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HomeMy WebLinkAbout2009-05-20 Council Packet - Work Session11 cpc91 _ OP141 11W•[ 1 I 1 i 11 SMA B UNDAIR IlVillage whit a Past, C# wA a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 MN9M Telephone: 907-283-7535 / FAX: 907-283-3014 11II1•i 1992 tI1CGCi)/of KENAI� KKA 11/1 �11I [I� TO: City Council & Airport Commission FROM: Rick Koch ®ATE: May 12, 2009 SUBJECT: Kenai Municipal Airport Fuel Flowage Fees The purpose of this correspondence is to provide information regarding the above referenced subject. A Fuel Flowage Fee was included in the fees and charges at the Kenai Municipal Airport for the fiscal year (FY 2009) beginning July 1, 2008. This fuel flowage fee included all fuel delivered to the Kenai Municipal Airport, "in the wing" and "bulk". The adopted FY 2009 budget for the Airport Fund included revenues of $ 75,000 from fuel flowage fees. This was based on a fee of $ 0.03 per gallon on an estimated 2,500,000 gallons of fuel being delivered to the Kenai Municipal Airport. The actual fuel flowage was significantly higher than projected. From July 1, 2008-April 30, 2009 the actual fuel flowage was approximately 2,430,000 gallons resulting in revenues of $ 72,900. Effective May 1, 2009 the fuel flowage fee was reduced to $ 0.02 per gallon. The estimated revenue from fuel flowage fees for May and June, 2009 is $ 9,712.00 (485,600 gallons @ $ 0.02). The proposed FY 2010 budget for the Airport Fund includes revenues of $ 68,000 from fuel flowage fees. This is based on a fee of $ 0.02 per gallon estimating total fuel flowage of 3,400,000 gallons. The proposed FY 2010 budget for the Airport Fund projects a negative performance of ($ 653,926). Based on recent investment earnings this projection may be overly pessimistic, but I would not expect performance better than a $ 200,000 loss. The airport has operated for many years at an operational loss. It is necessary to impose a schedule of fees and charges that are consistent with industry standards to support the airport. The most recent (effective February 1, 2009) fee schedule for the Anchorage and Fairbanks Airports for fuel flowage fees for non -signatory carriers is $ 0.067 per gallon. The fuel flowage fee for non -signatory carriers at the Juneau Airport (effective July 1, 2008) is $ 0.175 per gallon. These fuel flowage fees apply only to fuel that goes in the wing, and not to bulk fuel carried for re -sale. In addition to general airport expenses, runway/ramp maintenance, snow removal, fire protection, etc., the Airport does incur costs specifically in support of the primary bulk fuel carrier at the Kenai Municipal Airport. Estimated annual specific costs are as follows: Application of potassium acetate/sand ($ 2,400 x 3) S 7,200 Sanding ($ 100/week x 22) 2,200 Sand Removal (LS) 4,400 Total $ 13,800 The argument put forth by Everts Air is that we have singled out a single commodity/cargo (bulk fuel) that is carried from our airport for re -sale to impose a ele, when we do not impose a similar fee on equipment, machinery, groceries, etc. They feel the fee on bulk fuel is unfair. While I do not believe the fee is unfair, I understand their argument. In the event that Council desires to look at alternatives to the fuel flowage fee being imposed on bulk fuel there may be other fee structures to consider. Increase "in the wing" fuel flowage fees and eliminate "bulk" fuel flowage fees If a fuel flowage fee of $ 0.067 per gallon (Anchorage & Fairbanks) was imposed, the estimated revenue is $ 23,148.50 (345,500 x $ 0.067). This is $ 44,851.50 less than the proposed budget. If a fuel flowage fee of $ 0.175 per gallon (Juneau) was imposed, the estimated revenue is $ 60,462.50 (345,500 x $ 0.175). This is $ 7,537.50 less than the proposed budget. If a fuel flowage fee of $ 0.121 per gallon (Avg, ANC/FAI & JNO) was imposed, the estimated revenue is $ 41,805.50 (345,500 x $ 0,121). This is $ 26,194.50less than the proposed budget. What is problematic in this comparison, is there are not airports throughout the United States from which bulk fuel is carried. It is common for airports to have a fuel flowage fee, but as apractical matter it only applies to "in the wing" fuel because bulk fuel is not carried for re -sale in the lower 48 States. Administration recommends maintaining a $ 0.02 per gallon fuel flowage fee for all fuel delivered to the airport. 'Village with a Past, Ci� with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 1992 tGre ci o KENAI,ALASKA TO: City Council & Harbor Commission FROM: Rick Koch DATE: May 12, 2009 SUBJECT: Kenai River Special Management Area (KRSMA) Boundary The purpose of this correspondence is to discuss the above referenced subject. Last summer several signs were placed on the banks of the Lower Kenai River identifying the downstream boundary of KRSMA. These signs were located approximately 3/4 of a mile downstream from the Warren Ames Bridge. My understanding, based on numerous conversations with the Council and others, was that the KRSMA boundary was approximately'/4 mile upstream from the Warren Ames Bridge. Following discussion with the Council and having received their direction, the city administration contracted with Wince-Corthell-Bryson (WCB) to research the KRSMA boundary on the river. WCB's findings question the statutory boundary of KRSMA as the City of Kenai owns the lands within Alaska Tidelands Survey 272 which include the bottom of the Kenai River approximately 2-1(2miles upstream from the Warren Ames Bridge. I contacted Mr. Jim King, the Director of the Alaska Division of Parks, questioning the KRSMA boundary on the lower river. His response was basically "if it is in statute it must be so". In a subsequent conversation Mr. King asked me what was the City's desired outcome in this potential dispute, which brings us to this work session. There are a number of alternatives: 1. Do nothing and allow State Parks to impose management authority over the statutory boundaries of KRSMA. 2. Employ a law firm specializing in this area to receive a legal opinion defining the City's position. 3. Request the Governor and our Legislators introduce legislation to correct/modify the statutory KRSMA boundary. 4. Negotiate with State Parks to accomplish a desired outcome. Or some combination of everything above. Attached for your review is the following: 1. Koch letter to King dated December 15, 2008, including a portion of WCB findings. 2. King letter to Koch dated February 12, 2009. 3. Koch letter to King dated March 9, 2009. 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Haan Telephone: 907-283-7535 / FAX: 907-283-3014 1992 tic a� of RENAL ALASKA U December 1.5. 2008 Mr. James King, Director AiaSka Drvrsron of Parks & Outdoor recreation 550 W. 7"' Ave. Suite 1380 Anchorage, AK 99501-3561 Subject: Kenai River Special Management Area (KRSMA) Boundary Dear Mr, King Last summer signage was placed on the banks of the Kenai River identifying the section line common to sections 16 & 17, Township 5 North, range 11 West, Seward Meridian, Alaska, as the down -river boundary of KRSMA. The City of Kenai contracted with Wince-Corthell-Bryson to research all relevant information, including the enabling legislation, to determine if the State Division of Parks signage was accurate, and if not, what was the Kenai River down -river boundary for KRSMA. I have attached the information used by the consultant in their research and a title search we had accomplished to verify ownership of the Lower Kenai River tidelands and submerged lands. The consultant's preliminary finding has determined the City of Kenai owns the tidelands and submerged lands within Alaska Tideland Survey 272. The State of Alaska Department of Natural Resources owns property adjacent to the Kenai River tidelands and submerged lands contained in ATS 272. The State does not own the tidelands or submerged lands within ATS 272 and the City of Kenai has not granted management authority over this property to the State. The consultant suggests the down -river KRSMA boundary to he section line common to Sections 10 & 15, Township 5 North, Range 11 West, Seward Meridian, Alaska, the limits of ATS 272, and roughly 2.75 miles up -river from the Warren Ames Bridge. Enclosed is a copy of the information prepared by our consultant and a litigation guarantee identifying ownership of ATS 272. Are you in agreement the down -river boundary of KRSMA is the section line common to Sections 10 & 1.5, Township 5 North, Range 11 West Seward Meridian? If so, the City would be interested in meeting with the Division of Parks to discuss the Division of Parks management authority over City lands as provided for in the KRSMA enabling legislation. I am available to meet with you regarding this matter at your convenience. Sincerely, CITY OF KENAI Rick R. Koch City Manager enclosures WINCE-C®RTHELL-BRYSON P.O. BOX 1041 KENAI, ALASKA 99611 PHONE: (907) 283-4672 FAX: (907) 283-4676 Email gw�Dll v'.6G �NL�2.Uai��CcI CC:'SZY July 28, 2008 Job #08-017 Citv of Kenai 216 Fidalgo Avenue, Suite 200 Kenai, Alaska 99611 .ciilbj eel: l River Special Management Area Boundary (KRSMA) Research, specifically within Township 5 North, Range 11 west, Section 16, Seward Meridian Alaska. Attention: Rich Koch In accordance with your verbal request, Wince-Corthell-Bryson has prepared this preliminary report from information provided by the City Clerk which was extracted from. City Council minutes, correspondence between the State and the City, and applicable State Statutes. Platting Prior To Statehood A Federal field survey breaking down Township 5N Range 11 W into sections and parcels was performed during 1921 and 1922. Final Federal plat approval was received on March 12, 1923. This platting action created, within Section 16 of the subject Township, three aliquot part land tracts and ten land lots, with the meander line of the Kenai River estuary formally established by surveying. This subdivision of lands effectively defined the tidal lands and submerged lands of the Lower Kenai estuary located between the lots and tracts. Federal Tidelands Transfer To The State Of Alaska Title to uplands, tidelands and submerged lands within T5N, R11W, SM, Alaska was transferred from the federal goverment to the State of Alaska in 1959 about the time of Statehood. Alaska Tideland Survey No.272 (ATS 272) In 1968, Tidelands Survey ATS 272 was initiated with the concurrence of the State of Alaska, Department. of Natural Resources, approved, and filed on December 31, 1974 in the Kenai Recording District as 76-179. It incorporated the previously created meander lines of the lower Kenai River estuary from the 1921 survey described for T5N, RI I W, SM, Alaska, as an integral part of the document. DRAFT DOCUMENT State Of Alaska Transfer Of ]nand To The City Of Kenai Title to the tidelands and submerged lands, as platted and described in ATS No. 272 excepting prior authorized and approved claims, were transferred from the State of Alaska, Department of Natural Resources to the City of Kenai on January 6, 1977. On September 5, 1979, the City Council approved Ordinance 455-78 specific to ATS No.272, "An ordinance accepting conveyance by the State of Alaska to the City of Kenai of tidelands and submerged lands lying seaward of the City; approving and adopting the official subdivision of the area conveyed; and establishing procedures by which preference rights maybe exercised." Kenai River Special Management Area (KRSMA) The State law establishing the KRSMA, AS 41.21.500-514, becarne law on June 2, 1984. State Statute 41.21.502, provided the legal description for those state-owned lands, water, and other concurring properties contained within KRSMA. This document was approved affective December 31, 1997. City Council Position on Statute 41.21.502 The City position on the proposed KRSMA boundary has been consistently clear with regard to the City desire to exclude City owned tidelands and submerged lands from within the regulatory KRSMA boundary referred to interchangeably as the "lower five miles", "down river from Warren Ames Bridge" and `lower river". It is assumed for the purpose of this report that the intent of that wording was to exclude the City owned Kenai River estuary both within and downriver of Section 16. At the council meeting of September 17, 1997, Resolution 97-65 was approved objecting to the KRSMA legislation as drafted. The resolution also contained references to the lower four miles. Correspondence containing the same reference was sent from the City the next day. Attached are Council minutes and Kenai City Administration correspondence prepared after that meeting. Kenai Peninsula Borough Tax Status Records Kenai Peninsula Borough land status records indicate that Lands situated within Section 16, TSN, RI IW, excluding the Kenai River, are owned by the State of Alaska. Title to tidelands and. submerged lands within Section 16, the Kenai River estuary portion remains unchanged, and are depicted as being owned by the City of Kenai. )Extracts kronur Statute 41.21.502 (With Comments) Section 41.21.502(a) describes all State owned or subsequently acquired lands, water, shore, tide and submerged lands lying within the parcels indicated. Section 41.21.502(a)(1) states that State owned KRSMA lands generally extend downstream to the common section line of Sections 16 and 17, TSN, R11W, S.M., AK. This includes all of Section 16. Section 41.21.502(a)(4) lists all State properties described within 41.21.502(a)(1). Section 41.21.502(a)(4)(L) lists all State properties in the lower river land, including T5N, Rl1 W, Section 16 lands adjacent to the City tidelands and submerged lands. Section 41.21.502(b) clarifies that all lands described under 41.21.502(a) are subject to valid existing rights. Section 41.21.506 (Comprehensive Management Plan and Regulation), subsection (d) clarifies that said management does not apply to land not owned by the State located within municipalities, unless so approved by the municipality. Section 41.21.508 (Acquisition of Additional Land) allows the commissioner to add lands by p ur`chase, exci mge, v1111— yaeS�; gift CI' other ia'v'v'itri 1.1.4s, U t i.ivt Uy cctt mcut uvutaui. Section 41.21.512 (Cooperative Management Agreements) allows the commissioner to enter into cooperative management agreements with a municipality. Conclusion The legal document establishing the KRSMA boundary appears to at least wrap State owned uplands around City owned tidelands and submerged lands. The State asserts that it includes the City property (tidelands and submerged lands). It is our engineering opinion, for that to occur, the City would need to concur in such an inclusion by means of a Memorandum of Agreement or other such document, none of which have yet appeared in Council minutes or other available records. WCB recommends that a title search be performed to verify that no transfer of authority concerning the City owned tidelands and submerged lands in section 16 is likely to have occurred by authorized City personnel. The KRSMA management boundary may ultimately be a legal issue of general State Powers that may have to be settled by the courts. If you have any additional questions, please contact our office at your earliest convenience. We are available to meet with Administration concerning this item after July 28, 2008. S.i�ncerely, _ Philip W. Bryson, P.E. APPENDIX A. EXTRACT FROM PLAT FOR T5N, RI 1 W, S.M., AK(1921-1923) B. EXTRACT FROM ALASKA TIDELANDS SURVEY 272 (1968-1974) C. CITY ORDINANCE 455-78 ACCEPTING ATS 272 FROM STATE (1977) D KENAI RIVER SPECIAL MANAGEMENT AREA (KRSMA) STATUTE 41.21.502 (1984-1997) E RESOLUTIONS, CORRESPONDENCE, COUNCIL MINUTES, DRAFTS (1979- 2004) COUNCIL MEETING APRIL 5, 1989 DISCUSSION - PUBLIC TESTIMONY CORRESPONDENCE SEPTEMBER 6, 1990 MAYOR TO KRSMA BOARD NOTING CITY OBJECTIONS CORRESPONDENCE APRIL 12, 1996 COMMISSIONER TO MAYOR CORRESPONDENCE APRIL 8 1996 CITY CLERK TOCOMMISSIONER APPOINTING KRSMA ADVISORY BOARD t •, CORRESPONDENCE JUNE 4, 1997 CITY MANAGER TO KRSMA CONCERNING CITY OBJECTIONS TO KRSMA IN LOWER RIVER COUNCIL MEETING SEPTEMBER 17, 1997 RESOLUTION 97-65 OBJECTING TO KRSMA AS REVISED SEPTEMBER 1997 CORRESPONDENCE FEBRUARY 17, 2004 SENATOR WAGONER TO MAYORS RE: MODIFYING KRSMA BOUNDARY UP RIVER �i N� 9 .. r 9/ � APPENDIX B 7 �k -o o VICINITY MAP SCALE I"= 1>2 MILE its W Y z r i� 45• e H HIGHWA 43 j 34 I I ORIGIN OF ASSUMED COORDINATES ry Y ® 2,792p 408.88 oPo/ BE LOOP ;-- — mo 9 10 T=. - IV 0007'00"W SECTION LINE � I ONW e x ' ate" I I cy ��bq� DIVISION OF PARKS AND OUTDOOR RECREATION February 12, 2009 Mr. Rick Koch, City Manager City of Kenai 210 Fidalgo Avenue Kenai, AK 99611-7794 Re: Kenai River Special Management Area (KRSMA) Boundary Dear Mr. Koch: SARAH PALIN, Governor 550 W. P^ AVENUE, SUITE 1380 ANCHORAGE, ALASKA 99501-3561 PRON& (907) 269-8100 FAX: (907) 269-8907 tEB 1 3 2009 Thank you for the thorough land status research document that you sent to us in mid December, outlining the City of Kenai's legal claim to the lower Kenai River tidelands and submerged lands within Alaska Tideland Survey 272. Please note that we do not dispute that the City of Kenai owns these lands, which are surrounded in large part by uplands that are designated as the Kenai River Special Management Area and assigned to the Division of Parks and Outdoor Recreation to manage. Additionally the waters of the Kenai River upstream of the common section line between Sections 16 and 17, Township 5 North, Range I I West, Seward Meridian, Alaska are also legislatively designated KRSMA waters as established in AS 41,21,502. I do not agree with your suggestion that the down -river KRSMA boundary should be the section line common to Sections 10 & 15, Township 5 North, Range 11 West, Seward Meridian, Alaska, a line that is nearly 4 miles above our legislatively designated boundary, I do not view the City of Kenai's ownership of the tidelands and submerged lands within ATS 272 as being in conflict with state management of the KRSMA. When the KRSMA was established in 1984, the City's ownership of the tide and submerged lands was a matter of record. The flowing waters of the Kenai River within the boundaries of ATS 272 nevertheless remained navigable and public water of the state under AS 38.05.126. Rules of statutory construction indicate that the legislature intended state management of navigable and public waters within the KRSMA to extend to the current statutory boundary. Please be assured, however, that I acknowledge that DPOR would need to obtain the permission of the City of Kenai if we desired to construct a boat launch or other facility that required use of the submerged lands or tidelands in question. No such projects are being considered at this time. cPrink( on Recycled Paper Even though I do not agree with your suggestion to move the KRSMA boundary further upstream than has been legislatively designated, I believe that it is in the best interests of the Kenai River, its resources, and its users for all land management entities to work together. To that end, I would like to schedule a time to talk to you and others about formalizing a Memorandum of Understanding that includes not only the City of Kenai, but also the City of Soldoma and the Kenai Peninsula Borough. We currently have an MOU between the State of Alaska (DNR, DEC and ADFG), US Fish and Wildlife Service and the US Forest Service. It seems more than appropriate to add the local government entities to this agreement. Please let me ]snow if you are interested in considering this option. I look forward to working with you on issues of importance to each of our agencies. O1111:G1 G1y, ames King Director Cc; Jack Sinclair, Kenai/PWS Area Park Superintendent 7 `Xlla�e wttk a Past C# witk a Fatare' ✓�, 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 .__ Telephone: 907-283-7535 / FAX: 907-283-3014 1992 KENttie tc�o f L ALAS March 9, 2009 Mr. James King, Director Alaska Division of Parks and Outdoor Recreation 55u VV. / ', Suite 1380 Anchorage, AK 99501-3561 Subject: Kenai River Special Management Area (KRSMA) Boundary Dear Mr. King: Thank you for your letter of February 12, 2009. In that letter you state, "Rules of statutory construction indicate that the legislature intended state management of navigable and public waters within the KRSMA to extend the current statutory boundary." Beyond that conciusory statement, there is no supporting information for the proposition that KSRMA rules apply to the portion of the city owned tidelands and submerged lands. It is undisputed that: 1) the City of Kenai owns the tidelands and submerged lands shown in ATS 272; 2) AS 41.21.506(d) provides that KRSMA regulations do "not apply to land not owned by the state that is located within the boundaries of a municipality unless the regulation has been approved by the municipality; and 3) the City of Kenai has not approved the KRSMA regulations within its boundary. Given the above, could you please provide supporting information for the conclusion that the rules of statutory construction indicate the legislature intended for the KRSMA rates to apply that the City owned tidelands and submerged lands? Thank you in advance for your assistance with this issue. Sincerely, CIITY OF ENAI l f Rick Koch City Manager PUBLIC NOTICE IeNA1.AlA51(A U The Kenai City Council will meet in a work session on Wednesday, May 20, 2009, with members of the Airport Commission and Harbor Commission. Topics to be discussed are: Airport Fuel Flowage Fee Kenai River Special Management Area Boundary within the City of Kenai (if time allows) FY10 Budget (if time allows) The work session will be held in the Kenai City Council Chambers located at 210 Fidalgo Avenue, Kenai and begin at 5:30 p.m. The work session is open to the public. Contact the Kenai City Clerk's office at 210 Fidalgo Avenue, Kenai, 283-7535, extension 231, with questions. Carol L. Frees, City Clerk D1211 C•� From: Carol Freas Sent: Friday, May 08, 2009 10:33 AM To: denise.reece@peninsulaclarion.com Subject: May 20, 2009 Kenai council work session Attachments: Work Session Form for Paper3.doc Hi again... Here's an ad for the May 20, 2009 council work session to be published on Monday, May 18, 2009. Let me know if there are any questions/problems. Enjoy the sun! Carol Willa e it as c` wif Future 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 / Fax: (907) 283-3014 www.ci.kenai.ak.us \�c theeciyYYe,'Xl 6 April 21, 2009 TO WHOM IT MAY CONCERN: The Kenai City Council has scheduled a work session for Wednesday, May 20, 2009 to discuss concerns related to Kenai Municipal Code, Chapter 21.05.085 entitled, "Airport Fuel Flowage Fee." Because you are a user of the Kenai Municipal Airport, the Council encourages you to attend the work session and offer your comments. The work session will be held in the Kenai City Council Chambers, located at 210 Fidalgo Avenue, Kenai, and will begin at 5:30 p.m. A copy of KMC 21.05.085 is attached, along with a copy of Ordinance No. 2392-2009 which reduced the fee from $.03/gallon to $.02/gallon. If you are unable to attend and want to submit written comments, please forward them to me by Noon on May 13, 2009. You may mail them to me at 210 Fidalgo Avenue, Kenai, 99611, drop them by my office (downstairs at Kenai City Hall), or email them to cfreas@ci.kenai.ak.us. If you have questions, please contact me at 283-7535, extension 231. CITY OF KENAI Carol L. Freas City Clerk Cif Enclosures Crowley Everts Air Cargo 201 Arctic Slope Avenue POB 61680 Anchorage, AK 99518 Fairbanks, AK 61680 Doyle's Fuel Service Everts Air Fuel, Inc. POB 582 POB 60908 Kenai, AK 99611 Fairbanks, AK 99706 Harbor Enterprises d/b/a Jackson Enterprises Alaska Oil Sales Box 2091 POB 389 Soldotna, AK 99669 Seward, AK 99664 r Air Supply Alaska POB 874 Kenai, AK 99611 Universal Airlines POB 1774 Kenai, Alaska 99611 21.05.080 (2) Charges for any service performed in, on or through the business conducted under this agreement, and includes all other income and proceeds from or in- cidental to any business conducted in whole or in part in, on or in connection with the rights granted under a permit; (3) Goods, work or services furnished by any person in lieu of payment in ex- change for value received; (4) Sales or fees for automobile liability insurance and personal accident insur- ance. (p) No deductions from gross revenue other than those specifically identified below shall be allowed: (1) The amount of Federal, State, Borough or municipal sales or other similar taxes separately stated and collected and/or reimbursed from customers; (2) Any sums received from sales of capi- tal assets; (3) Any sums received from insurance or other settlements from damage to automobiles or other property of the concessionaire, or for the loss, conver- sion or abandonment of such automo- biles, or any charges collected from a customer for damages to the automo- bile rented; (4) Any sums received for loss damage waiver insurance; (5) Replacement fuel charges. (q) In this section, "airport' means the area of land or water that is used or intended to be used for the landing and take -off of aircraft and includes its buildings and facilities such as the terminal, ramps, taxiways, parking lots and the float plane basin. (Ord.2180-2006) 21.05.085 Airport fuel flowage fee. (a) Any person, firm or corporation who deliv- ers aviation gasoline, motor vehicle gaso- line, diesel fuel, kerosene, aviation jet fuel 367 or like substance (hereafter referred to as fuel) to any person, firm or corporation at the Kenai Municipal Airport shall pay a fuel flowage fee of three cents ($0.03) for each gallon of fuel. (b) On or before the fifteenth (15th) day of each month, each person, firm, or corporation de- livering fuel as designated in this section shall deliver to the City of Kenai Finance Department a statement showing the type of fuel, and the number of gallons delivered in the previous month, to whom delivered, and the amount due the City of Kenai under this section, and remit the statement with the amount due. The City of Kenai shall prepare statement forms for reporting and payment of fuel flowage fees. (c) Any person, firm or corporation delivering fuel to the Kenai Municipal Airport shall furnish within ten (10) days of request by the Kenai Airport Manager all delivery tick- ets, purchase invoices or other records nec- essary to conduct any audit to determine compliance with the requirements of this section. (d) The funds derived from fuel flowage fees shall be utilized solely for the maintenance, operation and improvement of the Kenai Municipal Airport. (Ord.2303-2008) 21.05.090 Penalties. Violations of this chapter shall be punished as provided for violations in KMC 13.05.010. (Ord. 2180-2006) (Kenai Supp. No.93, 10-08) Suggested by: Administration tHyf KENAI, ALASKA CITY OF KENAI ORDINANCE NO. 2392-2009 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING KMC 21.05.085, AIRPORT FUEL FLOWAGE FEE. WHEREAS, the City of Kenai Municipal Airport budget for FY 2009 includes a fuel flowage fee of three cents ($0.03) for each gallon of aviation gasoline, motor vehicle gaso iinne., diesel fuel, kerosene, aviation jet fuel or like substances; and, WHEREAS, the quantity of fuel delivered to the Kenai Municipal Airport has exceeded the estimates on which the FY08 budget was based; and, WHEREAS, the fuel flowage fee can be reduced from three cents ($0.03) per gallon to two cents ($0.02) per gallon and achieve the revenue required to support airport maintenance, airport crash fire and rescue, and other required airport support activities. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that KMC 21.05.085(a) be amended as follows: (a) Any person, firm or corporation who delivers aviation gasoline, motor vehicle gasoline, diesel fuel, kerosene, aviation jet fuel or like substance (hereafter referred to as fuel) to any person, firm or corporation at the Kenai Municipal Airport shall pay a fuel flowage fee of [THREE CENTS ($0.03)] two cents 0.02 for each gallon of fuel. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 18th day of March, 2009. �✓ /.,[-A PAT PORTER, MAYOR ATTEST: Carol L. Freas,�City Clerk Introduced: March 4, 2009 Adopted: March 18, 2009 Effective: May 1, 2009 New Text Underlined; [DELETED TEXT BRACKETED] "Village with a Past, Gi y with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 1992 tleu 0f KENALALASKA TO: City Council FROM: Rick Koch DATE: February 26, 2009 SUBJECT: Kenai Municipal Airport Fuel Flowage Fees The purpose of this memorandum is to provide information and recommend Council approval of an ordinance to lower the airport fuel flowage fee from there cents ($ 0.03) per gallon to two cents ($ 0.02) per gallon. As you may recall the airport has operated at a deficit from FY 2002 through FY2008, and had fees, leases and rents that were in most cases significantly below industry standards and what was charged at other similar Alaskan airports. We increased and instituted many fees and charges in order to begin to bring our pricing structure in -line with other Alaskan airports and the industry in order to reduce our operational deficit. One of the fees instituted was a fuel flowage fee. The fuel flowage fee was estimated to produce approximately $ 75,000 of revenue based on an estimated volume of 2,500,000 gallons of fuel. The fuel flowage fee is based on all fuel delivered to the airport including but not limited to fuel that goes "into the wing" of aircraft, but also fuel that into "bulk fuel tanks" for re -sale at other locations. Through the first seven months (July 08-January 09) of the fiscal year the City has received $ 61,295.04 in revenue from fuel flowage fees based on 2,043,167.23 gallons of fuel, or an average of $ 8,756.43 and 291,881.03 gallons per month. If we project the monthly average over the twelve months of the fiscal year, total estimated fuel flowage revenues for FY 09 would be $ 105,077.16, Total estimated volume of fuel would be 3,502,596.36 gallons. A reduction in fuel flowage fees by one cent for the remainder of FY 09 would decrease fuel flowage fees by an estimated $ 5,837.62 and for FY 10 would result in total estimated revenues of $ 70,051.93. Administration recommends the reduction in fuel flowage fees as the services provided by the airport remain essentially unchanged by the increase in volume. If you have any questions please contact me at your convenience.