HomeMy WebLinkAboutOrdinance No. 3401-2024i
KENAI
CITY OF KENAI
ORDINANCE NO. 3401-2024
Sponsored by: Administration
AN ORDINANCE 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 Sales of the 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 2023 year ending market value of $3,654,494 was
an increase of $414,376 from December 31, 2022 balance; 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 31, 2023 earnings reserve balance was $173,382, thus the FY2024 transfer
is limited to $146,180 (4% of the Fund's value); and,
WHEREAS, after deducting the FY2024 allowable transfer, the earnings reserve balance will be $27,202;
and,
WHEREAS, the FY2024 budgeted transfer from the General Land Sale Permanent Fund was $138,209,
meaning the actual can be $7,971 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 $7.971
Increase Appropriations —
Transfer to General Fund $Z19zi
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
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Ordinance No. 3401-2024
Page 2 of 2
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 6T" DAY OF MARCH, 2024.
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Mic e e .San MM , City Clerk
Approved by Finance:
Brian Gabriel Sr., Mayor
Introduced: February 21, 2024
Enacted: March 6, 2024
Effective: March 6, 2024
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City of Kenai 1 210 Ficialgo .Ave, Kenai, AK 99611-7794 1907.283.75351 www1enaixity
MEMORANDUM,
TO:
Mayor Gabriel and Council Members
THROUGH:
Terry Eubank, City Manager
FROM:
Dave Swarner, Finance Director
DATE:
February 13, 2024
SUBJECT:
Ordinance No. 3401-2024 — GLSPF Appropriation Increase
The purpose of this memo is to recommend passage of Ordinance 3401-2024. This Ordinance
will increase the authorized transfer amount from the General Ledger Sale (GLSPF) to the City's
General Fund for FY24. This increased amount is possible because earnings were higher than
projected for calendar year 2023.
GLSPF
Pursuant to KMC 7.30.020 (a) (6) 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 31sl of each year. "Cummulative Earnings" is defined as the market
value at calendar year end minus the fund's inflation adjusted principal balance.
The December 31, 2023 market value of the GLSPF was $3,654,494 with cumulative earnings of
$173, 382.
December 31. 2023
Market Value $3,654,494
4% of Market Value $ 146,180
Cumulative Earnings $ 173,382
FY24 Allowable Transfer $ 146,180
Th FY24 budgeted transfer amount was $138,209. This Ordinance will increase the budgeted
transfer amount to the maximum value of $146,180, an increase of $7,971.
Your support for Ordinance 3401-2024 is respectfully requested.