HomeMy WebLinkAboutOrdinance No. 3272-2022KENAI
CITY OF KENAI
ORDINANCE NO. 3272-2022
Sponsored by: Administration
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 2021 -year ending balance of $3,926,077
was an increase of $282,322 from the December 31, 2020 balance after the FY2021 withdrawal
of $145,750; and,
WHEREAS, 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, the December 30, 2021 earnings reserve balance was $766,941, thus the FY2022
transfer is limited to $157,043 (4% of the Fund's value); and,
WHEREAS, after deducting the FY2022 allowable transfer, the earnings reserve balance will be
$609,898; and,
WHEREAS, the FY2022 budgeted transfer from the General Land Sale Permanent Fund was
$148,315, meaning the actual will be $8,728 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 $8.728
Increase Appropriations —
Transfer to General Fund $
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Ordinance No. 3272-2022
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, provision, 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
immediately upon enactment.
ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 16`h day of February,
2022.
ATTEST:
ice a Sa er, MC'CCiity�Cleerrk
Approved by Finance: /
BRIAN GABRIEL SR., MAYOR
Introduced: February 2, 2022
Enacted: February 16, 2022
Effective: February 16, 2022
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KENAI
City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www.kenai.city
MEMORANDUM
TO: Mayor Gabriel and Council Members
THROUGH: Paul Ostrander, City Manager
FROM: Terry Eubank, Finance Director
DATE: January 25, 2022
SUBJECT: Ordinance No. 3272-2022 — GLSPF Appropriation Increase
The purpose of this memo is to recommend passage of Ordinance 3272-2022. This Ordinance
will increase the authorized transfer amount from the General Land Sale (GLSPF) to the City's
General Fund for FY22. This increased amount is possible because earnings were higher than
projected for calendar year 2021.
GLSPF
Pursuant to KMC 7.30.020 (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, 2021 market value of the GLSPF was $3,926,077 with cumulative earnings of
$428,072.
December 31, 2021
Portfolio Value $3,926,077
4% of Portfolio Value $157,043
Cumulative Earnings $766,941
FY21 Allowable Transfer $157,043
The FY22 budgeted transfer amount was $148,315. This Ordinance will increase the budgeted
transfer amount to the maximum value of $157,043, an increase of $8,728.
Your support for Ordinance 3272-2022 is respectfully requested.