Loading...
HomeMy WebLinkAboutOrdinance No. 3517-20267/ KENAI CITY OF KENAI ORDINANCE NO. 3517-2026 Sponsored by: Administration AN ORDINANCE INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE GENERAL FUND AND AUTHORIZING A CONSULTING AGREEMENT TO EVALUATE NATURAL GAS STORAGE OPPORTUNITIES ON KENAI MUNICIPAL AIRPORT LANDS. WHEREAS, the City of Kenai seeks to evaluate competing applications for leasing land for natural gas storage, including possible use of pore space in depleted reservoirs held by the City for the benefit of the Airport; and, WHEREAS, specialized technical expertise is required to assess such opportunities; and, WHEREAS, Kenai Municipal Code (KMC) 7.15 authorizes the City Manager to procure professional services costing less than $35,000; and, WHEREAS, Ordinance 3507-2026 appropriated $30,000 from the Airport Fund for consulting services related to this evaluation; and, WHEREAS, the City entered into a professional services agreement with Alaska Marine Power, LLC in an amount not to exceed $30,000; and, WHEREAS, the scope of work and hourly billing structure under the agreement are expected to exceed the original authorized amount; and, WHEREAS, KMC 7.15.070 (6) permits procurement by direct negotiation when appropriate; and, WHEREAS, the fee schedule submitted by Alaska Marine Power, LLC has been determined to be fair and reasonable; and, WHEREAS, additional appropriation is required to complete the evaluation; and, WHEREAS, sufficient unassigned fund balance is available in the Airport Fund for this purpose; and, WHEREAS, it is in the best interest of the City of Kenai and the Kenai Municipal Airport to authorize and fund these consulting services. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS FOLLOWS: Section 1. That estimated revenues and appropriations be increased as follows: Airport Fund: Increase Estimated Revenues — Appropriation of Fund Balance $30- 000 Increase Appropriations — Other Buildings and Areas — Professional Services $30,000 Section 2. That the City Manager is authorized to execute a change order to the contract with Alaska Marine Power, LLC in the amount of $30,000 for a total contract amount of $60,000 for consulting services. New Text Underlined; [DELETED TEXT BRACKETED] Ordinance No. 3517-2026 Page 2 of 2 Section 3. 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 4. 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 KEl Approved by Finance: -' Introduced: April 22, 2026 Enacted: May 6, 2026 Effective: May 6, 2026 New Text Underlined; [DELETED TEXT BRACKETED] KE AA1 ___, _...enai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www6nai.c1ty MEMORANDUM TO: Mayor Knackstedt and Council Members FROM: Terry Eubank, City Manager DATE: April 16, 2026 SUBJECT: Ordinance No. 3517-2026 - Increasing Estimated Revenues and Appropriations in the General Fund and Authorizing a Consulting Agreement to Evaluate Natural Gas Storage Opportunities on Kenai Municipal Airport Lands. The City has received competing applications to lease City -owned Airport land for natural gas storage, including the potential use of pore space within depleted reservoirs. These opportunities could represent a meaningful long-term revenue source for the Kenai Municipal Airport. Due to the technical complexity of subsurface storage, reservoir capacity, and associated infrastructure considerations, the City engaged Alaska Marine Power, LLC to provide specialized consulting services. Ordinance No. 3507-2026 previously appropriated $30,000 for this work, and the City executed a professional services agreement for that amount. As the evaluation has progressed, it has become clear that additional analysis is necessary to fully assess and compare the proposals, including technical feasibility, operational considerations, and potential value to the City. Because the agreement is structured on an hourly basis, the total cost is expected to exceed the original authorization. The proposed ordinance appropriates an additional $30,000 from the Airport Fund unassigned fund balance to complete this work and authorizes the City Manager to enter into an agreement for this amount. The consultant's fee schedule has been reviewed and determined to be fair and reasonable, and procurement by direct negotiation is permitted under Kenai Municipal Code. Completing a comprehensive and technically sound evaluation is essential for the City to make informed decisions regarding natural gas storage opportunities on City -owned Airport lands. Administration recommends approval of the ordinance increasing estimated revenues and appropriations in the Airport Fund and authorizing additional funding for consulting services with Alaska Marine Power, LLC to evaluate natural gas storage opportunities on Kenai Municipal Airport lands. Thank you for your consideration.