MEMORANDUM

TO:                Ron Long, Assembly President

Members of the Kenai Peninsula Borough Assembly

THRU:           John J. Williams, Borough Mayor

Craig Chapman, Finance Director

Bonnie L. Golden, Grants Manager

FROM:          Gary Davis, Road Service Director

DATE:           July 20, 2006

SUBJECT:    Ordinance No. 2006-19-11, an ordinance accepting $325,080 from the State of Alaska for the local match to federal funds for Keystone Drive road improvements and appropriating the grant to a road service area capital project account

            Over the past several years, the residents and users of Keystone Drive have expressed their desire for a paved road. Through their efforts, a total of $6.4 million in federal funding has been earmarked for this project.

In February 2005, the Assembly enacted Ordinance 2004-19-34 which accepted the first $909,700 for this project. This initial funding required a local match of $90,300, for total of $1 million. An additional $2 million for this project was appropriated through Ordinance 2005-19-01, which was enacted in July 2005. The Alaska Department of Transportation and Public Facilities (“ADOT”) informed the Borough that these additional funds do not require any matching funds.

In the past week Governor Murkowski signed the FY2007 Legislative Capital Budget, SB 231, which included an additional $3.4 million federal earmark for Keystone Drive. We were aware that these funds required a local match. With this information the legislative delegation requested and received the $325,080 funding to go toward this match.

            The Borough and ADOT entered into a Memorandum of Agreement “(MOA”) that states that the Borough will manage the project in coordination with ADOT personnel. This will ensure that the road is designed and constructed in accordance with Borough road standards.

            Work on the Keystone Drive project has begun and is expected to continue for the next couple of years. The environmental documentation and design efforts required by the FHWA make a completion date difficult to determine. We certainly hope and expect the construction of this project to begin during the summer of 2007. Acceptance and appropriation of the $325,080 will provide funding for the local match of the latest federal earmark and is expected to provide the final funding effort necessary for project completion.

Attachments: Ordinance, DCCED notification letter