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HomeMy WebLinkAboutOrdinance No. 3108-2020Sponsored by : Administrat ion CITY OF KENAI ORDINANCE NO. 3108-2020 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE GENERAL LAND SALE PERMANENT FUND TO TRANSFER EARNINGS IN EXCESS OF BUDGETED AMOUNTS TO THE CITY'S GENERAL FUND . WHEREAS, Article 5, Section 5-11 of the City's Charter, requires the proceeds from the Sale of all City owned, non-trust lands be deposited in a separate fund, the General Land Sale Permanent Fund , and allows for the investment earnings to be used for any lawful purpose but prohibits the expending of the proceeds from land sales; and , WHEREAS, the General Land Sale Permanent Fund's 2019-year ending balance of $3,430,972 was an increase of $500,494 from the December 31 , 2018 balance. The allowable transfer to the General Fund for operations is limited to 4% annually and excess earnings are reserved to supplement spending when portfolio earnings are less than the 4% limit in any given year; and, WHEREAS , 2019 portfolio earnings exceeded the 4% spending limit after accounting for inflation , thus the 2019 annual transfer is limited to $137,239 (4% of the Fund's value) and all other earnings will be credited to the earnings reserve ; and , WHEREAS, after deducting the allowable transfer, the earnings reserve at calendar year end was $379 ,000 ; and , WHEREAS, the FY2020 budgeted amount for the General Land Sale Permanent Fund was $124,252 mean ing the actual will be $12 ,987 more than budgeted and increasing the transfer amount to the maximum amount is in the City 's best interest. NOW , THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. That the estimated revenues and appropriations in the General Land Sale Permanent Fund be increased as follows: General Land Sale Permanent Fund : Increase Estimated Revenues - Investment Earnings Increase Appropriations - Transfer to General Fund New Te xt Underlined; [DELETED TEXT BRACKETED] $12.987 $12,987 Ordinance No. 3108-2020 Page 2 of 2 Section 2. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, pro vision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances . The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision , or application . Section 3. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect upon adoption. ENACTED BY THE COUNCIL OF THE CITY OF KENAI , ALASKA, this 4th day of March, 2020. b~~ BRIAN GABRIEL SR., MAYOR ATTEST : New Text Underlined; [DELETED TEXT BRACKETED] ''(/;ff~ t11/tli a Pa~t, tt'tj t11/t/i a f"atare 11 210 FidalgoAve , Kenai , Alaska 99611 -7794 Telephone: (907) 283-7535 I Fax: {907) 283-3014 www.kenai .city MEMORANDUM TO: THROUGH : FROM: DATE: SUBJECT: Mayor Brian Gabriel and Kenai City Council Paul Ostrander, City Manager Terry Eubank, Finance Director February 11 , 2020 Ordinance No. 3108-2020 -GLSPF Appropriation Increase The purpose of this memo is to recommend passage of Ordinance 3108-2020 . This Ordinance will increase the authorized transfer amount from the General Land Sale {GLSPF) to the City's General Fund for FY20 . This increased amount is possible because earnings were higher than projected for calendar year 2019. GLSPF Pursuant to KMC 7.3 0 .020 {a) (5) the annual transfer from the GLSPF shall be limited to the lesser of the cumulative earnings at calendar year end for the fund or four percent {4 %) of the fund's fair market value as of December 31st of each year. "Cumulative earnings" is defined as the market value at calendar year end minus the fund 's inflation adjusted principal balance. The December 31, 2019 market value of the GLSPF was $3,430,972 with cumulative earnings of $516,239. December 31, 2019 Portfolio Value 4% of Portfolio Value Cumulative Earnings FY20 Allowable Transfer $3,430,972 $137 ,239 $516 ,239 $137,239 The FY20 budgeted transfer amount was $124,252. This Ordinance will increase the budgeted transfer amount to the maximum value of $137,239, an increase of $12,987. Your support for Ordinance 3108-2020 is respectfully requested.