HomeMy WebLinkAboutORDINANCE 0196-1971C~']'Y OF KENAI - ORDINAMCE 196-71
PROVIDING FOR THE LEASE OR LEASE PURCHASE OF THY ELECTRICAL DISTRIBUTION
SYSTEM OF THE CITY OF KENAI BY HOMER ELECTRIC ASSOCIATION, INC., AN
ELECTRICAL COOPERATIVE CORPORATION ORGANIZED UNDER THE LAWS OF THE
STATE OF ALASKA, SAID CONFIRMATION OF SALE TO BE APPROVED BY THE VOTERS
AT SUCH REFERENDUM ELECTION AS MAY BE DEEMED APPROPRIATE AND DECLARING
AN EMERGENCY.
WHEREAS, the City of Kenai has agreed to lease and authorize in such
lease an option for purchase, the electrical distribution facilities
of the City of Kenai to Homer Electric Association, Inc., an electrical
cooperative corporation organized under the laws of the State of Alaska,
best be approved at a referendum election, it is,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA:
Section l. The lease, or lease with an option for purchase, of the
elec%~ical distribution system of the City of Kenai, Alaska (sometimes
hereinafter called KCL) is hereby authorized and confirmed, and a
contract of lease or lease/sale and the administrative actions required
to accomplish such formal agreement with Homer Electric Association, Inc.,,
(sometimes hereinafter called ~EA) shall be incorporated in a written
contract approved by the City Council.
Section 2. It is hereby fou,,d and declared that the public health,
Welfare, safety, and convenience require the City to carry out a lease
purchase agreement with Homer Electric Association, Inc.,(sometimes
hereinafter called HEA) as hereinafter provided.
Section 3. That it is hereby determined that the property to be trans-
ferred pursuant to the agreement between the City and HEA, shall continue
the administration of said property in a public, or quasi-public entity,
and therefore, an appraisal of the property in question is not required,
for the purposes of the sale, in the event of exercise of option by HEA.
Section 4. That it is hereby found and determined that a competitive
~a'le of the property contemplated would not be in the public interest,
in that any non-governmental or so-called private power company would
have to increase electric consumer rates an estimated 12-18 percent
and for that reason, a sale for operation as a private utility would not
be in the public intercst.
Section 5. That in the event that option to purchase is exercised by
HEA, then 'the purchase price shall include, as a part of the consideration,
payment of sufficient sums to repay all of the outstanding obligations
of KCL in accordance with the covenants and conditions of existing or-
dinances for electrical revenue bonds sold by the City of Kenai for
the operation of the said electrical distribution system.
Section 6. That the City agrees that the ultimate obligation for repay-
~ent of the electric bonds shall remain the obligation of the City of
Kenai until such bonds are completely paid off by the City, with revenues
received from the lease of the svstem, in the event a complete purchase
is carried out by said HEA.
Section 7. It is found and determined that grant of a franchise by
the'city of Kenai required in view of provisions set forth in Title
42.04 of Alaska Statutes, which provides for the regulation of all public
utilities by the Alaska Public Utility Commission.
Section 8. This ordinance shall be submitted to the qua].tfied electors/
voters of the City of kenai at a referendum election.
Section 9. An emergency is hereby declared to exist and the rules
governing the introduction, reading, passage and approval of this
ordi~ance shall be effective immediately upon its passage.
First Reading 23 day of April, 1971.
Emergency declared 23 day of April, 1971.
PASSED 23 day of April, 1971.
City of Kenai
ATTEST:
~~g ~~C lerk
I
JOHN F. STEINBECK, Mayor