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HomeMy WebLinkAboutOrdinance No. 3400-2024�z KENAI CITY OF KENAI ORDINANCE NO. 3400-2024 Sponsored by: Administration AN ORDINANCE INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE AIRPORT LAND SALE PERMANENT FUND TO TRANSFER EARNINGS IN EXCESS OF BUDGETED AMOUNTS TO THE CITY'S AIRPORT FUND. WHEREAS, Kenai Municipal Code 7.30.010 established a fund to account for the proceeds from sale of land deeded to the City by the US Government for the benefit of the Kenai Municipal Airport; and, WHEREAS, Kenai Municipal Code 7.30.020(a)(5) provides for appropriations from the Airport Land Sale Permanent Fund at 3.8% or 4.2% of the funds five-year, December 31 st fair market value depending on the inflation adjusted principal balance; and, WHEREAS, the 2023 year-end market value of the fund was $28,316,544, the 2023 year-end inflation adjusted balance was $31,302,494, and the fund's five-year year-end average market value was $28,042,585; and, WHEREAS, as the five-year, year-end market value was less than the inflation adjusted balance at December 31,2023, the FY2024 annual transfer is limited to 3.8% pursuant to KMC 7.30.020(a)(5); and, WHEREAS, the allowable transfer for FY2024, 3.8% of the five-year, year-end market value, is $1,065,518 and the FY2024 budgeted transfer from the Airport Land Sale Permanent Fund was $1,053,636 meaning the actual transfer can be $11,983 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 Airport Land Sale Permanent Fund be increased as follows: Airport Land Sale Permanent Fund: Increase Estimated Revenues — Investment Earnings $ Increase Appropriations — Transfer to Airport Fund Ulm 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. 3400-2024 Page 2 of 2 ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THIS 6T" DAY OF MARCH, 2024. a ST- Michell an MC, City Clerk Approved by Finance: Brian Gabriel Sr., Mayor Introduced: February 21, 2024 Enacted: March 6, 2024 Effective: March 6, 2024 New Text Underlined; [DELETED TEXT BRACKETED] C7 K. _NA City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.75351 www.kenaixity MEMORANDUM TO: Mayor Gabriel and Council Members THROUGH: Terry Eubank, City Manager FROM: Dave Swarner, Finance Director DATE: February 21, 2024 SUBJECT: Ordinance No. 3400-2024 — ALSPF Appropriation Increase The Purpose of this memo is to recommend passage of Ordinance 3400-2024. This Ordinance will increase the authorized transfer amount from the Airport Land Sale (ALSPF) to the City's Airport Fund for FY24. This increase amount is possible because earnings were higher that projected for calendar year 2023. ALSPF Pursuant to KMC 7.30.020 (a) (5) the annual transfer from the ALSPF will be based upon the five (5) year average of the fund's calendar year end market value. An amount not to exceed three and four -fifths percent of the five-year average market value may be distributed if the average market value is less than the fund's inflation adjusted principal balance. An amount not to exceed four and one -fifth percent of the five-year average market value may be distributed if the average market value is greater than the funds inflation adjusted principal balance. The December 31, 2023 5-year average market value of the portfolio ($28,042,585) was below the inflation adjusted principal ($31,302,494), thus the allowable transfer is limited to the lower bound of the spending rate (3.8%). The 2023 allowable transfer based upon this calculation is $1,065,518. The FY24 budgeted transfer amount was $1,053,635. This Ordinance will increase the budgeted transfer amount to the maximum value of $1,065,518, an increase of $11,983. Your support for Ordinance 3400-2024 is respectfully requested.