Proposition No. 1 - School Board Representation

In the spring of 2001, a reapportionment committee established by the Assembly and appointed by the Assembly President, conducted public hearings throughout the Borough regarding various plans for assembly representation and districting. During these hearings, the committee heard concerns about the existing plan under which the Board of Education was elected at large.

As a result, the Assembly directed the reapportionment committee to consider various forms of school board representation including districting. The reapportionment committee met several times during the fall of 2001, and on December 6, 2001, the committee voted to recommend that the Assembly place a proposition on the October 1, 2002 ballot offering the voters two options for school board representation: status quo (seven members elected at large) or seven single-member districts elected by the residents of each district.

On February 5 and March 12, 2002, the Assembly conducted joint meetings with the school board and the reapportionment committee to discuss the committee's report to the Assembly. Some concerns were raised that creating districts might harm the school board's effectiveness and representation of the entire school district. Alternatively, concerns were raised that failure to create districts would result in inadequate representation of the outlying areas. Everyone agreed that the voters should decide this issue.

On June 4, 2002, the Assembly enacted Ordinance 2002-16 placing two plans for school district representation before the voters as follows:

Plan A. Seven members elected at large. (Status quo)

Plan B. Nine single member districts elected by district. (These districts would coincide with existing assembly districts. If this option is approved by the voters, all members would stand for election in October 2003, and the terms of new members would be staggered so that each board seat would terminate the year following termination of the assembly seat in that district.)

Proposition No. 2 - General Obligation Bonds for Solid Waste Disposal Facilities

In the early 1990's, a solid waste improvement program was implemented to upgrade landfills and transfer facilities to ensure compliance with federal and state regulations. The Kenai and Seward landfills closed, transfer sites were consolidated and improved, and the Central Peninsula Landfill (CPL), located south of Soldotna, was improved to serve the Borough as a regional landfill. The CPL will reach capacity in 2004-2005 and funding is needed to expand the landfill to the south of the existing fill.

Federal and State regulations require installation of extensive environmental controls with any new or expanded landfill. Ten-year landfill capital costs are estimated at $12,000,000 and include long-term planning and design, construction of two cells lined with an impermeable bottom liner with an estimated capacity of five-years each, leachate (water passing through the waste) and gas collection and treatment system, equipment, and related improvements.

Currently waste from throughout the Peninsula (except the Homer area) is managed at the CPL. It is estimated that 75% of the Borough population is served by the CPL, and this is anticipated to increase to 98% with the future inclusion of waste from the Homer area.

If the voters approve this proposition, it is anticipated that bonding would be through two separate sales to coincide with the development of each new landfill cell. The bonds will be repaid over a ten-year period to match the life of the improvement. In addition, the Borough will also seek grants and other sources of funding which could reduce the actual amount of bonding needed for this project.

This ten-year bonding approach provides sufficient authorization to proceed with facility planning and development. Planning, design and construction work will span several years. Once the first cell is developed, planning and design will commence for second cell development.

If this proposition is not approved, other means of financing will be necessary since this work is required by regulation.

Fiscal Note: The issuance of $12,000,000 of general obligation bonds will impact the annual tax levy by approximately $36.75 per $100,000 of assessed taxable property value (based on the estimated total 2002 assessed valuation). The actual rate of interest and term of the bonds will be determined by market conditions when the bonds are sold.

Proposition No. 3 - $14,700,000 General Obligation Bond for Seward Middle

School Construction

Two years ago, the Kenai Peninsula Borough Board of Education appropriated funds to conduct a code compliance review of the Seward Middle School. This school was constructed in 1968. The code review was recently completed, and a final report was issued to the School District on May 31, 2002.

This report stated that the cost to bring Seward Middle School into compliance with the 2000 Uniform Building Code, to upgrade building standards to current building standards in Alaska, and to cover the cost of portable classrooms for the two years such repairs and renovations would take, was estimated to be $10,700,000. It was further estimated that these renovations would extend the life expectancy of the building by approximately 10 years.

The cost to construct a new middle school to meet student needs for the next 30 to 50 years is estimated to cost no more than $14,700,000.

The Seward Site Council, the Seward City Council and the Kenai Peninsula Board of Education have recommended construction of a new school to replace the existing middle school. It is the intent of the School District to continue to use the existing middle school during construction of the new facility to eliminate the need for portable classrooms.

If this proposition is approved by the voters on October 1, the Borough will seek State of Alaska debt service reimbursement eligibility. If the state approves the project for reimbursement of at least 60% of the debt service, the project will proceed immediately. If the state fails to approve the project, the bonds will not be issued. State reimbursement is subject to the annual appropriation of funds by the state legislature.

Local voter approval at this time will demonstrate to the legislature the existence of local support for the project. Putting this question before the voters after legislative approval would add approximately four months to the project completion schedule.

Fiscal Note: Assuming a 60% reimbursement rate from the State of Alaska, the cost to taxpayers would be approximately $11.67 per $100,000 of assessed taxable property value (based on the estimated total FY2002 assessed valuation, a 5.0% average rate of interest, a 20-year payback period and a 60% reimbursement from the State of Alaska). Operating and maintenance costs of the new facility are expected to be lower than the existing facility.

Proposition No. 4 - Sales Tax Initiative

On May 15, 2002, the Borough Clerk issued a petition to sponsors seeking an initiative to exempt sales of all nonprepared food items from borough sales tax. These food items would include those that have been previously granted an exemption in KPB 5.18.200 (14) for food purchased with coupons issued under the federal food stamp program.

Petition packets were returned to the Clerk on August 5, 2002. A review of the petitions revealed that the petitioners had collected the requisite 1935 signatures of qualified voters of the borough, thus requiring placement of the question on the ballot for the October 1, 2002 regular election.

Fiscal Note: If approved by a majority of the voters voting on the question at the October 1 election, borough sales tax will no longer be collected on the sale of nonprepared food items. It is estimated that this will result in the loss of approximately $2,000,000 annually in tax revenues to the borough. One hundred percent of sales taxes levied by the borough are used to fund education.

Applicability: Under Alaska Statutes Title 29, the borough collects sales taxes levied by the borough and by those levied by cities located within the borough. Currently, that includes taxes levied by the cities of Homer, Kenai, Seldovia, Seward and Soldotna. As home rule municipalities, Kenai and Seward have the legal power to locally determine whether to apply or reject such an exemption. As general law municipalities, Homer, Seldovia and Soldotna may also be able to determine locally whether to accept or reject this exemption if authorized to do so by borough ordinance. The approximate reduction in city revenues resulting from the exemption of nonprepared food is estimated as follows:

Homer                 $409,000

Kenai                 $959,000

Seldovia             $ 19,000

Seward             $279,000

Soldotna             $959,000

Implementation: If the initiative is approved by a majority of the voters, implementation of the exemption would be planned for January 1, 2003. Changes in the borough sales tax code are normally implemented at the start of a calendar quarter to coincide with the sales tax reporting schedule of many borough businesses. If approved by borough voters, but not applied within some cities, implementation may be delayed to allow adequate time for changes to the automated sales tax systems and reporting formats used by impacted businesses and the borough.

Proposition No. 5 - Proposed Anchor Point Port and Harbor Service Area

Voters in Anchor Point petitioned the Assembly to establish a service area to exercise the powers necessary to provide a port and harbor feasibility study. The boundaries of the proposed service area are identical to the boundaries of the Anchor Point Fire Service Area.

The ordinance creating the service area also establishes an elected service area board composed of five voters residing within the service area. This board will be elected at the October 1 election. Swearing in and seating of the elected board is contingent upon approval of this proposition.

The ordinance establishing the service area directs the Service Area Board to cooperate with the Corps of Engineers and any other appropriate agency or organization to fund and conduct a study investigating the feasibility of providing port, harbor, boat launch or other facilities to provide water access and navigation improvements in the vicinity of Anchor Point. In addition, the Board would advise the Mayor and Assembly concerning the administration and operation of the service area.

The tax levy for support of the service area will be set by the Borough Assembly. It is the intent of the petitioners that the annual tax levy will not be greater than 0.1 mills, and that these funds would be used solely to support administrative costs incurred by the Service Area Board in its efforts to raise funding for the feasibility study.