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HomeMy WebLinkAbout1971-07-28 Council Packet - Special MeetingKenai C i ty Counc i i Special Council Meeting July 28, 1971 General Ob I i gat i on Bond~ NAT © L BAN [{ © P A LA $ KENAI BRANCH . DRAWER H - KENAI, ALASKA 99611 July 28, 1971 Sharon Sterling Acting City Clerk City Council City Hall Kenai, Alaska Gentlemen· Reference is made to your Official Notice of Sale regarding $1,000,000 City of Kenai, Alaska (General Purpose)' General Obligation, Unlimited Tax Bonds, Series 1971. For said $1,000,000 Bonds, we will pay you the principal amount thereof and accrued interest from August 1, 1971, to the date of deliveryof said bonds plus a premium of $ 96. 70 for bonds bearing interest at the following rates and due August first in the years indicated. 6 1/2% 19 72 through 19 76incl. only 5.60 % 1977 through 19 incl. only 5.80 % 1978 through 19 incl only 6 % 1979 through 19 incl. only 6. 10 % 19_80 through 19 incl. only through 19 incl. 6.25 Fo 1981 through 1 9 incl. ... % 19through 19__ incl. % 19 through 19 incl. __ ... % 19 through 19 incl. through 19 incl. % 1 9 throug, hl 9 incl. , The following is for informational purposes only. Gross Interest Cost $366.~ 715. 00 Net Interest Cost $ 366,618.3O Net Effective Rate _ This bid is made subject to our receiving a satisfactory legal opinion from Messrs. 'Preston, Thorgrimson, Starin, Ellis & Holman, bond counsel of Seattle, Washington, approving the validity of said issue. It is our understanding that you will furnish same, alson with the printed bonds, to the successful bidder without charge. National Bank of Alaska This bid is subject to acceptance not later than 24 hours from the date and hour at which bids .are to be opened, and as a further condition, if the bonds are awarded to us but not tendered within forty (40) days accompanied by said legal opinion, we reserve the right, at our option, to cancel the contract of purchase and in such event the deposit accompanying this bid shall be returned. We are enclosing our Cashier's Check in the amount of $30,000.00, which is to be retained by you to apply against the purchase price if our bid is successful, otherwise to be promptly returned if this bid is not accepted. Respectfully submitted, NATIONAL BANK OF ALASKA, KENAI, ALASKA PACIFIC NATIONAL BANK OF WASHINGTON, SEATTLE, WASHINGTON VAN KAMPEN, WAUTERLEK & BROWN, INC. , CHIC AGO, ILLINOIS SEATTLE NORTHWEST SECURITIES CORP. , SEATTLE, WASHINGTON CO LORADO /-~ / B J./G'. O"~'~nnefl, Assist~ce President NATIONAL BANK OF ALASK2~,- KENAI DENVER, This bid accepted by- City Council Kenai Alaska By Title __ Date Good Faith Check ret~ffi-ed and re~--~ereof ac'knox~le dged RESOLUTION NO. 71-32 A RESOLUTION ACCEPTING THE BID OF BANK OF A~iERICA N.T. & S.A. AND ~iERRILL, LYNCH, PIERCE, FENNER, AND SMITH INCORPORATED, JOINT MJtNAGERS AND ASSOCIATES WHEREAS, the City of Kenai did advertize and solicit bids for $1,000,000 General Purpose General Obligation Bonds, and WHEREAS, the Bank of America N.T. & S.A. and Merrill, Lynch, Pierce, Fenner, and Smith Incorporated, Joint Managers and Associates, did submit the low bid at the effective rate of 5.8175%, net interest cost of $328,765.00 NOW THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA to accept the bid of the Bank of America N.T. & S.A. and Merrill, Lynch, Pierce, Fenner,and Smith Incorporated, Joint Managers and Associates at an effective rate of 5.8175% in accordance with details contained in their proposal submitted at 10:00 A.M. Pacific Standard Time at the offices of Preston, Thorgrimson, Starin, Ellis & Holman, Seattle, Washington. PASSED THIS'~. ~'~day of July, 1971. ~(~hh- F.~- stei~be~k, Mayor ATTE S T: -~ha~on sterlings-,~- A'6ting Cfty-Clerk CITY OF KENAI. ALASKA Kenai, Alaska, with Mt. Redoubt in background beyond Cook Inlet. $1,000,000 GEN,ERAL PURPOSE GENERAL OBLIGATION BONDS, 1971 DATE OF SALE: JULY 28, 1971 AT 10:00 A.M., ALASKA DAYLIGHT TIME OFFICIAL STATEMENT of the CITY OF KENAI, ALASKA Relating to $1,000,000 GENERAL PURPOSE GENERAL OBLIGATION,BONDS, 1971 The information contained within this Official Statement was prepared by Marshall and Meyer, Incorporated, 1705 Norton Building, Seattle, Washington 98104, financial consultant for the City of Kenai. The summaries of ordinances, resolutions and other documents contained herein are made subject to the provisions of such documents and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents for further information in connection therewith. The information contained herein has been compiled from official and other sources considered reliable and, while not guaranteed as to accuracy, is believed to be correct. No other offering, of general obligation bonds will' be made by the City of Kenai during the next ninety days from the date of sale of these bonds. The City of Kenai has always promptly met principal and interest payments on outstanding bonds when due. July 16, 1971 CITY OFFICIALS CITY OF KENAI MAYOR John S teinbeck CITY COUNCIL Robert Bielefeld James Doyle James Hornaday Hugh Malone Tru McGrady Robert Norene ADMINISTRATIVE STAFF City Manager ..................................... Edwin H. Glotfelty Acting City Clerk .................................... Sharon Sterling Finance Director . Raymond D. Burt James E. Fisher Attorney ........................................... BOND COUNSEL Preston, Thorgrimson, Starin, Ellis & Holman Seattle, Washington FINANCIAL CONSULTANT Marshall and Meyer, Incorporated Seattle, Washington OFFICIAL NOTICE OF BOND SALE $1,000,000 CITY OF KENAI, ALASKA GENERAL PURPOSE GENERAL OBLIGATION BONDS, 1971 NOTICE IS HEREBY GIVEN that the City of Kenai. Alaska (hereinafter called the "City"), proposes to issue under date of August 1, 1971 its unlimited tax levy general obligation bonds in the principal amount of $1,000,000, payable both principal and interest at the Kenai Branch of National Bank of Alaska, or at the option of the holder at Seattle Trust & Savings Bank in Seattle, Washington, or at Chemical Bank in New York, New York. Said bonds will be in the denomination of $5,000 each, will bear interest at a rate of not to exceed 8% per annum payable on the first day of February, 1972 and semiannually on the first days of February and August of each year thereafter, and will mature on August 1 in each of the following years in the following amounts: Year Amount 1972 $ 75,000 1973 80,000 1974 85,000 1975 90,000 1976 95,000 1977 100,000 1978 110,000 1979 115,000 1980 120,000 1981 130,000 The City has not reserved the right to redeem the bonds of this issue prior to their stated maturities. The City, as authorized by law, votes of its qualified electors, and ordinances and resolutions duly and regularly adOpted, has irrevocably pledged itself to make annual levies of ad valorem taxes upon all the taxable property within the City without limitation as to rate or amount and in amounts which will be sufficient, together with other moneys legally available therefor, to pay the principal of and interest on these bonds as the same shall become due. NOTICE IS FURTHER GIVEN that sealed bids for the purchase of this issue will be received at the Chambers of the City CoUncil, Kenai, Alaska, until 10:00 o'clock a.m. Alaska Daylight Time, and simultaneously in the office of Preston, Thorgrimson, Starin, Ellis & Holman, 2000 IBM Building, Seattle, Washington 98101, until 12'00 o'clock noon Pacific Daylight Time, on July 28, 1971, at which time all bids will be publicly opened and read.' The bids will be considered and acted upon by the City Council at a meeting to be held at 8:00 p.m. Alaska Daylight Time on the same date. Each bid .submitted shall provide for payment of accrued interest to date of delivery, and shall specify either (a) the lowest rate or rates of interest and premium above par at which the bidder will purchase the bonds, or (b) the lowest rate or rates of interest at which the bidder will purchase said bonds at par. One or more rates of interest may be fixed for the bonds, which rate or rates must be in a multiple of 1/8 or 1/10 of 1% evidenced by a single coupon for each semiannual interest payment, and no rate may exceed 8%. All bonds maturing on the same date must bear interest at the same rate. There shall not be a difference of more than 1% between the lowest and highest rates specified. It is requested that all bids submitted state the total interest cost over the life of the bonds, less the premium if any, and the net effective interest rate over the life of the bonds of such bid. Such statements shall not be deemed to be a part of such bid, however. All bids shall be sealed and shall be accompanied by a good faith deposit of $30,000 evidenced by a cashier's or certified check made payable to the City, which check will be returned to the bidder if his bid is not accepted. If the successful bidder shall fail or neglect to complete the purchase of such bonds within 40 days following the acceptance of his bid, the amount so deposited shall be forfeited to the City. It is understood that if, prior to the delivery of the bonds, the income received by the holders thereof shall become taxable, directly or indirectly, by the terms of any federal income tax law, the successful bidder may at his option' be relieved of his obligation to purchase the bonds, and in such case the deposit accompanying his bid will be returned, without interest. The City reserves the right to reject any and all bids, and to waive any irregularities therein that may be to its advantage to waive. The printed bonds and the opinion of Preston, Thorgrimson, Starin, Ellis & Holman, bond counsel of Seattle, Washington, approving the legality of the issuance thereof will be furnished at the expense of the City, and said opinion will be reproduced on the bonds. These bonds will be delivered at the expense of the City at Kenai, Alaska or Seattle, Washington, and at any other place in the United States of America at the expense of the purchaser. Copies of a financial and statistical report and information relative tO the City and these bonds will be furnished upon request made to Marshall and Meyer, Inc., 1705 Norton Building, Seattle, Washington 98104, financial consultants to the City. The customary signature identification and nonlitigation certificate will be included in the closing documents. SHARON STERLING, Acting City Clerk Kenai, Alaska Oil Well Drilling Platforms in Cook Inlet. INFORMATION FOR BIDDERS $1,000,000 CITY OF KENAI, ALASKA GENERAL PURPOSE GENERAL OBLIGATION BONDS, 1971 THE BONDS The $1,000,000 Bonds, first part of a total authorization of $4,000,000 Bonds, are noncallable serial coupon bonds in the denomination of $5,000 dated August 1. 1971, and maturing August 1, 1972-81, inclusive. Principal of and semiannual interest (February 1 and August 1) on the Bonds will be payable at the Kenai Branch of the National Bank of Alaska. Kenai. Alaska, or the main office of the Seattle Trust & Savings Bank, Seattle, Washington, or the main office of the Chemical Bank, New York, New York. BOND RATINGS Ratings for this bond issue have been requested from Moody's Investors Service, Inc., and Standard & Poor's Corporation. The most recent previous issue of general obligation bonds of the City, $340,000 General Purpose General Obligation Bonds, 1970, dated April 1, 1970, were rated Baa by Moody's. PROPOSALS FOR BONDS Sealed bids for the purchase of the Bonds will be received on July 28, 1971, until 10:00 a.m., Alaska Daylight Time, at the Chambers of the City Council of the City of Kenai, Alaska, and until 12:00 noon, Pacific Daylight Time, at the office of Preston, Thorgrimson, Starin, Ellis & Holman, 2000 IBM Building, Seattle, Washington, at which time all bids received will be publicly opened and read. The bids will be considered and acted upon by the City Council at a meeting to be held at 8:00 p.m., Alaska Daylight Time, on the same date. Complete details of the terms of the bond sale will be found in the Official Notice of Bond Sale included herein, beginning on Page 5. SECURITY These Bonds constitute, in the opinion of Bond Counsel, direct and valid general obligations of the City of Kenai payable from ad valorem taxes to be levied upon all taxable property within the City without limitation as to rate or amount. In addition, the City, with approval of the voters on May 25, 1971, has enacted a 1 per cent consumer retail sales tax on all retail sales, rents and services within the City effective July 1, 1971. This tax will be in effect five years, and the tax income is pledged to the retirement of bonds approved in the total amount of $4,000,000 at the election of May 25,1971, of which these Bonds are the first issue. The City estimates the sales tax will yield a minimum of $160,000 a year. Property specially benefited by the water, sewer and street improvements financed by part of the proceeds from the sale of these Bonds will be subject to assessments which may be levied and applied toward debt service on the Bonds. The City estimates assessments totaling $282,750 will be levied in connection with these improvements. AUTHORITY FOR ISSUANCE OF BONDS The $1,000,000 Bonds are issued pursuant to Resolution No. 71-12 of the City Council of the City of Kenai adopted May 5, 1971 · approval of the electorate at a special election held May 25, 1971, and pursuant to Ordinance No. 201 setting forth the provisions for the issuance and sale of the Bonds adopted by the City Council on July 7, 1971. LEGAL OPINION The opinion of Preston, Thorgrimson, Starin, Ellis & Holman, Bond Counsel, of Seattle, Washington, approving the legality of the issuance of these Bonds, will be furnished the successful bidder and will be reproduced on each of the Bonds at the expense of the City of Kenai. TAX EXEMPT STATUS In the opinion of Bond Counsel, the interest on these Bonds is exempt from all present Federal income taxes. EXCERPTS FROM CITY OF KENAI, ALASKA ORDINANCE NO. 201 AN ORDINANCE OF THE CITY OF KENAI, ALASKA, PROVIDING FOR THE ISSUANCE AND SALE OF $1,000,000 OF GENERAL PURPOSE, GENERAL OBLIGATION BONDS OF THE CITY OF KENAI, FOR THE PURPOSE OF PROVIDING FUNDS TO DESIGN, PLAN, ACQUIRE, CON- STRUCT, INSTALL AND EQUIP A CIVIC CENTER COMPLEX, ADDI- TIONS AND IMPROVEMENTS TO THE WATER SYSTEM, ADDITIONS AND IMPROVEMENTS TO THE SEWER SYSTEM, A FIRE AND POLICE STATION, ADDITIONS AND IMPROVEMENTS TO THE MUNICIPAL AIRPORT, ADDITIONAL PARK AND RECREATION FACILITIES, A NEW SMALL BOAT HARBOR AND IMPROVEMENT TO STREETS AND ROADS; FIXING THE DATE, FORM, TERMS AND MATURITIES OF SUCH BONDS; AND DECLARING AN EMERGENCY. WHEREAS, at a special election held in the City of Kenai, Alaska, on May 25,. 1971, pursuant to Resolution No. 71-12, adopted May 5, 1971, the provisions of the Charter of the City of Kenai and other proceedings duly and regularly taken, the qualified voters of the City authorized the issuance of general obligation bonds of the City in the following amounts for the following purposes: 1. $800,000 to plan, acquire, install and equip a civic center complex for the City including an auditorium convention center, a library health center, conference rooms, kitchen and swimming pool, together with all necessary utility and appurtenances; 2. $1,421,282 to plan, acquire, construct and install certain capital improvements to the water supply and distribution of the City, including a 21" trunk line from the Kenai River above Eagle Rock to the industrial complex north of the City, a second artesian well, an elevated storage facility, a transmission line from the City to Wildwood Air Force Station, improvements necessary to loop a major portion of the water supply and distribution system and additional laterals in areas of the City not now served; 3. $350,000 to plan acquire, construct and install capital improvements to the sanitary sewer system of the City, including a west interceptor line and lift station in the Mommsen area, an east interceptor line, an airport interceptor line, a new primary and secondary treatment plant and additional laterals to serve areas of the City not now served: 4. $450,000 to plan, acquire, construct and equip a fire and police station for the City of Kenai, together with all necessary equipment and appurtenances; 5. $526,587 to plan, acquire and construct a cargo ramp, general aviation terminal and access road improvements to the Kenai Municipal Airport; 6. $79,682 to plan. acquire, construct and install additional parklands and facilities, a new rifle range and oval track, and to fence and screen the existing parklands from the municipal cemetery; 7. $25,000 to plan, make preliminary site preparations, construct, install and equip a new small boat harbor for the City of Kenai; and 8. $347,449 to construct, install and make certain capital improvements to the streets and roads of the City of Kenai, including grading, widening, graveling and paving thereof; and WHEREAS it is deemed necessary and to the best interests of the City and its inhabitants that the City now issue the following amounts of such authorized bonds for the following purposes: Civic Center - $40,000 Water system - $100,000 Sewer system - $100,000 Fire & police station - $450,000 Kenai Airport - $35,000 Park and recreation facilities - $35,000 Small boat harbor- $5,000 Street improvements - $235,000; and WHEREAS it is necessary that the date, form, terms and maturities of such bonds be now fixed; NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That for the purpose to design, plan, acquire, construct, install and equip a civic center complex, additions and improvements to the water system, additions and improvements to the sewer system, a fire and police station, additions and improvements to the municipal airport, additional park and recreational facilities, a new small boat harbor and improvements to streets and roads, the City shall issue and sell its general purpose general obligation bonds in the aggregate principal amount of $1,000,000 out of the $4,000,000 of bonds authorized by the qualified voters of the City at the special election held therein on May 25, 1971, pursuant to Resolution No. 71-12 adopted May 5, 1971. Said $1,000,000 of bonds shall be sold as one issue... 10 Salmon Fishing is an Important Part of the Economic Base of Kenai. LEGAL DEBT LIMIT State law imposes no debt limit upon Alaska cities. However, the Kenai Municipal Charter establishes the following limitation upon City debt: Maximum general obligation indebtedness of the City incurred for all public purposes is an amount equal to 20 per cent of the assessed valuation (real and personal) of the City. This limitation does not apply to revenue bonds when the only security for the bonds is the revenue of a City enterprise, nor to bonded indebtedness to be paid from special assessments on benefited property, nor to refunding indebtedness. In determining the net indebtedness of the City subject to the debt limitation, there may also be deducted from the amount of outstanding general obligation debt any amounts credited to, or on deposit for, general obligation debt retirement and any portion of reserve funds or accounts pledged to the payment of the principal amount of any outstanding general obligation bonds. The genera'l obligation debt of the City of Kenai is well within the debt limitation. As shown in the Financial Statement on Page 12, of the $2,820,000 General Obligation Bonds (including this issue of $.1,000,000 Bonds) outstanding as of June 30, 1971, the remaining principal and interest payments 11 on the $.90,000 General Obligation Water and Sewer Bonds, 1964, are fully secured by special assessments and cash in the Bond Redemption Fund. Therefore, the debt limitation does not apply to those bonds. In addition, the remaining $2,730,000 Bonds are partially offset, for the purpo'se of establishing the debt limitation, by special assessments of $649,273 and cash in the Bond Redemption Funds in the amount of $64,855, leaving a 'net general obligation debt of $2,015,872 subject to the debt limitation. This net debt represents 4.60 per cent of the assessed valuation of real and personal property within the City of $43,870,157. FINANCIAL STATEMENT CITY OF KENAI As of June 30, 1971 Assessed Valuation, 1971: Real Property Personal Property (Basis of Assessment: 100% of Actual Value) General Obligation Bonds Outstanding, including this issue Less: (~) 1964 Water and Sewer Bonds (2) Assessments Receivable (.3) Cash in Bond Redemption Funds Net Direct Debt $35,772,687 8,097,470 90,000 649,273 64,855 $43,870,157 $ 2,820,000 804,128 $ 2,015,872 Estimated Overlapping General Obligation Debt: Kenai Peninsula Borough Net Direct and Overlapping Debt Ratio of Net Direct Debt to Assessed Valuation Ratio of Net Direct and Overlapping Debt to Assessed Valuation 4.6O% 9.59 2,192,397 $ 4,208,269 Population, 1970 U.S. Census- 3,533 Assessed Valuation per Capita Net Direct Debt per Capita Net Direct and Overlapping Debt per Capita $12,417.25 570.58 1,191.13 (1) Total principal and interest payable to maturity is $110,250, against which the following offsets apply: Cash in 1964 Bond Redemption Fund Assessments Receivable $ 77,475 66,862 T o tal $144,337 (2) Exclusive of Assessments Receivable for 1964 Bonds. (3) Exclusive of Cash in 1964 Bond Redemption Fund. 12 TAX COLLECTION RECORD CITY OF KENAI As of June 30, 1971 Assessed Millage Year Valuation Rate Levy Amount Collected Per Cent Collected Current and Delinquent 1970-71 *$43,485,000 8 $347,880 $342,135 98.35% 1969-70 29,600,100 10 296,001 286,866 96.91 1968-69 18,273,800 10 182,738 181,951 99.57 1967-68 12,408,370 10 124,084 124,084 100.00 1966-67 8,945,750 10 89,458 89,458 100.00 *-Includes $35,500,000 real and $7,985,000 personal property. Previous years include real property only. NOTE- Taxes are payable in two installments on August 15 and November 15. If the first installment is not paid on or before August 15, the entire tax becomes delinquent. GENERAL FUND CITY OF KENAI STATEMENT OF INCOME AND EXPENSE Year Ended June 30 Revenue Expense Net Income 1971 $605,729 $563,186 $42,543 1970 539,975 538,345 1,630 1969 290,855 343,961 (53,106) 1968 248,306 251,557 ( 3,251 ) 1967 131,456 152,584 (21,128) 1966 193,140 152,158 40,982 NOTE' General Fund balance as of June 30, 1971, was $24,379. WATER AND SEWER DEPARTMENT CITY OF KENAI STATEMENT OF INCOME AND EXPENSE Year Ended June 30 Revenue Expense ,,, ..... 1971 $100,728 $ 96,716 1970 97,687 76,173 1969 75,521 64,199 1968 42,275 36,617 1967 43,090 34,136 1966 41,682 49,694 Net Income $ 4,012 21,514 11,322 5,658 8,954 (8,012) 13 DEBT SERVICE REQUIREiVl'ENTS CITY OF KENAI GENERAL OBLIGATION BONDS As of June 30, 1971 Year 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 '1986 1987. 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Principal 40,000 50,000 50,000 55,000 55,000 55,000 60,000 65,000 65,000 60,000 60,000 60,000 65,000 65,000 70,000 75,000 80,000 85,000 90,000 90,000 65,000 70,000 70,000 75,000 80,000 80,000 85,000 $1,820,000 Interest 53,188.75 03,677.50 00,577.50 97,477.50 94,077.50 90,677.50 87,277.50 83,377.50 79,277.50 75,252.50 71,502.50 67,577.50 64,017.50 60,187.50 56,347.50 52,037.50 47,53.1.25 42,567.50 37,470.00 32,100.00 27,825.00 24,380.00 20,670.00 16,960. O0 12,985.00 8,745.00 4,505.00 ,,, $1,512,270.00 Total R~uirement 93,188.75 153,677.50 150,577.50 152,477.50 149,077.50 145,677.50 147,277.50 148,377.50 144,277.50 135,252.50 131,502.50 127,577.50 129,017.50 125,187.50 126,347.50 127,037.50 127,531.25 127,567.50 127,470.00 122,100.00 92,825.00 94,380.00 90,670.00 91,960.00 92,985.00 88,745.00 89,505.00 $3,332,270.00 REVENUE BONDS OUTSTANDING CITY OF KENAI As of June 30, 1971 Electric Light & Power Bonds Airport Terminal Bonds $853,000 420,000 14 Apartment Building in K enai. Kenai Residential Street. KENAI -"Oil Capital of Alaska" Kenai is the second-oldest permanent settlement in Alaska, dating back to its founding in 1791 as a Russian fur trading post on the Kenai Peninsula of Southcentral Alaska some 76 years before the purchase of Alaska from Russia in 1867. Located on Cook Inlet at the mouth of the Kenai River 65 miles south of Anchorage, Kenai long was a small fishing and fish-processing community until 1957 when the discovery of oil nearby ushered in an entirely new economic era dwarfing all that had preceded it. The ensuing development of the petroleum resources of the region with Kenai serving as the field headquarters of operations and services brought the community the official designation of "Oil Capital of Alaska" by the Governor of Alaska. With the change of the oil and gas industry from the rapid expansion of exploration and development of the 1960s to the status of steady production, the growth of the City has also stabilized, and the current population is estimated to be approximately the same as the population reported by the 1970 U.S. Census, 3,533. The population of Kenai (U.S. Census) and the estimated population of the Greater Kenai Area have grown as follows: Year City of Kenai Greater Kenai Area, Est. 1970 3,533 7,300 1960 778 1,700 1950 321 500 CITY GOVERNMENT AND SERVICES Kenai was incorporated as a home-rule city of the first class on May 10, 1960, and is organized under a Mayor and six-member City Council with a City Manager employed as the chief administrative officer. The Mayor and Council members are elected at large on a non-partisan basis. The City operates water and sewer systems which were installed initially in 1964, financed by a $420,832 Federal grant and the sale of a $150,000 general obligation bond issue of the City. Since 1964, the facilities have been expanded to meet the growing needs of the City, financed by a $502,500 Federal grant and the sales of $1,000,000 general obligation bonds in 1967, $60,000 general obligation bonds in 1969, and $340,000 general obligation bonds in 1970. In 1963, the City acquired the electric distribution properties of the Kenai Power Corporation. Kenai City Light serves 1,014 customers. Also in 1963, the City acquired the Kenai airport and a total of 1,600 acres from the Civil Aeronautics Administration. The City has lengthened the airport's paved runway from its original 5,000 feet to 7,500 feet and has constructed a $495,000 Air Terminal Building. The additional acreage owned by the City has been planned for long-range development in subdivisions dedicated for sale or lease to commercial and service businesses, and a substantial share of the recent development of private enterprises serving Kenai has been in these areas. A notable example is the Cook Inlet Industrial Air Park adjacent to the Municipal Airport begun in 1966 with the assistance of a grant of $262,000 from the Economic Development Administration. This 44-1ot project 'is dedicated to firms serving the offshore oil developments in Cook Inlet. The development of Kenai ~is being guided by the "1980 General Plan," a comprehensive plan prepared for the City by the Alaska Housing Authority in 1962. Annexations pursuant to the Plan have brought the area within the incorporated limits to approximately 55 square miles, making Kenai the largest city of Alaska in area and giving the community ample room for development. 16 Phillips-Marathon Gas Liquefaction Plant. Collier Carbon & Chemical Corporation Ammonia/Urea Plant. 17 KENAI PENINSULA BOROUGH The Kenai Peninsula Borough was created as a borough of the second class by a vote of the electorate on December 3, 1963, pursuant to the provisions of the State of Alaska Borough Act of 1961, as amended in 1963. The Borough comprises the Kenai Peninsula of Southcentral Alaska and includes, in addition to the City of Kenai, the cities of Homer, Seward, Seldovia and Soldotna. The population of the Borough is 15,836 (U.S. Census, 1970). The Borough is responsible for education, taxation, planning and zoning within its limits and assesses and collects taxes for itself, for the Kenai Peninsula Borough School District and for the cities within the Borough. The governing body of the Borough is the Borough Assembly, which includes two representatives each from the cities of Kenai and Seward, one representative each from the cities of Homer, Seldovia and Soldotna, and eight members elected from' the area outside of the cities. The chief executive officer of the Borough is the elected Borough Chairman, who retains a veto power over the Assembly. The Kenai Peninsula Borough School District operates three schools at Kenai: Sears Elementary School, Kenai Middle Grade School, and the Kenai Regional High School. The District also is a co-sponsor with the University of Alaska of the Kenai Peninsula Community College. Pupil enrollment in grades 1 through 12 in the three schools in Kenai has been as follows: School Year Enrollment School Year Enrollment 1963-64 675 1967-68 1,391 1964-65 787 1968-69 1,751 1965-66 893 1969-70 2,062 1966-67 1,121 1970-71 1,929 PETROLEUM AND NATURAL GAS The Atlantic Richfield Company (then the Richfield Oil Corporation) brought in its first oil well in the Swanson River oil field 20 miles northeast of Kenai on July 19, 1957, and the first discovery of vast gas reserves in the region was made in an area 6 miles south of Kenai in 1959. Further oil discoveries have been made offshore in Cook Inlet so that there are now four additional oil fields in production - Middle Ground Shoal, Granite Point, Trading Bay and McArthur River. A fifth oil field, Redoubt Shoal, is not yet in production. Fourteen permanent offshore drilling platforms capable of drilling 32 to 48 wells each have been constructed in the Inlet. Combined oil production from the Swanson River field and the Inlet platforms has reached 220,000 barrels per day. The total oil reserve in the Cook Inlet-Kenai Peninsula region is estimated at 1.5 billion barrels. Of eighteeen gas fields discovered in the region, eight are in production. Among the leaders, the Kenai gas field supplies gas for local markets and the City of Anchorage as well as for repressuring 'the Swanson River oil field to increase production. Accompanying the development of the oil and gas resources has been the construction of pipelines, marine terminals and the other extensive facilities necessary to handle the oil and gas once it is brought to the surface. Most of the crude oil produced is shipped by tankers to West Coast refineries although two refineries have been built near Kenai. Standard Oil COmpany of California operates a 23,000-barrels-per-day refinery at Nikiski producing heating oils, diesel oil and jet fuels for the Alaska market. Chevron Asphalt Company, a subsidiary of Standard, operates Alaska's first plant 18 ~VAN RIVER GAS FIELD BELUGA RIVER GAS FIELD .4!ii~ COOK INLET GAS FIELD GRANITE POINT OIL FIELD TRADING BAY OIL FIELD MIDDLE GROUND SHOAL OIL FIELD NIKISKI TERMIN MAP: Oil and Gas Fields of Cook Inlet Basin. for producing paving asphalt at the refinery. Alaska's second refinery, a 17,500-barrels-per-day facility owned by Tesoro-Alaskan Petroleum Corporation, produces all grades of fuel up to automobile gasoline. The Tesoro-Alaska plant refines oil obtained under contract from the State of Alaska and which is part of the State's royalty oil from the Cook Inlet oil fields. Tesoro operates three other refineries in the United States. 19 Gas Reinjection Plant on Swanson River Oil Field. Natural gas is the basis for two large industrial developments completed in 1969 near Kenai. Collier Carbon & Chemical Corp., a subsidiary of Union Oil Company of California, has built a $55-million petrochemical facility which includes the largest ammonia plant on the West Coast and the world's largest plant for the production of prilled urea fertilizer. The facility has a capacity to manufacture 530,000 tons of ammonia from natural gas a year and, from a portion of the ammonia production, 350,000 tons of prilled urea annually. The products are distributed in the industrial, chemical and agricultural markets of the Western Hemisphere. The second major gas-based industrial developrrient is the $57-million gas liquefaction plant built by Phillips Petroleum Company and Marathon Oil Company. The output of this plant is shipped by two specially built 450,000-barrel refrigerated tankers to Japan for the Tokyo Gas Company and Tokyo Electric Power, Inc. Phillips operates the production plant, and Marathon handles the tankers. Marathon is also building a $3,000,000 natural gas extraction plant on Cook Inlet for the production of butane. Alaska Barite Company manufactures drilling mud at Kenai for drilling operators. FISHING Commercial fishing has long been a vital segment of Alaska's economy. Cook Inlet is an important salmon-production area, and the Kenai River is known for the largest salmon run in the world. Some 200 fishing boats operate out of Kenai. Figures released by the Alaska Department of Fish and Game show the 1970 Cook Inlet salmon catch totaled 19,700,000 pounds valued at $8,800,000. Crab and shrimp added 11,000,000 pounds and $3,800,000 value of fishery production. While salmon and, to a lesser extent, halibut have provided the primary source of fisheries revenue in Alaska, recent expansion to include the year-round harvesting of crab and other shellfish has strengthened the industry. Although the fishing industry is subject to fluctuation, stringent conservation measures by regulatory agencies and the fishermen coupled with greater development of the resource assure the continued prosperity of the industry. Fish processers with plants at Kenai included Columbia Ward, Kenai Packers and R-Lee Seafoods. 20 Columbia Ward Salmon Cannery. AGRICULTURE The growing season is approximately 100 days, but the extra hours of summer daylight compensate for the relative shortness of the season and agricultural yields are excellent. Some 600 homesteaders have settled in the area. Dairying and truck farming are expanding occupations, and the recent growth of population in the Kenai area should spur further agricultural activity to supply the demand. WILDWOOD AIR FORCE STATION , Wildwood Air Force Station outside Kenai, which was established by the U. S. Army in 1953 and subsequently transferred to the Air Force, is an important link in the communications system of Alaska and the center for the automatic computer network for the Air Force in Alaska. Population of the Station is 750 military personnel and their dependents. The Station is an electric customer of Kenai City Light. TRANSPORTATION AND UTILITIES Oceangoing barges provide heavy freight service to Kenai. Docking facilities include those of the Inlet Company at Kenai and the Port Nikiski Dock eight miles north of Kenai. Special facilities have also been built for the tankers serving the petroleum and gas industry. Scheduled air transportation is provided by Wien Consolidated Airlines and, between Kenai and Anchorage, by Alaska Aeronautical Industries, Inc. 21 Kenai is connected to other communities of the Kenai Peninsula and Anchorage by a highway which joins the Sterling Highway between Anchorage and Homer at the Soldotna junction. Kenai is 157 miles from Anchorage by the highway. In addition to the City-owned utilities, Kenai is served by the Glacier State Telephone Company, a subsidiary of the Continental Telephone Corporation. Natural gas service is provided to 621 customers at Kenai and to the Wildwood Air Force Station by the Kenai Utility Service Corporation. The Homer Electric Association provides electric service in the region and has a number of customers now inside the city limits of Kenai. RECREATION Sportsmen find that the Kenai Peninsula forest, which is 10art of the Chugach National Forest, abounds with the world's largest moose, black and brown bear, dali sheep, mountain goat and many smaller fur-bearing animals. The many lakes and streams yield trout and grayling. Grouse, ptarmigan and spruce hens are abundant, and the summer brings ducks.and geese. Canoeing is a popular recreational activity, and a 150-mile canoe system linking 70 lakes has been established in the 1,730,000-acre Kenai National Moose Range. Facilities for camping, hiking and skiing are also provided in the National Forest. CLIMATE Temperatures at Kenai are generally mild for Alaska thanks to the effect of the warming Japanese current that reaches into Cook Inlet. Winters average 20 degrees above zero, and the area is sheltered from winds. Snow is on the ground between October and late April with mid-winter depths usually passing the 12-inch mark. Summer temperatures seldom exceed 70 degrees, and the maximum recorded temperature is 82 degrees. The shortest period of daylight in winter is six hours, but the summer days have up to 22 hours of daylight. BANKING SERVICES The National Bank of Alaska, Anchorage (total deposits of $185,645,600 as of December 31, 1970) and the Alaska State Bank, Anchorage (total deposits of $56,340,699 as of December 31, 1970) each maintain branch offices in Kenai. ECONOMIC INDICES -CITY OF KENAI Year *Postal Receipts Building. Permits 1970 $159,552 $1,240,000 1969 164,120 1,077,000 1968 114,159 7,395,100 1967 63,240 7,518,191 1966 49,441 2,103,425 1965 41,756 444,705 1964 45,630 570,290 1963 24,376 1,752,155 1962 22,889 1,045,050 * - Figures for postal receipts are for fiscal year ended June 30. Receipts for the year ended June 30, 1971, totaled $156,410. 22 Kenai Packers Cannery, top, and Alaska Barite Company Ship's Hull Converted into Plant for Manufacturing Drilling Mud. Enclosed Mall Shopping Center in Kenai. MINUTES OF KENAI CITY COUNCIL SPECIAL bIEETING JULY 28, 1971 8'00 P.M. KENAI LIBRARY ROLL CALL' Members present - Robert Bielefeld, James Doyle, James Hornaday, Hugh Malone, and Mayor John Steinbeck. Members absent - Tru McGrady and Robert Norene. A - 1 Acceptance of bids - $1,000,000 G2neral Purpose ~-eneral Oblioation Bonds, 197i The administration opened the bids at 10'00 A.M. morning. The bids were' this Marshall and Meyer First National Bank of l~.enver National Bank of Alaska Bank of Americai The administration recommends of Bank of America at 5.8175% 6.2270 6.1772 6.1154 5.8175 accepting the lOw bid Bielefeld moved and Doyle seconded to adopt Resolution 71-32 - Accepting the bid of Bank of America N.T. & S.A. and Merrill, Lynch, Pierce, Fenner, and Smith Incorporated, Joint Managers and As'sociates. The motion carried unanimously by roll call vote. The clerk was instructed to send a telegram to the Bank of America accepting the b'ids. There will be a Council work session Friday night,. July 30, 1971, at 8'00 P.M. in the City Manager's Office. The City Manager reminded Council of the public hearing on the Soldotna sewer outfall Saturday at 2'00 P.M. in the Little Theatre at the Kenai Central High. School Meeting adjourned 8'50 P.M. Respectfully submitted, Sharon' Sterling ACting City Clerk