course of the main line;

E. The petition form cover sheet which explained to petitioners the nature of the project, its total and per-parcel cost, filing and signature deadlines and requirements, the approved withdrawal prohibition, and the filing fee;

F. A letter/statement from Enstar Natural Gas dated June 24, 2004, stating the total linear feet on the project, cost per linear foot, and out a schedule for construction of the proposed improvement during the 2004 season (KPB 5.35.050) if the project is approved;

G. Memo from the Finance Director dated the 9th day of June 2004, stating that in-house financing will be used and setting forth the number and frequency of payments.