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HomeMy WebLinkAboutOrdinance No. 3319-2022KENAI CITY OF KENAI ORDINANCE NO. 3319-2022 Sponsored by: Administration AN ORDINANCE INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE KENAI BLUFF EROSION CAPITAL PROJECT FUND FOR CONSTRUCTION OF THE KENAI BLUFF STABILIZATION PROJECT. WHEREAS, the Kenai Bluff Stabilization project has been the number one priority of the City of Kenai for over 30 years; and, WHEREAS, in February of 2022 the project received federal funding in the amount of $28 million; and, WHEREAS, federal funding will cover 65% of the total cost of construction of the Project; and, WHEREAS, the City's match requirement towards construction of this project is 35%; and, WHEREAS, the City has been pursuing funding for our local match through multiple sources, including the State of Alaska; and, WHEREAS, during the State fiscal year 2022 legislative session, $6.5 million was included in the State capital budget to support the Project; and, WHEREAS, appropriation of this $6.5 million Alaska Legislative Grant will help support the City's 35% match requirement and is in the best interest of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS FOLLOWS: Section 1. That the following budget revision is authorized: Kenai Bluff Erosion Capital Project Fund: Increase Estimated Revenues — State Grants $ .500.000 Increase Appropriations — Construction $�� 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. New Text Underlined; [DELETED TEXT BRACKETED) Ordinance No. 3319-2022 Page 2 of 2 ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 19T" DAY OF OCTOBER, 2022. ATTEST: &4i Michelle . San MM , City Clerk Approved by Finance: y114-- Brian Gabriel Sr., Mayor Introduced: Enacted: Effective: New Text Underlined, [DELETED TEXT BRACKETED] October 5, 2022 October 19, 2022 October 19, 2022 K E N A City of Kenai 1210 Fidalgo Ave, Kenai, AK 99611-77941 907.283.75351 www.kenaixity MEMORANDUM TO: Mayor Brian Gabriel and City Council Members FROM: Paul Ostrander, City Manager DATE: September 29, 2022 SUBJECT: Ordinance 3319-2022 and Resolution 2022-71 - Kenai Bluffs Stabilization, State of Alaska $6.6 Million Grant This memo is in support of both Ordinance 3319-2022 and Resolution 2022-71, legislation that authorizes the City Manager to execute a grant in the amount of $6.5 million from the Alaska Department of Commerce, Community, and Economic Development, Division of Community and Regional Affairs and appropriates the money into the Kenai Bluff Erosion Capital Project Fund to support construction of the Project. During the last State Legislative Session, the City was successful in getting this grant included in the State's Capital Budget. This grant is an important component of the City's required match of 35% of the total cost of the Project. With this grant, the City will have secured the necessary money to meet our required match if the project's total cost, design and construction, does not exceed $35,000,000. As we approach the completion of the efforts to get this important project built, a summary of the process that the City has navigated over the past 6 years is included for you information. February 17, 2017 — City of Kenai attended the Tentatively Selected Plan (TSP) presentation given by Alaska USACE to the USACE HQ in Washington D.C. Signed Directors Report was scheduled for November 10, 2017. June 10, 2017 — Schedule for Signed Directors Report slipped to April 31, 2018. June 19, 2017 — Draft integrated feasibility report, environmental assessment and draft Finding of No Significant Impact (FONSI) was issued for agency and public comment. July 5/6, 2017 — Public meetings held in Kenai, AK at the City Council Meeting on July 5 and at the Kenai Visitor and Cultural Center in Kenai on July 6. August 22, 2017 — Realization by the USACE that additional federal funding was necessary in the amount of $150,000 for the USACE to meet its 50% funding requirement to complete the feasibility report. The City of Kenai provided their full funding amount of $560,000 in February 2016. A congressional reprogramming request was submitted through OMB. February 22, 2018 — OMB approves reprogramming request. The reprogramming request was delayed to the point that authorization for the project — expiring on May 12, 2018 — would lapse prior to Directors Report signature. March 6, 2018 — Letter sent to Committee on Appropriations and the respective Committee Chairs. April 4, 2018 — USACE Alaska District recognizes the need to request a waiver from the Assistant Secretary of the Army of Civil Works to extend the project authorization beyond May 12, 2018, but does not have sufficient funds left to process the waiver. April 12, 2018 — Reprogramming approval signed by Representative Marcy Kaptur and Representative Mike Simpson, appropriating an additional $150,000 of Federal money to the project. April 26, 2018 — Time extension waiver package submitted to USACE HQ. April 31, 2018 — Second scheduled signature date for Directors Report is missed. Because of the significant lapse in project funding, other projects were re -prioritized in front of the Kenai project; hence, the scheduled date for the signed Directors Report is changed to January 23, 2019, to allow time for USACE Alaska District to take the project back up and finalize the feasibility report package. May 11, 2018 — Time extension granted by R.D. James, Assistant Secretary of the Army of Civil Works, increasing the total study time for the Kenai Bluffs Bank Stabilization Feasibility Study from 36 months to 44 months. November 15, 2018 — Final integrated feasibility report and environmental assessment and finding of no significant impact submitted from USACE Alaska District to USACE HQ. January 23, 2019 — Third scheduled signature date for Director's Report was missed. Re- scheduled for signature in late February. March 1, 2019 — Fourth scheduled signature date for Director's Report was missed. Re- scheduled for April 30, 2019. April 3, 2019 — Final submittal from USACE Alaska District to USACE HQ of feasibility report. Of note: according to USACE staff, nothing of substance changed from the feasibility report submitted on November 15, 2018 to this final report. April 10, 2019 — Director's Report was signed by USACE HQ Director Of Civil Works, James C. Dalton, P.E. This was the same day that Senator Murkowski testified in front of the appropriations subcommittee to the Assistant Secretary of the Army (Civil Works), R.D. James and to the Commanding General and Chief of Engineers Lieutenant General Todd Semonite, questioning why the USACE process was so difficult to navigate, using the Kenai Bluffs Stabilization project as an example. Page 2 of 4 i(C The City of Kenai I wwwlenai.city May 20, 2019 — Request from Alaska District to USACE HQ, signed by Colonel Phillip J. Borders to initiate Preconstruction Engineering and Design (PED) phase for the project with attachments from the City of Kenai including a letter committing the City to fully fund the PED phase at an estimated cost of $1,000,000 and a Resolution from the Kenai City Council stating the same. June 27, 2019 — A Finding of No Significant Impact (FONSI) Was signed by Colonel Phillip J. Borders, eliminating the need to prepare an Environmental Impact Statement. July 31, 2019 — The City sent a request to the USACE Alaska District to complete the Design Agreement. This agreement outlines the responsibilities of the non -Federal sponsor and the USACE during the design phase. September 15, 2020 — It took over 14 months to get the Design Agreement signed. Consistent communication with the USACE and our congressional delegation occurred during the entire period, but what should have been a much quicker turnaround labored for many months — far beyond what was expected or is reasonable. Although the Design Agreement implies that Federal Funding will be provided for the 65% match of the design effort, no Federal funding has been provided to date. February 2021 — The City issued an RFP for the design of the project planning to fund the entire design with City dollars, a $1,000,000 commitment with the intent of being reimbursed the 65% Federal obligation during construction. August 2021 — HDR Engineering begins the design of the project. As the design begins, there is a limited amount of Federal funding that the Alaska District of the Corps of Engineers has to support the efforts of the City during the design process. They are able to provide limited input, putting the City at risk because without Corps oversight, the design effort may not meet Corps requirements in all aspects. This could result in the Corps not accepting all or a portion of the design for construction. Because the Corps signed the Design Agreement in September of 2020, the City was hopeful that the full Federal share of $650,000 would be provided prior to the design effort beginning. Even though no Federal funding occurred, and considering the risks involved, the City strongly felt that it was essential to begin the design effort to keep the project moving forward. December 2021 — At the City's request, Governor Dunleavy included $6.5 million in State funding to support the City's efforts in the design and construction of our Project. If the legislature and the voters approve the Governor's proposed General Obligation Bond, this increases the total amount of match money the City has available to $9.5 million. This would be a sufficient match amount to construct an approximately $27 million project, with $17.5 million in Federal funding. February 2022 — The project received $28 million in Federal funding through the Infrastructure Bill. This funding is sufficient to support a $42 million project, comprised of $28 million in Federal funding and $14 million in local funding. April 2022 — Now with sufficient funding, the Army Corps of Engineers, Alaska District kicks off their full engagement in support of the design efforts of the Project. This engagement will slow the ultimate completion of the design, with design approval expected late in the 2022 calendar year, but will assure that the Project as designed meets the requirements of the Corps. / Page 3 of 4 The City of Kenai I www.kenai.city June 2022 — Governor Dunleavy signed the State of Alaska Fiscal Year 2023 budget. Included in the capital budget was $6.5 million in support of the Kenai Bluff Stabilization Project. September 2022 — The Federally committed funds of up to $28 million establishes the high end of total Project costs of $42 million. The Project will be funded 65% by the Army Corps of Engineers, and 35% through a local match. Our current construction estimates indicate that it is likely that the Project will not exceed $35 million. The City has secured $9.7 million in State funding, comprised of the $6.5 million that was included in the States fiscal year 2023 Capital Budget and $3.2 million that remains from State grants from 2012 and 2015. The City has also committed $2.55 million from our General Fund that was included in our 2023-2027 Capital Plan. This brings the total amount of secured match that the City has to $12.25 million, sufficient to support a total Project cost of $35 million, matching $22.75 million in Federal funding. Page 4 of 4 The City of Kenai I www.6naixity