MEMORANDUM

TO:                  Ron Long, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU:             John J. Williams, Borough Mayor

FROM:            Craig Chapman, Finance Director

DATE:             October 12, 2006

SUBJECT:       Resolution 2006-091, 2006 School Bond Sale

The attached resolution authorizes the issuance of $2,588,000 in general obligation bonds through the Alaska Municipal Bond Bank Authority. A majority of borough residents voting in the October 3, 2006 general election approved the issuance of these bonds. As described in the proposition, the total amount authorized was to be used for the cost of planning, designing, site preparation, constructing, acquiring, renovating, installing, and equipping educational capital improvement projects within the Kenai Peninsula Borough.

The resolution authorizes the Borough Mayor, Finance Director and Clerk to execute the documents and agreements necessary to complete the sale of the bonds. The resolution limits the term of the bonds to ten years and the interest rate to no more than 5%. Based on current interest rates for tax-exempt municipal debt, it is anticipated that the true interest rate of the bonds will be 4.0 and 4.5 percent. The actual rate of interest is subject to market conditions as of the actual sale date.

I will keep the assembly informed as we progress through the bond issuance process.