M E M O R A N D U M

TO: Members of the Kenai Peninsula Borough Assembly

FROM: Dale L. Bagley, Borough Mayor

William R. Popp, Assembly President

Jack Brown, Assembly Member

DATE: February 16, 2000

SUBJECT: An Ordinance Appropriating $50,000 from the General Fund Balance to Initiate Establishment of a Port Authority

The attached ordinance appropriates $50,000 to initiate the evaluation and establishment of a port authority. This project would be closely associated with the Cook Inlet LNG terminus project, which is the construction of an LNG pipeline from the North Slope to southcentral Alaska. A port authority would greatly improve the economic viability of the pipeline project. By seeking and obtaining tax-exempt status, the port authority could then issue tax-exempt bonds. A similar port authority created by the North Slope, Fairbanks and Valdez boroughs recently received a favorable ruling from the IRS concerning their tax-exempt status.

The $50,000 would provide funding to further initiate creation of a port authority. It would be used only if the LNG Terminus Group decides to pursue its establishment. Having the funds appropriated at this time would shorten the response time needed later on in the LNG project if the establishment of a port authority is deemed critical to the success of the project. A plan for the expenditure of these funds would require assembly approval, via motion, prior to any disbursement.

/bg

Attachment (Ordinance)