MEMORANDUM

KENAI PENINSULA BOROUGH

LEGAL DEPARTMENT

144 N. Binkley Street Tel. (907) 262-8609

Soldotna, Alaska 99669 Fax (907) 262-8686

TO: Members of the Kenai Peninsula Borough Assembly

FROM: Tim Navarre, Assembly President

Dale Bagley, Mayor

DATE: December 28, 2000

SUBJECT: Ordinance 2001-19-18 An ordinance appropriating $150,000 for professional services to assist the borough administration with the prison project

This ordinance appropriates $150,000 from the general fund balance to the borough's non-departmental budget to enable the mayor to hire outside expertise as needed to assist the administration with the pending prison project.

The proposed project is very complex, including the legislative process, negotiations with the department of corrections and with private firms for contracts to locate, design, construct and ultimately operate this proposed large prison facility. The dollar value of the construction phase of this project is expected to be in the range of $80 - $120 million dollars, with an additional $20 million or more per year expected to operate the facility. Existing in-house resources are not adequate to properly plan and administer a project of this size and scope, and outside assistance would best serve the borough's interests and enable the administration to function properly while this project is undertaken. It is anticipated that an initial amount of $150,000 will be needed to hire one or more independent experts who are familiar with prison financing, bonding, design, construction, and operational issues. As the project progresses, additional funding may be necessary.

The initial funding is expected to be used as follows:

Financial Advisor $ 25,000

Legal Support/Bond Counsel $ 25,000

Project Management/Consulting $100,000

Total $150,000

A shortened hearing is requested for January 23, 2000 in order to allow for contractual support of the RFQ review process currently scheduled to occur in late January.