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2010-10-20 Council Packet
AGENDA DISTRIBUTION MAKE 28 PACKETS COUNCIL PACKET DISTRIBUTION Mayor /Council Clerk Police Department Senior Center Library (2) Fire Department Projects Manager Attorney City Manager Finance Airport Parks Recreation Student Rep. `Hall Binder Feltman /Floyd Kebschull /Carver Ogle `Christine Clarion Mellish Schmidt Sewer Treatment Plant Shop Building Maintenance Water /Sewer Streets Dock Animal Control Counter DELIVER Council and Student Representative Packets to Police Department Dispatch desk. The Clarion, Mellish Schmidt's Office will pick their packet up in my office. The portion of the agenda published by the Clarion should be emailed as soon as possible on packet day. The camera -ready agenda c: /myfiles /documents /minutes /agenda form for paper) is emailed to Denise at Peninsula Clarion (at email folder Work Session /Special Meetings, or Composition in Contacts or lbell @acsalaska.net). Home Page documents (agenda, resolutions, ordinances for public hearing, and ordinances for introduction) are usually emailed to me and I hold them in my HTML file. Place information (meeting e- packet and agenda, resolutions and ordinances for public hearing, etc. on the city's webpage as soon as possible before leaving the office for the weekend. 2 ea LL V/ 5 Q G LL. W H cc 0 d W cC 0 0 V! f W O O A fui h II I s I w IN 111 jj M fl 7 :r17 1-17 KEY ria QUIS Aollo LBOYLE (PORTER MOORE GABRIEL A fui Fru I S jj M I 2 _IN 1.1 1 i MARQUIS MOLLOY 31A09 2331NOJ MOORE GABRIEL 1 :Y sinoUew MOLLOY BOYLE 2 3312iOd [MOORE GABRIEL KEY PION ;i N Bali i Tr 111 I CI I C5 0 cC OJ 2 J W W E o us 2 0 J J 0 W J 0 CD W 1— cc 0 0 W 0 0 2 0) 2 0 cc 0 J 0 W J 0 CO 1 W 0 0 COUNCIL MEETING 0 fui Fru I_ s 1 M I 1 _IN 1.1 i MARQUIS MOLLOY 31A09 2331NOJ MOORE GABRIEL :Y N Bali i Tr 111 I CI I C5 0 cC OJ 2 J W W E o us 2 0 J J 0 W J 0 CD W 1— cc 0 0 W 0 0 2 0) 2 0 cc 0 J 0 W J 0 CO 1 W 0 0 COUNCIL MEETING 0 ADD TO: None. OCTOBER 20, 2010 REGULAR COUNCIL MEETING REQUESTED ADDITIONS /CHANGES TO THE PACKET Item D -5, Resolution No. 2010 -60: 10/19/2010 Senator T. Wagoner memo and back -up Information 10/20/2010 D. Davis (Escopeta Oil) letter and back -up Information CONSENT AGENDA REQUESTED BY: CITY MANAGER CITY CLERK ITEM A: CALL TO ORDER AGENDA KENAI CITY COUNCIL REGULAR MEETING OCTOBER 20, 2010 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http: /www.ci.kenai.ak.us 1. Pledge of Allegiance 2. Roll Call 3. CERTIFICATION OF ELECTION 4. ADMINISTER OATHS OF OFFICE 5. ELECTION OF VICE MAYOR 6. Agenda Approval 7. Consent Agenda (Public comment limited to three (3) minutes per speaker. Persons may give their time over to another speaker present, however no single speaker present may speak for more than 30 minutes combined on their own and on others' behalf.) *All items listed with an asterisk are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. ITEM B: SCHEDULED PUBLIC COMMENTS (Public comment limited to ten (10) minutes per speaker) 1. Vincent Goddard Public Safety Concerns Related to the Proposed Natural Gas Storage Facility in Kenai 2. John O. Robertson, PhD, P.E. Expert Witness Testimony Regarding Public Safety Concerns Related to the Geology and Seismic Factors for the Proposed Natural Gas Storage Facility in Kenai ITEM C: UNSCHEDULED PUBLIC COMMENTS (Public comment limited to three (3) minutes per speaker) ITEM D: PUBLIC HEARINGS (Testimony limited to three (3) minutes per speaker. Persons may give their time over to another speaker present, however no single speaker present may speak for more than 30 minutes combined on their own and on others' behalf.) 1. Ordinance No. 2514 -2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type III, IV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008 4 2. Ordinance No. 2515 -2010 Increasing Estimated Revenues and Appropriations by S3,600.00 in the General Fund for the Purchase of Land for a Public and /or Charitable Use 3. Resolution No. 2010 -58 Authorizing the Purchase of Approximately 4.234 Acres of Property Described as Government Lots 131, 165 and 166, Section 31, Township 6 North, Range 11 West, Seward Meridian, Kenai, Alaska from the State of Alaska for $3,500.00 for a Municipal Production Well Site and Wellhead Protection Area, Greenbelt, Pedestrian Pathway and Conservation and /or Other Public Recreation Purposes 4. Resolution No. 2010 -59 Approving the Budget Transfer of $25,000 for a Snowplowing /Sanding Service Contract for Services at the Airport Terminal Building, Kenai Flight Service Station and the Alaska Fire Training Center 5. Resolution No. 2010 -60 Supporting the Use of Funding Provided Through the Economic Recovery Act for Buccaneer Alaska and Possibly Other Companies to Acquire a Jack -Up Drill Rig for Use in Cook Inlet 4. *Ordinance No. 2517 -2010 Decreasing Estimated Revenues and Appropriations by 58,167.75 in the Congregate Housing Capital Project Fund Due to the Settlement Reached With the Insurance Company 5. *Ordinance No. 2518 -2010 Increasing Estimated Revenues and Appropriations by $30,000 in the General Fund and Vintage Pointe Capital Project Funds for Needed ADA Improvements 9 13 22 24 ITEM E: MINUTES 1. *Regular Meeting of October 6, 2010 ITEM F: UNFINISHED BUSINESS ITEM G: NEW BUSINESS 1. Bills to be Ratified 2. Approval of Purchase Orders Exceeding $15,000 39 26 3. *Ordinance No. 2516 -2010 Increasing Estimated Revenues and Appropriations by $13,800 in the Visitors Center Fund for Professional Services to Provide for a Collection Inventory 41 45 47 6. Approval /Action Approval of Lease to Kenai Nikiski Pipe Line, LLC (KNPL) for an Approximate 22,575 Square Foot Portion of Tract A, Plat No. 78 -111 50 7. Discussion /Action Council Commission /Committee Assignments 72 ITEM H: COMMISSION /COMMITTEE REPORTS 1. Council on Aging 2. Airport Commission 3. Harbor Commission 73 4. Library Commission 5. Parks Recreation Commission 79 6. Planning Zoning Commission 83 7. Miscellaneous Commissions and Committees a. Beautification Committee 87 b. Alaska Municipal League Report 90 c. Mini -Grant Steering Committee 93 d. Kenai Convention Visitors Bureau e. Reports of KPB Assembly, Legislators and Councils ITEM I: REPORT OF THE MAYOR ITEM J: ITEM L: ADMINISTRATION REPORTS 1. City Manager 97 2. City Attorney 3. City CIerk 134 ITEM K: ADDITIONAL PUBLIC COMMENTS 1. Citizen Comments (Public comment limited to five (5) minutes per speaker) 2. Council Comments EXECUTIVE SESSION None Scheduled. ITEM M: ADJOURNMENT PENDING LEGISLATION (items listed below are legislation which will be addressed at a later date as noted and are not action items for this meeting.) INFORMATION ITEMS KENAI CITY COUNCIL MEETING OCTOBER 20, 2010 10/20/2010 Purchase Orders Between $2,500 and 15,000 for Council Review 2. Budget Transfer in Capital Projects in Excess of 5,000 Page No. 146 3. City of Kenai Building Permits /Third Quarter 2010 147 4. Planning Zoning Commission Resolutions /Third Quarter 2010 151 5. 10/14/2010 Kenai River Special Management Area Advisory Board Meeting Agenda and minutes of September 9, 2010 meeting 153 CANDIDATES POLL VOTES RECEIVED ABSENTEE, TOTAL ETC. VOTES VOTES RECEIVED RECEIVED BOOKEY, Terry 643 81 724 SMALLEY, Hal 548 83 631 ELDRIDGE, Barry 330 57 387 GABRIEL, Brian G., Sr. 586 99 685 Write -Ins 9 2 11 ABSENTEE (in- person, by -fax, personal needs, by -mail) POLL VOTES RECEIVED ABSENTEE, ETC. VOTES RECEIVED AND QUESTIONED BALLOTS RECEIVED PORTER, Pat 213 ABSENTEE /QUESTIONED BALLOTS REJECTED 850 17 ABSENTEE /QUESTIONED BALLOTS COUNTED 67 196'.... POLL VOTER TURN OUT 1279 25A% TOTAL VOTER TURN OUT 1475 29% NUMBER OF KENAI REGISTERED VOTERS 5098 CANDIDATES POLL VOTES RECEIVED ABSENTEE, ETC. VOTES RECEIVED TOTAL VOTES RECEIVED PORTER, Pat 724 126 850 Mike 537 67 604 Write -Ins 5 3 8 CITY OF KENAI REGULAR ELECTION OF OCTOBER 5, 2010 WE, the members of the Kenai City Council, do hereby certify the results of a canvass of the ballots for the Regular Election of October 5, 2010. Y:*************** Pat Porter, Mayor Mike Boyle, Council Member Ryan Marquis, Council Member MAYOR /ONE, THREE -YEAR TERM: CITY COUNCIL /TWO, ONE THREE -YEAR TERM EACH: Robert J. Molloy, Council Member Joe Moore, Council Member Date Carol L. Freas, City Clerk Hal Smalley, Vice Mayor Barry Eldridge, Council Member ATTEST: NAME NUMBER OF I VOTES RECEIVED 1 NUMBER OF VOTES RECEIVED BOOKEY, Terry BOYLE, Mike W/ SMALLEY Hal 1 W3 ELDRIDGE, Barry GABRIEL, Brian G., Sr. 1 L/ y Write -ins NAME NUMBER OF I VOTES RECEIVED 1 PORTER, Pat BOYLE, Mike Write -fns CERTIFICATION OF RESULTS ABSENTEE, SPECIAL NEEDS AND QUESTIONED BALLOTS WHEREAS, the undersigned judges of City of Kenai Canvass Board for the Regular Election of the City of Kenai, held on October 5, 2010, do solemnly affirm the results of said election for absentee, personal needs, and questioned ballots, counted on October 12, 2010 as follows: REGULAR ABSENTEE, QUESTIONED AND PERSONAL NEEDS BALLOTS o Absentee ballots voted: Questioned ballots voted: Personal Needs ballots voted: Total Ballots Voted: CITY OF KENAI REGULAR ELECTION OF OCTOBER 5, 2010 FOR MAYOR, ONE THREE -YEAR TERM FOR CITY COUNCIL, TWO THREE -YEAR TERMS Rejected ballots: Not registered, registered too late or Registered out of the City of Kenai: Purged from voter rolls: Ballot envelope not signed or witnessed: No identifier provided on envelope: Voted twice: Signed /witnessed or postmarked after election day: Total Ballots Rejected by Canvass Board- Absentee ballots counted: Questioned ballots counted: Personal Needs ballots counted: Total Absentee, Questioned and Personal Needs ballots counted: /7 REVIEW OF PRECINCT MATERIALS The Canvass Board further certifies we have examined in detail all original and questioned registers for the three polling precincts, AVO's and absentee by -mail of the City of Kenai and have found them to be in proper order. Upon completion of the canvass, it is our opinion the attached summary of election returns, as compiled by the City Clerk, accurately reflects the totals shown on the Certificate of Election Returns by the election board of each voting precinct and the returns of the absentee, questioned and personal needs ballots cast in this election. We, the undersigned, certify the foregoing to be true and accurate to the best of our knowledge and belief. Signed and dated this day of October, 2010. A C 1 On ATTEST: Carol L. Freas, City Clerk KU 13 -8 WHITE PAPER Introduction KU 13 -8 History e-) l�G ©ix -d In the vetting and preliminary due diligence phase of the Cannery Loop gas storage project, the Kenai Unit 13 -8 "KU 13 -8 wellbore was identified as a potential risk for gas migration, during gas storage operations in the Sterling C reservoir. Petrotechnical Resources of Alaska, LLC "PRA was asked to construct a "White Paper" on the KU 13 -8 wellbore and initially focused determination of whether the KU 13 -8 well could be a "fatal flaw" that would eliminate the Cannery Loop Sterling C reservoir from consideration as a viable storage prospect due to an inability to mitigate or eliminate the risk of the well bore serving as a gas migration conduit. In addition to focusing on the mitigation of the KU 13 -8 potential risk, PRA was looking to identify any other unrecognized risks associated with the KU 13 -8 well. As a result of the continuation of the detailed engineering evaluation of the Cannery Loop gas storage project, a more thorough technical review of the Sterling and Beluga production and pressure data was performed, which greatly reduced the assessed risk of gas migration in the KU 13 -8 wellbore. This second White Paper draft reflects PRA's current assessment of the risk that gas migration might occur under gas storage operations. KU 13 -8 was drilled (spudded on 11/22/64) and abandoned (12/8/64) by Union Oil Company of California in 1964. The only well information recovered to date has been from the Alaska State files and is very sparse. The well was drilled into what is now the Cannery Loop Unit looking for oil to a depth of 5,506'. In doing so, it penetrated the Sterling A, B, and C sands as well as the Upper portion of the Beluga formation. Note that the proposed formation for the CINGSA gas storage project is the Sterling C reservoir, which has produced just over 22 Bcf of gas via the Cannery Loop Unit -06 "CLU -6 wellbore. The CLU -6 well is the only well in the unit that has produced from the Sterling C reservoir (currently producing), although the CLU -10 well was also perforated, but never produced. Also of relevance to this KU -13 White Paper, is the fact that Marathon is currently producing from the Upper Beluga sands in the CLU -7, CLU -8, CLU -9, and CLU -11 wellbores. The KU 13 -8 well penetrated the Sterling C sand sequence along the west flank of the reservoir, down dip from the reservoir crest. Drilling records make no mention of any gas shows from the Sterling C, so it is unknown whether any gas was encountered at this location. The well was abandoned in accordance Page 1 of 30 with the State procedures at that time, but without isolating the sands mentioned above from one another. Included in this paper is the KU 13 -8: Well "As Built" Schematic, which shows the current well abandonment configuration. The original well abandonment documents can be viewed in Appendix 1. Included in Appendix 2 are the current abandonment regulations required by the Alaska Oil and Gas Conservation Commission "AOGCC as well as a discussion regarding the abandoned KU 13 -8 cased hole section and how it compares to current regulations. Due to the fact that the KU 13 -8 well was abandoned without isolating the various Sterling and Upper Beluga intervals, the possibility exists for gas to cross flow between these various sands within the KU 13 -8 wellbore. As previously mentioned, the Sterling C sand in the Cannery Loop Unit has been depleted via on -going production from the CLU -6 well and the Upper Beluga sands from numerous wells, including the CLU -5, CLU -7, CLU -8, CLU -9, CLU -10 and CLU -11. The Sterling A and B sands have been penetrated by all fourteen (14) well penetrations at Cannery Loop Unit, but have never been perforated or produced. A thorough review of the historic Sterling C (and where available, the Beluga) production and pressure data from the Cannery Loop Unit, indicates that there has not been any gas cross flow into or out of the Sterling C reservoir, either within the KU 13 -8 wellbore or anywhere else in the unit. The data also suggests that the reservoir is in complete pressure isolation from the underlying Beluga formation and the over -lying Sterling A and B intervals. A detailed discussion of the pressure isolation of the Sterling C formation follows. Because of this apparent isolation, the future risk of gas cross flow in the KU 13 -8 wellbore, due to gas storage operations, is minimal. If, however, cross flow occurs during storage operations, procedures for accessing and remediating the KU 13 -8 wellbore are outlined later in this paper. Sterling C and Beluga Isolation in addition to the KU 13 -8 wellbore, twelve (12) wellbores have penetrated the Sterling, Beluga, and possibly Tyonek formations within the Cannery Loop Unit. Production commenced from the Beluga formation in 1988 and produced in excess of 33 Bcf of gas by October 2000, when the first gas was produced from the Sterling C interval (via the CLU -6 wellbore). Data obtained from the AOGCC shows the initial reservoir pressure of the Beluga formation to be 2,310 psia, at a reservoir datum of 5,175' ND. This equates to an initial reservoir pressure gradient of 0.446 psi /ft. Likewise, the initial Sterling formation pressure, measured in the CLU -6 well (in Oct. 2000), was 2,206 psia at datum of 4,966' ND. This equates to an initial Sterling pressure gradient of 0.444 psi /ft. The initial Sterling reservoir pressure was obtained from Marathon Oil supplied data (P /Z vs. cumulative gas production data). Note that this normal pressure gradient is consistent with other Sterling C reservoirs in the region. Both reservoirs showed virtually the same initial pressure gradients, even though the Sterling formation pressure was measured after 33 Bcf of gas had been withdrawn from the Beluga formation. If the reservoirs had been in pressure communication, via the KU 13 -8 wellbore (or elsewhere within the CLU), the Sterling pressure gradient, in October 2000, would have shown depletion. Page 2 of 30 Analysis of the historic pressure and gas production data from the Sterling C formation shows a closed system or reservoir container. A plot of bottom hole pressure divided by the Natural Gas Compressibility Factor (P /Z) versus the cumulative gas produced (Figure 1 and Appendix 3), shows a straight line over the producing life of the Sterling C reservoir. This straight line fit through the data indicates an isolated reservoir. If the pressure and /or production from Sterling C interval had been influenced by another outside source (i.e. from the Sterling A or B formations, from any of the Beluga intervals, or from an active aquifer drive), the P/Z data would have deviated from the straight line seen on the plot. Material balance for the Sterling C producing volume thus indicates that there has not been any gas cross flow, or any pressure communication between the Sterling C intervals and the Beluga formation, within the KU 13 -8 wellbore. Reviewing the historic Cannery Loop Unit production data for both the Sterling C and Beluga formations (Figure 2) also indicates that the reservoirs have been in pressure isolation from one another. Note that when the Sterling C interval was first produced in October 2000, the decline in the Beluga production data did not change. Likewise, in 2004 when the CLU -07, CLU -08, and CLU -09 wells were completed in the Upper Beluga formations and the total Beluga off -take was increased from 2 -3 MMcf /d up to 20 -28 MMcf /d, the production decline from the Sterling C formation did not change. If there were pressure communication between the formations, the ten -fold increase in Beluga production would most likely have impacted the Sterling production, resulting in a noticeable decline. Note that the 2004 and subsequent data points on the material balance P/Z plot, fall directly on the established straight line trend. Finally, the current reservoir pressure in the Sterling C interval is substantially lower than the reported pressure in the Beluga formation. If the reservoirs were in communication, there would have been a natural tendency to equilibrate. The last pressure measured from the Sterling C formation, was 424 psia, taken in October 2009. Annual reservoir property reports, submitted by Marathon Oil to the AOGCC, indicated that the average Beluga reservoir pressure at the end of 2009 was 1,371 psia. This substantially higher Beluga pressure would have caused the late -time Sterling C P/Z data to deviate upwards from the straight line trend, if the reservoirs were in pressure communication. This did not happen. From the above discussion, PRA concludes that there has been no pressure communication or gas cross flow between the Sterling C formation and either the Sterling A B or Beluga formations, in the Cannery Loop Unit. The KU 13 -8 wellbore has been in its current abandoned configuration throughout the past 46 years and the ensuing production history of the Cannery Loop Unit, and thus has not been a conduit for communication. It is PRA's judgment that the chance for future gas cross flow to occur via the KU 13 -8 wellbore, as a result of the proposed gas storage project, is very remote. Isolation Theory Several natural or induced mechanisms may be preventing cross communication in the KU 13 -8 wellbore. The Sterling and /or Beluga reservoir rock may be "tight" at the KU 13 -8 location (preventing cross flow), or simply not connected to the produced reservoir volumes at Cannery Loop. The limited Page 3 of 30 open -hole logs run in the KU 13 -8 well, show the Beluga formation to be thin and of poor quality. The Sterling A and B intervals appear to be water saturated in the KU 13 -8 wellbore. Secondly, the near wellbore reservoir rock is likely damaged due to the mud system used to drill the well and further damaged due to the abandonment procedure. The mud system and techniques used in 1964 throughout the Kenai Peninsula were very damaging to the formations being drilled. Many papers have been written about the severe reservoir permeability damaged caused by clay particles swelling in the formation when introduced to fresh water mud systems. All modern day mud systems use invasion inhibitors containing chlorides and or polymers to prevent fresh water from contacting the reservoir rock. KU 13 -8 was not only drilled with a fresh water mud system, but also due to the abandonment procedure, the 10.3 ppg mud was left in contact with the formation for the past 46 years. The result was likely severe to nearly total reduction in reservoir permeability in and around the KU 13 -8 wellbore. The 10.3 ppg mud used to drill the KU 13 -8 well (which was subsequently left in the wellbore), was significantly overbalanced as compared to all the potential gas zones. This overbalance exerted over 450 psi of excess pressure (as compared to the initial discovery pressure) to the face of the Sterling C sands. This overbalance, by design, would prevent gas from entering the wellbore from the various formations. This differential would be even greater once the reservoir was depleted through gas production, thus making it even less likely for gas to enter the KU 13 -8 wellbore. Even if all the solids in the old mud had settled out, the fresh water hydrostatic pressure would be nearly equal to the Sterling C initial reservoir pressure, preventing or severely limiting gas from entering the wellbore. In phase 1 of CINGSA's gas storage plan, the Sterling C reservoir will only be charged to approximately 69% of its original reservoir pressure (1,521 psia vs. initial reservoir pressure of 2,206 psia). This is a result of the phase 1 planned maximum gas volume of 18 Bcf (compared to the OGIP of 26.5 Bcf). CINGSA Phase 2 may in the future re- charge the reservoir to initial pressure, which would equate to a fresh water hydrostatic pressure. Should CINGSA not go to phase 2 of their gas storage project, the hydrostatic pressure in the KU 13 -8 wellbore (2,186 psia using a conservative 8.35 ppg fresh water gradient see Appendix 4) would always be significantly higher than the maximum reservoir pressure after summer fill -up (expected to be 1,521 psia). This pressure differential would prevent any gas injected into the Sterling C reservoir from entering the KU 13 -8 wellbore. A more complete discussion of the KU 13 -8 mud system, along with calculations of possible volumes of solids that may have settled out, is attached to this paper in Appendix 4. Included are discussions and calculations regarding the possible fluids left in the wellbore. In addition, Appendix 4 contains manufacture specifications on Spersene I and XP -20 water systems. Regarding the Sterling A and B sands, which have not been produced and are thus assumed to be at virgin reservoir pressure, it is even less likely for Sterling C gas to migrate into them, due to their higher pressures. Perhaps more importantly, it is unknown if commercial quantities of hydrocarbons exist in the Sterling A and B sands. If at some point in time, Marathon produces gas from the Sterling A and /or B zones (within the Cannery Loop Unit), and reduces their respective reservoir pressures, the theoretical possibility could exist for cross flow into the A and e sands. Even so, this is highly unlikely given the fluid Page 4 of 30 in the KU 13 -8 wellbore and the fact that no cross flow or pressure communication has been noticed between the formations. It should be pointed out that the reservoirs (Sterling C as compared to the Sterling A B) are current at a maximum differential pressure and no communication has been noticed. As previously stated, the Sterling C reservoir has shown no signs of pressure communication with surrounding strata. Some of the above restrictions to cross communication could however change during the life of the Cannery Loop storage reservoir, considering the rates of injection and withdrawal, and the long -term cycling of reservoir pressure. In particular, this would apply to changes to near wellbore damage and possible permeability reductions due to clay swelling. Fortunately, the fluid hydrostatic in the KU 13 -8 wellbore will by itself prohibit any gas from entering the wellbore. The KU 13- 8 wellbore will also see much more gradual pressure changes (as compared to the storage wells) and will not be subjected to high flow /injection rates. Regarding the abandonment of the KU 13 -8 wellbore, it is unfortunate that the abandonment did not adhere to current State regulations, which require the isolation of all producing sands by cement plugs. This would have alleviated any possibility of gas migration in the KU 13 -8 wellbore. Although the open hole section of the KU 13 -8 wellbore does not have complete zonal isolation, the cased portion of the wellbore was abandoned such that the risk of gas migrating to the surface is virtually zero. The 1964 cased hole section abandonment of the KU 13 -8 wellbore (from the 8 5/8" casing shoe up), adheres to current well abandonment criteria. A cement plug was placed from approximately 100 feet below the casing shoe to 100 feet above it, or some 200 feet thick. Additionally, well records indicate that the 8 5/8" surface casing was cemented with 300 to 340 sacks of construction cement (varying reports on amount pumped). 340 sacks would put cement to surface if there were no washouts. The original program called for 450 sacks, and it is unclear why they went with less. The monthly drilling report states that the top of the cement is 350' from surface. There is no report in the files on how this was measured. Sometime later they ran a 1" pipe to an unknown depth inside the 13 3/8" x 8 7/8" annulus and cemented with 35 sacks and cement to surface, Thus, the combination of the 200 foot cement plug at the 8 5/8 inch casing shoe coupled with the surface plug should provide an effective seal against gas migration to the surface via the 8 5/8 casing. While there is no report of a cement bond log having been run, the volume of cement that was utilized for cementing the casing and for setting the surface plug should have provided an effective seal. Finally, the 13 3/8" casing was not cemented in place. Reentry Risks The potential for cross flow within the existing KU 13 -8 wellbore can be eliminated if CINGSA is able to re -enter the lower part of the wellbore below the cement plug and completely isolate the Sterling C from all porous and permeable formations above and below it. The procedure for accomplishing this is to re -enter the well, drill out the cement plug near the surface and the plug that exists across the bottom of the casing, clean out the wellbore to total depth, and then set several staged cement plugs from the bottom of the well to ground surface. There are risks associated with performing this procedure. The drill bit can deflect off the cement and start drilling "new" hole rather than following Page 5 of 30 the original wellbore. The cement plug may be much harder than the formation, and under such circumstances the bit may "skip" or "walk" off the cement plug and preferentially drill formation. Once this happens, it is rare to be able to re -enter the old wellbore. The wellbore below the cement plug could also have collapsed due to formation instability, age, and damage. If this has occurred, debris in the wellbore could deflect the bit out of the original drill hole and start a new hole. As with the case above, once a new hole is initiated, it is extremely difficult to reenter the old hole and thus properly abandon the original open -hole section. Note that if the existing hole has collapsed, it would be more difficult for gas to migrate from one reservoir to another. There is no means of identifying this without reentering the wellbore. Every precaution (see attached draft program) would be taken to prevent the loss of the hole, however, it is estimated there is still a 15% to 20% chance of this happening. In addition to the possibility of losing the hole, the following risks will be incurred by reentering the KU 13 -8 wellbore: 1) Coal gas leakage between the 13 3/8" and 8 5/8" annulus a. A likely event. Most wells have some annular gas associated with shallow coal zones. It bleeds through the surface cement job. Oil and Gas operators live with it as a nuisance. This might be more of an issue in regards to the cannery being above the KU 13 -8 well head. It generally cannot be mitigated. 2) Stuck pipe a. Potential is low to medium depending on the condition of the old hole. Costs for each incident would be approximately $250,000. We will be coring the cement plug leaving a very hard sheath of cement. If this becomes dislodged during operations it could fall and stick the pipe. Risk is additional costs. b. Differential sticking is a medium concern. The mud system will be contaminated and not in the best shape while drilling /cleaning out depleted gas zones. 3) Well Control /Lost Circulation a. Well Control is a low risk generally associated with drilling a combination of normal and subnormal zones. The subnormal zones have lost circulation and reduce the hydrostatic on the normally pressured zones. Having a good shoe at 1159' decreases the potential impact of a well control event. A lost circulation event could cost $50,000 $100,000. A well control incident would cost about the same, however, a well out of control has significant implications of $5,000,000 although the risk of this happening is extremely remote. 4) Poor Cement Job(s) a. Cement plugs are not always 100% effective. The biggest risk is in severely washed out zones. The hole condition may have deteriorated over the last 46 years causing the near wellbore area to become unstable. b. The casing cement job in the monitoring well scenario is of less risk due to the expected hole conditions and smaller volume of cement required to effect a seal. In addition, the quality of the cement can be evaluated by a bond log. c. The estimated cost for this event is $75,000 (squeeze cementing). Page 6 of 30 5) Surface Casing is not suitable a. The specification pipe grade of the current surface casing is unknown. It may not be strong enough to get to the well TD. This would require another casing string. This is a medium risk. No data has been found regarding the grade of pipe in the hole. b. If an intermediate string has to be set, this reduces the size of the clean out tools that can be used to get to bottom. It may compromise the ability to fully clean out the old wellbore and get a good cement job. c. The costs associated with this problem are 4 days of rig costs (at $80,000 /d) and $80,000 of casing costs. 6) Spills a. The largest concern is the proximity to the Kenai River and the toxicity of the old mud. The potential costs for a catastrophic release are in the range of $1,000,000. Recovery Options Recovery options are limited in the event that the drill bit "skips" off the cement plug and begins drilling new hole. The well could continue to be drilled to total depth in the hopes of re- entering the original wellbore, although the likelihood of success is extremely small. If the original wellbore is not tracked from surface to TD, casing could be run and cemented into the new well, providing the option for passive monitoring of pressure /temperature at the Beluga and /or Sterling intervals. This would help provide assurance that gas is not cross flowing from one reservoir to the other. Down hole pressure /temperature surveillance of the Sterling C sand, coupled with routine storage inventory monitoring and annular pressure monitoring of all wells penetrating the Sterling C in the Cannery Loop Unit would provide ample early warning that gas is escaping from the reservoir, so that corrective measures could be implemented to either arrest migration or implement additional measures to recover the gas. Corrective measures include injecting water and /or polymers into the 13 -8 re -drill wellbore to increase hydrostatic pressure above reservoir pressure, connection of the well and production to directly recover the gas, or possibly pumping cement at pressures above fracture gradient to connect the two wellbores and seal off the original borehole with cement. Each of these measures carries their own costs and risks. Again, it should be emphasized that historic pressure and production data from the two pools indicates that there has been no cross flow thus far, even while differential reservoir pressures and withdrawal rates have been significant. In the event that the original wellbore was lost and the well was re- completed as a pressure monitoring well, the following mitigation procedures would be considered to arrest the suspected cross flow in KU 13 -8 well: 1) Kill the cross flow with water. The monitoring well would be filled with water. The water would take the same flow path as the leaking gas and exert a hydrostatic and dynamic pressure reducing or stopping the flow. The chances of success increase the closer the two bottom hole locations are. No additional capital cost, once a month pump truck costs at $1,500 each. Yearly costs $18,000. Page 7 of 30 2) Kill the cross flow with polymer The monitoring well would be slugged with two treatments of viscous polymer. The polymer would plug the surrounding pore spaces blocking the passage of gas. The chances of success increase the closer the two bottom hole locations are. Each 500 bbl treatment is estimated to cost $50,000 plus $10,000 in pumping charges. Total cost is $120,000. 3) Frac from the monitoring well over to the original wellbore and cement. This assumes the monitoring well completion can handle hydraulic fracture pressures. Water would be pumped down the tubing at a high rate ("20 bbls /minute). Modeling would indicate how long to frac and maybe what pressures to expect if the original well bore had been intersected. The water would be chased with cement sealing off the gas flow. The chances of success increase the closer the two bottom hole locations are. Estimated costs are in the range of $250,000 to $400,000. 4) Produce the monitoring well The monitoring well completion should be identical to a producing type completion. The only change might be the addition of perforations to increase the flow rates. A small 3" line and meter run would be laid from the well to the nearby Marathon pad and gas manifold. The line would be approximately 3000' in length and use the road easement. Using an installed price of $50 /ft or $150,000 plus additional capital start costs of $50,000 gives a total installed cost of $200,000. If a new hole is drilled and either cemented off or completed as a monitoring well, the original hole section would still be subject to the same concerns that were present before the intervention. Secondly, the real benefit for a monitoring well, whether it be at the KU 13 -8 location or elsewhere in the field, would be to monitor the formation pressures above (Sterling A B) or below (Upper Beluga) the Sterling C reservoir. CINGSA would have to get permission from Marathon Oil in order to monitor these pressures. Considering that the Sterling C reservoir is a sealed tank, which has been (and will continue to be) depleted by depletion drive, an additional monitoring well in the Sterling C reservoir won't provide that much more information than will already be obtained from the five development wells. Decision Tree Analysis A decision tree was constructed to characterize the options, risks and costs associated with this well. The results indicate that reentering the well and re- plugging it to fully isolate the Sterling C interval or converting the well to an observation well is likely to be successful, although costly, and perhaps most likely unnecessary. This option also reflects the most conservative approach in terms of risk potential for cross flow /leakage, though the procedure itself is not without risk. The decision tree analysis yielded a probability of success re- plugging the original wellbore of 80 but the low probability for risk of cross flow places the value of the mitigation in question. The attached decision tree was assembled with the following assumptions: Page 8 of 30 Chance of 13 -8 having cross flow with other formations 1% (assuming no action is taken to isolate the Sterling C with cement). Note that this assigned risk of cross flow dramatically decreased from the original white paper, due to the continued detail engineering evaluation of the Sterling C reservoir. Chance of drilling out of the original wellbore during the cleanout of KU 13 -8 20 Base Cost for Plug and Abandon of KU 13 -8 $1,500,000 (assuming existing lower plug can be drilled out and the drill bit remains in the original hole to total depth). Additional logging /diagnostics in the case where a new hole is drilled and then P &A'd $100,000. Cost for re -drill of KU 13 -8 and converting to an observation well $2,400,000 (assumes permanent installation of 5 inch casing and 2 7/8 inch tubing set on a packer, at an additional well cost of $900,000). Cost of lost gas to other formations if KU 13 -8 has cross flow $3,500,000 The minimum detectable loss of gas through routing pressure monitoring is on the order of 250 500 MMcf. Using 500 MMcf at $7 /MMcf, equates to a cost of lost gas of $3.5MM. The risk of gas flow to the surface in its current condition is nil. All of the historic data indicates that there has been no cross flow between the Sterling C formation and surrounding strata, within the KU 13 -8 wellbore. Unfortunately, this continued isolation cannot be guaranteed if no action is taken to properly isolate the Sterling C interval. Therefore a probability of 1% was judged to be reasonable within the decision tree analysis, for the chance of future cross flow. Once the field is placed into storage service, routine monitoring of individual well pressure and storage gas inventory will provide an early warning if cross flow or migration to other formations is occurring. Such measures are used widely across the storage industry and are consistent with prudent operations. An ongoing assessment of the volume per -pound change in reservoir pressure (MMcf /psia) is an excellent method to evaluate whether gas losses of any sort are occurring, and is well suited for the Cannery Loop Sterling C reservoir due to its well defined pressure depletion drive characteristics. During primary production, the Cannery Loop Sterling C reservoir exhibited a volume per -pound decline of approximately 10.2 MMcf /psia. When used in concert with semi annual shut -in pressure tests (which are AOGCC mandatory requirements for all storage operators), this metric provides a reliable and sensitive measure of gas losses. Given the size of the Sterling C reservoir, and its well defined depletion drive characteristics, a gas loss on the order of 250 -500 MMcf would be easily detectable on a plot of P/Z vs. total gas inventory. This magnitude of loss would be reflected in a pressure reduction of 25 -50 psi below what would be expected for a given inventory. This method of inventory verification applied in concert with other routine measures including annular pressure monitoring, bottom hole pressure surveys, down hole casing inspection logs, temperature surveys, and robust periodic reservoir modeling, provides an effective safety net for detecting and responding to gas losses from individual wells and the reservoir proper. Page 9 of 30 If cross flow or migration is suspected or determined to be occurring, corrective measures could be implemented to mitigate or fully arrest any gas loss. One such measure would be to reenter the KU 13 -8 wellbore at a later date to curtail cross flow. Options Summary and Costs After a thorough review of the Sterling C (and where available the Beluga) pressure and production data (for the Cannery Loop Unit), it is clear that the Sterling C formation has been in complete isolation from the above Sterling A and B sands and from the Beluga sands below, over the production history of the field. Considering the fact that the KU 13 -8 wellbore was in its present condition long before any Beluga or Sterling production occurred, and that there are no historic indications of cross flow within the wellbore, it seems very unlikely that the KU 13 -8 wellbore will experience cross flow during future gas storage operations. If CINGSA chooses to reenter the KU 13 -8 wellbore, there exists an 80% chance that the wellbore would be reentered successfully and then properly abandoned. Reentering the well would however incur additional risks, such as annular gas, stuck pipe, spills, etc. (discussed earlier). If CINGSA chooses not to reenter the KU 13 -8 wellbore at this time and losses are detected in the future gas storage operations, the KU 13 -8 wellbore could be reentered at a later date. If CINGSA is concerned about the possibility of gas migrating to the surface, a hybrid option would be to access the KU 13 -8 wellhead and set the well up for surface monitoring. This option would involve locating the well head and minor work to install pressure transducers (casing annulus). This capability would allow CINGSA to monitor surface pressure at the well on a real -time basis, via SCADA. If pressure were to be detected, CINGSA could undertake further investigations to confirm the pressure source. The cost estimate to do this would most likely be less than $400,000. As previously mentioned, there is a fairly likely chance that small amounts of gas could be leaking from the surface pipe /annulus, sourced by shallow coal seams and not from the bottom hole section. Experience has shown that in general these coal seam sources are not a threat. Because of this, monitoring for gas pressure (as opposed to the presence of gas) is a much more definitive indication of gas migrating from the storage reservoir. A KU 13 -8 "Well Preparation Procedure" and "Abandonment Procedure" have been included with this paper, in the event that CINGSA chooses to proceed with reentering the KU 13 -8 wellbore. A complete decision process flow diagram is included at the end of this paper. Summarized below are the three primary KU 13 -8 options and exposure levels outlined in the decision tree. These three options include 1) re- entering and attempting to re -plug of the KU 13 -8 prior to significant project construction, 2) leave the well in its current state /configuration (do nothing) during initial start-up and operation of the facility and assessing storage integrity on an ongoing basis to determine if losses may be occurring and to what extent, and 3) undertake a limited investigation to confirm the well location, and install pressure monitoring equipment that will enable real -time monitoring of the plugged casing for any indication of gas migration associated with storage operations. Page 10 of 30 KU 13 -8 Options: Reenter KU 13 -8 Success Reenter KU 13 -8 Not Successful Access, but do not reenter the KU 13 -8 well Limited Surface Monitoring Do nothing on KU 13 -8 Commercial Issues KU 13 -8 Decision Tree Summary No 0.5 Bcf Gas Loss Gas Loss Mitigation Total Cost Exposure Cost Exposure Cost Exposure Exposure Range $1,500,000 $0 50 $1,500,000 51,600,000 $250,000 51,600,000 $5,000,000 53.500,000 53,000,000 $11,500,000 52,500,000 5400,000 $400,000 $3,500,000 53,000,000 $6,900,000 52,500,000 50 53,500,000 53,000,000 50 $6,500,000 If at some future date gas loss is determined to be occurring, CINGSA would first need to determine the magnitude of loss and whether the gas is accumulating in some other porous and permeable zone. If the magnitude of loss was deemed significant and the gas was accumulating in a collector zone, options for recovery would likely require that CINGSA negotiate to acquire the necessary rights to recover the gas from the thief zone. The magnitude of gas loss (both volumetric and financial) would have to be balanced against the cost of acquiring the necessary surface and /or sub surface rights to recover the gas along with any safety considerations. The circumstances that would drive a decision process for this sort of event are complex and extensive. It is not possible, nor practicable, at this stage to outline the range of conditions that might drive such a decision, and frankly an exhaustive discussion of this potential is beyond the scope of this paper. Page 11 of 30 KU 13 -8: Well "As Built" Schematic Conductor 13 34"; wt unknown Shoe 7S11. M/ IntermediateH ole: 121/4" Intermediate C a sing: 8 5i8"; 24 #1t 340 s Class cement Shoe 1159ft. MI Production Hole: 7 5,8 Open Hole TO: 5500 ft. ND Plug #2: Set from 25 ft Mi to surface Cement Top Calc: -190ftMl Plug #1: Set from 1270 ft to 1000 ft MI !lotto Sc Dia a °.nmatic Page 12 of 30 October 28, 2000 e CLU #6 e June 8, 2004 A May 16, 2008 October 22, 2009 y 0.0989x 2606 R 0.9945 3000 2500 2000 ,t 1500 1000 500 Figure 1 Cannery Loop Unit Sterling C P/Z versus Cumulative Gas Production CANNERY LOOP UNIT Sterling C Sand Material Balance Analysis 5,000 10,000 15,000 20,000 Cumulative Produced Volume, MMscf 25,000 Page 13 of 30 30,000 100,000 10,000 1,0 0 00 m m m c c c CO CO 3 3 Figure 2 Cannery Loop Unit Sterling and Beluga Production History Cannery Loop Beluga Sterling Pool Production History BELUGA Average Gas Rate STERLING Average Gas Rate BELUGA Cumulative Gas STERLING Cumulative Gas added CLU -08 (Apr. '04) added CLU-0 (Dec. '04) CLU -05 Prod oniv a m u 03 Added CLU -06 Steding C Oct 2000 0 c Month Vi 01 V u> 6r 0 0 at, 0 A m 0 0 m CO m CO m 1 1 "I -3 Page 14 of 30 90,000 80,000 70,000 60,000 0,000 40,000 30,000 20,000 10,000 DRAFT KU 13 -8 Well Well Preparation Procedure PURPOSE: Locate and prepare well casing for drilling operations by installing and testing a casing head on the 8 5/8" casing. A well cellar and possibly a mouse hole for the drilling rig should also be considered depending on timing. BACKGROUND: Civil and geophysical surveys studies were carried out in November 2009 on the subject property in attempts to locate the plugged and abandoned KU 13 -8 well. Results from these studies show a buried object with strong magnetic susceptibility in close proximity (within 2 feet) of the civil surveyed location of the well based on drilling sundry records obtained from the Alaska Oil and Gas Conservation Commissions public records. The suspected location of the well is approx. 5 feet north of the "break room" building, buried below the asphalt driveway that runs between the "break room" and "main fish processing" buildings. The well files do not indicate the condition of the top of the well, other than a 25' surface cement plug was placed in the 8 5/8" casing presumably from the top of the casing. The casing or starting head may or may not be in place. In the well files, there was a recommendation that a cap be welded over the well, but no confirmation that this was ever done, was found. It does state that the space (annulus) between the 13 3/8" and 8 5/8" casing was cemented by a 1" pipe to surface. Casing heads normally would have been installed 2' -3' below grade in a well cellar. There is no reference to the current pad elevation so the depth of the casing is unknown. LOCATION PROBLEMS: 1. Locating well 2. Depth of the top of the well 3. Condition of 8 5/8 "casing 4. pressure /gas underneath cap This is the most annoying problem. Historically cement plugs at the end of the well were considered a nuisance. Kill weight mud is in the hole and the success of the plug was never really tested. KU 13 -8 they have documented that the plug across the shoe was set and "tested" by tagging it or setting down on it 4000 pounds of weight. Over time the barite will settle out of the mud and or the mud will swap with gas in the well. Sometimes just thermal pressures or the decomposition of the mud will generate gas and pressure. Pressure underneath the well cap that cannot be bled off in 5 to 10 minutes will need further evaluation. Most likely multiple small attempts will result in a successful bleed off. In the unlikely event that the pressure cannot be bled down heavy weight mud will have to be bullheaded (pumped) into the well. Page 15 of 30 MATERIALS: 8 5/8" x 10 3/4" or 13 5/8" casing head Hot tap weld -o -let and valve 8' Well Cellar Pre -lob site preparation (2 3 days): Heating mats will be laid over an area of 8 foot by "'8 foot immediately atop the area identified by the civil and magnetic surveys. These mats will be installed approximately 48 72 hours depending on the time of year prior to excavation operations to allow for thawing of the substrate and softening of the asphalt. OPERATIONS: (4 days): 1. Cut asphalt: 8 ft by 8 ft area immediately surrounding the suspected subsurface well location. 2. Remove asphalt using small track hoe, caution to be taken to not further damage surrounding driveway area. 3. Excavate to "'5 ft, or top of casing by hand digging, caution to be exercised below 1 foot depth. a. Pull soil samples for analysis of possible contamination. b. Obtain water samples from the Inlet Fish well and perform complete organic and inorganic analyses, to establish a baseline. 4. Hand -dig around casing top to expose 1 feet of casing. 5. Survey excavated pit for methane and H2S gas w/ gas detector (sniffer). Record results. Cease operations if either gas is leaking from casings. 6. Inspect, document and photograph findings. Specifically, whether steel cap is in-place, integrity of cap and visual of weld, Ultra -sonic wall thickness of the 8 5/8" casing and cap, dimensions of observed casing, depth below driveway grade, depth below break room building slab, distance from break room building foundation, other. 7. Clean out remainder of material sufficient for installation of well cellar. Small track hoe maybe used carefully. Note: there are reports of cable around the wellhead. Be prepared to torch cable.; check for presence of gas again. 8. Install Well Cellar 9. Prepare the 8 5/8" casing. The following supposes that a cap is welded directly to the 8 5/8" casing stub and the 13 3/8" casing is a foot or two below. a. Check for gas again b. Weld hot tap fitting to top of plate. c. Install valve and packoff. d. Drill 3/8" hole through plate. Check for pressure. Sniff for methane and H2S. e. Thermal expansion may contribute to some slight pressure or blow. Bleed off pressure, be prepared to capture up to 5 gallons of fluid. If H2S is present, continuously monitor and ensure adequate ventilation. If bleeding takes more than 5 minutes, consider capture and burning of the gas. Page 16 of 30 PURPOSE: 10. Observe well for 1 hour. Well should be free of gas. Cut off cap and dress top of 8 5/8" casing. Document top of cement inside 8 5/8 Dress off 13 3/8" casing approximately 1 1/2' foot below top of 8 5/8 11. Take coupon sample of the surface casing for testing. 12. Weld on 8 5/8" casing head. Install blind flange with valve and test casing head to 2500 psi. 13. Suspend operations and cover cellar with rig mat while waiting on rig. Draft KU 13 -8 Abandonment Procedure Isolate the Sterling C sands from shallower and deeper porous and permeable formations with a cement plug. Most likely the state will also request that the other zones in the Beluga and upper Sterling be also isolated. BACKGROUND: The well was drilled by Union Oil Company of California in 1964. The well records are very sparse as was typical during that time, but indicate that Marathon also received a copy of the reports and may have been a partner in the well. Chevron (Unocal) say they do not possess any well files from this well, however, Marathon may have maintained their records longer. The mud company, Magcobar (MI Drilling fluids now) does not have any records. Operations appeared normal with setting 13 3/8" surface pipe at 75' and drilling 9 7/8" intermediate hole opened to 12 1/4" to 1209'. 8 5/8" 24# casing of unknown grade was run and cemented at 1159'. The well was TD'd at 5,506' with 7 5/8" hole. After logging a cement plug was set across the shoe of the 8 5/8" casing from 1,270' to 1000'. The top of cement was tagged at 1,000' with 4000 pound of weight. A 25' surface plug was set presumably from 25' below the wellhead to ground level. A subsequent letter from what appears to be Oil and Gas describes the well as full of cement with some buried cables (drill line around the well. They recommended a well cap be welded to the top of the casing, however, there is no record of a cap being installed. The well was drilled with a mud called Spersene XP -20. Typical of the period it contained bentonite gel, chrome lignosulphanate and lignites, as well as caustic soda and potentially some diesel. The manufactures specifications on these products are included in Appendix 4. The location, condition, and contents of the drilling mud pits associated with KU 13 -8 well are unknown. No mention of them was found in the well files. Historically, pit liners were not used during the time that the KU 13 -8 well was drilled and most likely the mud and cuttings were just left out to drain. Some pits were refilled with overburden. Page 17 of 30 RE -ENTRY RISKS: 1) Plug across the shoe leaking, creating pressure underneath the surface plug This is considered low risk as the formations encountered in this well have been well depleted. In addition, even if the shoe plug leaked, it still would have trapped the 10.3 ppg mud in the casing. The initial investigation procedure will include a hot tap of the casing if a plate was in fact welded on top of the casing; this will allow assessment of whether any fluid pressure exists at the surface. In the unlikely event the plug at the shoe has leaked and pressure exists below the shallow plug or all the way to the surface, it will be mitigated by drilling out the surface plug with the hydril closed taking returns through the choke. 2) Handling of the old mud this will have to be researched. The old mud will inevitably contaminate the entire mud system. 3) Poor Casing. The surface casing size and weight are known but not the grade. Assuming the lowest grade and that it retains 80% of its burst, the well can be abandoned safely. General experience is that old casing does not deteriorate in the hole. There wasn't much drilling time in the casing which means it should be in reasonable shape. There could be issues with the upper most part that may have been exposed to oxygen, however, that can be cut back to solid casing. Internal corrosion is usually not a factor, however, the mud may have deteriorated causing the generation of H2S. Regardless, the casing will be tested once the surface plug is drilled out. The contingency if it fails is to run a 5.5" inner string, scabbing over the bad casing. Casing collapse is an unlikely possibility with cement to surface. 4) Drilling out the shoe plug and not losing the old hole we do not have any directional or bottom hole assembly records for this well. We will have to drill out over 100' of old cement in open hole. Exacerbating the problem will be that the last 60' of shoe track was drilled to at least 12 1/4" hole and washed out most likely considerably more than that. Old cement can either be extremely hard or almost none existent. Drilling out with a stabilized bottom hole assembly and a PDC bit (low drill weights) give us the best shot at finding the old hole. 5) Getting to bottom The well has set idle for over 45 years with the original drilling mud in it. Generally, if the coals haven't collapsed completely sealing off the wellbore, the well can be cleaned out with a bull nose hole opener, if taken slowly,. The mud and cutting returns will require close monitoring of drilling fluid properties to ensure that hole cleaning is adequate and that cuttings are being removed efficiently. 6) Lost Circulation The well penetrated multiple zones that are severely depleted. Lost circulation is expected and may not be able to be controlled, even with cement plugs. 7) Cement isolation There are three separate areas to isolate, the Upper Sterling, the Sterling C and the Beluga sands. The interval is over 2500' in length and not recommended to be done in one plug. AOGCC will get involved in what is necessary and acceptable for this, however, this draft procedure is assuming 4 x 400' plugs. OPERATIONS (16 days): 1. Layout Herculite Rig liner. 2. Rig up Rig. Mix Mud. 3. Nipple -up and Test BOP stack, (State rep. observer present) 4. Pick up 7 5/8" used PDC bit on HWDP and run in hole.. Page 18 of 30 5. Tag surface cement plug. Close Hydril with minimum pressure and drill out surface plug with light weight taking return over choke. 6. On breakthrough of plug, observe well dead for 30 minutes. Open bag and Pull out of hole. 7. Pick up stabilized BHA with 6" collars and run in hole tagging plug at approximately 1000'. Displace old mud to waste tank. 8. Control drill through shoe plug with light weight. Monitor cuttings for cement and formation. When through plug, circulate bottoms up, observe well dead or static for 30 minutes and pull out of hole. 9. Pick up 7 5/8" casing scraper and clean out casing to the shoe. Circulate bottoms up and pull out of hole. Note: normally a leak off test would be performed, however, with the large amount of open hole and under pressured zones below, this should be waived by the state. 10. Pick up 7 5/8" hole opener and limber BHA and run in hole. 11. Slowly ream hole to TD, circulating as necessary. 12. Circulate and condition mud. Pull out of hole. 13. Pick up tubing cementing stinger with guide shoe and run in hole to TD. 14. Rig up cement unit. Balance 4 to 5 cement plugs as directed across formations.. 15. Pick up to 1300' and balance 400' cement plug across shoe. Set surface cement plug as directed. 16. Nipple down BOPs, demob rig. 17. Post rig activities (6 days): 18. Cutoff casing flange and weld on steel cap 19. Scoop -up temporary pad materials (front end loaders), and haul off of property. Final clean -up of the affected site area to conform to pre -job conditions. Page 19 of 30 0 m 0 0 eN 6.■ to.0 ra o_ 4 g 0 0 O N N to (6 C Appendix 1 Kenai Unit 13 -8 Well Abandonment Documents Page 22 of 30 XHVZE Image' lroject Well History File Cover This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. f X11 7 0 Z 2 Well History Fi e Ident'fier Organizing (done) WD -Si ded 1I IIII III 11111 esDan Needed IN I IIIII 11111 RESCAN DIGIT DATA OVERSIZED (Scanna Color items: LcJ Diskettes, No. Maps: Grayscale items: Other, No/Type Other items scannable by large scanner Poor Quality Originals: OVERSIZED (Non Scannable) Other: Logs of various kinds NOTES: BY: BEVE Project Proofing BY: BEVERL 'OBI VINCENT SHERYL MARIA WINDY DATE ,i er/5/ X 30 �t 1 J( 3 TOTAL PAGES ,�S BY: BEVER Scanning Preparation VINCENT SHERYL MARIA WINDY NCENT SHERYL MARIA WINDY Production Scanning Stage 1 PAGE COUNT FROM SCANNED FILE: PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: /j \I YES NO BY: Y_T- ']a�� OBIN VINCENT SHERYL MARIA WINDY DATE: 9,10 Is/ Stage 2 iY 1iI BY: IF NO IN STAGE 1, PAGE(S) DISCREPANCIES. ERE FOUND: BEVERLY ROBIN VINCENT SHERYL MARIA (SCANNING 51 COMPLETE ATTTHPOINT IMAGES SPECIAL ATTENTION IS REQUIRED ON NON BNIDUAL PAGE BASIS UNLESS DUE TO QUALITY, ReScanned (individual page [special at/eat/0W scanning romp! d) I General Notes or Comments about this file: Other DATE i /S/ t DATE 91n 66 DATE 11 11111 11 11111 RESCANNED BY. BEVERLY ROBIN VINCENT SHERYL MARIA WINDY /St III 111E111111111 YES NO 2 ��I5. 1 IIIIIIJII11IB Quali y Checked (done) III 11E1111 N 1II1I1 1c -apfrn 10)an95 State of Alaska OIL AND GAS CONSERVATION COMMISSION Memorandum To File: API No. /33 /CO cl Well Name k8_71 1 NJ) Ft 13 Z Operator L, V O CAL Location S S" T SAL R ti /I/ Abnd Date,3 tt- tn7 Spud: ;CD flo t TD: S� 0 Completed C g 6 1 2 Note casing size, wt, depth, amt vol, procedure. S£c Csg: (O S Long Csg: 'Vac 02 (l5 al d 1 S x Liner: Perf intervals tops: Review the well file, and comment on plugging, well head status, and locat on clearance provide loc. clear. code. Plugs: as //S Well head cut off: Conclusions: Code /d LOCATION CLEARANCE REPORT Marker post or plate: ye_j Location Clearance: (/77 9)P0PAJ'i Signe Date FROM: Jack :v« AN010RAC »1S »v9i TO: 2: »a« c Trans d «a« are the folio Run No. Sepia ow Scale Er I 'nude do saxes Dual ee«a :ew«J m< Sonic/Caliper ec :e.iJ 8110 Sonidt/Calir/Gem :2 e: Formation Log 2« Formation Compensated Formation Density a=(c) Neutron e: Formation Neutron Log J High Resolution my««( co: Safety Print ec v Printout_ 1 ƒlots C Ray-Neutron Log :ae::az 910 Sidcwsll Neutron 9e«? 9= Laterlog Mud log 2w Gx 3d icns, Conventional, Core mw« dons, Sidowall Cor Analysis Formation Testa Directional Surveys' Core Chips Sage G: RECEIPT cwo :sal: 2 ow: Log (Comma G r !d/ O AND RETURN RECEIPT TO: Union 011 Gs m c wac« Anchorage Anchorage, Alaska Attn: case 1. F11111 0 0 ‘.0 0 r4 04 Cfl 4 111 r-1 r-4 r-4 C4 Mt. C Union pi 2 Via Stree Ancbarage, Alaska Dear r. Dunham: Mr e sett steel moved well which some nearby The well s ings are correct top of the ed8e inches. It could marker. The regulat and extending four feet above the surface. As the casing is already full emeat the only alternative would be to weld a cap to the casing and weld bottom of the mariner to the plate. Both welds should be completely around the circumferences. KLVebb of California th Re: letter as -a matter of record as I understand that y notified you in regard to the condition of the Unit 13-8. levelled off but the fill ins the sump had e was ►mat we 11 cleaned up. Some loops of and there was some trash that had not been re- water flowing out of the casing of the water off and covered unless it is to be used by ight d ter and height above ground and the pipe is only four feet long, is sitting on s ing And is melded thereto for only two or three knocked over and cannot be considered a permanent for a four inch diameter pipe buried in cement it Very truly yours, 1965 Suggest the exposed cables be cut or burned off below the surface of ground, all exposed trash thrown in the low places of the sump and the sump be filled level. Karl L. VouderAhe Petroleum Engineer FORM 369 10.99 150M PRINTED IN U.S.A. FROM E. H. East UNION OIL COMPANY OF CALIFORNI Document Transmitt AT 2805 Denali St. Anchorage TRANSMITTING THE FOLLOWING: Tanuary 13. 1 965 O Mr. Tom Marshall AT Kenai Unit 13 -8 2 Completion Report n MIN I■ -pia 1 III Induction-Electrical Print S 1 Baroid Comb. Mud Lith Log Kasilof #2 Sepia 1 Ea Comb. Mud Lith Log Print 1. 111 n11—I■ MI 1111 1111.11=1 Illringinilall Illatinlill rararall i■ III FORM 369 10.99 150M PRINTED IN U.S.A. FROM E. H. East UNION OIL COMPANY OF CALIFORNI Document Transmitt AT 2805 Denali St. Anchorage TRANSMITTING THE FOLLOWING: Tanuary 13. 1 965 O Mr. Tom Marshall AT Fo;m. "t VThTED STATES SUBMIT IN Tr' NiCATE" i 111 '0131 DEPARTM T OF THE INTERIOR e seasFtrnel on re- id ej GEOLOGICAL SURVEY Form Opp' Bureau l.EA E 11 IONATI0N -,.o A- 028138 g. ,F INDIAN, ALLOt No. 42-- 81424. SERIAL No. SUNDRY NOTICES AND REPORTS ON WELLS not nap this form for proposals to drill or to deepen or plug back to u different reservoir. Use "APPLICATION FOR PERMIT for such proposals.) DR Tnla6 NAME 1 JIL 8 WF.0 WELL J OTHER Abandoned 7. UNIT AGREEMENT NN16 KerCi 2, NAME 01` OPERATOR Union Qi1SLompany of California 8. FARM 01' LEASE NAME. B. ADDRESS OF OPERATOR 2805 Denali Street, Anchorage, Alaska 9. WELL NO. 1.3 -8 4. LoraTION of ivel,L (Report location clearly and In accordance with any State requirements,* See ids, space 17 below.) At surface 1774' from S and 1034' from W line Sec. 8, T5N, R11W, SM 10. Ft£LU ,Nn Poor, oR WILncnT Exploratory 11. SECc., T., II., M., Olt BLit AND 011 46684 Sec. 8 T5N /R11W, SM 14. PERMIT N0, 64 -14 16. ELEVATIONS (Show whether Dr. RT. oft, etc.) KB 38' 12. COUNTY OR PARISH Kenai Penn. 13. STATE Alaska 16. NOTICE OF INTENTION TO TEST WATER SHUT -OFF PULL OR ALTER CASINO FRAC'1'IJ11 TREAT MULTIPLE COMPLETE FRACTURE TREATMENT 511001 Ott Al. 1x.168 ABANDON• SHOOTING OR 401066INO RRP.tlC WELL CHANGE PLAN8 (Other) 17. ohs' nn,, :am,ms D0 on co IPLETED OPERATIONS (Clearly state all pertlnen details, and gins pertinent dates, Dcllding estimated date of starting any p LIPO¢u work, If we is directionally drilled, give subsurface !oast one and measured and true vented depth» for alt markrrs and zones peril. Sant to this work.) Subsequent report of abandonment. i, Left hole full of 77" mud, 2. Laid in 80 sax cement plug across shoe at 1159'. Tested with 4000# and found top at 1000'. 3. Laid in 15' cement plug at surface. 4, installed 4" post and marker 4' above ground. 5. Contractor released at 10 PM and well PLUGGED AND ABANDONED 12 -8 -64" 18. I hereby ceEC4h SIGNED (This apace for Federal o APPROVED BY to office use) CONDITIONS OS APPROVAL, IF ANY: Check Appropriate Box To Indicate Nature of Notice, Report, or Other Data ue and correct WATER 8160T-ORB SUBSEQUENT REPORT 08: (Non: Report results of multiple completion on Well Completion or Reeompletlon Report and Log form.) REC rD DEC 3 1, 1964 DIVISION Of MINES MINERALS ANCHORAGE TITLE Dist, Mgr, of Exploration DATE TITLE DATE See Instructions on Reverse Side REPAIR tau WEI.:: ALTERING CASING ABANDONMENT. i1' x pNnry lIV (l4 LS AA,F f V R M� 6. IV INDIAN, ALLOTTBE OR TRIBE NAME WELL COMPL -N OR RECOMPLETION REPORT AND LOG Ot Is. TYPE OF WELL: L GAR F.LtQ MIT I� Other 't UNIT AOMARM88? NAME WELL 0 w h TYPE OF COMPLETION: Kenai NEW L Q OiEB RK 0 WO DBEP- EH P aAC LOD B I� DI IlO RVR. Other Abandonment 8. FARM ea LEASE NAME h'RL Q tll 2. NAME COT OPERATOR Union Oil Company of California e. nu, no.. 8. ADDRESS or OPERATOR 13 8 2805 Denali Street, Anchorage, Alaska 10,,8781.4" AND POOL, OR WILDCAT 4, LOCATION OF nu. (Report location clearly and in ae0ardano619ith alto State requirements)• Exploratory At surface 1774' from S and 1034' from W line Sec. 8, TSN, RIJW ii. SEC, MI T., R., M., 08 BLOCK S M OR AREA At top prod. Interval reported below Sec, 8, TSN, R11W, SN At total depth 14. PERMIT NO. DATE ISSUED 12. BOROUGH I. 1 3 STATE 64 -14 1 11/13/64 Kenai Penn'. Alaska MP. 15. DATE SPUDDED 16. DATA T.D. REACHED 1 DATE CO. (Ready to mod.) 18. ELEVATIONS (DP, 88 E H, BT,. R, ETC.)* 19. 8LBV. C80IN08880 11 -22 -64 I 12 -7 -64 Dry Hole t? 5 6 `f KB: 38' 20. TOTAL Drawn, me a Tvo 21. PL00, MACK T.D., 89 COMM., ETD 22. IT MULTIPLE CO 23. INTERVALS .ROTARY TOOLS CARLE TOOLS 5506' I now MANY. nR BY 10 -5506' 1 24. PRODUCING INTERVAL(8), or THIS COMPLETION -TOP, BOTTOM, NAME (YD AND STD)* 26. WAS DIR No production No 26. TYPE ELECTRIC AND OTHER LOGS HUN 27 WAS wind. CORED IES, Sonic, OD No CASINO SIZE WEIGHT, L8. /3'T. DEPTH 86T (MD) HOLE BIM CEMENTING RECORD AMOUNT POLLED 13 -3/8 65' 12 -1/4 R -5 /R 244 1159' 12 -1/4 335 sax 2e: LINER RECORD 30. TURING RECORD SIZE TOP (MD) BOTTOM (MD) BACKS CEMENT! SCREEN (MD) BM mown an (WO PACKER SET (MD) 81. Pnar43ATION RECORD (rnter,oI, else and number) 82. ACID, SHOT, FRACTURE, CEMENT SQUEEZE. ETC. OU DEPTH INTRETAT (MD) LIMN AND RIND OP MATERIAL USED DATE FIRST PRODUCT ON PRODUCTION METHOD (Rowing, pas Stt, pumping -size and type of pump) WELL STATUS (Producing or shubM) None Dry DATE OE TEST HOURS TESTED CHOKE 81ZI IL PROD'N. FOE O-881,. 0FP -MCP. WATER -BBL. 0A11-011. RATIO vier =R* I I PLOW. TUBING PREM. CASINO PRESSURE 0ALOODATED 01L-8 MG GAB --VCR WATER -BBL. OIL OBAFITT -API (COBS,) 24 home EATS l 1 I l 34. DISPOSITION Or OAS (Bold, seed for.tue),<meted,eto.). TEST MEND 8Y FDrm --RECEIVED 7 2S. 33.• DEC 3i 1964 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION N P 88. LIST OT ATTACHMENTS 36. I hereby e t g and attached lvtormatlon Is complete and correct to determined from all avaliable records SIGNED TITLE Dist. Mgr. of Exploration DATE. 12/29/64 e Instructions and Spaces For Additional Data on Reverse Side) CASING RECORD (Report at/ strings n i PRODUCTION SUBMIT IN DUPLj E• (Sec otter In= et side) Idse) Effective: July 1, 1904 5. LEASE DESIGNATION AND SERIAL NO. A- 028138 CASINO SIZE WEIGHT, L8. /3'T. DEPTH 86T (MD) HOLE BIM CEMENTING RECORD AMOUNT POLLED 13 -3/8 65' 12 -1/4 R -5 /R 244 1159' 12 -1/4 335 sax 2e: LINER RECORD 30. TURING RECORD SIZE TOP (MD) BOTTOM (MD) BACKS CEMENT! SCREEN (MD) BM mown an (WO PACKER SET (MD) 81. Pnar43ATION RECORD (rnter,oI, else and number) 82. ACID, SHOT, FRACTURE, CEMENT SQUEEZE. ETC. OU DEPTH INTRETAT (MD) LIMN AND RIND OP MATERIAL USED DATE FIRST PRODUCT ON PRODUCTION METHOD (Rowing, pas Stt, pumping -size and type of pump) WELL STATUS (Producing or shubM) None Dry DATE OE TEST HOURS TESTED CHOKE 81ZI IL PROD'N. FOE O-881,. 0FP -MCP. WATER -BBL. 0A11-011. RATIO vier =R* I I PLOW. TUBING PREM. CASINO PRESSURE 0ALOODATED 01L-8 MG GAB --VCR WATER -BBL. OIL OBAFITT -API (COBS,) 24 home EATS l 1 I l 34. DISPOSITION Or OAS (Bold, seed for.tue),<meted,eto.). TEST MEND 8Y FDrm --RECEIVED 7 2S. 33.• DEC 3i 1964 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION N P 88. LIST OT ATTACHMENTS 36. I hereby e t g and attached lvtormatlon Is complete and correct to determined from all avaliable records SIGNED TITLE Dist. Mgr. of Exploration DATE. 12/29/64 e Instructions and Spaces For Additional Data on Reverse Side) CASING RECORD (Report at/ strings n i PRODUCTION SUBMIT IN DUPLj E• (Sec otter In= et side) Idse) Effective: July 1, 1904 5. LEASE DESIGNATION AND SERIAL NO. A- 028138 DATE FIRST PRODUCT ON PRODUCTION METHOD (Rowing, pas Stt, pumping -size and type of pump) WELL STATUS (Producing or shubM) None Dry DATE OE TEST HOURS TESTED CHOKE 81ZI IL PROD'N. FOE O-881,. 0FP -MCP. WATER -BBL. 0A11-011. RATIO vier =R* I I PLOW. TUBING PREM. CASINO PRESSURE 0ALOODATED 01L-8 MG GAB --VCR WATER -BBL. OIL OBAFITT -API (COBS,) 24 home EATS l 1 I l 34. DISPOSITION Or OAS (Bold, seed for.tue),<meted,eto.). TEST MEND 8Y FDrm --RECEIVED 7 2S. 33.• DEC 3i 1964 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION N P 88. LIST OT ATTACHMENTS 36. I hereby e t g and attached lvtormatlon Is complete and correct to determined from all avaliable records SIGNED TITLE Dist. Mgr. of Exploration DATE. 12/29/64 e Instructions and Spaces For Additional Data on Reverse Side) CASING RECORD (Report at/ strings n i PRODUCTION SUBMIT IN DUPLj E• (Sec otter In= et side) Idse) Effective: July 1, 1904 5. LEASE DESIGNATION AND SERIAL NO. A- 028138 FDrm --RECEIVED 7 2S. 33.• DEC 3i 1964 STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION N P 88. LIST OT ATTACHMENTS 36. I hereby e t g and attached lvtormatlon Is complete and correct to determined from all avaliable records SIGNED TITLE Dist. Mgr. of Exploration DATE. 12/29/64 e Instructions and Spaces For Additional Data on Reverse Side) CASING RECORD (Report at/ strings n i PRODUCTION SUBMIT IN DUPLj E• (Sec otter In= et side) Idse) Effective: July 1, 1904 5. LEASE DESIGNATION AND SERIAL NO. A- 028138 38. GEOLOGIC MARKERS 37. SUMMARY OF POROUS ZONES: SHOW ALL IMPORTANT ZONES OF POROSITY AND CONTENTS THEREOF: CORED INTERVALS: AND ALL DRILL -STEM TESTS, INCLUDING DEPTH INTERVAL TESTED, CUSHION USED, TIME TOOL OPEN, FLOWING AND SHUT-IN PRESSURES, AND RECOVERIES sand, shale, coal 1 HowOR 0 r+ On Lo ,IOS NOLSY4vll03 ro .N 6. rcl 0) rv.. 1. Completed (F -GL -P) Remarks: 8 5/8" 1159' 335 Surface Lowest Tested State of Alaska Department of Natural Resources DIVISION OF MINES AND MINERALS Petroleum Branch INDIVIDUAL WELL RECORD WELL STATUS R4lease Date 1 67 Sec.NWk Sw; 8 T. R. 13 3/8" 65' 10'. ro surf 5N 11W Seward Meridian Permit No. 64 -14 Issued 11 -13 -64 Operator Union nil ro of Cal +f. Location (Surface) 1774' FST, 1034' FWT,, Ser. 8 Lease No. A 028138 or Owner Kenai Loc. (Bottom) Well No. 13 Area Kenai Spud Date 11 22 64 Drilling ceased Total Depth 5506 Suspended Abandoned 12 -8 -64 Elevation 22. Grd. IP B/D, Grav API Cut Gas MCF/D, Bean /64 CP psi, TP psi Casing: Size Depth Sx Cmt Perf: Plugs: 7959' -in59' GEOLOGIC FORMATIONS PRODUCTIVE HORIZONS Name Depth Contents Year Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Com.a W RC`r_:nnb 1/4/65 P< OR COMPLETION REPORT Union Oil Company of California Exploratory, Kalifor::.cy Beach, Alaska Kenai Unit 413 -8 LOC ION 1774' N 1 71''.' m SW corner of Section 8 Seward Meridian. Ground 27 6' Kelly bushing 38.6' NOTE: All measurements from kelly bus Santa ^e Drilling Company All equipment trailer mounted Mast 94', 210,000* Hopper Drawworks: Hopper Model GXXTA double main arum ered by one GMC 6 -110 diesel engine tbroa;n Alison Torquematic transmission. Pumps: One 1 .onai C -250 (7 -1/4" x 15 "i pcvrar by twin GiviC 6 -71 diesel engines Drill Pipe: Drill tubing 3 -1/2 9.30 Pittsburg, special Acme thread N -80, EU, R -2 with tubing cou__:ii: for tool joints Drill Collars: 14 4 -3/4" x 30" Reed extra hole COM8CEO CED DRILLING November 22, 1964 0081'? _r; 'ED DRILLING December 6, 1964 STATUS Well abandoned December 8, 1964 RECEIVED JAN 14 1965 DIVISION OF MINES MINtR JS ANCHORAGE One Halliburton AC (4 -1/2" x 10 mug a. x. pump powered by 1 GMC 3 -71 diesel e'c;ine 7x R. C. Hartmann Drilling Engineer 0 O w 0 O C cd c p, I co O T1 ra i~ 0 n '0 .ti 0 U _O u) i !l1 CO O (0 N .a N. C17 L0 I 0- I 1 10 0 r4 O •c 0 1 N x-s z a o ro u) CI. 1 O is 0) m �N-+ 0 O Y O m 0) 03 _iF V r n, O d.,., v ..1 d ci 0 O 0 cn 0,1 CO H N .4 v) 0_, ti F: '0 O I O w O 0 cn O U 00 L' E g 0 C 1 U TS O M O 0 x N M 0) 'O -a 0 O U N O 1O O) 'i N H Q Q O 0 V' LO LO LO J) 0 0 O ,9 in 10 LO LI) LO LO CO 0) 0) N N N PI LO h CO l 1 r-d H N N N Form 0-131 V STATES SUBMIT IN TP"NICATld• (May 1063) (Other Inetvna 00 ru" DEPART N. _NT OF THE INTERIOR verseeide) GEOLOGICAL SURVEY SUNDRY NOTICES AND REPORTS ON WELLS (no not out tills form for propomnis to frill or to deepen or plug beck to n di kern nt reservoir. Use ^AFPI,IOA'piON FOR PERMIT for each nrrznoanle.) 015, OAn I �l NPLI. OTHER Exploratory 2. NAME Or OPERATOR Union Oil Co. of California, Operator 8. Anon ENN OF OPERATOR 2805 Denali Street, Anchorage, Alaska 99503 4. LOCATION Or PELL (Report location clearly and In accordance with any State requirrmente.' See oleo Spate 17 below.) At surface 1774 feet from south line and 1034 feet from west line of Section 8, Township 5 North, Range 11 West, Seward Meridian. Form approved. Budget Bureau No. 42-I11424. 5. c n DESIGNATION .1. I.P.AYR AND SERIAL NO. A- 028138 ft, 112 INDIA AI.LOTTP.D on TI[0IP NAME 7. UNIT AOIII:I:Ai4 NT Kenai 8. PAPA on LEASE NAM& 9. wmLr. No. 13 -8 Fir"I.t' AND 1OOL, nR wll Exploratory SURVEY OE AREA Sec 8, T5N, R11W, SM 14. T1nOUT no. 16. ELEVATIONS (Show whether OP. RS,, OR, eta) 12. CoTNTV OR PARISH 13. STATE 64 -14 KB 38' enai Peninsula Alaska 3orough 18. Check Appropriate Box To Indicate Nature of Notice, Report, or Other Data NOTICE OF INTENTION To: SOBREOUENT REPORT OR: TCNT PATER SLLOT'Orr us ACTI1RE Tn5AT SHOOT OR 401011E REPAIR WERE (other) 17. DESCRIBE PROr'o S F:0 OR Proposed work. It merit to this work.) APPROVED 4V COND1T10N9 OF APPROVAL, IF ANY: rum. OR 41,105 CARING MULTIPLE CoMPLCTt ABANDON' CHANGE r1,ANs 18. i horeby 'r(I f l true and correct HATER SIIOT -ORP FRACTURE TREATMENT SHOOTING on 140IUI1581 (Other) 1E MEIN, ALTERING CASING AUANUON.n ENT* 1. (NOTE: Report results of multiple completion on Wei Completion or Racompletlon Report and Log form.) u OPERATIONS (Clearly etnto all pertinent details, and give pertinent Inlet. Eel nl ing" estim ated` dote of starting ony I is directionally drilled. give subsurface locations and measured and true unction 'depths for all markers and zones pert6 1. Leave hole full of 774t mud total depth 5,506'. 2. Lay in 200' plug across shoe of 8 /B 20 casing cemented at 3. Lay in 10' plug at surface. 4. Erect 10' 4" steel marker post 6' in cement, 4' above ground. 5. Erect abandonment marker. Confirming phone call to Mr. M. H. Soyster USGS and Mr. K. L. VonderAhe State Division Mines and Minerals on 12 -7 -64. (Tpace for Feder& o 'rate ee use) hin s TITLE "See Instructions on Reverie Side Dist. Mgr. of Exploration PATE December 9, 1.96 8". A" SS OP )f Pw, Rsno a co W NO. Dxn PmOeovau ESSRZLS or OS thwart ou• Fr. m nee On or On thOUSIMIS) aA90LEI8 RECp4EHED R&nxie Dr REMARKS W S OB at Q' L o f tat %r vuolia r none, w elate) oommt or aW TW 1/4 5N 11 KU Spudded 9 PM, 11 W 1/4 13 Drld 12 -1/4" hol e ec 8 75' and dr ve 1 3/8" cs• to 65'. Drld 9- /8" hole to 1209' opened to sax ceme 12 -1 t, 35 4 Cemented 8 -5/8" from sur ace. casi g at 1159' with 3C Cemented 35'sa from top' hru 1" .nd had r -turns to surface. d tested •K. '11 at 2295 Installed continuin OP a to d Drld out wit 7 -5/8" bit and on 11- 0 64. r y" Ol r r ii` p. G NORP UNITED STATES DEPARTMENT OF THE INTERIOR GEOLOGICAL SURVEY Budget, Bureau No. 42- R340.6. Approval expires 12 -31-80. LESSEE'S MONTHLY REPORT OF OPERATIONS LAND OFFICE Anchorage- LEASE NUMBER Y tJ' UNIT Kenai State Alaska County _Kenai Penn, Bprouchord Kenai Unit The following is a correct report of operations and production (including drilling and producing wells) for the month of November Ig 64, Agent's address 2805 Denali Street Anchorage, Alaska Phone U Company Signed BRadflw3 Y 6- b2_81 w..._.A_.a_.._. .mm_... .4gent's title Dist, Mgr —o of California ,Oper Exploration Noah: There were runs or sales of oil; M ou. ft, of gas sold; rune or sales of gasoline during the month. (Write "no" where applicable.) Note. —Report on this form is required for each calendar month, regardless of the status of operations, and must be fled in duplicate with the supervisor by the 8th of the succeeding month, unless otherwise directed by the supervisor. Form a -ess (demur MO) .18-9518-95701H11 e O. ws.n pawls. won -22- to and 0 QL Form 9-331a (Feb. 1021) NOTICE OF INTENTION TO DRILL NOTICE OF INTENTION TO CHANGE PLANS NOTICE OF INTENTION TO TEST WATER SHUT-OFF NOTICE OF INTENTION TO RE -DRILL OR REPAIR WELL NOTICE OF INTENTION TO SHOOT OR ACIDIZE NOTICE OF INTENTION TO PULL OR ALTER CASING__. NOTICE OF INTENTION TO ABANDON WELL Kenai Unit Well No. 13-8 is located 1774 ft. from__ SW 1/4 Sec 8 5N Sow and Son. No.) Kenai Unit Company (Field) \obi% `yQV Y 4,11TED STATES 1h M\ {�EP AA' TMENT OF THE INTERIOR GEOLOGICAL SURVEY SUNDRY NOTICES AND REPORTS ON WELLS KU 13 -8 spudded 9:00 P.M. 11- 22 -64 3 USGS, Ancb. i Div CxM, Andre 1 Marathon, L A 1 Marathon, Anch, 1 File Address 2805 Denali Street (INDICATE ABOVE BY CHECK MARK NATURE OP REPORT, NOTICE, OR OTHER DATA) Anchorage, Alaska 99503 (SUBMIT IN TRIPLICATE) Lease No. Unit SUBSEQUENT REPORT OF WATER SHUT -OFF SUBSEQUENT REPORT OF SHOOTING OR ACIDIZING SUBSEQUENT REPORT OF ALTERING CASING SUBSEQUENT REPORT OF RE- DRILLING OR REPAIR SUBSEQUENT REPORT OF ABANDONMENT SUPPLEMENTARY WELL HISTORY Subsequent report of spudding x RoYember__25 19 -b4. 11W line and 1034 ft. from me of sec. 8 S (Twp.) (Range) (Meridian) Kenai Peninsula Borough Alaska (County or Subdivision) The elevation of the derrick floor above sea level is 37 ft. DETAILS OF WORK Union Of1.Co of California, Operator Budget Bureau No. 42- R358.4. Approval expires 12- 31-00. Land Office Anchorage (State or Territory) A- 026138 Kenai (Stele name. of and expected depths to objective sands; show sires,waimhts and length of proposed casings; indicate mudding jobs, cement- ing points, and all other important proposed worn) I understand that this plan of work must receive approval in writing by the Geological Survey before operation. may b. commenW. By Title Dist, Mgr. of Exploration GPO 562040 Mr. R. A. Lyon District Manager Union p1 Company of 2865 Denali Street Anchorage Re: Unit 13 -8 App li Dear Sir; TRM :bb Enc. Appr.Cy. Appl. 1 The cap:tioaed permit is appro d subject to the following: 1. Monthly reports of operations will be submitted by the 10th he month following the report month. 2. A complete set of well samples and cores will be delivered to the State sample storage within 30 days after completion or abandonment of this well. Very truly yours, Street November 13, 1964 for permit to drill Thomas R. Marshall, Jr. Petroleum Geologist NOTICE OF INTENTION TO DRILL X SUBSEQUENT REPORT OF WATER SHUT-OFF NOTICE OF INTENTION TO CHANGE PLANS SUBSEQUENT REPORT OF SHOOTING OR ACIDIYING NOTICE OF INTENTION TO TEST WATER SHUT -OFF SUBSEQUENT REPORT OF ALTERING CASING NOTICE OF INTENTION TO RE -DRILL OR REPAIR WIT I SUBSEQUENT REPORT OF RE- DRILLING OR REPAIR.. NOTICE OF INTENTION TO SHOOT OR ACIDIZE SUBSEQUENT REPORT Of ABANDONMENT NOTICE OF INTENTION TO PULL OR ALTER CASING._.__ SUPPLEMENTARY WELL HISTORY NOTICE OF INTENTION TO ABANDON WELL Pbrta B -BBia (Feb. 1061) Og Bee. a and S O.) Kenai.Field (Field) RECEIVED Nov 131%4 SUNDRY NOTICES AND REPORTS OMivWELFI.AS.ES MINERALS ANCHORAGE Address (INDICATE ABOVE BY CHECK MARK NATURE OF REPoRT, NOTICE. OR OTHER DATA) Well No.KKU_13 8_- is located 1_774__ ft. from.. The elevation of the derrick floor above sea level is -3y- ft. DETAILS OF WORK (Statename. of end.ap.eted depths to objective ho s 1enwolgbts, en d le pri casings; Indicate muddtnE)ob., cement- Int 1. Cement 20" conductor at 22'. 2. Drill 12 -1/4" hole to 1300'. 3. Cement 8 -5 /8" casing at 1200' with 450 sax cement and returns to surface. 4. Install and test casinghead and BOP. 5. Drill 7 -5/8" hole to 5500'. 6. Run logs. 7. If warranted, cement 5 -1/2" casing at 3500' and test selected intervals. 3 USGS, Anch, 1 Marathon LA, 1 Marathon, Anch., 1 KJ Robertson, 1 File, 2 DM &M, Anch I understand FR".[ this iiilartMaa ve approval in writing by the Geological survey before operation. may be commend. Company Union Oil Company of Oalifprnia Operator 2805 Denali Street Anchorage, Alaska 99503 (SUBMIT IN TRIPLICATE) UNITED STATES DEPARTMENT OF THE INTERIOR GEOLOGICAL SURVEY November 9 line and .-19.3.4_ ft. from ..T514 R11W (Twp.) (Range) (Meridian) Ker�ai_Penlnsula__B_oxough--- (County or Subdivision) By Title Dist. M Budget Bureau No. 42- 8353.4. Approval expired 12 -31-60. Lend Office Anchorage L N A- 028138 Unit Kenai Alaska (State or Territory) line of seq. --_8 Exploration GPO 662040 APPLICATION FOR PERMIT TO DRILL, DEEPEN OR PLUG BACK APPLICATION TO. DRILL a r, DEEPEN PLUG BACK 0 NAME OF COMPANY OR OP BATOR DATE p the 198 Address Clty State 2888 1708411 Alaska 93503 DESCRIPTION OF SVELL AND LEASE Name of lease A- 02815& Well number na township range IW' Elevation (ground) or block survey Well location (Rive footage trio section tines SecUOn- Inn IMa mil r 'R Field reservoiir'.CU,, voiidcatSss stake) i 'Y'iLLm1r I if Distance, 1n milks, and direction from nearest. town or post offloe Nearest distance from proposed location to property or lease line set Distance from proposed location to nearest drilling. 000 or applied —for well on the same lease: aY feet Proposed depth S5 Rotary or cable to Number of wells on completed in or dril 11 Approx- date work will start I I8 -1 -69 lease, including this well, ing to tide reservoir: Number of acres in lease: 1805.81 If lease, purchased with one or more Name Address wells drilled, from whom purchased- Status of bond •a a Remarks: (If this is an applieationto producing zone an 1J"4" bake ik J ye L a."" Wj/ a a t$3 V YT 5 04 0 .11 J Y:t t; a Y C'. deepen or plug back, brie (1Y describe work to he done, giving present expected new producing zone) O t* 1SE* o z. ,��y yy,, Ity t ...6Y,4c ,rt tq a. a♦r�,, wpi�.�.__ f z C� �GSGV.p 1R'y u Yy WiM+9UV �µG MN peMFiR G m a re, rm Permit Number' Approval Date Approved By' CERTIFICATE: I, the undersigned, state that I am th (company), and that I am authorized by said company to make this report; and that this report was pre pared under my supervision and direction and that the laced sin 3, true, correct and complete to the best of my lmowledge, 69 l4 Div. of Ines Minerals Notice: Before sending in this form be sure that you have given all information requested. Much unnecessary correspond- ence will thus be avoided. See Instruction on Reverse Side of Form Signature of the 4741410-011-001-91 Califfnia Alaska 011 and Gas Conservation Commission Application to Drill, Deepen or Plug Back Form No. P.1 Authorized by Order No. 1 Effective October 1, 195B OF CALIFORNIA CNSTRICT P 'Oi C ED WELL .LOC. UN IT .T5N -R -H- ION 0 CJ tKEI VA/ S -4) ui 0 0 0 s mA DI/74 ON 0 a2, Appendix 2 Well Plugging Requirements KU 13 -8 Well Abandonment /Plugging Comparison: The plugging of the cased portion of KU 13 -8 complied with current requirements of the AOGCC for well abandonment. The open hole section does not meet with the current regulations. The key difference between plugging requirements in 1964 and now are that in 1964 they were only concerned with well fluids escaping to surface. Now, they are equally concerned with cross communication. AOGCC regulation 20 RAC 25.112 states Plugging of the uncased portion of a wellbore must be performed in a manner that ensures that all hydrocarbons and freshwater are confined to their respective indigenous strata and are prevented from migrating into other strata or to the surface Multiple balanced cement plugs would have to be set and tested in the open hole section of 13 -8 to meet today's regulations. As previously mentioned in the body of the White Paper, there is no regulatory requirement to reenter the KU 13 -8 wellbore and plug it according to the current AOGCC regulations. For reference the current abandonment plugs were done by displacement method. AOGCC Well Plugging Regulations: 20 AAC 25.112. Well plugging requirements (a) Plugging of the uncased portion of a wellbore must be performed in a manner that ensures that all hydrocarbons and freshwater are confined to their respective indigenous strata and are prevented from migrating into other strata or to the surface. The minimum requirements for plugging the uncased portion of a wellbore are as follows: (1) by the displacement method, a cement plug must be placed (A) from 100 feet below the base to 100 feet above the top of all hydrocarbon- bearing strata; (B) from the well's total depth to 100 feet above the top of all hydrocarbon hearing strata; (C) from the well's plugged back total depth to 100 feet above the top of all hydrocarbon bearing strata, if all hydrocarbon bearing, abnormally geo- pressured, and freshwater strata below are isolated; however, the commission will approve plugging from the top of fill or the top of junk instead of from the plugged back total depth, if the commission determines that the objectives of this subsection will be met; or (D) from 100 feet below the base to 50 feet above the base of each significant hydrocarbon bearing stratum and from 50 feet below the top to 100 feet above the top of each significant hydrocarbon- bearing stratum; Page 23 of 30 (2) by the displacement method, a cement plug must be placed from 100 feet below the base to 50 feet above the base of each abnormally geo- pressured stratum and from 50 feet below the top to 100 feet above the top of each abnormally geo pressured stratum; (3) by the displacement method, a cement plug must be placed from 150 feet below the base to 50 feet above the base of the deepest freshwater stratum. (b) Plugging of a well must include effectively segregating uncased and cased portions of the wellbore to prevent vertical movement of fluid within the wellbore. The minimum requirement for plugging to segregate uncased and cased portions of a wellbore is one of the following: (1) by the displacement method, a continuous cement plug must be placed from 100 feet below to 100 feet above the casing shoe; (2) by the down squeeze method using a retainer set no less than 50 feet but no more than 100 feet above the casing shoe, a volume of cement sufficient to fill the wellbore from the retainer to 100 feet below the casing shoe must be pumped through the retainer, and cement must be pumped above the retainer to cap it with a 50 foot cement plug; (3) by the down squeeze method using a production packer set no less than 50 feet but no more than 500 feet above the casing shoe, a volume of cement sufficient to fill the wellbore from 100 feet below the casing shoe to the packer must be pumped through the packer, and cement must be pumped above the packer to cap it with a 50 foot cement plug. (c) Plugging of cased portions of a wellbore must be performed in a manner that ensures that all hydrocarbons and freshwater are confined to their respective indigenous strata and are prevented from migrating into other strata or to the surface. The minimum requirements for plugging cased portions of a wellbore are as follows: (1) perforated intervals must be plugged by one of the following methods: (A) by the displacement method, a cement plug placed from 100 feet below the base to 50 feet above the base of the perforated interval and from 50 feet below the top to 100 feet above the top of the perforated interval; (B) by the displacement method, a cement plug placed from the well's total depth to 100 feet above the top of the perforated interval; (C) by the displacement method, a cement plug placed from the well's plugged -back total depth to 100 feet above the top of the perforated interval, if all hydrocarbon bearing, abnormally geo pressured, and freshwater strata below are isolated; however, the commission will approve plugging from the top of fill or the top of junk instead of from the plugged -back total depth, if the commission determines that the objectives of this subsection will be met; (D) by the down squeeze method using a cement retainer or production packer set no less than 50 feet but no more than 500 feet above the perforated interval, a volume of cement pumped Page 24 of 30 through the retainer or packer sufficient to fill the wellbore from 100 feet below the base of the perforated interval to the retainer or packer; (E) if the perforations are isolated from open hole below, a mechanical bridge plug set no more than 50 feet above the top of the perforated interval, and either a minimum of 75 feet of cement placed on top of the plug by the displacement method or a minimum of 25 feet of cement placed on top of the plug with a dump bailer; (2) casing stubs within outer casing must be plugged by one of the following methods: (A) by the displacement method, a cement plug placed from 100 feet below the stub to 100 feet above the stub; (B) by the down squeeze method using a retainer set 50 feet above the stub, a volume of cement pumped below the retainer sufficient to fill the casing stub with 150 feet of cement, and cement pumped above the retainer to cap it with a 50 foot cement plug; (C) if the casing stub annulus is cemented, a mechanical bridge plug set no more than 25 feet above the casing stub, and either a minimum of 75 feet of cement placed on top of the plug by the displacement method or a minimum of 25 feet of cement placed on top of the plug with a dump bailer; (3) if freshwater is present, the smallest diameter casing string extending to the surface must be plugged by one of the following methods: (A) by the displacement method, a cement plug placed from 100 feet below the depth of the surface casing shoe to 100 feet above the depth of the shoe; (8) a mechanical bridge plug set 100 feet below the depth of the surface casing shoe and at least 200 feet of cement placed on top of the plug. (d) Plugging of the surface of a well must meet the following requirements: (I) by the displacement method, a cement plug at least 150 feet in length, with the top of the cement no more than five feet below original ground level onshore, or between 10 and 30 feet below the mud line datum offshore, must be placed within the smallest diameter casing string; (2) either (A) all annular space open at the surface onshore, or in communication with open hole and extending to the mud line datum offshore, must be plugged with cement to seal the annular space in a manner satisfactory to the commission; or (B) all casing interior to the surface casing must be recovered to a depth of 100 feet or more below the original ground level onshore or the mud line datum offshore and the casing stubs plugged with cement as provided in (c)(2)(A) of this section; if the cement plug is extended to Page 25 of 30 within the distance from the surface specified in (1) of this subsection, the requirement of (I) of this subsection need not be met. (e) Cement used for plugging within zones of permafrost must be designed to set before freezing and have a low heat of hydration. (f) Each of the respective intervals of a wellbore between the various plugs must be filled with fluid of sufficient density to exert a hydrostatic pressure exceeding the greatest formation pressure of permeable formations in the intervals between the plugs at the time of abandonment. (g) Except for surface plugs, the operator shall record the actual location and integrity of cement plugs, cement retainers, or bridge plugs required by this section, using one of the following methods, which in the case of a cement retainer or bridge plug may be performed before cement is placed on top of the plug: (1) placing sufficient weight on the plug to confirm its location and to confirm that the plug has set and a competent plug is in place; (2) testing the plug to hold a surface pressure of 1,500 psig or 025 psi /ft multiplied by the true vertical depth of the casing shoe, whichever is greater, and tagging the plug to confirm location; however, surface pressure may not subject the casing to a hoop stress that will exceed 70 percent of the minimum yield strength of the casing. (h) At least 24 hours notice of plugging operations must be given to the commission so that a representative of the commission can witness the operations. (i) The commission will, in its discretion, approve a variance from the requirements of this section if the variance provides for at least equally effective plugging of the well and prevention of fluid movement into sources of hydrocarbons or freshwater. Page 26 of 30 Appendix 3 Sterling C Reservoir Pressure Data Stalin?. C Production/Pressure Decline Curve (PIZ) for Material Balance Analysis WHP Date BHP Z PIZ Gp psig polo 174Mscf 1950 10(280000 2206 024651 2605..997 1883 1C1212001 2129 024748 2511,913 475.05 1855 51212001 2•098 0.84797 2474,325 97722 1842 9029E001 2084 024872 24•6..379c 1,35626 1810 .3374t 7 047 024891 2•411.719 3,57293 1559 1E802002 1763 025724 2056.542 5444.69 1550 .5C2112003 1753. 0.85763 20437690 7,32011 1180 61872004 1334 027933 1516,602 10278.01 805 5711/2005 1912 0.90 11 13,96424 445 5116I 509 0.94753 53•6.727 20,77726 368 612/2008 422.8 0.95604 442.190 20,230.19 3•9 1032 474,51 0,955863 444.112 22,045.59 CLIO 395 10E412009 465 0.955 4216911 27,045,59 Estimate Original GE:72u Place 0: 10000 8.000 25,500.09 500C ODE 5 CANNERY LOOP UNVT Sterling C Sand Material Balance Analysis -C 2c OLT C /1739211■Itive Produced Volume, 3.13,1cof 45 ULM 2EXCD scar Page 27 of 30 Appendix 4 KU 13 -8 Mud Discussion The mud or drilling fluid was most likely made with fresh water at 8.35 lb/gallon, bentonite, barite, and chemicals used to control viscosity and fluid loss. Drilling solids such as sand and native clays would also be present after drilling. Both Spersene and XP -20 are product names mentioned in the well files. They both contain Chrome. No mud system is designed to remain stable after 46 years. That being said, most drillers have re- entered wells that contain very old mud and have been surprised at its relatively good condition (not suitable for drilling, but able to still support solids). The mud system used in KU 13 -8 was typical of the time period. It was built with fresh water and bentonite (clay) for viscosity. The viscosity is needed to support the weight material and carry drill cuttings out of the hole. Caustic soda is added to control ph and Chrome Lignosulphonate added to control the viscosity. Barite is added for weight control. MI SWACO believes the weight material (barite) most likely has settled out and that the remainder of the mud has had some organic degradation resulting in the generation of H25. We can calculate the two extremes for the mud left in KU 13 -8. It either is at its original density of 10.3 ppg (pound per gallon) or all the solids have settled out to bottom and the fluid column is now clear water at 8.58 ppg. The most likely condition is somewhere in between. The top of the Sterling C sand in KU 13 -8 is at approximately 5000' TVD /MD. The Sterling C initial reservoir pressure was 2,206 psia. Likewise, the maximum phase 2 storage pressure is expected to be 2,206 psia. In order for the gas in the C sand to enter the KU 13 -8 it must overcome the hydrostatic pressure in the wellbore. If just fresh water was left in the hole (fresh water weighs approximately 8.35 ppg) the hydrostatic pressure at 5,000' TVD /MD is 2,186 psia [(5,000' x 8.35 x 0.052) +14.6 psi]. This results in approximately 20 psi to push the Sterling C sand gas into the VVell bore. The attached MISWACO estimated mud composition lists approximately 10 lbs/bbl of water soluble chemicals in a typical 1964 mud system. These chemicals would increase the fresh water "clear fluid" density to 8.58 ppg:. An 8.58 ppg density would give a hydrostatic pressure of 2,245 psia [(5,000' x 8.58 x 0.052) +14.6 psi], which equates to 39 psi of pressure holding back the gas from entering the wellbore. A mud column of 10.3 ppg at 5,000' would equate to a hydrostatic pressure of 2,693 psia or 487 psi above the estimated reservoir pressure in the Sterling C sand. All mud solids would have to settle out in order to get to a clear fluid. MI SWACO re- created the mud system expected for KU 13 -8. Using their assumptions approximately 25% of the fluid volume is due to solids. This is a displacement volume or the volume if the solids were compacted without any pore space. Assuming that all the solids settled out and there was no hole washout, the bottom 1,415' of the hole would be filled by mud solids or to a measured depth of 4,091'. This depth is above the Upper Beluga and the Sterling C sands in KU 13 -8. Page 28 of 30 As described above there is very little chance of gas being able to enter the KU 13 -8 wellbore, based upon the fluid left in the hole. This doesn't take into consideration wellbore skin damage and likely reservoir permeability damage due to clay swelling, which would both further restrict flow into the wellbore. If by some means gas were to enter the KU 13 -8 wellbore, it would most likely be from the higher pressured Sterling A and B intervals and would preferentially cross flow into the Sterling C and /or Upper Beluga formations, which are at lower reservoir pressures. Once again, it should be pointed out that there has been no indication of pressure support at all in the Sterling C pressure and production data. MI SWACO mud calculation Input Data Output Data Chlorides (mg /L) 0 K+ (from KCI) (mg /L) 0 Retort Oil 0 Retort Solids (Uncorrected) 10 Mud Weight (lb/gal) 10.3 CEC (Ib /bbl) 10 Oil Density (lb /gal) 7 Bentonite Fraction (0 -1) 0.11111 Chemicals Concentration (lb/bbl) 10 SG of Drill Solids 2.6 SG of Weight Material 4.2 NaCI NaCI (Ib /bbl) KCI KCI (lb /bbl) LGS LGS (Ib /bbl) Bentonite 0.00 0.000 0.00 0.000 5.22 47.494 0.72 Bentonite (lb/bbl) 5.563 Drill Solids 3.40 Drill Solids (lb/bbl) 30.930 Weight Material 4.78 Weight Material (Ib /bbl) 70.279 Average SG Solids 3.36 Chemicals Concentration (lb/bbl) 10 Ratio of Inert Reactive Solids 3.749 Page 29 of 30 Comments from MlSwaco "Regarding the chrome lignosulfonate mud (Spersene XP -20) stored in the KU 13 -8 well since 1964, the possibility of dehydration, barite settling (10.3 ppg), and H2S from organic breakdown is very good. The initial fluid to use for drilling the first plug should be a very thin fresh water system with a high ph (10.5) to deal with both the dehydration and possible H2S generation. Supplementary products for H2S neutralization, such as SafeScav or Lime, should be on location in case of more severe H2S. The first sample of mud from casing should be tested and analyzed for compatibility with the mud system to be used for drilling in open hole after second cement plug is drilled." Page 30 of 30 SPERSENE T SPERSENE 1 ferrochrorne lignosulfonate is a multi purpose de floccu lant and gel- strength reducer; temperature stabilizer, inhibitor,; and filtration- control additive for use in all water base systems. Physical appearance Specific gravity pH (1% solution) Bulk density SPEesENE has proven to be an excel- lent all purpose deflocculant and fluid loss control agent. It is effec- tive for viscosity control and fluid loss reduction in all water -base mud systems, including freshwater, brackish water, seawater, salt, lime, gyp and potassium systems. The product has proven to have supe- rior deflocculating capabilities, even in the presence of contaminants and elevated temperatures. Normal treatments of SPERSENE I range from 1 to 12 lb /bbl (2.85 to 34.2 kg /m'). Initial treatments usu- ally range from 1 to 6 lb/bbl (2.85 to 17.1 kg /m'), depending on the Brown powder 1.2 4 37 lb/ft' (590 kg /m') mud system, solids concentrations and the desired results; treatments can be added to the system through the mud hopper. Due to the product's low pH, SPERSENE. I treatments require addi- tional caustic soda, or an alternative alkaline material, to maintain a con- sistent pH. A normal ratio is 1 sack of caustic soda for every 4 sacks of SPERSENE I. SPERSENE I is most effective in mud systems with an alkaline pH in the range of 9 to 11. For lower pH systems, the product may be pre- mixed in a higher- alkalinity solu- tion prior to being added to the active mud system. 01996 M -1 Drilling Fluids L All rights reserved. Sri:MINT Is a trademark of Mk Drilling Fluids LLG ©Svtnscne CF is a registered trademark of M-I Udiling Fluids L.L.C. MI- 11912 -I 5191 7/97 Litho In USA. Highly effective deflocculant and theology stabilizer. Compatible with all water -base mud systems. Temperature tolerance in the 275 to 325 F (135 to 163 C) range. Helps reduce fluid loss without high concentrations of clay or filtration control additives. Most effective in alkaline systems with a pH of 9.5 or above. Contains chrome which may not be acceptable for all applications, depending on local environmen- tal regulations and considerations; SPERSENE CF, a chrome -free ligno- sulfonate, is available for these applications. Bioassay information is available upon request. Handle as an industrial chemical, wearing protective equipment SPERSENE I is packaged in 50-lb (22.7 -kg), multi -wall, paper sacks. Store hi a dry location away from sources of heat or ignition, and minimize dust. This material is supplied solely for informational purposes and M -1 Drilling Fluids L LC. makes no guarantees or warranties, either expressed or Irnplled, with respect to the acce- cncy or use of this data. All product warranties and guarantees shall be governed by the Standard Terms of Salt Effectively inhibits bentonitic cut- tings and /or shale hydration when used in sufficient concentrations. Tolerant to, and continues to function in, the presence of contaminants. Contains the more acceptable Cr" chrome valence state. and observing the precautions as described on the Transportation and Material Safety Data Sheet (MSDS). P.O. Box 721110 Houston, Texas 77272-1110 Tel: 281.561.1300 Fax: 281561.7240 http: /www.midf.com E -mail: mimud @midfre.com XP -20 N XP -20* N chrome lignite is a specially formulated product designed for use as a thinner, fluid stabilizer and fluid loss reducing agent in all water -base muds. It is an excellent additive for HTHP filtration control and Theological stabilization for muds subjected to high temperatures. Typical Physical Properties Physical appearance Black, free flowing powder Specific gravity 1 7 pH (2% solution) 9.0 10.5 Bulk density 52 lb /ft (833 kg /m Applications XP -20 N agent is used in water -base muds to reduce viscosity, increase Theological stability and improve filtration control. The effect of XP -20 N agent is most dramatic in fluids exposed to higher temperatures. XP -20 N agent can be applied to muds of any salinity, from fresh to saturated -salt, as well as to lime and gyp muds. For saturated -salt or low -pH mud systems, presolubilize XP -20 N agent in a lower-salinity, high -pH fluid. XP -20 N agent may be added to the system through the mixing hopper. Depending on viscosity and fluid -loss requirements, 1 to 6 lb/bbl (2.85 to 17.1 kg /m may be required. Improved 1-TTHP filtration control and rheological stability under adverse conditions, such as high temperatures, may require greater concentrations. For improved mud system and product performance, the pH should be maintained at 9.5 or greater. Mi SWAC Customer focused, solutions- driven Product Bulletin Advantages Compatible with all water -base mud systems Reduces differential pressure sticking tendencies by reducing filtercake thickness and HTHP fluid loss Stabilizes the fluid loss and rheology of water -base muds at temperatures up to 450 °F (232 °C) Performance is not adversely affected by mud contaminants Particularly effective in freshwater and seawater mud systems An economical sodium hydroxide- neutralized, chrome lignite product designed for exceptional high temperature performance Contains the more acceptable Cr' chrome valence state Limitations Most effective in alkaline systems with a pH of 9.5 or above Contains chrome which may not be acceptable for all applications, depending on local environmental regulations and considerations; use TANNXTIIIN for applications when the use of chrome is restricted Toxicity and Handling Bioassay information is available upon request. Handle as an industrial chemical, wearing protective equipment and observing the precautions as described in the Material Safety Data Sheet (MSDS). Packaging and Storage XP -20 N agent is packaged in 50 -lb (22.7 -kg), multi-wall, paper sacks. Store at moderate temperatures in dry, well ventilated area. Keep in origi This document is supplied solely for Informational purposes and 54-1 SWAG") makes no guarantees or warranties, either expressed or implied, with respect lo the arcurary and use of this data. All product warranties and guarantees shall be governed by the Standard Terms of Sale. ©2005 At r.. All rights reserved. Mark of Md.... 5 512401 at /45 at container. Mi P.O. 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U Q) V) (1) 4 5 j CU U I- m D W W Z W I- 1 m >is O z Ems °I 0 SHJj 20 O ill" O 0 lig co 0 st To 0 co 4 E; 2 SWIM Mae eta U co 0) 4J 0J c 0) 0 i V L g W 0 W 5- c 0) ten 5- 5- 5- 0 \V c 0) 5- N c 0) 5- 0 0 L (o 0i co 01 5- 0) 0 T CO 5- co o a) (o 5- 0.l co m c 4:J ro CO U V) CO ro w ro 4.d ro u 0 tio ry W c9 (en 0 CO C.= 0 4 .11) c 0 Lana c CO CO 4- L CC ry L ryg ry c N L n U e t s 0 1- D usa U O N 1 V) 4- a"i al L CULn 0 4--- CO 0 g 0 0 c6 N co C O O co coy a 73 .2 a O Q CO 73 N CD I) QU O CU a' U 4-1 o O ea in U CD VS 0 V4 a L a c e c X O 73 CO 0 O Q O N Q CU C13 Vf N CL c O cc O s- .1 1 o c N CD L v) O e W s V E e L e co N c -c V 0 cra c S.. cn U 0 S 0 H (A c NJ 0 0 v c c CU 4J 0 L 0 4-) r c (o E E 0 h ui KENAI ALASKA Sponsored by: Administration and Building Official CITY OF KENAI ORDINANCE NO. 2514 -2010 AN ORDINANCE OF THE COUNCIL OF THE CITY OF' KENAI, ALASKA, AMENDING KMC CHAPTER 4.30.015, LOCAL AMENDMENTS TO THE NATIONAL ELECTRICAL CODE 2008, TO ALLOW THE USE OF NON METALLIC CABLE IN TYPE III, IV, AND V CONSTRUCTION AS OTHERWISE PERMI YJ'ED IN 334.10(3) OF THE NATIONAL ELECTRICAL CODE 2008. WHEREAS, the City adopted the National Electrical Code 2008 for the purpose of establishing standards governing the installation of electrical cable within or on public and private buildings and premises within the City; and, WHEREAS, as part of the process of adopting the National Electrical Code 2008, the City made certain additions, deletions, and amendments to that national code and those changes are reflected in KMC 4.30.015 as local amendments to the national code; and, WHEREAS, through making local amendments to the National Electrical Code 2008, the City deleted a standard in section 334.10(3) of the national code and thereby prohibited the use of non metallic cable in certain types of commercial construction known as Type III, IV, and V construction, a type of construction made from all wood or from other combustible materials; and, WHEREAS, section 334.10(3} of the National Electrical Code 2008 permits the use of non metallic cable in Type III, IV, and V construction if the cables are concealed in walls, floors or ceilings so as to provide physical protection from direct contact or fire; and, WHEREAS, this use of non metallic cable is presently permitted for use in residential structures where it is deemed to be safe and sufficiently protective of public health and safety; and, WHEREAS, the City's Building Official recommends that the City apply section 334.10(3) to permit the use of non metallic cable in Type III, IV, and V commercial construction because non metallic cable is among the rn.ost inexpensive and readily available wiring methods and because its use will not compromise public safety where properly installed in accordance with section 334.10(3); and, WHEREAS, by including section 334.10(3) as a portion of the National Electric Code 2008 adopted by the City, the City's standard will also be consistent with the State of Alaska. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: New Text Underlined; (DELETED TEXT BRACKETED] Ordinance No. 2514 -2010 Page 2 of 4 Section 1. Form. This is a Code ordinance. Section 2. Amendment of Section 4.30.015 of the Kenai Municipal Code: The Kenai Municipal Code, Section 4.30.015, Local Amendments to the National Electrical Code 2008, is hereby amended as follows: 4.30.015 Local Amendments to the National Electrical Code 2008. 210.8(B) Other than dwelling units. Add paragraphs 210- 8(B)(6) and 210- 8(B)(7) as follows: (6) Outdoors where accessible from ground level. (7) Within 6 feet of the outside edge of a sink 210.23(E) Outlets per circuit. Add a subsection (E) to Section 210.23 to read as follows: Outlets per circuit. In dwelling units, no more than 13 outlets are allowed on one branch circuit. All smoke detectors on a circuit may be counted as a total of one outlet. Appliance circuits are limited to six duplex receptacles per circuit. Exception: Fixed lighting circuits designed to meet the appropriate sections of the code. 250.118 Types of equipment grounding conductors. Delete subsections. (21 thru (141 and replace with: (2) The copper sheath of mineral insulated, metal- sheathed cable. (3) Metal enclosures of busways listed for grounding. 300.4 Protection against physical damage. Amend by adding new subsection (G): (0) Roofs. Raceways run on the surface of a roof or subject to damage from snow, ice, or foot traffic, shall be rigid metal or intermediate metal conduit only. 300.4(11) Protection against physical damage. Add a new subsection (H): New Text Underlined; DELETED TEXT BRACKETED] Ordinance No. 2514 -2010 Page 3 of 4 (H) Roofs. Raceways run on the surface of a roof or subject to damage from snow, ice, or foot traffic, shall be rigid metal or intermediate metal conduit only. 310.13 Conductor construction and applications. Amend by adding the following sentence to the end of the section: Thermoplastic type insulation shall not be installed when the temperature is less than -7C (20F). [334.10 USES PERMITTED. DELETE THE FOLLOWING SUBSECTION: (3) OTHER STRUCTURES PERMITTED TO BE OF TYPES III, IV AND V CONSTRUCTION, EXCEPT AS PROHIBITED IN SECTION 334.12. CABLES SHALL BE CONCEALED WITHIN WALLS, FLOORS, OR CEILINGS THAT PROVIDE A THERMAL A BARRIER OF MATERIAL THAT HAS AT LEAST A 15- MINUTE FINISH RATING AS IDENTIFIED IN LISTINGS OF FIRE-RATED ASSEMBLIES.] 334.16 Non metallic- sheathed cable; installation; installation temperature. Add a new section as follows: 334.16 Installation temperature. Non metallic- sheathed cable shall not be installed when the temperature in the building or work area is below 20 degrees Fahrenheit -70). 410.17. Other closet or storage spaces. Add a section 410,17: 410.17 Other closet or storage spaces. Luminaries shall meet the location requirements for clothes closets or be of a totally enclosed fluorescent or LED type. Section 3. Severability: 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 pan, provision, or application. New Text Underlined: [DELETED TEXT BRACKETED] 6 Ordinance No. 2514 -2010 Page 4 of 4 Section 4. Effective Date: Pursuant to KMC 1.15.070(1). this ordinance shall take effect one month after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENA[, ALASKA, this 20th day of October, 2010. ATTEST: Carol L. Freas, City Clerk PAT PORTER, MAYOR New Text Underlined %DELETED TEXT BRACKETED] Introduced: October 6, 2010 Adopted: October 20, 2010 Effective: November 20, 2010 the of KENAI, ALASKA MEMO: TO: Rick Koch, City Manager FROM: Wayne Ogle, Public Works Director DATE: September 28, 2010 SUBJECT: ORDINANCE NO. 2514-2010; CHANGES TO LOCAL AMENDMENTS TO THE NATIONAL ELECTRIC CODE 2008 Rick, "Village with a Past, CL with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 FAX: 907 283 -3014 IIII'I 1992 This memo is in support of Ordinance No. 2514 -2010 which will restore subsection 334,10(3) of the National Electric Code 2008. The City had adopted the National Electric Code 2008 in April 2009. However, through local amendments, subsection 334.10(3) of the National Electric Code 2008 was not adopted by the City. This was consistent with the City of Anchorage which also deleted paragraph 334.10(3) by local amendment in their adoption of the National Electric Code 2008. The City's deletion of subsection 334.10(3) of the National Electric Code 200B prohibited the use of non metallic cable in certain types of commercial construction known as Type III, IV V construction, a type of construction made of wood or other combustible materials. The use of non metallic cable is presently permitted for use in residential structures where it is deemed to be safe and sufficiently protective of public health and safety. The Building Official recommends that City restore subsection 334.10(3) to permit the use of non metallic cable in Type III, IV and V commercial construction. He believes that this non metallic cable is among the most inexpensive and readily available wiring methods. He also believes that this will not compromise public safety where it is properly installed in accordance with section 334.10(3). The City's inclusion of subsection 334.10(3) in the National Electric Code 2008 by ordinance will make the City consistent with the State of Alaska. AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA INCREASING ESTIMATED REVENUES AND APPROPRIATIONS BY $3,600.00 IN THE GENERAL FUND FOR THE PURCHASE OF LAND FOR A PUBLIC AND /OR CHARITABLE USE. WHEREAS, the City of Kenai desires to purchase Government Lots 121, 165 and 166, Section 31 T6N R11 W, Seward Meridian excluding the Kenai Spur Highway Right -of- Way, Kenai, Third Judicial District (the Property) as a potential site for a municipal well site and wellhead protection area, greenbelt, pedestrian pathway and conservation and /or public recreation purposes; and, WHEREAS, pursuant to AS3S.05, the State of Alaska, Department of Natural Resources, Division of Mining, Land and Water issued a notice to proceed for the sale of the Property in the amount of $3,500.00, plus a $100.00 document handling fee. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA that estimated revenues and appropriations be increased as follows: General Fund Increase Estimated Revenues: Appropriation of Fund Balance Increase Appropriations: Land Administration Land $3,600.00 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. ATTEST: Carol L. Freas, City Clerk Approved by Finance: -b, CITY OF KENAI ORDINANCE NO. 2515 -2010 PAT PORTER, MAYOR Suggested by Administration $3,600.00 Introduced: October 6, 2010 Adopted: October 20, 2010 Effective: October 20, 2010 MEMO: e with a Past Gi with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 FAX: 907 283 -3014 TO: Rick Koch, City Manager FROM: Christine Cunningham, Assistant to the City Manager DATE: October 13, 2010 SUBJECT: Ordinance No. 2515 -2010 and Resolution 2010 -58 Purchase of Land for a Public and Charitable Use The purpose of this correspondence is to provide information regarding the above ordinance and resolution authorizing the purchase of the above property from the State of Alaska. In 2007, the City, as a preference right applicant, applied to the State to acquire the property shown on the attached map, for a public and charitable use. The State issued a preliminary decision approving the City's request to purchase the property in 2008, and, after a public notice process, the State issued a Final Finding and Decision to approve the sale of the Property to the City subject to the State's reservation of a reversionary interest in the property if it is ever used for anything other than for a public purpose. The approval of the Final Finding and Decision required the City to conduct an Alaska State Land Survey of the Property in order to move forward with the purchase. Additionally, KMC 22.05.135(a) requires that the City obtain an appraisal of property prior to authorizing a purchase. Based on the Scope of Work for this property, which required identification of significant archeological sites with reservation zones (or limited development areas) encompassing those sites, a two step appraisal was required which would also include a location of the archeological sites since they were not delineated on any maps provided by the State. The Summary Appraisal Report prepared by Derry Associates, Inc. dated August 30, 2010 valued the property at $20,000.00 and included, under separate cover as requested by the State (the current owner), the locations and photos of the archeological sites for the City's private consideration. -10- The total amount the City has expended to date toward the acquisition of the referenced property is as follows: Application Fee $100.00 Reimbursement of advertising cost of Public Notice $481.66 Survey Instructions Fee $225.00 Survey $8,866.00 Appraisal $3,050.00 TOTAL $12,722.66 To proceed with the purchase of the property, the City must provide the attached Declaration of Intent, pay a $100.00 document handling fee, and pay either the full purchase price of $3,500.00 or a minimum deposit of 5% of the purchase price in order to enter into a contract for sale with the State by October 22, 2010. Attachments 405 3 0 1 1B 72 1404 1407 IKAIKA KN 3-7 112 1404 1403 1401 2-A 1406 1402 FIRST AVE GOVT, LOT 162 2060 Kenai Spur Highway GOVT. LOT GOV'T. LOT 42 41 GOV'T. LOT 65 2 3 GOVT, LOT 64 GOVT. LOT GOVT. LOT 89 88 73 13E6 1397 92 113 1306 1397 132 TR A 74 91 GOV'T. LOT 84 GOV'T, LOT 85 GOVT. LOT 87 GOV'T. LOT 86 -12- 0. GOVT LOT 63 GOV'T. LOT 62 Subject Parcel 1216 0 e 2 0 1 WAREHOUSE,SUBD, 2 1212 21 1211 129 1210 2 1210 1207 128 1 1206 1204 20 19 776 '86 VT Lo GT. LOT 17 1201 1 2 1 2 18 L. ,y7 tAc city o/ KENAI CITY OF KENAI RESOLUTION NO. 2010 58 Suggested by: Administration A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING THE PURCHASE OF APPROXIMATELY 4.234 ACRES OF PROPERTY DESCRIBED AS GOVERNMENT LOTS 131, 165 and 166, SECTION 31, T6N, R11W, SEWARD MERIDIAN, KENAI, ALASKA, FROM THE STATE OF' ALASKA FOR $3,500.00 FOR A MUNICIPAL PRODUCTION WELL SITE AND WELLHEAD PROTECTION AREA, GREENBELT, PEDESTRIAN PATHWAY AND CONSERVATION AND /OR OTHER PUBLIC RECREATION PURPOSES. WHEREAS, property described as Government Lots 121, 165 and 166, Section 31, T6N, R11W, Seward Meridian, excluding the Kenai Spur Highway Right -of -Way, Kenai, Third Judicial District (the Property) as a potential site for a municipal well site and wellhead protection area, greenbelt, pedestrian pathway and conservation and /or other public recreation purposes; and, WHEREAS, the Property is owned by the State of Alaska and managed by the Department of Natural Resources; and, WHEREAS, in 2007, the City, as a preference right applicant, applied to the State to acquire the Property for a public and charitable use; and, WHEREAS, pursuant to AS 38.05, the State of Alaska Department of Natural Resources, Division of Mining, Land and Water issued a notice to proceed to purchase the Property in the amount of $3,500.00, plus a $100.00 document handling fee; and, WHEREAS, KMC 22.05.135(a) states the following: and, The city, by authorization of the city council, expressed in a resolution for such purpose, may lease, purchase or acquire an interest in real property needed for a public use on such terms and conditions as the council shall determine, but no purchase shall be made until a qualified appraiser has appraised the property and given the council an independent opinion as to the full and true value thereof; WHEREAS, the City has obtained a Summary Appraisal Report prepared by Derry Associates, Inc. dated August 30, 2010 valuing the Property at $20,000.00; and, WHEREAS, under AS38.05.010, the deed of conveyance shall contain a reversionary inter if the land is used for anything other than a public purpose. -13- Resolution No. 2010 -58 Page 2 of 2 NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the Council of the City of Kenai authorizes the purchase of approximately 4.234 acres of property described as Government Lots 131, 165 and 166, Section 31, T6n, R1 lw, Seward Meridian, Kenai, Alaska, from the State of Alaska for $3,500.00, for a municipal production well site and wellhead protection area, greenbelt, pedestrian pathway and conservation and /or other public recreation purposes. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. ATTEST: Carol. L. Freas, City Clerk -14- PAT PORTER, MAYOR MEMO: Villa e with a Past, Gi with a Ftctare" 210 FideIgo Avenue, Kenai, Alaska 99611 -7794 if Telephone: 907 283 -7535 FAX: 907 283 -3014 l� Ir -15- TO: Rick Koch, City Manager FROM: Christine Cunningham, Assistant to the City Manager „rf DATE: October 13, 2010 SUBJECT: Ordinance No. 2515 -2010 and Resolution 2010 -58 Purchase of Land for a Public and Charitable Use The purpose of this correspondence is to provide information regarding the above ordinance and resolution authorizing the purchase of the above property from the State of Alaska. 1997 In 2007, the City, as a preference right applicant, applied to the State to acquire the property shown on the attached map, for a public and charitable use. The State issued a preliminary decision approving the City's request to purchase the property in 2008, and, after a public notice process, the State issued a Final Finding and Decision to approve the sale of the Property to the City subject to the State's reservation of a the it ever used for anything other than for a public reversionary interest in the property I I� is vvc� u:a.... y a r purpose. The approval of the Final Finding and Decision required the City to conduct an Alaska State Land Survey of the Property in order to move forward with the purchase. Additionally, KMC 22.05.135(a) requires that the City obtain an appraisal of property prior to authorizing a purchase. Based on the Scope of Work for this property, which required identification of significant archeological sites with reservation zones (or limited development areas) encompassing those sites, a two step appraisal was required which would also include a location of the archeological sites since they were not delineated on any maps provided by the State, The Summary Appraisal Report prepared by Derry Associates, Inc, dated August 30, 2010 valued the property at $20,000.00 and included, under separate cover as requested by the State (the current owner), the locations and photos of the archeological sites for the City's private consideration. The total amount the City has expended to date toward the acquisition of the referenced property is as follows: To proceed with the purchase of the property, the City must provide the attached Declaration of Intent, pay a $100.00 document handling fee, and pay either the full purchase price of $3,500.00 or a minimum deposit of 5% of the purchase price in order to enter into a contract for sale with the State by October 22, 2010. Attachments Application Fee $100.00 Reimbursement of advertising cost of Public Notice $481.66 Survey Instructions Fee $225.00 Survey $8,866.00 Appraisal $3,050.00 TOTAL $12,722.66 -16- 402 3 72 140? 1403 I KAIKA SUBD. KN 3-7 1 21 112 113 1404 1403 1401 1-A 2-A B 2-B gr 1404 1396 1406 1402 FIRST AVE GOVT. LOT 162 12080 GOV'T, LOT 65 41 64 GOV'T LOT GOV'T. LOT 89 88 1397 92 1396 1357 GOVT. LOT 0 42 GOVT. LOT 73 132 Kenai Spur Highway 74 91 114 GOVT, LOT 61 GOV'T. LOT 87 GOV'T, LOT 86 -17- GOV'T. LOT GOV'T. LOT 63 GOV'T. LOT 62 GOVT. LOT 64 GOVT LOT 85 fr 1208 90 co w D CL co L 115 z 0 1216 1 2 GOV'T LOT 25 GOV'T. LOT 32 76 1206 89 1211 129 0 33 1 W4REHOUSEISU003 2 3 1212 1210 1 7 6 N 2,3 L 5 GOV'T LOT 28 GOV'T LOT 27 GOV; LOT 8,L IDORENDA CT THIRD AVE 1209 1205 4 1204 lOut 1202 88 1207 128 16 117 Subject Parcel k 1216 1202 1201 I 1 2 2 1 I Z 170 2 I 3 I L i d 1200 J. 1204 k3 20 19 VT. LOT 8 GO 'T. Lo'r 17 \z,/ AN INCOMPLETE AND /OJ? UNSIGNED APPLICATION MAY DELAY PROCESSING. Purchaser fl: Print Last Name, First Name, Mailing Address City Contact Phone No Alternative Contact Phone No (You may list this on Page 4) Date of Birth E-mail Address (optional) Are you a U.S. Citizen? Yes No I you are not a U.S. citizen, you must provide your Alien registration No. and submit a completed IRS form WS -VEN, available from DNR offices. Alien Registration No. Are you applying for a Veteran's Discount under AS 38.05.940? Purchaser 2: Print Last Name, First Name, Mailing Address Cil Date of Birth E -mail Address (optional) STATE OE ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING, LAND AND WATER CONTRACT ADMINISTRATION ATWOOD BUILDING, 550 WEST 7' AVENUE, SUITE 640 ANCHORAGE, ALASKA 99501 -3576 Middle Initial Suffix State Zip Code Middle Initial Suffix State Zip Code Contact Phone No. Alternative Contact Phone No. (You may list this on Page 4) Are you a U.S. Citizen? Yes No DECLARATION OF INTENT If you are not a U.S. citizen, you must provide your Alien registration No, and submit a completed IRS form W8 -VEN, available from DNR offices. Alien Registration No. Are you applying for a Veteran's Discount under AS 38.05.940? -18- ADL Number Niaritall Status (check one) Single Person Married Person Division of Mining, Land Vila :',usiness Organization or Trust (For Over the- Counter purchases only) (Do not check marital status) Type of Title (check one) (See explanation on Page 3) Husband and Wife as Tenants by the Entirety Husband and Wife as Tenants in Common Other persons as Tenants in Common Title taken Individually Yes No. r File No. Business Organization or Trust (For Over -the- Counter purchases only) (Do not check marital status) Marital Status (check one) Single Person Married Person Type of Title (check one) (See explanation on Page 3) Husband and Wife as Tenants by the Entirety Husband and Wife as Tenants in Common Other persons as Tenants in Common Title taken Individually Yes No. Page 1 of 4 Purchaser 3: Print Last Name, First Name, Mailing Address City State Zip Code Contact Phone No, Alternative Contact Phone No. (You may list this on Page 4) Dale of Birth E -mail Address (optional) DECLARATION OF INTENT Middle Initial Suffix Are you aU.S. Citizen? Yes No If you are not a U.S. citizen, you must provide your Alien registration No. and submit a completed IRS form W8 -VEN, available from DNR offices. Alien Registration No, Are you applying for a Veteran's [Discount under AS 3805,940? Down Payment Enclosed'* 5 (19) Document Handling Fee individual 5100.00 152) For a TOTAL, of Signature, Purchaser 1 Signature, Purchaser 2 Signature, Purchaser 3 CONTRACT: -19- Business Organization or Trust (For Over the- Counter purchases only) (Do not check marital status) Maritail Status (check one) Single Person Married Person Type of Title (check one) (See explanation on Page 3) Husband and Wife as Tenants by the Entirety Husband and Wife as Tenants in Common Other persons as Tenants in Common Title taken Individually Yes No How do you want to pay? Please check either CONTRACT or PAYOFF. Payment options include money order, check, or credit card. Required credit card info on separate page. PAYOFF: Amount Enclosed Pr S (19) Document Handling Fee individual 5100.00 (52) For a TOTAL of 5 *DOWN PAYMENT AMOUNT MUST BE AT LEAST 5% OF THE PURCHASE BRUCE. The Contract will provide a monthly level-payment basis unless the department determines a quarterly or annual payment is more administratively efficient, according to the following financed principal amounts pursuant to 11 ,4.4C 67.875: 1. $2,000.00 or less must be paid in full; 2. 52,000.01 to 59.999.99, not more than 5 years; 3. $10,000.00 to $14,999.99, not more than 10 years; 4. 515,000.00 to 519,999.99, not more than 15 years; 5. $20,000.00 or more, not more than 20 years. PLEASE NOTE: Transferring, or attempting to transfer ownership of this parcel without prior written approval from the State of Alaska or receipt of a final conveyance document Talent or Omit Claim Deed) is prohibited Date Date Date 102-4039 (Rev. 10/06) Page 2 of4 DECLARATJON OF INTENT AS 38.05.035(a) authorize the director to decide what information is needed to process an application for the sale or use of stale land and resources. This information is made a part of the state public land records and becomes public information under AS 40.25.100 and 40.25.120 (unless the information qualifies for confidentiality under AS 3 &.05.035(a)(9) and confidentiality is requested). Public information is open to inspection by you or any•ember of the public. A person who is the subject of the information may challenge its accuracy or completeness under AS 44.99.310, by giving a written description of the challenged information, the changes needed to correct it, and a name and address where the person can be reached. False statements made in an application for a benefit are punishable under AS 51.56 210. DECLARATION OF INTENT INSTRUCTIONS AND DEFINITIONS Use extra forms if more than three. parties are to he part of the contract or title documents. Veteran's discount applicants: please provide a copy of your Form DD 214 showing character of discharge and length of service. You must currently be an Alaska resident and have been a resident for one year preceding the date of sale; submit proof of such residency. If there is more than one purchaser, all purchasers must be residents and submit proof of residency. If co- purchasers are eligible veterans, only one purchaser need submit their DO 214; however, all purchasers will have exhausted their once -in -a- lifetime veteran's land discount. o Organizations such as Trusts, Limited Liability Companies, or Corporations are not individuals, and are not required to disclose the marital status of the partners. Type. of Title Husband and wife, as tenants by the entirety. This is only available for monied persons, e.g., "John Q. Smith and Deborah R. Smith, husband and wife, as tenants by the entirety'". The law presumes tenancy by the entirety for a husband and wife unless it is expressly declared otherwise. (AS 34.15.110) Husband acrd wife, as tenants in common. A husband and wife can choose to purchase property together as tenants in common. A husband and wife are encouraged to seek the services of an attorney before selecting this form of tenancy. Other persons as tenants in common. Those persons who wish to purchase property together can do so as tenants in common. k is possible for each person to have a different marital status. This example illustrates a possible combination, e.g., "William P. Jones, a married person, Sandra S. Smith, in single person, and Andrew X. Read and Barbara A. Read, husband and wife; tenants in common." There is no right of survivorship for the tenants under this type of tenancy. Titletaken individually. If an application has just one purchaser, whether single or married, that pers would select this option. ft may be advisable to seek the services of an attorney if you have concerns about how your estate and property are affected by the above types of tenancy. 02 -4039 (Rev, 10/06) Page 3 of 4 -20- Social Security information will not become public information from submission of this forme These are utilized as required identifiers far the customer information database, revenue and billing reporting system, and to report paid loan interest to the contract holder and the Internal Revenue Service. Purchaser I Name Purchaser 1- Nome Purchaser 3- Name Check one ri VISA Credit Card Number .milling address: Verification Code This pope will be destroyed when Ifevenuc and Sillinl re: -ortin data is established II Customer name on card: Master Card II Expiration Date: Zip code: DECLARATION OF INTENT SOCIAL SECURITY NUMBER Social Security Number Social Security Number Social Security Number CREDIT CORD PAYMENT Credit Card Users: This authorization constitutes an unconditional promise to pay the amount doe from Page Z. This authorization inctndes consent to adjust the amount charged if the amount you specify is less than the required 5% of the deposit amount. If at the time your Declaration of intent form is processed we are unable to obtain authorization to charge against the credit card presented due to specific limitations of the account, your application may be declared void, Please make prearrangements with your financial institutions to ensure funds will he available at the time of payment. Signature: -21 Date of Birth Date of Birth Dam of Birth Amount of Charge: Contact Phone Number: Credit card information will not become public information. This page well be destroyed after payment has been processed 102 -4039 (Rev. 10106) Page4of4 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING THE BUDGET TRANSFER OF $25,000 FOR A SNOWPLOWING /SANDING SERVICE CONTRACT FOR SERVICES AT THE AIRPORT TERMINAL BUILDING, KENAI FLIGHT SERVICE STATION AND THE ALASKA FIRE TRAINING CENTER. WHEREAS, the FAA Airport Certification Inspector noted the lack of sufficient qualified personnel to accomplish snow removal operation at the airport during a mild snow event; and, WHEREAS, a bid package has been prepared to secure a. plowing /sanding contract for the parking lots at the airport terminal building, Kenai Flight Service Station, and Alaska Fire Training Facility; and, WHEREAS, an Invitation to Bid is scheduled to advertise in October with a Bid opening October 25, 2010, and request to award the contract at the November 3, 2010 Council Meeting; and, WHEREAS, the contract is expected to reduce airport overtime and the previously budgeted re -lamp of the terminal parking lot has been canceled providing available funds for this contract. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the following budget transfers be made: F rom: Airport Airfield /Overtime Airport Terminal Improvements Other Than Buildings To: CITY OF KENAI RESOLUTION NO. 2010 -59 Airport M &O Repairs and Maintenance Suggested by: Administration $10,000 $15,000 25,000 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. ATTEST: Carol L. Freas, City Clerk Approved by Finance: -22- PAT PORTER, MAYOR Memo "Serving/the/greater Kenai/ Peninsula" 395N. NItLcW ST. SURE 290 KENAI, ALASKA 99611 TELEPHONE 907.28 -7951 FAX 907-283-3737 To: Rick R. Koch City Manager Terry Eubank Finance Director From: Mary Bondurant Airport Manager Date; October 13, 2010 Subject: Snow Plowing /Sanding Services Contract at the Kenai Airport Terminal Building, Kenai Flight Service Station, and Alaska Fire Training Facility In January 2010, a Letter of Correction from the FAA Airport Certification Inspector noted the lack of sufficient qualified personnel to accomplish snow removal operations at the airport during a mild snow event. Solutions were discussed during the FY11 Airport work sessions to address this and meet the part 139 requirement that the airport have sufficient qualified personnel. At the direction of the City Manager, additional City staff was assigned to be c n -call to the airport for snow removal operations and a bid package was prepared to secure a plowing /sanding contract for the parking lots at the airport terminal building, Kenai Flight Service Station, and Alaska Fire Training Facility. The intent is to free -up staff from low priority parking lot maintenance to allow for the high- priority of runway /taxiway /apron plowing and sanding. The Invitation to Bid is scheduled to advertise on October 14, 15 and 17. Bid opening is Monday, October 25, and the contract awarded at the November 3, 2010 Council meeting. I recommend transferring $10,000 from the Airtiield/Overtfine account and $15,000 from the Terminal /improvements Other Than Buildings account for a total of $25,000 into M &O /Repairs and Maintenance to cover this contract. Please contact me if you have any questions. .ci.kenai.akus. -23- ATTEST: Carol L. Freas, City Clerk CITY OF KENAI RESOLUTION NO. 2010 -60 -24- Suggested by: Administration A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, SUPPORTING THE USE OF FUNDING PROVIDED THROUGH THE ECONOMIC RECOVERY ACT FOR BUCCANEER ALASKA AND POSSIBLY OTHER COMPANIES TO ACQUIRE A JACK -UP DRILL RIG FOR USE IN COOK INLET. WHEREAS, the Economic Recovery Act allocated $7,315,000 to the Kenai Peninsula Borough and in total $135,000,000 was allocated throughout the State of Alaska; and., WHEREAS, a portion of that allocation was transferred to the City of Kenai, and the Kenai City Council declared the City of Kenai as an Economic Recovery Zone; and, WHEREAS, the unused portion of the funding provided through the Economic Recovery Act is now with the Alaska Industrial Development and Export Authority (AIDEA); and, WHEREAS, 513 309 was enacted and signed into law on July 7, 2010 and that legislation authorized credits for drilling from a Jack -Up Platform in the Cook Inlet; and, WHEREAS, Buccaneer Alaska, and possibly other companies, are submitting a proposal to the AIDEA for funds to acquire a Jack -Up Drill Rig to bring to the Cook Inlet; and, WHEREAS, Buccaneer Alaska has expressed an interest in establishing a local office within the City of Kenai. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the City of Kenai supports the use of funding provided through the Economic Recovery Act for Buccaneer Alaska and possibly other companies to acquire a Jack -Up Drill Rig for use in Cook Inlet. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. PAT PORTER, MAYOR KENAI, ALASKA MEMO: "Village with a Past, Gity with a Fature TO: Kenai City Council FROM: Rick Koch, City Manager DATE: October 14, 2010 SUBJECT: Resolution No. 2010 -60 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 FAX: 907- 283 -3014 The purpose of this correspondence is to recommend Council approval of the above referenced resolution. On October 14 Administration met with Speaker Mike Chenault, Senator Tom Wagner's staff, Representative Kurt Olson's staff and representatives from Buccaneer Alaska, to discuss the possibility of Buccaneer Alaska's acquisition of a jack -up drill rig for use in the Cook Inlet. They will be submitting a proposal to AIDEA for funds, and asked the City of Kenai for a letter of support. Thank you for your attention in this matter. -25- tees- 1 997 Official Business Session: January May State Capitol, #423 Juneau, AK 99801 Phone: 907465 -2828 Fax: 9074654779 8127 DATE: TO: FROM: RE: ALASKA STATE LEGISLATURE SENATOR THOMAS H. WAGONER Member, Senate Resources Committee October 19, 2010 Senator Tom Wagoner Mary Jackson Buccaneer Alaska Per your direction, I spoke with Mark Landt of Buccaneer Alaska on Monday, October 11, 2010 and arranged events during his visit to the Kenai. Mr. Landt said they (he, another person from Buccaneer and their permitting contractor) would be in town on Thursday and Friday (October 14 15) and indicated they had two specific issues: (1) Permitting for subsurface drilling near Kenai Airport and (2) Jack -up rig acquisition For Thursday morning, I arranged for them to meet with Kenai City Manager Rick Koch and Kenai Finance Director Terry Eubank. Also at that meeting was Speaker Mike Chenault, Konrad Jackson from Rep. Olson's office, and myself. The permitting activity is on City of Kenai property near the airport, off Marathon Road, with subsurface rights owned by the Mental Health Trust. They discussed the City's permitting process and requirements. Discussion regarding the permitting ended, and we then turned to the topic of the jack -up rig acquisition. Buccaneer said that they have had conversations with Alaska Industrial Development Export Authority (AIDEA) about partnering with them on some portion of the costs and also utilizing federal Recovery Zone Facility Bonds (RZF) for some portion of the costs. For the direct AIDEA portion, it was unknown whether they (AIDEA) will authorize directly or whether they will request approval during the upcoming legislative session. The RZF authorizations were distributed throughout Alaska (see attached excerpt from the Manual of the AIDEA regarding Recovery Zone Facility Bonds). The balance of the Kenai Peninsula Borough's "share" was $7.315 million. The amount that Buccaneer Alaska would like far exceeds that "share For the RZF bond discussion, both Mr. Koch and Mr. Eubank were very helpful as they had familiarity with the process. What is reported here is based primarily on their input. Interim: May December 145 Main Street Loop; Suite 226 Kenai, AK 99611 Phone: 907 283 -7996 Fax 907 -283- MEMO to Senator Wagoner from MJ RE: Buccaneer Alaska Page Two of Three DATED October 19, 2010 There will be a requirement to show support for the project the question was whether it was only from the affected area or also from entities that had returned their "share Given that there are distributions shown which have no commensurate political entity, it seems unlikely that such "other" support would be needed. When those support resolutions needed to be presented was also discussed, and it was determined we should work on it ASAP. Thus, we focused on providing local support documentation; a resolution from the City of Kenai (who would be meeting on October 20, deadline for packet submittal was the same day as the meeting, October 14) and some supporting documents from the Kenai Peninsula Borough. 1 The meeting with all parties ended around 10:30am and Konrad Jackson took the Buccaneer Alaska people to do a walk- through of the EDD Building and the permitting contractor went to the Kenai City Hall to meet with other city officials. While that was occurring, I provided a very preliminary drafted of a resolution for the City of Kenai via email to City Manager Koch. He emailed back a final draft, I inserted some specific dates, and it was finalized (see attached draft resolution). I then emailed Borough Mayor Dave Carey's office with a draft letter of support from him to AIDEA and attached the draft City of Kenai Resolution. 2 At noon, we went to the 406 for lunch. I was not able to contact Bob Favretto (Kenai Chapter Alliance President) to attend because he was out of state. I contacted Jack Focose and he joined us to provide other local contact information. After the lunch, the Buccaneer people went about their business and assured me that if they needed further assistance, they would contact me. I had no further contact with them while they were here. See below footnote for external activity. 3 I spoke with EDD Director John Torgerson on Wednesday. While Mr. Torgerson was in the office, I called Mr, Landt, and we three spoke about the project. Mr. Torgerson indicated his willingness to present a resolution of support to his Board of Directors for submittal to AIDEA. We were not certain if the support needed to be submitted with the loan application November 8 deadline or later. 2 I received a finalized letter of support by Mayor Carey on Monday, October 18, and forwarded it to Mr. Landt that same day (see attached letter from Mayor Carey). 3 This morning I received a telephone call from the Petroleum News (Erich) who had heard about potential jack -up rig activity. I provided them with Mr. Landt's contacts and advised them that the legislative delegation was "cautiously optimistic" about the endeavor and resolutions of support were being developed. He asked if we had contacted AIDEA and I responded no, that we would not get directly involved with a loan process and would extend support to any entity that was interested In bringing a jack up rig to the Peninsula. MEMO to Senator Wagoner from MJ RE: Buccaneer Alaska Page Three of Three DATED October 19, 2010 Attachments: Xc: Excerpt from AIDEA Recovery Zone Facility Bonds (1 page) Draft City of Kenai Resolution (1 page) Kenai Peninsula Borough Mayor Dave Carey's letter of support (1 page) Speaker Mike Chenault Rep. Kurt Olson Mayor Dave Carey EDD Director John Torgerson Kenai City Manager Rick Koch Area Recovery Zone Facility Bond Volume Cap 135,000,000 Alaska Anchorage Borough /Municipality None Aleutians East Borough None Bristol Bay Borough 369,000 Denali Borough None Fairbanks North Star Borough 49,137,000 Haines Borough 2,365,000 Juneau Borough /City 11,379,000 Kenai Peninsula Borough 7,315,000 Ketchikan Gateway Borough 5,616,000 3,399,000 Kodiak Island Borough Lake and Peninsula Borough 2,956,000 Matanuska- Susitna Borough None North Slope Borough None Northwest Arctic Borough 1,330,000 Sltka Borough /City 4,064,000 Yakutat Borough 148,000 Aleutians West Census Area 7,020,000 Bethel Census Area 22,906,000 Dillingham Census Area 2,586,000 Nome Census Area 2,660,000 P rince of Wales -Outer Ketchlkan Census Area 2,882,000 Skagway Hoonah- Angoon Census Area 1,478.000 Southeast Fairbanks Census Area None Valdez- Cordova Census Area 4,360,000 Wade Hampton Census Area None Wranjc ell- Petersburg Census Area 3,030,000 Yukon- Koyukuk Census Area None f l :44-1 -4 o °I -1 O Viitcitn2-1a 0 MANUAL OF THE ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY REGARDING RECOVERY ZONE FACILITY BONDS Dated August 5, 2010 Section E0. Scope of Manual. (a) This Manual has been adopted as a regulation under 3 AA: 99.907 to implement the provisions of sec. 6, ch. 68 SLA 2010, and federal law regarding RZF bonds (26 U.S.0 1400U-1 and 14000 -3, as amended) and to establish rules and procedures relating to RZF bonds, including the manner in which RZF bond volume cap may be used or reallocated by the authority. (b) Thror.gh IRS Notice 2009 -50, which can be found at www.irs.gov /pub /irs- drop /n- 09-50.pdf, the IRS published allocations of RZF bond volume cap for Alaska in the amounts and to the recipients set forth below: Page 1 of 38 A -Mt Z -2 I D- I q -II7 wnew p CITY OF KENAI Suggested by: Administration RESOLUTION NO. 2010 -XX A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, SUPPORTING THE USE OF FUNDING PROVIDED THROUGH THE ECONOMIC RECOVERY ACT FOR BUCCANEER ALASKA AND POSSIBLY OTHER COMPANIES TO ACQUIRE A JACK -UP DRILL RIG FOR USE IN COOK INLET. WHEREAS, the Economic Recovery Act allocated $7,315,000 to the Kenai Peninsula Borough and in total $135,000,000 was allocated throughout the State of Alaska; and, WHEREAS, a portion of that allocation was transferred to the City of Kenai, and the Kenai City Council declared the City of Kenai as an Economic Recovery Zone; and, WHEREAS, the unused portion of the funding provided through the Economic Recovery Act is now with the Alaska Industrial Development and Export Authority (AIDEA); and, WHEREAS, SB 309 was enacted and signed into law on July 7, 2010 and that legislation authorized credits for drilling from a Jack -Up Platform in the Cook Inlet; and, WHEREAS, Buccaneer Alaska, and possibly other companies, are submitting a proposal to the AIDEA for funds to acquire a Jack -Up Drill Rig to bring to the Cook Inlet; and, WHEREAS, Buccaneer Alaska has expressed an interest in establishing a local office within the City of Kenai. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, THAT THE CITY OF KENAI SUPPORTS THE USE OF FUNDING PROVIDED THROUGH THE ECONOMIC RECOVERY ACT FOR BUCCANEER ALASKA AND POSSIBLY OTHER COMPANIES TO ACQUIRE A JACK -UP DRILL RIG FOR USE IN COOK INLET. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this Twentieth day of October, 2010, ATTEST: Carol L. Freas, City Clerk PAT PORTER, MAYOR -to i0 -t't October 18, 2010 Mr. Ted Leonard, Executive Director Alaska Industrial Development and Export Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 RE: Jack -Up Drill Rig for Cook Inlet: Buccaneer Alaska Dear Mr. Leonard: Sincerely, Wt nvl Mayor Day KENAI PENINSULA BOROUGH 144 North Binkley Street Soldotna, Alaska 99669 -7520 Toll -free within the Borough: 1- 800 478 -4441 PHONE: (907) 262 -4441 FAX: (907) 262-1892 www.boroug h.kenai.ak.us DAVID R. CAREY BOROUGH MAYOR As Mayor of the Kenai Peninsula Borough, I want you to know that I whole heartedly support the efforts of Buccaneer Alaska to obtain a jack -up drill rig for the Cook Inlet. Legislation was signed in July of this year (SB 309) that authorized credits for drilling in the Cook Inlet. 1 was proud to have participated in that event which was held at the Kenai Peninsula Economic Development District building. Further exploration in the Cook Inlet has long been a desire of the Central Peninsula; we embrace the value of the oil and gas industries. Use of the Economic Recovery Act funds for this project is, I believe, an appropriate use and has tremendous potential benefits to revitalize the economy of our area As I understand it, the City of Kenai will be considering a resolution of support at their next Council meeting. I will submit a similar resolution of support to the Kenai Peninsula Borough Assembly for consideration at their next meeting. I welcome Buccaneer Alaska to the Kenai Peninsula and stand ready to help their endeavor. The Honorable Pat Porter, Mayor City o f Kenai Email: Dear Mayor, I am including to you the following: October 20, 2010 oil Oil: Gns Development 1.) Copy of existing contract with Spartan Drilling Company. II.) Copy of proposed rig move and proposed Heavy Lift Contracts. III.) Correspondence with Homeland Security. I was informed yesterday of the involvement of the City of Kenai to assist in bringing a Jack -Up Rig to the Gook Inlet Basin. In this regard, Escopeta is way down the road in getting this achieved. It is our plan to have the Spartan 151 Jack -Up arrive in the Cook Inlet and begin drilling the Kitchen Lights Unit #1 in April of 2011. Escopeta is waiting to hear from Homeland Security on these matters. When approved, Escopeta will begin to fund these various contracts. Escopeta plans to fund the drilling transactions internally along with the incentives provided by SB 309. Escopeta has not asked the citizens of Alaska for a dime, we feel it is our job and responsibility to bring a jack-up ourselves. If the City of Kenai is intent on providing $7,300,000 for the rig move to Alaska, we would be happy to entertain a "loan" of that amount to be used towards the $£,300.000 budget for the move. Escopeta would repay the loan with interest, direct from the SB 309 funds and from others sharing in the mobilization costs. It is our intent to use as much local labor as possible on the Spartan 1 as well as all operations, creating jobs locally. After all, we are bringing the Jack -Up for everyone, to find the natural gas needed so badly for all. Thank you for your attention and look forward to working with all of you. SECTION I Escopeta Oil From: PButler @Spartanoffshore.com Sent: Monday, October 11, 2010 12:37 PM To: escopeta @swbell.net; ramesh@zentech- usa.com Cc: TParker @Spartanoffshore.com Subject: RE: Spartan Rig 151 D2 ny /R ieeh, I'd appreciate your thoughts on P.. s before Send it to Gre are in b'.uee.. below, TIhanks Regards, Pau Butler From: Hobbs, Greg 5 DNR) [mailtmgreg.hobbs@alaska gov] lento Friday, October 01, 2010 2 :32 PM To: Paul Butler escopeta @swbell.net Cc: Dennis, Aian R (DNR); Banks, Kevin R (DNR); Decker, Paul L (DNR) Subject: Spartan Rig 151 Mr. Butler, Thank -you for your e -mail of September 15 (text below). I again apologize for the time that it has taken me to follow up. have copied this mail to Mr. Davis, of Escopeta, as he has called me asking what Mr. Dennis and 1 were interested in. It was and still is a general discussion on the capabilities of the Spartan 151 Rig to meet Cook Inlet environmental conditions if Mr. Davis contracts it for use on his project. Mr. Davis indicated in his conversation with me that the 151 rig may not be the rig that he ends up contracting. If that were the case, and he still were to contract with Spartan for another rig, the questions would be the same. It is our intent to make potential providers of a jack -up rig for the Cook Inlet aware of items that have created delays and costs for past contractors and operators. This is meant to better assure the success of ventures in the area. My background is 22 years in the oil and gas industry with the last 14 in onshore and offshore drilling and completion operations. This background, and the history of Alaskan Cook inlet operations that I have learned from those that participated in it, brought these questions and points to mind: 1. Rigs have come to the area and spent months at a dock installing heating systems and insulating lines for the sub arctic conditions of the area. Experience has been that work completed outside of Alaska has been more cost effective than work completed in Alaska due to logistics, supply, and craft support. Would the 151 rig require heating and insulation upgrades to work in Alaska? Are the fluid systems capable of circulating at all times if needed to prevent freeze -up? !Paul Butted We have staadied Rate the Gilbert Rowe Adriatic VIII A.s <hc, ooerraricr fF e €f axr o k up th ere r 1993 with ARCO..We mill he adding o fluid circulating system end heat trader; to the pop €t "cab ?e prpsr cg r stem plus p:. additional Wired sltiei:t' -q and heating on. the drill Poor ca: wet= as aduiti bnai..'na°ating in ;e rtcrfrs ap- spaces, At s` an EYNR. Our responses 2. It has been the experience of prior operators that securing an NPDES permit for discharge has been time consuming with significant opposition from fishermen, conservation groups and others. It is recommended that you confer with Mr. Davis to determine the status of this permit and its requirements to assure that your unit meets them prior to mobilization. As mentioned in number ten below, operation in the Gulf of Mexico may not assure that your unit will meet the EPA requirements for Alaska. This permit has created delays and significant cost impacts for operators in the past, and we want operators and Rig Contractors to be aware of this. ts'•eri Mr. C excr €rs is u: re by ft, the a, o wlsa. t Er u orx th DDES p e m ring. 3. Our work continues to determine the emission requirements that a unit in the net may need to meet, but comments from two knowledgeable sources to date indicate that older power systems would require an upgrade. Systems that do not have Cat 399 or newer engines may not meet emission requirements. [Pa el Rio 151's: :prime movers are all Cat 39,9s which ore currently "Grand Fathered' under the new EPA air errisslan s 'anaarr. The crane engines r ld ttfs be included r. ,°si Stich time as they wer e to be replaced, 4. Would crews that currently work the rig and have experience with it come with it? Is it a possibility that there could be a high turnover of current personnel on the rig given the remoteness of Alaska compared to where the rig currently operates? If a turnover occurs due to a lack of enthusiasm of current crews to work in Alaska, what are current thoughts to hire and develop talent to run the rig? How would this impact crew training and readiness? [Paul Butler We would much repc to utt:lz 8 al, At leas .n €"tiafi u =ci se ifiar with le layout an i operation, aals h7rne€iiaSfy d" Personnel uta. €rver d efinitely) consint}' rs. Tlie icater t no oosi It up th 'Yoe rid}. un 21Fe v�ltva, uld b e str ids,. Rig Shovers Crane Operator and Dr e kes it possible, cir tune 5, The environment of the Cook Inlet has been described as "Black Water Tides are extreme, second only to the Bay of Fundy in Nova Scotia with up to 35 foot differential between high and low tide. When the tide runs, it is like a river running in excess of 6 -7 knots. Has Spartan operated in the 151 or other rigs in conditions such as these in the past? :Ytar1 S' 2sc condition t arL well r wY` a we f had ZENTECH E i .e t rot~ perform CI t Nifty, This was dame tr acev;ddr e w ah he a tur xont uar: lad with Pacific ABS orttx"' USCG, 6. Experience has determined that the operating window for the inlet is about the middle of April to Thanksgiving. This removes rigs from the hazards of the thick ice slabs that are fed in the inlet from the many rivers that are around it during the deep winter months. If the rig needs to over winter in Alaska, It has been found that securing a dock to tie the rig to during this time saves a at of money. In the past, Rig Tenders Dock at Nikiski has been employed,, but it is unknown if that facility is in operation. [Paul Eu €ter, We are aware of the dock and are planning t o utilize such an alternative for potential storage during th 'Or season, Escoriet° is working on potential "Formou faarther south °rhor might permit working during the winter:. 7. In its maximum water depth, what is the distance between the hull to the sea floor for rig 151 or other rigs being considered for operation in the Cook net by your company? What is the normal operating air gap? (Paul flwtierj. The 151.iis equipped with mare than enough leg length to accommodate the tides and any reasonable air gap that may be required. fr tiraters such as the inlet we can operate with an air pap es law: as 15' to 27' (a€ high iaae)J at. we cnn maintain 43 tare areas contemplated with no problem, this w;rr leg $Yonetrnttat'ts 07 00 to 25' to 30`. Sloth the Gifnera i Ne and Adriatic Jill had cnrs about 3' penetration. 2 8. Prior to committing one of your units to a project in Alaska, I am certain that you will have the results of a marine survey in hand, as well as a third party certification for the unit operation in the conditions described in point five above. Even with these certifications in hand, prior units have had issues with movement in the above conditions due to unstable sea floor conditions. Do you have thoughts of a contingency for this event? [Paul Butler It is Escapeta`s respansfbil.ty to provide t '"sound location, Having said that, we do require soli dare and wkilezatec..E'" survesys before owing onto locailorts, These are then approved by tic and our insurance e 7derw: iters, Each location will be "Pre Approved" before we mobilized. 9, Given the cold water environment, and the above conditions, would you consider any changes to rescue techniques or equipment needed in the event of a person going overboard? [Pau, Butler] Mast tied t U e tan• to k'*'! 3'ci� nse u`.; w surwva 4Utt> und.cG!nduct t#' Pctk.. sunny every crew member, Oar consultant in Arndt GFYfrt is mL kin arrcr to Ement5 for th is plus investigat slue that we may need to oddness ahead q Thank you for your time- t 10, Are you aware that your unit would require inspection and approval of the Alaska Oil and Gas Conservation Commission prior to operation in Alaska? It is recommended that this inspection take place prior to mobilization of the unit. Operation in the Gulf of Mexico does not assure that modifications are not required for the unit to meet Alaska Oil and Gas Conservation Commission well control equipment requirements. Specifics of these requirements are found in 20 AAC 25.035 at the following link Review of these requirements and early, pre mobilization inspection of any of your units contracted for use on State leases would allow the earliest awareness of any issues. (Paul Butted Yes, in fact we have engager( MODUSpec to do a complete carver 3 with ABS and the USCG. We would very much taste fcome the Alaskan DNS to be i 1t ad�.eu it that c nd:wifl :ke you dcMsed as to our progress. I appreciate your time in answering these questions. Again, they your unit and the operator, Mr. Davis in this case. Should you want to schedule a call, let me know, Greg Hobbs, P,E. Petroleum Reservoir Engineer State of Alaska Department of Natural Resources Division of Gil and Gas, Resource evalu (907)375 -8239 greg hoebs{o aiaska.ene being dent I`Si. CEO F Id re Iregni 3 ed in an effort to assure the success of P.O. Box 6080 Metairie, LA 70009 Phone: 504-885 -7449 Fax:504- 456 -6560 Danny Davis Escopeta, Oil Company, LLC 5005 Riverway, Suite 440 Houston, Texas 77056 Subject: Load Out of Spartan Rig 151 for Transport to Alaskan Cook Inlet Dear Mr. Davis, This shall serve as Spartan Offshore Drilling's notification that the anticipated Toad out location for the Rig 151 would be in the Port of Freeport, Texas. Current scheduling is indicating ioadout would occur on or about February 15, 2011. Sincerely, Paul Butler President CEO Spartan Offshore Drilling, LLC September 22, 2010 OFFSHORE DAYWORK DRILLING CONTRACT BETWEEN SPARTAN OFFSHORE DRILLING, LLC CONTRACTOR AND ESCOPETA OIL COMPANY, LLC AS OPERATOR DATED EFFECTIVE AS OF THE 26th Day OF August, 2010 Escopeta Oil Company, LLC a corporation organized under the laws of Texas, located at 5005 Riverwav, Suite 440, Houston, Texas 77056 and (hereinafter called "Operator and Spartan Offshore Drilling, LLC. a corporation organized under the laws of Louisiana, located at Two Lakeway Plaza, 3850 North Causeway Boulevard, Suite 1160, Metairie, LA 70002, and (hereinafter called "Contractor"). WHEREAS, Operator desires to have offshore wells drilled or worked over in the Operating Area and to have performed or carried out all auxiliary operations and services as detailed in the Appendices hereto or as Operator may require; and WHEREAS, Contractor is willing to furnish the drilling unit, together with drilling and other equipment (hereinafter called the "Drilling Unit"), insurance and personnel, all as detailed in the Appendices and Exhibits hereto, for the purpose of drilling said wells and performing said auxiliary operations and services for Operator. NOW THEREFORE THIS AGREEMENT WiTNESSETH that in consideration of the covenants herein it is agreed as follows: 101. Definitions In this Contract, unless the context otherwise requires: (a) (b) "Execution Date" means the date in which both parties have signed this Contract as provided in Paragraph 1309 herein. The "Execution Date" may also, from time to time herein, be referred to as the "Effective Date" as that Term is defined in paragraph 201. (c) "Operator's Items" means the equipment, material and services owned by Operator or which are listed in Appendix D that are to be provided by or at expense of Operator; (d) "Contractor's Items" mean the Drilling Unit, equipment, material and services owned by Contractor or which are listed in Appendices B and D that are to be provided by or at expense of Contractor; (f) "Master Drilling Contract" THIS AGREEMENT (the "Contract dated the 26th day of August, 2010 is made between, ARTICLE I INTERPRETATION "Commencement Date" means the point in time (Date) that the Contractor has been given notice to make the Drilling Unit available for loading operations on to a Heavy Lift Transport Vessel preparatory to moving the Drilling Unit from the U.S. Gulf of Mexico to Operator's first drilling location under this Contract. Operator shall keep Contractor continually apprised as to the expected Commencement Date and shall finalize said date no later than 60 days prior. (e) "Contractor's Personnel" means the personnel to of Contractor and Contractor's subcontractors of any tier, including but not limited to their employees, consultants and other persons provided by Contractor from time to time in connection with operations hereunder; "Operator's Personnel" means the personnel of Operator, and Operator's other contractors and subcontractors of any tier, including but not limited to their employees, consultants and other _2_ (g) persons to be provided by Operator from time to time in connection with operations hereunder or present in the Operating Area; "Operating Area" means waters offshore of the state or area specified in Appendix A in which Operator is entitled to conduct drilling operations; (h) "Operating Base" means the place onshore Alaska designated by Operator and specified in Appendix A; (1) (j) "Affiliated Company" means a company or other legal entity which controls or is controlled by Operator or Contractor, or which is controlled by an entity which controls Operator or Contractor. For purposes hereof, control means the ownership, directly or indirectly, of fifty percent (50 or more of the shares or voting rights in a company or legal entity. "Technical Assistance Charge" Operator shall Pay Contractor a nonrefundable amount of Five Hundred Thousand Dollars and Zero Cents ($500,000.00) within 60 Days of executing this Contract. This payment is to compensate Contractor for costs it incurs providing services to Operator with respect to obtaining the various permits, providing Drilling Unit specific mobilization /demobilization related information and other technical evaluations that may be required of this project. If in the event that the Mobilization occurs this payment shall be credited to payments due pursuant to the Mobilization. (k) "Drilling Unit" and "Rig" as used herein shall represent the Spartan Rig 151 as described in Appendix B. (I) "Point of Origin" shall mean: 1) For the Drilling Unit, its location in the Guff of Mexico on the date that Contractor i given notice of the Commencement Date. 2) For Personnel, their respective permanent residential address, 102. Currency in this Contract, all amounts expressed in dollars are United States dollar amounts. 103. Conflicts Appendices A, 8, C, D, E, F and G attached hereto are incorporated herein by reference. If any provision of the Appendices conflicts with a provision in the, body hereof, the latter shall prevail. 104. Headings The paragraph headings shah not be considered in interpreting the text of this Contract. 105. Further Assurances Each party shall perform the acts and execute and deliver the documents and give the assurances necessary to give effect to the provisions of this Contract. 106. Contract's Status Contractor shall be an independent contractor in performing its obligations hereunder, 107. Operator's Status Operator enters into this Contract on behalf of itself and its co- venturers, co- lessees and joint owners, if any, and agrees that Operator and only Operator may enforce any obligation or rights herein contained expressed or implied to be for the benefit of Operator and/or the co- venturers, co- lessees and joint owners, and Operator and only Operator may commence any action, claim or proceedings against Contractor resulting from, arising out of or in connection with this Contract. 108. Governing Law This Contract shall be construed, interpreted, enforced and litigated, and the relations between the parties determined in accordance with the General Maritime Law of the United States of America, not including, however, any of its conflicts of law rules which would direct or refer to the laws of any jurisdiction. 203. Termination This Contract shall terminate: ARTICLE II TERM 201. Effective Date The parties shall be bound by this Contract when each o as "Effective Date hem h executed it (hereinafter referred to 202. Duration This Contract shall, subject to Paragraphs 203 and 204 below, be for the term specified in Appendix A. (a) Immediately lithe Drilling Unit becomes an actual loss or the date Contractor's Marine Surveyor determines a constructive or arranged total loss to have occurred; (b) On the date specified in Appendix A; or if operations are then being conducted on a well, as thereafter as such operations are completed and the Drilling Unit has moved off of Operator's drilling site; or in cases of the payment of a Lump Sum Demobilization Fee, when the Drilling Unit is afloat and ready to commence towing or movement off of Operator's drilling site; or the Drilling Unit is contracted to a third party to move to another location upon being released by Operator, when the Drilling Unit is afloat and ready to commence towing or movement off of Operator's drilling Site; whichever is latest. (cl In accordance with Paragraph 707 subject to the demobilization fee as specified in Appendix A. (d) In accordance with Paragraph 802. (e) If Contractor has failed to conduct its operations under this Contract in accordance with good oilfield practices as a result of causes solely within the control of Contractor, or if Contractor has failed to furnish or to maintain its equipment in good condition and suitable for the use intended, Operator may give Contractor written notice in which the causes of dissatisfaction shall be specified. Should Contractor fail or refuse to commence to remedy the matters complained of within five (5) days after written notice is received by Contractor, and thereafter to diligently prosecute such remedy until the failure has been fully corrected, Operator may, at -4_ (f) its option, terminate this Contract subject to the Demobilization Fee as stated and the provision of Paragraph 203(f) below will not be applicable. Operator shall have the right to terminate the Contract prior to the end to the term by providing written notice of termination to Contractor. In the event Operator terminates this Contract prior to the end of the "Initial Term" for any reason other than for cause as described in Paragraph 203(e) or that described in Paragraph 203(a), Operator shall pay Contractor within thirty (30) days of such termination, as liquidated damages and not as a penalty, a lump sum equal to (a) the number of days remaining on the "Initial Term" as of such termination of this Contract, multiplied by (b) the Operating Rate then in effect (the "Early Termination Fee provided that in the event the Drilling Unit works for another customer (Operator) following such termination but prior to the end of the "Initial Term Contractor shall refund to Operator the amount of proceeds earned by the Drilling Unit with such customer (Operator) prior to the expiration of the "Initial Term"; provided further that the maximum refund owed by Contractor to Operator shall not under any circumstances exceed the Operating Rate at the time of termination. Contractor shall use reasonable efforts to find work for the Drilling Unit and mitigate Operator's Early Termination Fee. 204. Option to Extend Operator may extend the duration of this Contract for an additional period by giving notice thereof to Contractor as specified in Appendix A, subject to mutually agreed rates, terms and conditions. 205. Continuing Obligations Notwithstanding the termination of this Contract, the parties shall continue to be bound by the provisions of this Contract that reasonably require some action or forbearance after such termination. 206. Return of Operator's Items Upon termination of operations, Contractor shall return to Operator on board the Drilling Unit, or as directed by Operator at Operator's sole cost, any of Operator's Items which are at the time in Contractor's possession. ARTICLE III CONTRACTOR'S PERSONNEL 301. Number, Selection, Hours of Labor and Remuneration Except where herein otherwise provided, the number, selection, replacement, hours of labor and remuneration of Contractor's Personnel shall be determined by the Contractor. Such employees or subcontractors' employees shall be the employees solely of Contractor or its subcontractors. 302. Contractor's Representative Contractor shall nominate one of its personnel as Contractor's Representative who shall be in charge of the remainder of Contractor's Personnel and who shall have full authority to resolve all day -to -day matters which arise between Operator and Contractor. Increase in Contractor's Personnel Operator may, at any time, with Contractor's approval require Contractor to increase the number of Contractor's Personnel and the rates provided herein shall be adjusted accordingly. -5 304. Replacement of Contractor's Personnel Contractor will remove and replace in a reasonable time any of Contractor's Personnel if Operator so requests in writing and if Operator can show reasonable grounds for its request. 305. Statutory Employees In all cases where Contractor's employees (including Contractor's and its subcontractor's direct, borrowed, special or statutory employees) are performing work in or offshore the State of Louisiana or are otherwise covered by the Louisiana Workers' Compensation Act. La. R.S. 23:1021 et seq., Operator and Contractor agree that the services performed by Contractor and Contractor's employees pursuant to this Contract are an integral part of and are essential to the ability of Operator to generate Operator's goods, products, and services for the purpose of La. R.S. 23:1061 (A) (1). Furthermore, Operator and Contractor agree that Operator is the statutory employer of Contractor's employees for purposes of La. R.S. 23:1061 (A) (3) and that Operator shall be entitled to the protections afforded a statutory employer under Louisiana Law. ARTICLE IV CONTRACTOR'S ITEMS 401. Obligation to Supply Contractor shall provide Contractor's Items and Personnel and perform the services to be performed by it in accordance with Appendices B, C and D. 402. Maintain Stocks Contractor shall be responsible, at its cost, for maintaining adequate stock levels of Contractor's Items and replenishing as necessary. 403. Maintain and Repair Equipment Contractor shall, subject to Paragraph 901 and Appendix D, be responsible for the maintenance and repair of all Contractor's Items and shall provide all spare parts and materials required therefore. Contractor shall, if requested by Operator, also maintain or repair any of Operator's Items on board the Drilling Unit which Contractor is qualified to and can maintain or repair with Contractor's normal complement of personnel and equipment on board the Drilling Unit, provided, however, that Operator shall at its cost provide all spare parts and materials required to maintain or repair Operator's Items, and the basic responsibility and liability for furnishing and maintaining such items shall remain with the Operator. ARTICLE V CONTRACTOR'S GENERAL OBLIGATION 501. Contractor's Standard of Performance Contractor shall carry out all operations hereunder on a daywork basis. For purposes hereof the term "daywork basis" means Contractor shall furnish equipment, labor, and perform services as herein provided, for a specified sum per day under the direction and supervision of Operator (inclusive of any employee, agent, consultant or subcontractor engaged by Operator to direct drilling operations). When operating on a daywork basis, Contractor shall be fully paid at the applicable rates of payment and assumes only the obligations and liabilities stated herein. Except for such obligations and liabilities specifically assumed by Contractor, Operator shall be solely responsible and assumes all liability for all consequences of operations by both parties while on a daywork basis, including results and all other -6- cbc- risks or liabilities incurred in or incident to such operations, notwithstanding any breach of representation or warranty, either expressed or implied, or the negligence or fault of Contractor, its employees, subcontractors, consultants, agents or servants, including sole, concurrent or gross negligence, either active or passive, latent defects or unseaworthiness of any vessel or vessels including the Drilling Unit, (whether or not pre existing) and any liability based on any theory of tort, breach of contract, breach of duty (whether statutory, contractual or otherwise), regulatory or statutory liability, or strict liability, including defect or ruin of premises, either latent or patent. 502. Operation of Drilling Unit Subject to Paragraph 605, Contractor shall be responsible for the operation of the Drilling Unit, including, supervising moving operations and positioning on drilling locations as required by Operator. Operations under this Contract will be performed on a twenty -four (24) hour per day basis. 503. Compliance with Operator's Instructions Contractor shall comply with all instructions of Operator consistent with the provisions of this Contract, including, without limitation, drilling, well control and safety instructions. Such instructions shall, if Contractor so requires, be confirmed in writing by the authorized representative of Operator. However, Operator shall not issue any instructions which would be inconsistent with Contractor's rules, policies or procedures pertaining to the safety of its personnel, equipment or the Drilling Unit, or request Contractor to perform in subh a way as to violate and Federal or State regulation, law or other mandate, or require Contractor to exceed the rated capacities of Contractor's Items or the minimum or maximum water depths or maximum well depth set forth in Appendix A. 504. Adverse Weather Contractor, in consultation with Operator, shall decide when, in the face of impending adverse weather conditions, to institute precautionary measures in order to safeguard the well, the well equipment, the Drilling Unit and personnel to the fullest possible extent. Contractor and Operator shall each ensure that each senior representative for the time being on board will not act unreasonably in the exercise of their discretion under this Paragraph. 505. Drilling Fluids and Casing Program Contractor shall take reasonable care to follow the Operator's instructions with respect to the Drilling Fluid and Casing Program as specified by Operator. Operator shall provide Contractor with these programs reasonably in advance of the spud date of each well to be drilled hereunder. 506. Cutting /Coring Program Contractor shall save and identify cuttings and cores according to Operator's instructions and place them in containers furnished by Operator. 507. Records to be Kept by Contractor Contractor shall keep and furnish to Operator an accurate record of the work performed and formations drilled on the IADC -API Daily Drilling Report Form or other form acceptable to Operator. A legible copy of said form signed by Contractor's Representative shall be furnished by Contractor to Operator. 508. Difficulties During Drilling In the event of any difficulty arising which precludes either drilling ahead under reasonably normal procedures or the performance of any other operations planned for a well, Contractor may suspend the -7- work in progress and shall immediately notify the representative of Operator, in the meantime exerting reasonable effort to overcome the difficulty. In the event Contractor is required to drill a relief wells) or to undertake well control activities, such operations may subject to the consent of, and additional conditions imposed by, Contractor's underwriters. Any additional premiums and all deductibles shall be for Operator's account during such operations. 509. Well Control Equipment Subject to Article IX, Contractor shall maintain its well control equipment listed in Appendices B and D in good condition at all times and shall use all reasonable means to prevent and control fires and blowouts and to protect the hole; and agrees it shah have in place a training plan for Contractor's Personnel which adheres to the requirements of the U.S. Bureau of Ocean Energy Management, Regulation Enforcement and the Alaskan State Department of Natural Resources, wherever and whenever applicable, while performing work hereunder. 510. Inspection of Materials Furnished by Operator Contractor agrees to visually inspect all materials furnished by Operator before using same and to notify Operator of any apparent defects therein. Contractor shall not be liable for any loss or damage resulting from the use of materials furnished by Operator. ARTICLE Vi OPERATOR'S OBLIGATIONS 601. Equipment and Personnel Operator shall at its cost provide Operator's Items and Operator's Personnel and perform the services to be provided or performed by it according to Appendix D. In addition to providing the initial supply of Operator's Items, Operator shall be responsible, at its cost, for maintaining adequate stock levels and replenishing as necessary. When, at Operator's request and with Contractor's agreement, the Contractor furnishes or subcontracts for certain items which Operator is required herein to provide, for purposes of this Contract said items or services shall be deemed to be Operator furnished items or services. Any subcontractors so hired shall be deemed to be Operator's contractor, and Operator shall not be relieved of any of its liabilities in connection therewith. For furnishing said items and services, Operator shall reimburse Contractor its entire cost plus a handling charge as specified in Appendix A. 602. Maintenance and Repair Operator shall be responsible, at its cost, for the maintenance and repair of all Operator's Items on board the Drilling Unit which Contractor is not qualified to or cannot maintain or repair with Contractor's normal complement of personnel and the equipment on board. 603. Operator's Representatives Operator may from time to time designate representatives for the purpose of this Contract who shall at all times have access to the Drilling Unit and may, among other things, observe tests, examine cuttings and cores, inspect the work performed by Contractor, or examine the records kept on the Drilling Unit by Contractor. 8 71 Operator shall designate a senior representative to resolve day -to -day matters requiring decision by Operator who will be present on board the Drilling Unit. Contractor may treat Operator's senior representative on board the Drilling Unit as being in charge of all Operator's Personnel on Board. Operator agrees that Operator's Personnel shall be subject to Contractor's policies regarding prohibition of alcoholic beverages, controlled substances, and contraband, including random searches and tests. Operator agrees that Operator's Personnel who have duties which directly affect the safety operations under this Contract shall be subject to and in compliance with applicable U.S. Coast Guard regulations with respect to drug and alcohol testing. Operator further agrees that Operator's Personnel shall have a thorough knowledge of regulations, laws, mandates and practices as required by the U.S. Bureau of Ocean Energy Management, Regulation Enforcement and the Alaskan Department of Natural Resources which may be applicable to the operations contemplated herein. 604. Replacement of Operator's Personnel Contractor shall have the right to request in writing Operator to remove and replace any Operator Personnel on board the Drilling Unit if the Contractor can show reasonable grounds for such request. 605. Drilling Site and Access Operator will be responsible for providing access to the drilling location, as well as selecting, marking and clearing drilling locations, for providing proper and sufficient certificates, including, without limitation, and if applicable, the Certificate of Financial Responsibility required pursuant to the OCS Lands Act and /or the Oil Pollution Act of 1990 (OPA 90) as amended, plus, any other permits or permission necessary to enter upon and operate on the drilling location, and for notifying Contractor of any obstructions, impediments, faulty bottom conditions or hazards to operations in the area of each drilling location or within the anchor pattern, including but not limited to, wellheads, platforms, pipelines, cables, boulders, and mud filled depressions. Operator will also provide Contractor with soil and sea bottom condition surveys at each drilling location hereunder adequate to satisfy Contractor's Marine Surveyor. In the event the Drilling Unit is used over a platform, all surveys to determine the structural integrity of the platform will be the responsibility of Operator. Should seabed conditions be unsatisfactory to properly support or moor the Drilling Unit upon arrival at the drilling location or during operations hereunder, Operator shall continue to pay Contractor the Standby Rate pursuant to Paragraph 705 until seabed conditions are ultimately remedied. Notwithstanding any other provision of this Contract, should there be any obstructions, impediments, faulty bottom conditions or hazards to operations at or within the area of the drilling location, including the anchor pattern, and these obstructions, impediments, faulty bottom conditions or hazards to operations damage Contractor's Items, or Contractor's Items damage these obstructions, or impediments, or if seabed conditions prove unsatisfactory to properly support or moor the Drilling Unit during operations hereunder, Operator will be responsible for and hold harmless and indemnify Contractor for all resulting damage, including payment of Standby Rate during required repairs, but Operator will receive credit for any physical damage insurance proceeds received by the Contractor as a result of any damage to the Drilling Unit. All expenses associated with improvements to the seabed -9- and repositioning of the Drilling Unit at the drilling location under this Paragraph 605 shall be for Operator's account. 606. State or Local Tax Liability In the event that the Contractor, as a result of operations under this Contract in any state waters, determines that a tax payment is due to an appropriate taxing authority or receive an assessment of tax directly by an appropriate taxing authority, Contractor will, prior to making any payment, notify Operator of such determination or assessment. If Contractor is required to pay the tax, Operator agrees to be responsible for and hold harmless and indemnify Contractor from any and all claims with respect thereto. In addition, Operator will reimburse Contractor any sums so paid. ARTICLE VII RATES OF PAYMENT 701. Payment Operator shall pay to Contractor during the term of this Contract the amounts from time to time due calculated to the nearest hour according to the rates of payment herein set forth and in accordance with the other provisions hereof, notwithstanding any breach of representation or warranty, either expressed or implied, or the negligence or fault of Contractor, its employees, subcontractors, consultants, agents or servants, including sole, concurrent or gross negligence, either active or passive, latent defects or unseaworthiness of any vessel or vessels, including the Drilling Unit (whether or not preexisting) and any liability based upon any theory of tort, breach of contract, breach of duty (whether statutory, contractual or otherwise), regulatory or statutory liability, or strict liability, including defect or ruin of premises, either latent or patent. 702. Initial Mobilization Operator shall provide the Mobilization and shall pay Contractor a Mobilization Rate as specified in Appendix A. 703. Final Demobilization Operator shall provide the Demobilization and pay Contractor a Demobilization Rate as specified in Appendix A which shall be earned on the date of termination of this Contract and /or as specified in Appendix A. 704. Operating Rate The Operating Rate specified in Appendix A will first become payable from the moment when the Drilling Unit arrives at the first drilling location and commences either jacking operations or running anchors (whichever is applicable). The Operating Rate shall continue to be payable throughout the duration of the Contract, except as herein otherwise provided. 705. Standby Rate The Standby Rate specified in Appendix A will be payable as follows: (a) during any period of delay when Contractor is unable to proceed because of adverse sea or weather conditions, including loop or eddy currents, or as a direct result of an act, instruction or omission of Operator including, without limitation, the failure of any Operator's Items, or the failure of Operator to issue instructions, provide Operator Items or furnish services; 10 #11 (b) during any period after Commencement Date that the Drilling Unit is under tow, or under way, (except initial Mobilization and final Demobilization) provided that if, at the termination of this Contract, the Drilling Unit does not go to the location specified in Appendix A, the period shall be the reasonably estimated time required to go to that location specified in Appendix A; (c) during any period after Commencement Date that the Drilling Unit is undergoing periodic inspections required for the maintenance of the Certification and Classification Certificates; (d) during any period when operations are suspended to repair the Drilling Unit or other Contractor Items as provided in Paragraph 605 or due to blowout, fire, cratering, shifting or punch through at a drilling location; (e) (g) during any period when operations are being conducted herein under to redrill or repair the hole drilled hereunder which is lost or damaged as a result of Contractor's sole negligence or willful misconduct and; during periods of delay between the Commencement Date and the commencement of Mobilization operations. (h) During the tow from the Drilling Unit's last location in the Gulf of Mexico to the Mobilization load out location. (f) as provided in Paragraph 901 706. Rate During Repair The Repair Rate specified in Appendix A will be payable for any period in excess of the period specified in Appendix A per occurrence during which operations are suspended to permit necessary replacement or repair of Contractor's Items, except as provided in Paragraphs 605 and 707. Suspensions for routine maintenance and inspections such but not necessarily limited to equipment lubrication, servicing top drive, packing of swivels, changing of pump parts, slipping lines, drill string, kelly hoses, vibrator hoses, any certification /regulatory inspections, testing BOPs, changing BOP rubber goods, changing shaker screens shall not be considered as repair time (Down Time) for purposes of this Paragraph and shall be at the Operating Rate. Repairs and maintenance of "additional rental equipment" requested by Operator shall not be Down Time. Delays in Contractor's ability to perform said repairs or replacement resulting from delays in Operator's transportation in excess of two (2) hours, per occurrence, shall not be considered as "Down Time" and shall be deleted from any "Down Time" calculation or credit. 707. Force Majeure Rate The Force Majeure Rate specified in Appendix A will be payable during any period in which operations are not being carried on because of Force Majeure as defined in Paragraph 1303, including periods required to repair damage caused by a Force Majeure event, up to a maximum of thirty (30) consecutive days, after which and during the continuous existence of the Force Majeure condition no day rate will be payable and the Contract may be terminated at the option of either party, subject to demobilization as provided in Paragraphs 703 and 705(c). 708. Additional Payments Operator shall, in addition, pay to Contractor: (a) the cost of any overtime paid by Contractor to Contractor's Personnel in respect of the maintenance or repair on board the Drilling Unit of Operator's Items or other overtime required by the Operator; (b) Contractor's cost associated with waiting on Operator furnished transportation or for time in excess of two hours in transit to or from the Drilling Unit, or as a direct result of an act, instruction or omission of Operator; (c) in the event the Drilling Unit is taken into sheltered waters or harbor for inspection, repair, maintenance, or structural defects, the related rig move costs and harbor expenses will be for Operator's account; (d) Contractor's costs associated with evacuations and accommodations of personnel caused by adverse sea or weather or other hazardous conditions; and (e) Contractor's costs associated with moving Contractor's Items and Personnel, and their personal effects, if Contractor is required to change its Operating Base. 709. Variation of Rates The rates and payment herein set forth shall be revised by the actual amount of the change in Contractor's cost if an event as described below occurs or if the cost of any of the items hereinafter listed shall increase by more than the amount indicated below from Contractor's cost thereof on the Effective Date or by the same amount after the date of any revision pursuant to this Paragraph: (a) (b) if Operator requires Contractor to increase the number of Contractor's Personnel; (0) (f) (g) labor costs, including all payroll burden and benefits paid by Contractor for its employees; if it becomes necessary for Contractor to change the work schedule of its personnel or change the location of its Operating Base or Operating Area; (d) in the event described in Paragraph 1102; (e) if the cost of insurance premiums increases by five percent (5 or more, or, if additional insurance policies of coverage should be required; if the cost of catering increases by five percent (5 or more; if there is any change in laws, rules, regulations, legislation or classification society rules, including the enforcement or interpretation thereof, that increases Contractor's financial burden; (h) the rates listed herein shall be increased for costs other than those listed above on the Commencement Date and at three (3) month intervals thereafter based on changes in the Bureau of Labor Statistics Oilfield and Gas Field Drilling Machinery Producer Price Index, (Series -t2- ID WPU 119102) as published by the U.S. Department of Labor from that reported for the month of the Effective Date. Said rates shall be increased proportionately by the percentage specified in Appendix A for each change of five percent (5 in said Index. ARTICLE VIII INVOICES AND PAYMENTS 801. Monthly Invoices Contractor shall bill Operator at the end of each month, or at the end of each well, if sooner, for all daily charges earned by Contractor. Other charges shall be billed as earned. Billings for daily charges will reflect details of the time spent (calculated to the nearest hour) and the rate charged for that time. Billings for other charges will be accornpanied by invoices supporting costs incurred for Operator or other substantiation as reasonably required. Contractor's billings shall be delivered as specified in Appendix A. 802. Payment Operator shall pay all invoices within thirty (30) days after the receipt thereof except that if Operator disputes an item invoiced, Operator shall within twenty (20) days after receipt of the invoice notify Contractor of the amount disputed, specifying the reason therefore, and payment of the disputed amount may be withheld until settlement of the dispute, but payment shall be made of any undisputed portion. Any sums (including amounts ultimately paid with respect to a disputed invoice) not paid within thirty (30) days after receipt of invoice shall bear interest at the rate specified in Appendix A or the maximum allowed by law, whichever is less, from said due date until paid. Contractor shall have the right, upon ten (10) days prior written notice, to terminate this Contract if Operator fails or refuses to timely pay Contractor amounts due and owing to Contractor. Other payment provisions and terms are as set forth in Paragraph 804 and Appendix H. 803. Manner of Payment All payments due by Operator to Contractor hereunder shall be made by wire transfer or as otherwise agreed to Contractor's bank account which is specified in Appendix A. 804. Financial Payment Guarantees Contractor requires that Operator shall, no later than 60 days prior to the Commencement Date, provide Contractor with a Letter of Credit or other financial security in an amount and form acceptable to Contractor. The security shall be structured to make the proceeds payable directly to Contractor upon presentation of a sight draft by Contractor. The structure and procedure for executing these drafts shall be at Contract's sole discretion In the event that Operator should qualify for any monetary reimbursements or payments as stipulated in certain Alaskan legislation known as HCS CSSB 309 (FIN), Contractor may, att its sole discretion, elect to reduce the amounts required in the aforementioned Letter of Credit or other financial security. Other financial and payment guarantee terms are as set forth in Appendix H. -13- Contractor may cancel this contract and be free of any and all obligations and or liabilities related to it if, in Contractor's (Contractor's Board of Directors and Lenders included) sole opinion, acceptable security and or guarantees are not in place as prescribed. 805. Liens and Encumbrances Operator shall have no right, power or authority to create, incur, or permit to be imposed upon the Drilling Unit any liens or encumbrances whatsoever. Operator shall at all times be responsible for and hold harmless and indemnify Contractor and the owners of the Drilling Unit from and against any and all claims, demands, causes of action, damages, judgments, costs and expenses (including attorney's fees, costs of litigation, and the costs of bonds or other security) which may be incurred or suffered by Contractor or the owners of the Drilling Unit resulting from or arising out of any lien or encumbrances filed, asserted or claimed against the Drilling Unit created, incurred or permitted to be imposed by, through or under Operator. ARTICLE IX— LIABILITY 900. General For the purpose of this Article IX, the terms "Affiliated Company", "Contractor's Items "Operator's Items "Contractor's Personnel" and Operator's Personnel" shall have the meanings as defined in Article I. 901. Equipment or Property (a) Except as specifically provided herein to the contrary, Contractor shall at all times be responsible for and hold harmless and indemnify Operator from and against damage to or loss of Contractor's property, Contractor's Items, and the property, equipment, material and services of Contractor's Affiliated Companies, partnerships, and limited liability companies, and its and all of their co- owners, partners, co- venturers, joint owners, and its contractors and subcontractors of any of any tier and the officers, directors, employees, agents, assigns, representatives, managers, consultants, insurers and subrogees of each of the foregoing. (1) Operator shall be responsible for and hold harmless and indemnify Contractor for loss or destruction of or damage to Contractor's drill pipe, drill collars, subs, reamers, bumper subs, stabilizers and other in -hole equipment when such equipment is being used in the hole below the rotary table, normal wear excepted. Abnormal wear and /or damage for which Operator shall be responsible hereunder shall include, but not be limited to, wear and /or damage resulting from the presence of H or other corrosive elements in the hole including those introduced into the drilling fluid, excessive wear caused by sand cutting, damage resulting from excessive or uncontrolled pressures such as those encountered during testing, blowout, or in a well out of control, excessive deviation of the hole from vertical, dog -leg severity, fishing, cementing or testing operations, and from any unusual drilling practices employed at Operator's request. Operator's responsibility for such abnormal wear and /or damage as referred to herein shall include abnormal wear and /or damage to Contractor's choke hoses and manifolds, BOP and other BOP appurtenant equipment. 14 Operator shall pay the cost of repairing damaged equipment if repairable. In the case of equipment lost, destroyed or damaged beyond repair, Operator shall reimburse Contractor an amount equal to the then current replacement cost of such equipment delivered to the Drilling Unit. (2) Operator shall be responsible for and hold harmless and indemnify Contractor for loss or destruction of or damage, including corrosion and contamination, to Contractor's surface equipment resulting from the presence of H CO or other corrosive elements introduced into the drilling fluid (including elements introduced from the hole), or the presence of naturally occurring radioactive materials (NORM). Operator shalt pay the cost of repairing and/or decontaminating damaged equipment if repairable. In the case of equipment lost, destroyed, damaged or contaminated beyond repair, Operator shall reimburse Contractor an amount equal to the then current replacement cost of such equipment delivered to the Drilling Unit. In addition, notwithstanding the provisions of Paragraph 706 of this Contract, the Standby Rate shall apply with respect to any downtime that may occur or result from such damage, including decontamination operations. (3) Operator shall be responsible for and hold harmless and indemnify Contractor for damage to or loss of the Drilling Unit caused by Operator furnished helicopters, tugs, supply or service vessels. (b) Contractor's operating practices require the BOP stack to be operated at one (1) degree or less from vertical to avoid abnormal wear and damage. In the event the stack angle exceeds one (1) degree from vertical, Operator shall be responsible for and hold harmless and indemnify Contractor for loss or damage to Contractor's subsea and in -hole equipment which may result. Operator shall pay the cost of repairing damaged equipment if repairable. In the case of equipment lost, destroyed or damaged beyond repair, Operator shall reimburse Contractor an amount equal to the then current replacement cost of such equipment delivered to the Drilling Unit. In addition, notwithstanding the provisions of Paragraph 706 of this Contract, the Standby Rate shall apply with respect to the period of time required to repair or replace Contractor's subsea and in -hole equipment that may occur or result from such loss or damage. Operator shall at all times be responsible for and hold harmless and indemnify Contractor from and against damage to or loss of Operator's property, Operator's Items, and the property, equipment, material and services of Operator's Affiliated Companies, partnerships, and limited liability companies, and its and all of the co- owners, co- lessees, farmors, farmees, partners, co- venturers, joint owners, and its contractors and subcontractors of any tier (with the exception of Contractor and its subcontractors of any tier) and the officers, directors, employees, agents, assigns, representatives, managers, consultants, insurers and subrogees of each of the foregoing. 15- 902. The Hole In the event the hole should be lost or damaged, Operator shall at any time, Operator shall, except as provided in Paragraph 705 (e), be responsible for and hold harmless and indemnify Contractor and its suppliers, contractors, and subcontractors of any tier from such damage to or loss of the hole, including all down hole property therein. 903. Contractor's Personnel Contractor shall be responsible for and hold harmless and indemnify Operator from and against all claims, demands and causes of action of every kind and character on account of bodily injury, illness or death of Contractor's Personnel or Contractor's invitees or damage to their property. 904. Operator's Personnel Operator shall be at all times be responsible for and hold harmless and indemnify Contractor from and against all claims, demands and causes of action of every kind and character on account of bodily injury, illness or death of Operator's Personnel or Operator's invitees or damage to their property. 905. Pollution and Contamination Notwithstanding anything to the contrary contained herein, the responsibility for pollution or contamination shall be as follows: (a) Contractor shall be responsible for and hold harmless and indemnify Operator for control and removal of pollution or contamination which originates above the surface of the water from spills of fuels, lubricants, motor oils, normal water base drilling fluid and attendant cuttings, pipe dope, paints, solvents, ballast, bilge and garbage wholly in Contractor's possession and control and directly associated with Contractor's equipment and facilities. For purposes hereof the term "normal water base drilling fluid" means drilling fluid which does not exceed toxicity limits specified for offshore discharges by the environmental protection entity having jurisdiction over the Operating Area. (b) Operator shall be responsible for and hold harmless and indemnify Contractor and its suppliers, contractors and subcontractors of any tier against all claims, demands, and causes of action of every kind and character (including control and removal of the pollutant involved) arising directly or indirectly from all pollution or contamination (including radioactive contamination), other than that described in Paragraph 905(a) above, which may occur including but not limited to, that which may result from fire, blowout, cratering„ seepage or any other uncontrolled flow of oil, gas, water or other substance, as well as the use or disposition of radioactive sources, lost circulation and fish recovery materials and fluids, oil emulsion, oil base or chemically treated drilling fluids, and attendant cuttings, drilling fluids other than "normal water base drilling fluid" defined in Paragraph 905 (a) above. (c) In the event a third party commits an act or omission which results in pollution or contamination for which either the Contractor or Operator for whom such party is performing work is held to be legally liable, the responsibility therefore shall be considered, as between the Contractor and Operator, to be the same as if the party for whom the work was performed had performed the same and all of the obligations and limitations set forth in Paragraphs 905(a) and (b) above, shall be specifically applied. l 6 906. Debris Removal and Cost of Control Operator shall be responsible for and hold harmless and indemnify Contractor for the cost of removal of debris (including Contractor's Items) to the extent that proceeds from Contractor's insurance as made available to Contractor do not compensate Contractor therefore. Operator shall at all times be responsible for and hold harmless and indemnify Contractor for the cost of regaining control of any wild well. 907. Underground Damage Operator shall at all times be responsible for and hold harmless and indemnify Contractor and its suppliers, contractors and subcontractors of any tier from and against any and all claims on account of injury to, destruction of, or loss or impairment of any property right in or to oil, gas or other mineral substance or water, if at the time of the act or omission causing such injury, destruction, loss, or impairment, said substance had not been reduced to physical possession above the seabed, and for any loss or damage to any formation, strata, or reservoir beneath the seabed. 908. Patent Liability Contractor shall at all times be responsible for and hold harmless and indemnify Operator from and against any and all loss or liability arising from infringement of patents of the United States covering equipment furnished by Contractor. Operator shall at all times be responsible for and hold harmless and indemnify Contractor from and against any and all loss or liability arising from infringement or alleged infringement of patents covering the property, equipment, methods or processes furnished or directed by Operator. 909. Consequential Damages Subject to and without affecting the provisions of this Contract regarding the payment rights and obligations of the parties or the risk of loss, release and indemnity rights and obligations of the parties, each party shall at all times be responsible for and hold harmless and indemnify the other party from and against its own special, indirect or consequential damages, and the parties agree that special, indirect or consequential damages shall be deemed to include, without limitation, the following: loss of profit or revenue; costs and expenses resulting from business interruptions; loss of or delay in production; loss of or damage to the leasehold; loss of or delay in drilling or operating rights; cost of or loss of use of property, equipment, materials and services, including without limitation those provided by contractors or subcontractors of every tier or by third parties. Operator shall at all times be responsible for and hold harmless and indemnify Contractor from and against all claims, demands and causes of action of every kind and character in connection with such special, indirect, or consequential damages suffered by Operator's co- owners, co- venturers, co- lessees, farmors, farmees, partners and joint owners. 910. Termination of Location Liability Notwithstanding any other provision of this Contract, once the Drilling Unit is under way from the well location, Operator shall be responsible for and hold harmless and indemnify Contractor for loss or damage to property, personal injury or death of any person which occurs thereafter as a result of the conditions of the well or the location and Contractor shall be relieved of such liability, _17_ 911. Indemnity Obligation (a) The parties intend and agree that the phrase be responsible for and hold harmless and indemnify" in Paragraphs 605, 606, 805 and 901 through 910 hereof means that the indemnifying party shall release, indemnify, hold harmless and defend (including payment of reasonable attorney's fees and costs of litigation) the indemnified party from and against any and all claims, demands, causes of action, damages, judgments and awards of any kind or character, without limit and without regard to the cause or causes thereof, including claims demands, and causes of action arising out of operation of any vessel or vessels, including the Drilling Unit, including ingress and egress to the well location, and loading and unloading of personnel and cargo, and also including preexisting conditions, defect or ruin of premises or equipment (whether such conditions, defect or ruin be patent or latent), the unseaworthiness of any vessel or vessels including the Drilling Unit, breach of representation or warranty (express or implied), breach of duty (whether statutory, contractual or otherwise), strict liability, any theory of tort, breach of contract, fault, regulatory or statutory liability, products liability, the negligence of any degree or character (whether such negligence be sole, joint or concurrent, active, passive or gross) of any person or persons, including such negligence of the party seeking the benefit of a release, indemnity or assumption of liability, or any other theory of legal liability. (b) An indemnifying party's obligations contained in this Contract shall also extend to the indemnified party and shall inure to the benefit of such party, its Affiliated Companies and their co- owners, co- venturers, co- lessees, farmers, framees, and joint owners, and the officers, directors, stockholders, partners, managers, representatives, employees, consultants, agents, servants in insurers of each, and to actions against the Drilling Unit, its legal and beneficial owners, whether in rem or in personam. Except as otherwise provided herein, the terms and provisions of Paragraphs 605, 606 and 805, 901 through 910 shall have no application to claims or causes of action asserted against Operator or Contractor which arise solely by reason of any agreement of indemnity with a person or entity not a party hereto. Nothing contained herein shall confer any rights upon any third party beneficiary. 912. General lntent The parties recognize that the performance of well drilling, workover and associated activities such as those to be performed under this Contract have resulted in bodily injury, death, damage or loss of property, well loss or damage, pollution, loss of well control, reservoir damage and other losses and liabilities. It is the intention of the parties hereto that the provisions of this Article IX and Paragraphs 605, 606 and 805 shall exclusively govern the allocation of risks and liabilities of said parties without regard to cause, (as more particularly specified in Paragraph 911), it being acknowledged that the compensation payable to Contractor as specified herein has been based upon the express understanding that risks and liabilities shall be determined in accordance with the provisions of this Contract. ARTICLE X INSURANCE 1001. Contractor's Insurance Contractor shall carry and maintain, or cause to be carried and maintained, insurance coverages of the type and in the amounts set forth in Appendix E, covering only those liabilities specifically assumed by Contractor under this Contract. All references in this Contract to "insurance" of Contractor shall mean such insurance as set forth in Appendix E. Contractor shall have the right to self- insure any or all of that portion of insurance relating to loss or damage to Contractor's Items. Operator shall carry and maintain or cause to be carried and maintained, the insurance coverages of the types and amounts set forth in Appendix F, covering only those liabilities specifically assumed by Operator under this Contract, All references in this Contract to "insurance" of Operator shall mean such insurance as set forth in Appendix F. Operator shall have the right to self- insure any or all of that portion of insurance relating to loss or damage to Operator's items. 1002. Certificates Contractor will furnish Operator, on request, with certificates indicating that the required insurance is in full force and effect and that the same shall not have canceled or materially and adversely changed without ten (10) days prior written notice to Operator. 1003. Subrogation For liabilities assumed hereunder by Contractor, its insurance shall be endorsed to provide that the underwriters waive their right of subrogation against Operator, its Affiliated Companies and co- venturers, and employees of each. Operator will, as well, cause its insurer to waive subrogation against Contractor and Contractor's Affiliated Companies and employees of each for liabilities it assumes. 1004. Additional Insured Contractor shall name Operator as additional insured, where permitted, under its policies of insurance, but only with respect to and to the extent of the liabilities specifically assumed by Contractor under this Contract. Operator shall name Contractor as additional insured, where permitted, under its policies of insurance, but only with respect to and to the extent of the liabilities specifically assumed by Operator under this Contract. ARTICLE XI SUBLETTING AND ASSIGNMENT 1101. Subcontracts Operator may employ other contractors to perform any of the operations or services to be provided or performed by it. Contractor may employ other contractors to perform any of the operations or services to be provided or performed by it with the prior consent of Operator, which consent shall not be unreasonably withheld. 19 1102. Assignment Neither party may assign this Contract to anyone other than an Affiliated Company without the prior written consent of the other, and, prompt notice of any such intent to assign shall be given to the other party. In the event of such assignment, the assigning party shall remain liable to the other party as a guarantor of the performance by the assignee of the terms of this Contract. If any assignment is made by Operator that increases Contractor's financial burden, Contractor's compensation shall be adjusted to give effect to any increase in Contractor's operating costs or taxes. ARTICLE XII NOTICES 1201. Notices Notices, reports and other communications required or permitted by this Contract to be given or sent by one party to the other shall be delivered by hand, mailed, telexed, or telecopied to the address as specified in Appendix A. Either party may by notice to the other party change its address. Notices shall be effective upon receipt. ARTICLE XIII GENERAL 1301. Confidential Information Upon written request of Operator, all information relating to the well obtained by Contractor in the conduct of operations hereunder shall be held confidential by Contractor who will use the same degree of care it uses in safeguarding its own confidential information. 1302. Attorney's Fees If this Contract is placed in the hands of an attorney for collection of any sums due hereunder, or suit is brought on same, or sums due hereunder are collected through bankruptcy or arbitration proceedings, then the prevailing party shall be entitled to recover reasonable attorney's fees and costs. 1303. Force Majeure Except as otherwise provided in this Paragraph 1303, and without prejudice to the risk of loss, release and indemnity obligations under this Contract, each party to this Contract shall be excused from complying with the terms of this Contract, except for the payment of monies when due, if and for so long as such compliance is hindered or prevented by riots, strikes, wars (declared or undeclared), insurrection, rebellions, terrorist acts, civil disturbances, dispositions or order of governmental authority, whether such authority be actual or assumed, acts of God (except however adverse sea or weather conditions including loop or eddy currents excluding tropical storms), inability to obtain equipment, supplies or fuel or necessary labor, or by any act or cause (other than financial distress or inability to pay debts when due) which is reasonably beyond the control of such party, such cause being herein sometimes called "Force Majeure." Neither Operator nor contractor shall be required against its will to adjust any labor or similar disputes except in accordance with applicable law. In the event that either party hereto is rendered unable, wholly or in part, by any of these causes to carry out its obligation under this Contract, such party shall 20 give notice and details of Force Majeure in writing to the other party as promptly as possible after its occurrence. In such cases, the obligations of the party giving the notice shall be suspended during the continuance of any inability so caused except that Operator shall be obliged to payto Contractor the Force Majeure Rate provided for in Paragraph 707. 1304. Right to Audit For a period of two (2) years from termination of the Contract or respective well operation, Contractor shall keep proper books, records and accounts of operations hereunder and shall permit Operator at all reasonable times (during normal business hours) to inspect the portions thereof related to any variation of the rates under paragraph 709 or charges for reimbursable items, 1305. Compliance with Laws Each party hereto agrees to comply with all laws, rules and regulations of anyfederal, state or local government authority which are now or may become applicable to that party's operations covered by or arising out of the performance of this Contract. When required by law, the terms of Appendix G shall apply to this Contract. In the event any provision of this Contract is inconsistent with or contrary to any applicable federal, state or local law, rule or regulation, said provision shall be deemed to be modified to the extent required to comply with said law, rule or regulation, and as so modified said provision and this Contract shall continue in full force and effect. If any act or omission by Contractor in response to an instruction of Operator's Personnel violates such law, Operator shall indemnify Contractor for any consequences thereof. 1306. Waivers It is fully understood and agreed that none of the requirements of this Contract shall be considered as waived by either party unless the same is done in writing, and then only by the persons executing this Contract, or other duly authorized agent or representative of the party. 1307. Entire Agreement This Contract constitutes the full understanding of the parties, and a complete and exclusive statement of the terms of their agreement, and shall exclusively control and govern all work performed hereunder. All representation, offers and undertakings of the parties made prior to the effective date hereof, whether oral or in writing, are merged herein, and no other contracts, agreements or work orders, executed prior to the execution of the Contract, shall in any way modify, amend, alter or change any of the terms or conditions set out herein. 1308. inurement This Contract shall inure to the benefit of and be binding upon the successors and assigns of the parties. Document Execution is On the Following Page 21 1309 Execution Effective Date IN WITNESS WHERE OF THE PARTIES HAVE EXECUTED THIS CONTRACT ON EFFECTIVE DATE OF THE 26th DAY nf AUGUST, Z0l0( OPERATOR LLC): TITLE: CONTRA re Dm LLC): BY: TITLE: President CEO WITNESS: Attached to and incorporated as a part of that certain Contr Rig Name: 101 Operating Area: 101(a) Commencement Date: 101(1) Technical Assistance Charge 101(g) Operating Base: 202 Term Duration: 203 Termination: 705 Demobilization Location: 204 Option Term: Option Notice: Deadline for Agreement 503 Maximum Water Depth: (non- Hurricane) Maximum Water Depth: (Hurricane) Minimum Water Depth: Maximum Well Depth: 601 Handling Charge: 702 Mobilization Costs Charges: initials Operato APPENDIX A "TERMS AND RATES' Spartan Rig 151 15% Contractor _23_ t dated: August 19, 2010 Cook Inlet Basin, Alaska To be provided by Operator no later than 60 days prior Operator will Pay Contractor an amount of 500,000 Days of executing this Contract. TBD One (1) Year from the Commencement Date After One (1) Year or as extended between Contractor Operator agreement Sabine Pass, Texas or, other mutually agreed location Two (2) 1 Year, each at mutually agreed rates 90 Days prior to expiration of the current Term 15 Days after notice of exercise of option In accordance with Appendix "B" In accordance with Appendix "0" In accordance with Appendix "0" In accordance with Appendix "B" The Operator shall pay all costs for and during Mobilization including a Mobilization Rate of $32,500 per day. The Mobilization shall commence when the heavy lift vessel has arrived at the port submerged and ready to accept the "Float Over" of the Rig. The Mobilization shall end and the Operating Dayrate shall begin at the time the Rig is offloaded free and clear of the transport vessel in Alaskan waters. No later than 60 days prior to the scheduled load out date of the Rig, Operator shall pay Contractor an amount equal to the estimated Mobilization days (55 days) times the $32,500 Mobilization Rate ($1,787,500). In the event the Mobilization exceeds 55 days the additional days would be charged at the Mobilization Rate and would be due upon offloading the Rig in Alaskan Waters. hin 60 703 Demobilization Costs Charges: 704 Operating Rate: 705 Standby Rate: Winter Stand by /Layu p: 706 Repair Rate: Repair Rate Time: 707 Force Majeure Rate: 709 Percentage Increase for Variation of Rates 801 Address for Payment: Initials Operator Contractor The Operator shall pay a Demobilization Rate of $32,500 per day. The Operating Rate shall end and the Demobilization Fee shall begin once the Rig is undertow from Operator's last location. In the event the Rig has work with another operator upon its release, Operator's demobilization obligation will be limited to paying the Demobilization Fee and all tug costs (including their "ON" "Off" costs), to clear the Rig from Operator's Field Block. In the event that the Rig does not have another Contract with another operator, upon its release, Operator will pay the Demobilization Fee until the Rig is safely jacked up to the required air gap at the Demobilization Location .Operator shall pay all costs related to transport of the Rig from the Cook Inlet back to the U.S. Gulf Coast (Sabine Pass, Texas) at cost plus 10 Fluids to provide for this Demobilization will need to be agreed upon and secured /guaranteed at least 60 days prior to the Commencement Date U.S. $65,000 First year, $80,000 First Option Year, Negotiable Second Option Year U.5. $65,000 First year, $80,000 First Option Year, Negotiable Second Option Year Operating rate less any "Direct Operating Cost" savings such that Contractor's "Operating Margin earned from the Operating Rate, is maintained. U.S. $6S,000 First year, $80,000 First Option Year, Negotiable Second Option Year 12 Hours per occurrence 24 hours maximum per calendar month U.S. $65,000 First year, $80,000 First Option Year, Negotiable Second Option Year 5% increase in costs Ms. Ginger LeBlanc Spartan Offshore Drilling, LLC Two Lakeway Plaza 3850 North Causeway Blvd, Suite 1160 Metairie, LA 70002 Telephone: 504 -885 -7449 Facsimile: 504 456 6560 E mail: eleblanefabl„ keoffshore.cani 24 802 Interest Rate on Late Payments 18% per annum 803 Address for Payment: Whitney National Bank Routing 65000171. Account Number: 714167649 1201 Address for Notices: Operator: Other Provisions: Initials 1. Contractor: Operator Contractor Mr. Danny Davis Escopeta Oil Company, LLC 5005 Riverway Suite 440 Houston, Texas 77056 Telephone: 562 -628 -1538 E -mail: Escopeta@swbell.net Mr. Paul Butier Spartan Offshore Drilling, LLC Two Lakeway Plaza 3850 N. Causeway Blvd Suite 1160 Metairie, LA 70002 Telephone: 504 -456 -6560 E -mail: pbutler@spartanoffhsore.com "Farm Out" Provision Contractor shall, with Operator's prior consent, have the right but not the obligation, to "Farm Out" the Rig to other operators during times when Operator's drilling schedule would otherwise have the Rig idle. In the event that the Operating Rate received during the "Farm Out" exceeds 15% that which is in effect with Operator, Contract shall pay Operator one half of the Operating Rate which is in excess of the 15 2. NORM Survey Ciean Up A norm survey will be conducted after completion of each well at operator's cost. Any cleanup of norm pertaining only to operator's well, will be for operator's account. Safety) Training /Cleric and Regulatory Compliance Coordinator (RSTC) A "Safety and Training Coordinator" will be placed on board the rig during the project and will assist in coordinating pre -tour meetings, safety, training, clerical duties and regulatory compliance for the operator and contractor. The cost will be paid by operator, per Appendix "C 4. Rig Modifications Winterization No environmental, winterization, regulatory or other modification requirements are anticipated, however, in the event that any such modifications are required by Operator, or become necessary due to regulatory requirements, they shall he the responsibility of and paid for by Operator. Winter Standby/Layup Any additional cost incurred by Contractor to secure and protect the Drilling Unit for "Winter Layup" periods shall be borne by Operator or recharged to Operator by Contractor with no markup. 25 Initials 6. Phone Service Phone sen+ice will be provided at a cost to the operator at an additional flat rate of $250.00 per day. The phone system includes V -SAT, two voice lines, one fax line and unlimited high speed Internet. Any additional services and all maintenance or repair will be billed to operator. 7. Waste Material Disposal of all waste oils, grease, muds, well bore fluids, well bore cuttings, garbage and other wastes shall be for Operator's account S. Mobilization Demobilization Fuel /Water Operator will be responsible for all Rig fuel and water for the Mobilization and Demobilization, 9. Mud Pumps Contractor will provide the initial mud pump liner size only. Subsequent sizes will be for Operator's account. The pumps shall be operated at a maximum of 85% of manufacturer's stroke, flow rate pressure rating when operating on a continuous basis. All mud pump replacement liners, swabs and valves shall be recharged per Appendix "D 10, Regulatory inspections Notwithstanding any other terms to the contrary, Operator shall pay Contractor, in addition to any other rates specified herein, a fee pro -rata per day for each day in which any rate stated herein applies, equal to seven (7) days per calendar year as a regulatory inspection cost accrual for ABS USCG certification inspections, This fee shall be billed by Contractor and paid by Operator upon termination of this Contract or initiating said inspections, whichever occurs first. 11. Wash Outs "Wash Outs" in Contractor's valves, pump seats, pump impellers, pump fluid ends, chokes and piping (including manifold assemblies) caused by unusually corrosive or abrasive well bore fiuids(including mill cuttings) shall be repaired or replaced by Contractor. The cost of which shall be borne by Operator. These occurrences shall not be considered as "Down Time 12. Rental Drill String In the event that Contractor's rental drill string components shall be lost in the hole or damaged Operator shall reimburse Contractor, at cost, for any required replacement and /or repairs, (including all transportation handling) unless said lose or damage is caused by Contractor's sole or gross negligence or its willful misconduct, which includes all tiers of Contractor's personnel, which are defined within the Contract. 13. Optional "Rental Equipment' All transportation, maintenance, repairs and rig: up /rig down costs associated with 'Rental Equipment" shall be recharged at Contractor's cost. 14. Tow To and From. the. Point Of Origin (Initial Mobilization Final Demobilization) Mobilization: Operator shall pay all towing costs from the Rig's last GOM location to the Mobilization load out point. Final Demobilization: Operator shah pay all towing costs from final Demobilization offloading paint back to Sabine Pass, Texas or GOM Block West Cameron 38. Operator .'Ire'" Contractor _26_ Drifling Vesse Description Designed and constructed by Bethiebem Steel Corporation n 1981, comp[ete}y refurbshed and up graded n 2006. The 150' independent egJcantllever unit was bujlt n accordance wth the ru}es of the American Bureau of Sfflpping and s dassifled as an A4 SeIf E!evatinRMub|ieDri||inKUnit. Type: Baker Marine Corporation 150 H Gaas Independent Leg [anti|everjackop. Class: ABS &1 Self Elevating Mobile Drilling Unit, 1980Rules USCG Requirements for Mobile Offshore Drilling Units. Design Operating Conditions: Maximum water depth (non-hurricane) 150' Minimum water depth 12' Drifling depth capacity 25,000/ Maximum Operating/ Environmental Conditions: Normal Drilling: Variable deck load (kips) 3.313 DriHing load (kips) 1,300 Combined Hook, Setback Pipe Rack load (kips) 1,600 Wind speed (knots) 70 Wave height (ft.) 35 Hurricane Survival: Water depth 130' Variable Load (kips 2,313 Wind speed (knots 100 Wave height (ft,) 45 Drill Floor Loadkig: a. Rotary Beam Load 1,000,000 lbs. b. Setback 500,080 |bs. c. Cornbined Hook and Setback 1,300,000 lbs. Rig Storage Capacities: Pipe Racks: Weight Material Cement: Bulk Mud 3 cu. ft. Bulk Cement 3,000 cu. ft. Sack Storage 5,000 sacks Liquids: Drilling mud 1,315 bbls. Drill water 3,373bb|s. Diesel fuel 1,543hb|s. Potable water 1,I86bb|s, APPENDIX E3 ^27 Spartan Rig 151 Rig Inventory w o�I/ Legs: Three (3) triangular Truss type, 250' -3" long. Elevating System: Baker Marine electro hydraulic drive rack and pinion system. Engine Generator Units: Four (4) Caterpillar D -398, radiator cooled diesel engines, each driving an 800 kW, 600 volt, 60 Hz AC generator. One (1) Caterpillar D -398, radiator cooled engine driving an 800 kW, 600 volt AC generator can be used as a standby or on main AC buss. Two (2) Caterpillar D -399, radiator cooled diesel engines, each driving a 1050 kW, 600 volt AC generator to be used for the top drive and Drawworks. Electrical Distribution: Ross -Hill Model 1400 four (4) bay SCR distribution system for drilling and shipboard operations. Gulf Coast two (2) bay SCR system for powering the Drawworks and Top Drive. Drawworks: Mid- Continent U -1220 driven by two GE 752 DC motors each rated at 1000 HP (intermittent) complete, with two (2) catheads, 1 -3/8 Lebus grooving, crown safety device. Complete with Elmagco 7838 electric brake. Derrick: Branham 147' high x 30' base rated at 1,300,000 pounds static hook load. Complete with adjustable air powered casing stabbing board, derrick climbing assistor, racking platform. Mud Pumps: Two (2) Gardner Denver P2 -10 triplex pumps each rated at 1350 HP and driven by two (2) GE 752 DC. motors complete with suction and discharge pulsation dampeners. One (1) FB 1600 Triplex Pump 1600 HP, rated at 11600 HP and driven by two (2) GE 752 DC motors complete with suction and discharge pulsation dampeners. Note: Spartan Offshore will provide one (1) size liner for mud pumps. Operator to designate size prior to rig mobilization. The pumps shall be operated at a maximum of 85% of manufacturer's stroke and pressure rating when operating on a continuous basis, 28 Rotary: National C-375 with a 37.5 inch opening, independently driven by a GE 752 DC motor through a two-speed gear box comptete with aft brake. Crown Block: Branham 583 ton. Traveling Block: 500 ton Standpipe: Dual 5'9/I6"0Dx425"|D5,O00psi. Top Drive: Varco 105-3, Fligb Torque, powered by aOL 752 traction motor Rotary Hose: Two j.5"|D750O psi m/phoses. Ezy-Torque: Varco Spinning Wrench: Va/coSSVV]0u/equivalent. Upper Kelly Valve: lO,000 psi, T|VV. inside BOP: 10,000 psi, Gray. L om/er Kelly Valve: Two l0 psi, T|VV. Drill Pipe Elevators: Two DJ. Type 6G]50ton. Drill Pipe Slips: Two VauoS9XL. Drill CoIIar Slips: Tm/nVarco Rotary Tongs: 8]DD with 3'l/l" through ll jaw capability. Deadline Anchor: National EB for l'3/8 drill line. Drill Line: 1-3/8 EIPS Wire Line Unit: 8ecko hydraulic 2V,08U' capacity UlO5" wire line. Rig Floor Air Hoist: Two (I) Ingersoll Rand 5KUL70UU#pull. '29- Instrumentation: Weight indicator Driller's console Tong torque indicator Pump pressure gauge Pump strokes Rotary RPM Pit Volume Gain /loss indicator Mud flow Air purge 6 -pen recorder (ROP, wt. pump pressure, torque, rpm, strokes) Shale Shaker: Two (2) Brandt King Cobra Desander /Desilter /Mud Cleaner: One (1) Brandt King Cobra Mud Cleaner unit with, Three (3) Cone Desander and Twenty Four (24) Cone Desilter Degasser: Brandt DG -5 (500 gpm) Gumbo Buster Install a flow Tine gumbo buster under substructure Desander Pump: 6x8 centrifugal driven by a 75 HP 1180 rpm AC motor. Desilter Pump: 6x8 centrifugal driven by a 75 HP 1180 rpm AC motor, Mud Mir, and Transfer Pump: Two (2) 6x8 centrifugal pumps driven by a 75 HP 1800 rpm AC motor. Charging Pumps: Two (2) 5x6 centrifugal pumps driven by a 100 HP1800 rpm AC motor. Mixing Hoppers: One barite hopper and one chemical hopper. Surge Tank: One 75 cu. ft. barite tank and one 75 cu. ft. cement tank Bulk Mud: Total capacity of 3000 cu. ft. Bulk Cement: Total capacity of 3000 cu.ft. Rig Air: Two (2) Quincy Q51 -500 rotary screw compressors or equivalent- 500 cfm @125 psi, each. 30 Auxiliary Pumps Equipment: Two (2) 3x4 centrifugal drill water pumps driven by 40 HP AC motors. Two (2) 3x4 centrifugal ire pumps driven by 50 HP AC motors. Two (2) 3x4 centrifugal bilge pumps driven by 10 HP AC motors. Two (2) gear type fuel transfer pumps driven by 5 HP AC motors. One (1) Miller 400 amp welding machines One (1) waste oil gear pump driven by 3 HP AC motors. Two (2) potable water pressure sets. Two (2) sanitary water pressure sets. Two (2) 60 HP AC stage 6" submersible deep well pump. Omnipure sewage treatment unit. Quarters: 54 -man air conditioned quarters complete with galley, mess hall, recreation room, hospital room, bath facilities, change room, laundry and state rooms and office for rig manager and Operator's representatives. Heliport: 62' nominal diameter designed for Sikorsky 5 -61 loading. Communication System: 24- station, Gai-tronics inter -rig system and VHF marine radio. Cranes: One (1) Baker Marine Model 900 cranes with 100' of boom rated at 49,965# at a 20' radius and 41,055# at a 40' radius. One (1) Draco King Post crane to accommodate heavier loads 80,000 lbs. 25'. Cementing Unit: BJ Unit is onboard. Costs for the Unit and associated equipment shall be for Operator's account. Life Saving Fire Protection; Two (2) 65 -man life boats. CO2 fire extinguisher system or both engine room and emergency generator room. All safety and fire protection equipment per USCG, ABS and MMS regulations. Weather Instruments: Wind speed and direction unit Barometer. Drill Pipe: As per Contract provisions -31 Hev\-Wate: As per Contract Provisions l Drill Collars: As per Contract Provsons BOP Equipment: All have Hz5trim Diverter: 214/4" with hydro corttroi valves over hoard lines 2OOVpsi. (Recharged per Contract provtsions) Annular: l95/8'Hydri| Type °5K` 5,000 psi Single: 1J-6/8'/ Cameron Type ''U''l0,U00psi Double: 13-5/8^ Cameron Type ^U"lV,O00psi Gate Valves: Two /I\4'1/16'' Cameron Type ''F'18,0OU psi Gate Valves: Two (I)4-1/16/' Cameron Type ^F''1n,UO0 psi (hydrauticafly operated) Kearney type 8O:7 station, IZ bottle, 3U0O psi dosing unit with two air pumps, a triplex etectric driven pump Choke Manifold: 3'1/16`1O,800 psi, with two /I\ adjustable chokes and one (1) Swaco autornatic choke, BOP Handling System: Two (2) 25-ton pneumatic hoists with a BOP itt ring to install BOPs. BOP Choke and IC Hoses: One (1) each Note: Contractor will provide the nitial size rams tor Contractor suppued drifl pipe and one (1) set ot shear rams. Alt replacement BOP rubher goods shall be recharged per Contract. Sate||ite/Ce||Commnno*icaMons Comrnunications provided by Broadpoint (Recharged per Contract provisions) Job Classification Number on Board Total Payroll Normal Working Hr. /Day S.T. Pay W/O Burden Overtime Rate w /45 Burden Additional Crew Cost Per Day APPENDIX C (Drilling. Rigs) "Standard Crew Complement" (30 days "On" 30 days "Off Rig Manager Assistant Rig Manager 1 2 n/a Driller 2 Derrickman 2 Total 28 56 initials Operator n/a salary salary salary TBD salary TBD 12 TBD TBD TBD 12 TBD TBD TBD Floorman 6 12 12 TBD TBD TBD Shakerhands 0 0 0 TBD TBD TBD Crane Operator 2 2 12 TBD TBD TBD Roustabouts 6 12. 12 TBD TBD TBD Rig Maintenance Supervisor 1 2 12 TBD TBD TBD Rig Electrician 1 2 12 TBD TBD TBD Motorman 1 2 12 TBD TBD TBD Welder 1 2 12 TBD TBD TBD Cook 2 4 12 TBD TBD TBD Utility (Galley &Bedroom) 3 6 12 TBD TBD TBD RSTS /Cleric/Compliance 7. 2 12 TBD TBD TBD ADDITIONAL PROVISIONS Overtime Overtime (hours in excess of hours per day) for the crew personnel where requested by the Operator will be reimbursed at the Overtime Rates. Additional "Extra Contractor Personnel" "Extra Contractor Personnel" requested by the Operator will be paid to the Contractor at the Additional Crew Cost Rate. Catering 1) The catering crew is provided under a separate contract by the Contractor. Meals and. bunks forthe Operator's excess personnel above two (2) per day will be billed for each meal and each bunk. 2) All service personnel are required to sign for each meal and bunk. 3) Spartan Offshore's catering complement consists of two (2) cooks, three (3) combination galley utility persons. .5 4) Operator shall provide per Appendix "D" two (2) addition galley /br personnel at times when persons on board exceed 35. 6). Any additional Catering personnel, other than Provision 3 above, will be charged to Operator at Cost plus 15 The cost for each meal and each bunk for Operator's and Contractor's extra personnel is $26.50. Travel Time Related Expenses Dock /Rig: Travel time in excess of two (2) hours, each way, from or to the Rig /Cook Inlet Dock shall be paid by the Operator to Contractor at. the Straight Time pay rate plus 45 %burden. During crew changes, "Waiting On Transportation Time" for the crew going out and the crew coming in will be paid by Operator to Contractor at the Straight Time rate plus 45% burden. However, the "Waiting On Transportation Time" shall not be charged for the first two (2} hours. To /From Cook Inlet Dock, To /From Point of Origin:. All travel expenses plus travel time pay from each crewmember's Point of Origin will be recharged to Operator. Operator Required Training Any training that Operator may require, in addition to Contractor's standard training programs, would be recharged to Operator at$175 per day per person plus $35 per day per person for meals $80 per day per hotel room (if required). Rig Safety Training Cerk Compliance Representative (RSTR) The RSTR personnel are contracted under a separate agreement with Contractor and will be recharged to Operator, in addition to any Dayrate stipulated herein with no "Mark Up Crane Operator Over Time Due to safety concerns, Crane Operators w ill not be allowed to work more than four(4) hours over time in two (2) consecutive days. Wages Labor Charge Rates These rates shall be determined based on the prevailing wage rates (by position) paid in. the Cook Inlet at the time the Rig mobilizes. Initials Operator Contractor 7 34 Category APPENDIX D CHECKLIST OF CONTRACTOR'S AND OPERATOR'S OBLIGATIONS Furnished by Contractor and paid by Contractor Furnished by Contractor, paid by Operator, plus handling charge Furnished by Contractor, paid by Operator, no handling charge Furnished by Operator, paid by Operator Contractor's Items as set forth in Appendix B. 2. Except as otherwise specified, maintenance and repair including repair parts of Contractor's Items. Maintenance and repair including repair parts of Operator's Items except as provided 4 in Paragraph 403. 4. All charges relative to acquisition, shipping and and transportation (except charges as provided in Items 61, 62, 64, 65, 66, 70 and 73) of all Contractor's Items required as replacements or spare parts. Contractor's Personnel including replacement, subsistence, insurance, wages, benefits and all other costs related thereto, except for increases pursuant to Paragraph 709. Extra personnel in excess of the complement of personnel set forth in Appendix C 3 when requested in writing by Operator 7. Overtime beyond normal work schedule, as set forth in Appendix C, for Contractor's 3 personnel when requested in writing by Operator. B. Required licensees, permits, certificates of financial responsibility and clearances 4 to enter upon and depart from drilling location, pursuant to Paragraph 606. 9. Surveying service and marker buoys to mark drilling location. 4 Sea floor surveys required by Contractor's Marine Surveyor. 12. Sea bottom coring services at the drilling location if required by Contractor. Initials Operator Contractor 35- Category 4 4 12. Fuel, oil, greases, tubes and hydraulic fluid for Contractor's equipment and Operator's equipment. a) All fuel (including mobilization fuel), oil, greases, lobes hydraulic fluids. b) Soap, degreasers, cleaner solvents, and pipe dope 3 13. Water for drilling, wash down and cementing and excess potable water, if required. 4 14. Drilling fluid and additives including lost circulation material. 4 15. Mud logging services 4 16. Normal welding services required on Operator's Items to the extent available 1 from Contractors Personnel 1'. Welding materials used on Operator's Items. 2 18. Pneumatic hoses between supply vessels and Drilling Unit for unloading fuel, water bulk cement and mud materials including repair and replacement of same. a) Initial Hoses b) All Replacements Mooring system between supply vessels and Drilling Unit including repair and replacement: a) Initial Mooring System b) All Replacements 20. Pre -slung cargo and pre -slung cargo baskets for use in transporting Contractor's Items to and from supply vessels, 21. Pre -slung cargo and pre -slung cargo baskets for use in transporting Operator's Items 4 to and from supply vessels. 22. Towing service for all Drilling Unit moves, as approved by Contractor's insurance 4 underwriters. a) Rig Movers, as approved by Contractor's insurance underwriters. 3 23. Tow lines and bridles 4 24. Anchor setting and retrieving with marine vessels including anchor handling crews 4 if required. Initials Operator 1" Contractor 36 Category 1 7 1 2 25. Additional anchors and buoy lines, if required, including all repairs and replacement. 3 26. Inspection of Contractor's drill pipe, drill collars and other in -hole equipment (per Appendix 8) according to API -IADC standards before operations commence under this Contract, if required. a) Initial transportation of Contractor's drill pipe, drill collars and other in -hole equipment. 27. Inspection, transportation, repairs and/or replacement of Contractor's drill pipe, 4 drill collars and other in -hole equipment (per Appendix 3) according to API -IADC standards after operations commence under this Contract at reasonable intervals as may be requested by Operator and upon termination of this Contract. 23. Drill pipe casing protectors on Contractor's drill pipe. (one per joint inside casing) 4 29. Drill pipe casing protectors on other drill pipe furnished by Operator, if required 4 by Operator. 30. Kelly saver -sub rubbers and replacements for kellys furnished by Contractor. 1 31. Drill pipe wipers. 4 32. Fishing tools other than provided by Contractor as set forth in Appendix "B 4 33. Repair and/or replacement parts for Contractor furnished fishing tools. 3 34. Drilling bits, stabilizers, hole openers, reamers, under reamers, well scrapers, drilling 4 bumper subs, drilling safety joints, hydraulic drilling jars, and other special in -hole equipment, including replacement parts and repairs for same. 35. Directional surveying equipment and service. 4 36. Deflection drilling tools and service. 4 37. Drill pipe, drill collars and handling tools other than those specified in Appendix "B" 4 38. Blowout prevention equipment other than as listed in Appendix "B 4 39. Wellhead equipment and supplies. 4 40. Tubular goods, hangers, packers and accessories, 4 Initials Operator ri r: Contracto 37 Category 4or3 41. Casing shoes, float collars, baskets, centralizers, scratchers, scrapers, baffles and 4 other casing accessories. 44, Swabbing equipment, including lubricator, swab valve, swabs, oil savers, sinker bars, 4 rope sockets and jars, if required (except sand line). 54. Repair and maintenance of Contract or furnished cementing unit. 55. Labor to install servicing equipment by Operator aboard the Drilling Unit and 2 for later removal, if required, such as, but not limited to: Cementing Unit, Electric Logging Unit, Mud Logging Unit, Diving Equipment, Well Testing System. �It Initials Operator Contractor 38 Category 42. All casing tools for all sizes for casing. 4 a) All transportation, repairs and replacements, if used. 3or4 43. Tubing tools, including slips, elevators, power tongs (or jaws for Contractor's power 4 tongs), wrenches, tubing pipe wipers and tong dies. 45. Swab rubbers and oil saver rubbers. 4 46. Core barrels and handling tools. 4 47. Core heads and core catchers. 4 48. Electric logging unit, maintenance of unit and logging services. 4 49. Wire line formation testing and sidewall sampiing equipment and services. 4 50. Drill stem test equipment and services. 4 51. Gun and perforating services. 4 52. Cement and cementing services. 4 53. Cementing Unit.* 4or2 *NOTE: If Operator uses the services of a cementing service company other than the owner of the cementing unit on board, any charges imposed upon Contractor by the owner of the cementing unit as consequence thereof shalt be for the Operator's account. 2 Category 56. Supplies and materials for initial installation of Operator's Items. 4 57, Well testing system complete with separators, heaters, gas vents, metering, piping and 4 valves, oil and /or gas burner, necessary booms, piping igniters, fabrication and installation. 58. Test tanks for well fluid. 4 59. Administrative center including offices, office furniture, equipment and supplies for 4 Contractor's Personnel, warehousing and storage yard at Operating Base for Contractor's items, if required. 60. Administrative center including offices, office furniture, equipment and supplies for 4 Operator's Personnel, warehousing and storage yard facilities for Operator's Items. 61. Port facilities and dockside area in vicinity of Operating Base for loading and unloading 4 Contractor's and Operator's Items on and off supplyvessels. 62. Transportation for Contractor's Items and Personnel: a) All transportation from point of origin to Operating Base (Reference Appendix C); 3or4 b) Routine transportation from Operating Base to return from dockside and /or 4 Heliport(Reference Appendix C); c) Routine transportation from one Operating Base to another; 3or4 d) Temporary lodging including meals, if required and transportation from Operating 3 Base to and return from dockside and /or heliport and between Operating Base during evacuation due to weather or other safety reasons in the event Operator is unable to provide adequate evacuation transportation pursuant to Paragraph 708 (d); e) Emergency transportation for both Operator and Contractor, as required. 4 f) Sperial transportation for crews to Operator's shore base if rig personnel's cars are at a different location because of rig moving locations including initial mobilization to operator's first location. 3 63. Transportation for Operator's Items and Personnel to dockside at Operating Base or point 4 of departure and return. 64. Dockside labor and equipment at Operating Base to load and unload Contractor's and 4 Operator's Items from or to and transportation and from or to supply vessels. 65. Marine transportation for Contractor's and Operator's Items and Personnel from dockside 4 to Drilling Unit and return with supply vessels supplied by Operator. a) Crew boats to transport personnel of Operator and Contractor, if required; 4 b) Standby boat, if required. 4 Initials Operator Contractor 39 Category 66. Marine transportation for Contractor's Personnel between Drilling Unit and Operations 3 Base during evacuation due to weather or other safety reasons in the event Operator is unable to provide adequate evacuation transportation. 67. Storage space at dock site for Contractor's Items, 4 68. Storage space at dock site and Operating Base for Operator's Items. 4 69. Onshore transportation for Contractor's shore based personnel. 1 70. Onshore transportation for Operator's shore based personnel. 4 71. Fees, licenses, pilotage fees, wharfage fees, harbor fees and costs or similar charges including any sales taxes or clearing agent or brokerage fees relating to Contractor's Items and replacements or spare parts. 72. Fees, licenses, pilotage fees, wharfage fees, harbor fees and cost or similar charges 4 including any sales taxes or clearing agent or brokerage fees relating to Operator's Items and replacements or spare parts. 73. Communication Systems: a} Radio system from Drilling Unit to supply vessel and supply vessel to Operator's 4 Operating Base office or direct to Operating Base, including permits and licenses b) Radio system from Drilling Unit to Contractor's office or shore base, including 1 permits and licenses c) Radio operators. 4 d) Rig based telephone and computer lines for operator and contractor use. 3 e) Gai- tronics phone system on rig 3 74. All helicopter transportation as required including medical evacuation. 4 a) Non directional beacon for helicopter operations. 4 75. Helicopter refueling system aboard Drilling Unit including helicopter fuel tanks, 4 fuel tank stand, fuel pump filters, hoses and grounding systems. 76. Helicopter fuel and tubes. 4 77. Special or additional helicopter safety equipment aboard Drilling Unit. 4 78, Diver services as required. 4 Initials Operator Contractor 40 Category 79. Meals and quarters for all of Contractor's Personnel and up to and including 1 Two (2) per day Operator's Personnel. 80. Meals and quarters for Operator's Personnel and Operator's third party personnel 4 in excess of Two (2) per day to be charged at: a) Twenty Dollars Fifty Cents ($26.50) per meal 3 b) Twenty Dollars Fifty Cents ($2630) per bed 3 81. Waste storage, removal and disposal, including any required registration and permits. 4 82. Insurance as provided in Appendix "E 1 83. Additional Galley BR. personnel per Appendix "C" 3or4 84. Maintenance and repair including repair parts: a) Of Contractor's surface equipment; 1 b) Rubber goods in Contractor's BOP's 3 c) Of Contractor's subsurface equipment except as provided in Paragraph 901 3 d) Of Contractor's subsurface mooring equipment including pendant lines. 3 85. Extra labor (in excess of supply vessel's personnel) required aboard supply vessels 4 when alongside Drilling Unit to unload or load Contractor's and /or Operator's Items. 86. Anchor piles, if required, and, placement of same, 4 87, Subsea and well control equipment: a) Wellhead equipment; 4 b) Wellhead connector from BOP stack to wellhead; 4 c) Subsea running tools for wellheads if required; 4 d) Contractor's surface or subsea blowout preventor system as described in Appendix "B" 4 e) Wellhead temporary guide base, if required; 4 f) Wellhead guide post structure, if required; 4 g) Jetting tools for drilling in conductor casing, if required; 4 h) Guide arms and bushings for drilling conductor hole and running conductor Casing, if required 4 i) 13 -5/8° blowout preventers, 10,000 p.s.i. 4 j) Accumulator Bottles to accommodate 13 -5/8" BOP stack 4 k) 11" blowout preventers, 5,000 p.s,i. 4 1) 7-1/16y blowout preventers, 5,000 p.s.i. 4 m) Repair and/or replacement for items (a), (c), (e), (f), (g), (h), O, (j) and (k) 4 initials Operator Contractor 41 89. Weather forecast services (if required). 4 91. Conductor drive hammer and accessories (if applicable), including: transportation 4 repairs and /or replacement. 102. Beam clamps to secure false rotary for caisson driving Initials Operator Contractor _42- Category 88. Screens a) For shale shakers, above 80 mesh 3or2 b) For mud cleaners 3or2 90. Engineering drawings for operators location showing rig elevation and plan views 4or2 including any and all sea floor and platform required views. 92. Trash compactor 4or2 93. Trash compactor bags 4or2 94. Swaco Hydraulic Choke 4or2 95. Mud Pump Liners Swabs, other than the initial set 4or3 96. Casing rams for all casing sizes 4or2 97. Mud Pump other than in Appendix "B" 4or2 98. Power Swivel 4or2 99. Boots, coveralls, slicker suits, safety glasses, safety goggles face shields and all 4or2 personal protective equipment (PPE) for personnel exposed to oil base mud or completion fluids. Including additional "house keeping" items. 100. Instrumentation on board unit, pvt, chart recorders, gas detectors. 4or2 101. Porta- Powers, four (4) 100 ton for lifting rig floor' for caisson driving 4or2 4 103. Diverter system including valves, over board lines, controls and replacement parts 3or4 I. Contractor's Information Company Name: Address: Phone: Fax: II. Proof of Coverage III. Worker's Compensation Employer's Lability APPENDIX E CONTRACTOR'S INSURANCE Spartan Offshore Drilling LLC Two Lakeway 3850 North Causeway Boulevard Suite 1160 Metairie LA 70002 (504) 885 -7449 (504) 456-6560 Please submit or email the ACORD to "Certificate of Insurance" form showing coverage where required within this Appendix E and the Contract. A. Workers' Compensation insurance to comply fully with the provisions and applicable laws of the country or state in which the Contractor qualifies as an employer and in which operations hereunder are performed, including U.S. Longshore Harbor Workers Act and Outer Continental Shelf Lands Act coverage, if applicable. B. Employer's Liability with limits of: Bodily Injury by Accident $1,000,000 each accident Bodily Injury by Disease $1,000,000 policy limit Bodily Injury by Disease $1,000,000 each employee C. Maritime Employer's Liability including Jones Act and Death on the High Seas Act coverage and transportation, wages, maintenance and cure with limits of $1,000,000 each person/$1,000,000 each accident. D. "In rem" endorsement. E. Borrowed Servant Alternate Employer endorsement. IV. Commercial General Liability insurance A. Commercial General Liability, Protective Liability including coverage for: _43_ VII. Marine Insurance 1. Premises operations 2. Contractor's protective liability 3. Contractual liability 4. Products completed operations coverage and subject to a $1,000,000 combined single limit of liability each occurrence for Bodily Injury and Property Damage. B. Charterer's Legal Liability. C. Deletion of watercraft exclusion as respects operations and contractual liability for watercraft exposure not covered by Protection and Indemnity policy. D. "In Rem" endorsement. V. Automobile Liability Insurance Standard comprehensive form including all owned, hired and non -owned vehicles with a $1,000,000 cornbined single limit of liability each accident for bodily injury and /or property damage. VI. Excess Umbrella Uiahility Insurance VI 1. No Recourse of Premiu Providing following form coverage for Employer's Liability, Maritime Employer's Liability Commercial General Liability, Automobile Liability, Aircraft Liability, and Protection and Indemnity Insurance. 2. Limit of Liability: U.S. 525,000,000 combined single limit of liability each occurrence for bodily injury and /or property damage. Hull and Machinery Insurance (including collision liability) shall be provided for the Drilling Unit owned or chartered by Contractor and utilized in the performance of this Contract in an amount equal to the declared value of the Drilling Unit, subject to a deductible determined by Contractor. 2. Protection and Indemnity Insurance or equivalent comprehensive general liability insurance, with watercraft exclusion deleted, shall be provided with a combined single limit of U.S. $1,000,000. Ali policies of insurance shall be endorsed to delete any recourse of premium, club calls, assessments or advances against Operator, Operator's Affiliated Companies, partnerships and 44 IX. Deductibles X. Scope limited liability companies, and its and all of their co- owners, partners, co venturers, and joint owners. Except as otherwise provided, deductibles shall be for the account of Contractor. The above specified amounts and types of insurance coverage shall not be deemed to constitute, or be construed as, a limitation on Operator's liability under this Contract. XI. Producer Informat Please provide your insurance producer's information below: Company Name: McGriff, Seibels Williams of Texas, Inc. Address: 10375 Richmond Avenue Suite 1700 Houston, TX 77042 -4143 Telephone: (713) 877 -8975 E -mail: jbuchanan @mcgriff.com Contact Name: Jeff Buchanan 45 APPENDIX F OPERATOR'S INSURANCE Operator's Information Company Name: Escopeta 011 Company, LLC Address: 505 Riverway, Suite 440 Houston, Texas 77056 Telephone: 713 -623 -2219 Facsimile: 713 -439 -1205 E -mail: escopeta Pswhell.ne't Proof of Coverage Please submit or email the ACORD tm "Certificate of Insurance" form showing coverage where required within this Appendix F and the Contract. 111. Worker's Compensation Employer's Liability F. Workers' Compensation insurance to comply fully with the provisions and applicable laws of the country or state in which the Operator qualifies as an employer and in which operations hereunder are performed, including U.S. Longshore Harbor Workers Act and Outer Continental Shelf Lands Act coverage, if applicable. G. Employer's Liability with limits of: Bodily Injury by Accident $1,000,000 each accident Bodily Injury by Disease $1,000,000 policy limit Bodily Injury by Disease $1,000,000 each employee H. Maritime Employer's Liability including Jones Act and Death on the High Seas Act coverage and transportation, wages, maintenance and cure with limits of $1,000,000 each person /$1,000,000 each accident. "In rem" endorsement. J. Borrowed Servant Alternate Employer endorsement. IV. Commercial General Liability Insurance A. Commercial General Liability including coverage for: 1. Premises operations 2. Contractor's protective liability 3. Contractual liability 4. Products completed operations coverage and subject to a $1,000,000 combined single limit of liability each occurrence for Bodily injury and Property Damage. 46 B. Underground Resource C. Charterer's Legal Liability D. Deletion of watercraft exclusion as respects operations and contractual liability for watercraft exposure not covered by Protection and Indemnity policy. E. "In Rem" endorsement. uipment Coverage V. Automobile Liability Insurance Standard comprehensive form including all owned, hired and non -owned vehicles with a $1,000,000 combined single limit of liability each accident for bodily injury and /or property damage. VI. Aircraft Liability Aircraft Liability including contractual liability covering all owned (if any) hired and non -owned aircraft (fixed wing and rotary) including passenger liability with a $5,000,000 combined single limit of liability each accident for bodily injury and /or property damage. VII. Excess Umbrella Liability Insurance A. Provide following form coverage for Employer's Liability, Maritime Employer's Liability Commercial General Liability, Automobile Liability, Aircraft Liability, and Vessel Liabilities, where applicable. Ix. B. Limit of Liability: U.S. $35,000,000 combined single limit of liability each occurrence for bodily injury and /or property damage. All Risk" Insurance "All Risk" Insurance, subject to a nominal deductible, covering physical loss or damage (including wreck debris removal) to all Operator's Items and other property of Operator. Operator's Extra Expense insurance Operator's Extra Expense Insurance in the amount of not less than: U.S. $35,000,000 combined single limit per occurrence to cover any and all sums which Operator and /or Contractor may be obligated to incur as expenses and /or liabilities which may be incurred on account of bringing under control an oil or gas well which is out of control or extinguishing an oil or gas well fire, redrilling or repair of loss or damage to an oil or gas well, seepage and pollution, cleanup and contamination arising from operations under this Contract. No Recourse of Premium All policies of insurance shall be endorsed to delete any recourse of premium, club calls, assessments or advances against any member of Contractor, and its Affiliated Companies, partnerships and limited liability companies. _47_ XI. Deductibles Except as otherwise provided, deductibles shall be for the account of Operator for payment. XII. Operator's Certificate Financial Responsibility Operator shall provide a Certificate of Financial Responsibility in compliance with the Oil Pollution Act of 1990, as applicable, for operations in U.S, waters and shall provide a copy to Contractor. XIII. Scope The above specified amounts and types of insurance coverage shall not be deemed to constitute, or be construed as, a limitation on Operator's liability under this Contract. XIV. Contract By signing this contract, you are signifying your understanding to provide coverage on all of the elements covered in Appendix F Operator's Insurance. XV. Producer Information Please provide your insurance producer's information below: Company Name: Address: Telephone: E -mail: Contact Name: -4 APPENDIX G (See Paragraph 13V5) The following clauses, when required by law, are incorporated in the Contract by referenced as if fully set out: 1. The Equal Opportunity Clause prescribed in 41 CFR 60 1.4 2. The Affirmative Action Clause prescribed in 41 CFR 60 250.4 regarding veterans of the Vietnam era. 3. The Affirmative Action Clause for handicapped workers prescribed in 41 CFR 60 741.4 4. The Certification of Compliance with Environmental Laws prescrbed in 40 CFR 15.20 49 APPENDIX H Financial Payment Guarantees Terms Notwithstanding any other term or provision of this Contract to the contrary, all payments due Contractor as described herein must be fully guaranteed and secured in a form acceptable to Contractor, Contractor's Board of Directors and Contractor's Lenders. In the event that Operator fails to secure said guarantees and approvals, Contractor shall have the exclusive right to terminate this contract, retain any monies already paid to Contractor and have no obligations or liabilities what so ever to Operator. It is the intent of Contractor hat the guarantees shall be sufficient to cover: 1) Mobilization: The Mobilization Charges as outlined in Appendix A. 2) Demobilization: In addition to, but not necessarily limited to, the Demobilization charges described in Appendix A, all other estimated Demobilization costs including the heavy lift transport vessel, insurance, loading and offloading costs. 3) Operating Rate: Rig Operating Dayrate plus other estimated Contractor "recharges" for a minimum of 90 days of operation. This security could he facilitated on a time sensitive rolling or revolving basis. In recognition of Operator's efforts to secure the aforementioned guarantees Contractor will consider the following forms, or combination thereof: 1) LOC: Irrevocable Letter of Credit from a reputable U.S. bank acceptable to Contractor; 2) State Guarantees: Guarantees as may be provided by the State of Alaska in conjunction with or supplemented by the Alaskan Net Income Tax Act, as amended pursuant to HCS CSSB 309 (FIN). 3) Escrowed Funds: Escrowed funds in an account established in a reputable' U.S. bank with exclusive draw rights and payment directly to Contractor. 50 SECTION II GOM TRANSPORT a Domestic Transport, WC area to Freeport Sinkhole b Pilots for transit from Sea Buoy to Sink Hole c Assist Tugs for transit from Sea. Buoy to Sink Hole d Rig Mover, (51950 per, plus per diem travel) e Crew Cost During GOM transport f Catering Cost 9 a b 0 d e 9 h Insurance Cost, pro -rata RIG MOVE FROM GULF OF MEXICO TO COOK INLET LOADOUT Labor/crews to relocate and loadout Catering during loadout Rig Fuel During Make Ready Assist Tugs for positioning onto submersible vessel Pilots for loading Operations Freeport "hole "cost for loading, (11 k per day z 2) Vessel Lay Days In Freeport Logistics, (Trucking Bus to return Crew to Cameron) Rig Mobilization Day Rate Insurance Cost, pro -rata CONTINGENCY a An Above Items SPARTAN 151 RIG COSCOL SUMMARY Mobilization Cost (Based on COSCO Quote) 2 MAKE READY a Labor /crews to relocate and loadout (14 days 12,000per day) b Catering during loadout (14 1550.00) c Rig Fuel During Make Ready d Insurance Cost, pro -rata f Berthing &.Dock Services g Securing Rig for Transport h Leg Stability and Fit for Transport Survey 14.00 14.00 Total GOM Transport Total Loadout 4 DryTranspo a COSCO HL Vessel, (CIF Sea Fastenings) b Rig Day Rate during transport, (46 transport, plus 3 load- 2 to unload) c HL Vessel. Lay Days, Discharging Rig d Tug Cost to assist with Discharge (3 tugs for 1 day) Harbor. Pilot. Cost for Discharge Operation (2 pilots for 2 days) Price is swage pending call back a f Mise Discharge Cost -Warfare Total Try Transport .�a4_T e.�.. TOTAL. DRY TRANSPORT COST GRAND TOTAL Qty Rate Total 1.00 3215300 1.00 512,000 2.00 515,000 530,000 7.00 $2,100 514 14.00 317,000 3238,000 31,550 $21,700 $2,600 336,400 $568,400 10.00 $17,000 $170,000 10.00 51.,550 315,500 10.00 51,000 510,000 10,00 $2,600 326,000 10.00 $1,500 $15,000 10.00 $15,000 3150,000 1.00 $50,000 $50,000 $436,500 2.00 317,000 $34,000 2.00 $1,550. $3,100 2.00 $1,000 52,000 3.00 $15,000 545,000 3.00 $8,800 326,400 3.00 $11,000 $33,000 4.00 $45,000 $180,000 1,00 $8,000 58,000 2.00 $32,500 $65,000 2.00 $2,600 55,200 401,700 1.00 2.00 $500 5% $4,218,600 53.00 332,500 51,722,500 3.00 545,000 5135,000 3.00 531,300 593,900 2.00 315,000 530,000 51,000 580,000 $6,281,000 7,687,600 5384,380 8,071,980 HEATICON 2007 STAN H EAVYLIFT CHARTER PARTY PART z 1. Place and date of Contract. OSLO, .NORWAY 3rd September 201D Owners /place of business ICI, 1.j 3. Charterers /place of business (CI 1.1 OHT AS, Haakonill's gate 1, 0161 OSLO,.NORWAV, as agents to OHT EAGLE AS as OWNER ESCOPETA OIL, .5005:Riverway, Suite 440, Housten, TEXAS 77056, USA 4. Vessel name, type and other particulars; also description of Owners' equipment) (01.1 CI 4 and C1.201 MV. EAGLE, Tanker for oil converted to semi submersible heavylift ship, LOA 199m., BEAM 42m,, free deck 110m. 5. Cargo (MI description of cargo; indicate whether full and complete cargo or part cargo; also slat e minimum /maximum weight of cargo) (Cr. 1, and 01311 lack-up rig Spartan 151 BMC 150 H Class Maximum weight: TBA, LCG from bona TBA, TCG: TBA, VCG: TBA, Spudcan Protrusion: Max 0.2.m. The Cargo, including any equipment, properly reinforced, filled with all structures necessary for guiding, seafastening, cribbing, properly manned for the transport and the loading and dischargeing operadmtswithout any stack tanks giving free surface effect, pontoons, leg wells and spudcans cleaned and in all resuects read fortheseatrans oriat ion accordin. to Owner and Marine Surveyors remirments. 6 Loading port(s) (01 Cl 1 7. Discharging port(s) and intended route from loading port(s) to discharging port(s) to (including r (I 1, CL 301 and 111 Corpus Christi area, TX OR suitable Mexican port It suitabte OPL location) TBA by Charterer Cooklnletarea Alaska USA• via Magellan Sraights 8. Loading method(s) (Indicate altcreative(s): jj or fill as agreed) fOL 4671 0. Discharging method(s) (indicate alternative(s): L4 or tie, as agreed) (CI 459 Float -On Float-Off 10. The Period (state dates) (CI; 4(a) and CL 8(a)1 11, Notifi cation schedule jCL -8(0)1 15o February 2011.15 March 2011 Owners to give 30 days, 15 days, 5 days, 3 days and 24hrs approximate notice of Vessels ,expected time :of readiness for loading. During the voyage, the Owners will give the daily posistion report from the Vessel, stating Vessel's posistion speed, weather and ETA for Discharge port. 12. Layday period (slate number of days) fel. Eidj) 28 days Notices for loading to be given to C[..10} Hal McWorther•. Dean Maritime Ltd. Ca. haleedaanmaritime.com Danny Davis Escopeta 00- escopetaGeswbeli.net 14. Not ices for discharging stat e interval periods and to whom to be given) Cl and Gtl, 12) Ow ners 0 give 7 days, 3 days, and 24 hrs approximate notice of Vessels expected time of readiness to Charterers 15. Marine Surveyor(s) and: date for transportation approval MI. 111 TBA by Charterers 16. Freight. (CI 844 01 ;?and CI 151ia i 17. Freight and demurrage, etc. payment (instalments, currency and where payable also state owners' bank account) (Ci.12.and X31 6.100000, -(USD SixMillion One Hundred Thousand) 10l on Contract signing 40% on Vessel tendering 5108 50% 5 days ono r fo R1„_..,r C.,,.hu,gcs Ohnu,y iitvgiceS 18 Froahme r, pay`. 4_CJ�('n total tree time for loadingldischarging and canal transit appfcahie) and Cl 1501148 19. Demurrage 2e per day (^I. 3 112 C 3(`],.OL SIh$ G� 3 CI E3 C;.15(cJ, „.hooredaYS 01 ;I 1i; and C21) 13 a CI. USD 65 000 (United States Dollars Sixty Five Thousand) per day or pro rata for part of day 20. Mobilisation charge (if agreed, stale lumg sum arnoupt). (f;[ 141 21. Demobilisation charge (if agreed state lump sum amount) N/A NIA 22. Cana transit ifany) limited to jCf `f5lt' 23. Bunker. Escalation 101. 16) USD 30000 forMagellan Straights passing Grade: dF038Dquanliky :3285t- price: 926por media ton Grade: NA quanhty NAI p me., NApenneir 24. Termination Feels) (state imou nt(s) [agreed) vt 1 25 Liabdiry far cargo (state whether 8 of Ladmg)orcargd Receipt) Cargo receipt; 1 r' 70% from Contact signing until tendering thereafter 90 26, General averageshall be adjusted /settled 05 ICI .3{t 27. Double banking i 01.3 (i) State Owners' additional premiums, it any (II) State Owners' additional cost for insuring deductible ,ifany 28. Brokerage and to whom: payable EL35+ Rate 2Z% (5) Broker(s) Dean Maritime Ltd. Co. 9. Dispute Resolutio hether altern alive {ml,3or oof Clause 39 agreed) (a) London 30. Numbers of additional clauses covering special provisions, 51 agreed HEAVYCON 2007 Standard Heavy lift Charter Party xis mutually agreed that this Contract shall be performed subject to the conditions contained in the Contract consisting of PART I including additional clauses, if any agreed and stated in Box 30 and PART including Annex A (Demarcation of Scope of Work), In the event of a conflict of conditions, the provisions of PART I and any additional clauses including Annex A (Demarcation of Scope of Work) shall prevail over those of PART H to the extent of such conflict but no further. Signature (Owners) Signature (Charterers) Demarcation of Scope of Work HEAVYCON 2007 Standard Heavylift Charter Party Demarcation of Scope of Work Activity Tick one Charterer Owner 1. Engineering 1.1 calculation of dynamic forces durtngseavoyage [9 1 .2 ti 1 S2ionahcxes ig Cat N engineerinq•2=;c' prcr and'r 1.3 El engineering and preparation seafastening plan&, 1 .4 .engineering and preparation ef- 4ead -s;.re oribina plan4s4 1.5 check of structural strength of Cargo during loading discharging and sea transportation ❑Y i 1.6 check of structural strength of Vessel's deck 1.7 preparation of transportation manual 0 1:6 obtairyng p,an approval ,of MWS 1 'x❑ n 2. loadport 2.1 arrangement ofte #n suitanis.tcading txscati 2.2 preparation of vessel for loading El 2.3 supply of load spreading El installation o 4 ad _n cnrllar;.cribhirignnd quid Ig 2.4 supply vr.:ee, Stroncibo;.es E of c,,usr-; :.d^'•- #i.;ab hron,+s s tstatiag or, of st rangb axes g -y-s f fttag of C rgc far Trarispnrt snctudirrg instai[a #ion preparation ofiR Catchers 2.5 bringing Cargo alongside Vessel within reach of Vessel's gear CI K1 2.6 #Geld; an Receiving Vessel's mooring lines oti Careen and connecting 2.7 loading by Vessel's gear; operated by Vessel's Crew as servants of the Charterer Li 2.8 ballasting of Vessel during loading 'U 2.9 arrangement and costs of stevedoring cif compulsory) 2.10 supply of seafastening Z installation of seafastening E welding NDT lii 2.11 obtaining MWS approval for sailing a 3. discharge port 3.1. arrangement of bent` suitalalc' Discharge -ir cab 3.2. preparation of vessel for discharging tg 3. 3. 1- e'eiaahi f El 0 cutting of seafastening 3.4. soppy- .a= slirga- sdaekfea :N A EDW. j a F.emoval of trop bores Y kr /A q 1# f a .1• {if s „..:.e.. e rb Ef Ar 3.5. discharging by.Vessol sngear; operated by Vessei's.crew, as servants oftfie Charterer j 3 :6. receiving Cargo alongside Vessel.witnrn reach ft of Vessel's gear ii 3.7 .1 4..aff Reieas'snc Vessel's rrtoorinv lines from Cargo N 3.8, ballasting of Vessel during discharging 3.9. arrangement and costs. of stevedoring (if compulsory) 3.10. removal of seafastening of ti�sl cribbing and N r emoval Q guideposts deck cleaning by gauging grinding HEAVYCON 2007 Standard Heavylift Charter Party Demarcation of Scope of Work PART II HEAVYCON 2007 Standard Heavylift Charter Party it shall be seafastened and /or lashed by the Owners at their expense, unless otherwise agreed in Annex A 52 (Demarcation of Scope of Work), to the satisfaction of the Master. 53 (o) At the loading port, the Cargo shall be delivered by the Charterers without delay in the sequence required 54 by the Master at any time during day or night, Saturdays, Sundays (or their focal equivalent) and holidays 55 included and shall be loaded by one or more of the following methods stated in Box 8: 56 (i) 'If grcc' in Eax-° that t ^c C- ,�*a,- F�'erc 11 ce- cct the- 4ea4iicg -ep: rat •:a7:' i4aoe+:! 57 beard ar o.,i'ir ee: r--'! rand:- aGtier e=ll =c $ast ^z. Cka 58 nd-; ay-fe t lab .1-oti r that that- stated- in -Seg-4- he-6h rt e e °hv# 59 #:+a-fr s c'J_c -.plc c,c t 60 (ii) 'If agreed in Box 8 that the Cargo shall be loaded by means of float -on method, the Charterers shall 61 position. the Cargo prior to loading at 50 metres or at an agreed distance from the Vessel's submerged 62 deck to the full satisfaction of the Master. The Charterers shati properly man the Cargo and hook on 63 from the Vessel+ Lines will be taken to c rao by Vessel's line handling boat, The Owners shall atto-ah and secure the rgo over the submerged deck by using winches and/Or tubs. The Owners shall,procure 64 and pay the necessary (abaft and winch men° either from the sroW.or from shore. 65 r t The Charterers :shall procure and pay for workboats and tugs required for the positioning of the cacgo. 66 The Owners shall have the right to use such workboats and tugs for the loading operation. 67 Indicate alternative(s) (1) or (ii), as agreed, in Box a 68 (d) The Charterers shall name the precise discharging area or place within the discharging, port, which shall 69 be always safe and accessible and suitable for the discharging operation, well in advance of the Vessel's 70 arrival, always subject to the approval of the. Owners and the Master. Such approval shall not be unreasonably 71 withheld. 72 At the discharging port the Charterers shall take delivery of the Cargo without delay in accordance with 73 sub clause (f) at any time during day or night, Saturdays, Sundays (or their local equivalent) and holidays 74 included. 75 The entire discharge operation always to be done to the full satisfaction of the Master. 76 (e) Prior to actual discharge the Owners shall, unless otherwise agreed in Annex A (Demarcation of Scope 77 of Work), remove all seafastening and /or lashing and prepare the Vessel for the discharge operation. 78 (t) The Cargo shall be discharged by one or more of the following methods stated in Box 9: 79 (1) *If agreed in Box 9 that the Charterers shall discharge the Cargo, the Charterers shall procure and pay 80 for the necessary equipment and labour. The Charterers shall have free use of the Vessel's gear 81 by the Vessel's crew. 82 (it) If agreed in Box 9 that the Cargo shall be discharged by means of float off method, the Owners shall 83 submerge. the Vessel and float -off the Cargo. The Owners shall procure and pay the necessary labour 84 and winchmen either from the crew or froni shore. 85 The,Charterers shalhprocure and pay forworkboats arieugsrequired`for dbscharging`the Carg Owners shall have the right use such workboats and tugs :or the discharging operations, Indicate alternative(s)' or (ii), as agreed, in Bo.. 8. (g) All expenses associated with the Vessel such as harbour dues, pilotages, local tug assistance, if required, 89 agency fees, fuel and lubricants shall be paid for by the Owners except as otherwise provided for in this 90 Charter Party. 91 (h) Any compulsory shore labour connected with loading operations, lashing/seafastening, removal of 92 lashinglseafastening andlor discharging operations required by local authorities or union regulations shall 93 be for the. Charterers' account. 94 Permits /Licences 95 (a) All necessary permits and /or licences pertaining to the loading and /or discharging operations shall be 96 provided and paid for by the Charterers, unless such permits and /or licences can only be obtained by the 97 2 the 86 87 88 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party owners, in which case they shall be provided by the Owners but paid for by the Charterers. The Owners and the Charterers shall assist each other in obtaining such permits and /or licences. (b) Any delay caused by the Charterers in obtaining the permits and/or licences related to sub -douse 5(a) shall be at the Charterers' time and any time lost shall be paid for at the demurrage rate stipulated in Box. 19. 6. Duties, Taxes and Charges 103 The Charterers shall pay all duties, taxes and charges whatsoever levied or based on the Cargo and/or the 104 freight at the Loading Port and/or Discharging Port irrespective of how the amount thereof may be assessed, 105 including agency commission assessed on the basis of the freight. 106 7. Quarantine 107 Unless due to health conditions on board. the Vessel, any tirne lost as a result of quarantine formalities and! 108 or health restrictions imposed or incurred at any stage of the voyage, including any such loss of time at the 109 Loading Port and /or the Discharging Port, shall be paid for by the Charterers at the demurrage rate specified 110 in Box TEr. The Charterers sharalso pay !oral! other expenses which may be incurred as a result thereof. 111 8. Cammencdmerit of Loading/Cancellin pate 112 (a) The first layday shall be on orbetween'the dates stated in' Box 10 ('the Period"")." 113 (b) The Period shall be narrowed down to one firm date "the First Layday") accordance with the notification schedule in Box 11. If Box 11 is not filled in then the notification schedule is in Owner's option. (c) Each narrowed Period shall always be within the previously notified Period and the number of days' notice shall always be prior to the first day of the previously notified Period. (d) The cancelling date shall be the number of days stated in Box 1.2 after the First Layday "the Cancelling Date If Box. 12is not filled in then fourteen (14) days shall apply. (e) The date of commencement of the loading shall be at any time on or between the First Layday and the cancelling Date, both dates inclusive, in the Owners' option. Should the Owners give notice of readiness prior to the First Layday, the Charterers may, at their option, accept such an earlier loading date and the time used shah count against the free time in accordance with Clause: 13 (Free Time /Demurrage). (f) Should it appear that the Vessel will not be ready to commence loading latest on the Cancelling Date the Owners shall immediately notify the Charterers. The Owners shall state a new cancelling date as soon as they are in a position to do so with reasonable certainty. Within seventy -two (72) running hours after receipt of the Owners' notice as aforesaid and latest when the vessel is ready for loading, whichever is the earlier, the Charterers shalt advise the Owners whether they elect to cancel this Charter Party, failing such advice the new cancelling date as notified by the Owners shall become. the Cancelling Date. (g) Should the. Charterers cancel the Charter Party in accordance with sub clause (f), any amount paid to the Owners in advance and not earned shall be returned to the Charterers by the Owners, (h) The Owners shall not be responsible for any loss or damages whatsoever incurred by the Charterers as a result of the Charterers cancelling this Charter Party in accordance with sub-clause (f) no shall the Owners be responsible for any_loss or damages whatsoever suffered by the Charterers as a result of the failure of the Vessel to be ready fordoadinglatest on'ihe Cancelling Date:, (i) Should the cargo for r sons beyond the OWners`ooritroLnot be Icaoed•withu}.,fourteen (14) days after the free time for loading stated in Sox 18 has expired, the Owners shah have the option to cancel this Charter Party or to sail with only part of the Cargo on. board. (j) If the Owners exercise their option to cancel the Charter Party in accordance with sub clause it the (k) If the Owners exercise their option to sail with part of the Cargo on board in accordance with sub clause (i) the Charterers shall pay to the Owners the full freight stated in Box. 16 in addition to any demurrage 98 99 100 101 102 114 115 116 117 118 1'19 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 Charterers shall pay to the Owners the applicable termination fee according to the provisions of Disuse..21 141 (Termination) in addition to any demurrage incurred. 142 143 144 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party incurred. 145 9. Advance Notices 146 (a) Advance Notices of Expected Load- readiness 147 The Owners shall give notices of the expected day of the Vessel's arrival and/or readiness to load fourteen 148 (14) days, seven (7) days and three (3) days in advance unless otherwise stated in Box 13. Furthermore, the 149 owners shall give twenty-four (24) hours approximate notice of the expected hour of the Vessel s readiness 150 to load. 151 12, (b) During the voyage the Owners shall give no of expected time of arrival at the Discharging Port with intervals of the number of days stipulated in Box f4 (b) All relevant documentation required by the Marine Surveyor(s) for theft approval of the Transportation shall be submitted to the Marine Surveyor at the earliest possible stage after this Charter Party is concluded, if not already submitted eadier. As soon as possible after submission of the relevant documentation, Transportation approval shalt be given by the Marine Surveyor. (c) The Charterers shall pay all expenses relating to the production of documentation related to the Cargo andtor the Charterers' equipment The Owners shall pay all expenses relating to documentation related to the vessel and all other equipment being provided hy the Owners in the performance of the Transportation (d) The Charterers shall arrange and pay for all the Marine Surveyor(s) services, including approval of the transportation. (e) The Charterers warrant that the full description of the Cargo stated in Box is correct and further warrant that the Cargo is in all respects tight, staunch, strong and in every way fit for the Transportation. (f) Should the Cargo and/or its description not be in compliance with the aforesaid then the Owners shall have the option to cancel this Charter Party. (a) The freight stipulated in Box 16 shall: be paid in instalments in accordance with Box.' :is :Kit .r,r,,,.pfe- :#uea rife;! at- paall- _e-:uP9= frreG4C ^n-pc frte eirz2:.'' .EA r'r rt -t„* 4F 1 1 -YG Tnw.0 or. i r:.. c. Thee de,.174. -14 Iaaa= E sathrira^: d` >c -r .Q wkethenkhr a dlo- _.go c fest g�eaf4est -a c scn rr= ;ewcpuvos. The fr'eighftinstalmelts..shall he paid in full without any deductions in the currency and to the Owners' bank account stated in Box 17. (b) In the event of change in applicable laws or regulations and /or interpretation thereof, resulting 10 an unavoidable and documented change of the Owners' costs after the date of entering into the Charter Party, freight shall be adjusted accordingly. 13. Free Time /Demurrage (a) The Charterers are allowed the free time stipulated in Box 18 in the loading and discharging port(s) and for canal transit if applicable, Saturdays, Sundays (or their local equivalent) and holidays included. 4 152 153 10. Notice of Readiness 154 The Owners shall give notice of readiness as per Box 13 advising when the Vessel is ready to commence 155 loading at the loading port and when the Vessel is ready to commence discharge at the discharging port 156 as per Box 14. All notices may be given at any time of the day or night, Saturdays, Sundays (or their local 157 equivalent) and holida Tincludedand notwithstanding hindrances as referred to imGlause 3(o) (Deviation/ 158 Delays /Pan Cargo).) A 159 I 11. Marine Surveyor /Conditiion`of the Vessel acid Cargo 160 (a) The Marine Surveyor(s) stated in Box 15 hall be appointed for this Transportation. If Box 15 has not 161 been filled in the Charterers and the Owners shall agree an the appointment of Marine Surveyor(s) acceptable 162 to the cargo underwriters. 163 164 165 166 167 168 169 170 171 172 173 174 175 176 (g) If the Owners exercise their option to cancel: the Charter Party in accordance with this Clause, the 177 Charterers shall pay to the Owners the applicable termination fee according to the provisions of Ctause21 178 (Termination). 179 Freight 180 181 182 183 184 185 166 1 188 189 190 191 192 The free time at the Loading Port shall start counting when notice of readiness has been tendered, in 193 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party accordance with Clause 10 (Notice of Readiness), whether in berth or not, unless loading has commenced earlier and shall count until the cargo is in all respects fully seafastened on board the Vessel and approved by the Marine Surveyor(s). The free time at the Discharging Port shall start counting when notice of readiness has been tendered in accordance with Clause 10 (Notice of Readiness), whether in berth or not, unless discharge has commenced earlier and shall count until the cargo is in all respects removed from the Vessel. (b) Demurrage shall he payable for ail time used in excess of the free time. The demurrage rate for the vessel is the amount stipulated in Box 19 calculated per day or pro rata for part of a day. (c) Free time shall not count and if the Vessel is on demurrage, demurrage shall not accrue for time lost by 202 reason of deficiency of the Master, officers or crew or strike or lockout of the Master, officers or crew or by 203 reason of breakdown of the Vessel or its equipment. 204 (d) Demurrage and other amounts which are calculated at the demurrage rate fall due day by day and are 205 payableby th`e Chartererspromptly, upon presenta of the Owners' i rivgice to'flie Ovdners' taank account 206 207 4. r .iy;?icat' °••me (a) Meld' atiae n (b) Eli`_ntisa which nmo t-cha0 F -carne 1-the (c) akaa mob ts,°Y#rvs+ra =d 4 ik tiort am aunt=.- shat a e- pewadl:: aga,a the- gv,in --r;` 15. Canal Transit 216 (a) If the Transportation is scheduled to pass through the canal stated in Box. 7, the Charterers shall he 217 granted free time for any such transit,, and such free time shall count against the of hours stipulated 218 in Box 18. If the Transportation is delayed beyond the free time stipulated therein, the Charterers shall pay 219 for such extra transit time at the rate of demurrage stipulated in Bo:: 19 -and paid in accordance with Clause 220 13fdi (Free Time/ Demurrage) and shall, in addition, pay for all other documented extra expenses thereby 221 incurred. Canal transit time is defined as from arrival at pilot station or customary waiting place or anchorage, 222 whichever is the earlier, and until dropping last outbound pilot when leaving for the open. sea. 223 (b) The freight rate stipulated in Box 16 is based upon the Owners paying canal tolls limited to the amount 224 stipulated in Rox 22. Any increase in the canal tolls and /or any additional expenses imposed on the 225 transportation for the canal transit actually paid by the Owners shall be reimbursed by the Charterers to the 226 owners: upon presentation of the Owners' invoice. 227 (c) Should the transit of a canal be made impossible for reasons beyond the Owners' control, the Charterers 228 shall pay for all extra time by which the voyage is thereby prolonged at the rate of demurrage stipulated in 229 Box. 19 and paid in accordance with Clause 13(d) (Free Time /Demurrage). 230 The Charterers shall also pay all other, expenses, including forbunkers, in addition .to those which would 231 normal)y been incu had the Vessel been standing =by in port loss the amount of canal tolls saved 232 by the Owners for not having Iran the canal. 233 (d) Notwithstanding the provisions of sun clause (c) the Owners may at their sole discretion, instruct the 234 Master to discharge the cargo at the nearest safe and reachable port or place and such discharge shall be 235 deemed due fulfilment of the Charter Party. All provisions of this Charter Party regarding freight, discharge 236 of the cargo, free time and demurrage as agreed for the original discharging port shall also apply to the 237 discharge at the substitute port. 238 16. Bunker Escalation This Charter Party is concluded on the basis of the price per metric ton and the quantityand g stated in Box 23, If the price actually paid by the Owners for this quantityo hunkers should be higher, the difference shalt be 242 5 1c a r( des of 194 195 196 197 198 199 200 201 208 209 210 211 212 213 214 215 239 bunkers 240 241 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party paid by the Charterers to the Owners. 243 If the price actually paid by the Owners for thisquantity of bunkers should be lower, the difference shall be paid by the Owners to the Charterers. 245 17. 81MCO Ice Clause for Voyage Charter Parties 246 The Vessel shall not be obliged to force ice but, subject to the Owners' approval having due regard to its 247 size, construction and class, may follow ice breakers. 248 (a) Pko4 e- leo <,iag !f et a y eaftefs ttki g -eat on The- anweaek' eye s-t a+rd re: the 4azp ng pctlis:inaseeessi- in26n^tt- n9rmiR8?e-'e 4e -4£ °nai„m,- hou,T9,s (ii 6 244 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 thek verse;. i..ay- ocecd to rs; takeem7istt- -wow c'3ry^ f9=tr (b) Port of Discharge 265 (1) If the voyage to the discharging port is impeded by ice, or if on arrival the discharging port is inaccessible 266 by reason of ice, the Master or Owners shall notify the Charterers thereof. In such case, the Charterers 267 shall have the option of keeping the Vessel waiting until the port is accessible against, paying compensation 268 in an amount equivalent to the rate of demurrage or of ordering the Vessel to a safe and accessible 269 alternative port. 270 If the Charterers fail to make such declaration. within 48 running hours, Sundays and holidays included, 271 of the Master or Owners having given notice to the Charterers, the Master may proceed without further 272 notice to the nearest safe and accessible port and there discharge the cargo. 273 (11) If at any discharging port the Master considers that there is a danger of the Vessel being frozen in, and 274 provided that the Master or Owners immediately notify the Charterers thereof, the Vessel may leave 275 with cargo remaining on board and proceed to the nearest safe and ice free place and there await 276 the Charterers' nomination of a safe and accessible alternative port within 24 running hours, Sundays 277 and holidays excluded, of the Master's or Owners' notification. 11 the Charterers fail to nominate such 278 alternative port, the Vessel may proceed to the nearest safe and accessible port and there discharge 279 the remaining cargo. ..280 (c) On delivery of the cargo other than at the port(s) named in the Charter Party, all conditions of the Bill 281 of Lading shall apply and the Vessel shall receive the seine freight as if discharge had been at the original 232 port(s) Of destination) except that if the distance of the substi ted[port(s)"exceedS 1'00 nautical)niles the 283 freight on the cargo delivered atthe sunst tuted port(s) shall De increased proportionately. 284 18. Dangerous Cargo 285 If part of the Cargo is of an inflammable, explosive or dangerous nature or condition or at any stage may 2 develop into such nature or condition it must be packed and stored or stowed in accordance with the MO 287 Dangerous Goods Code and /or other applicable regulations always' to the full satisfaction of the Master. Any 288 delay to the Transportation in this respect shall be paid for by the Charterers_ at the demurrage rate stipulated 289 in Box 19 and in accordance with Clause 13(d) (Free Time/Demurrage). 290 19. Lien 291 The Owners shall have a lien on the Cargo and. any Charterers' equipment for at freight and all other expenses 292 in relation to the Transportation, deadfreight, advances, demurrage, damages for detention, general average 293 and salvage including costs for recovering same. 294 PART!! HEAVYCON 2007 Standard Heavylift Charter Party 20. Substitution 295 The Owners shall, at any time before the Cancelling Date, be entitled to substitute the Vessel named in Box 4 296 with another vessel of equivalent capability and capacity, provided such substitute vessel is approved by the 297 Marine Surveyor(s) and subject also to the Charterers' prior approval, which shall not be unreasonably withheld. 298 Nothing herein shall be construed as imposing on the Owners an obligation to make such substitution. 299 21. Termination 300 (a) Notwithstanding anything else provided Herein, the Charterers shall have the right to terminate this 301 Charter Party prior to the Vessel's arrival at the first loading port against payment of the applicable amount 302 stated in Box 24 less any prepaid freight. 303 (b) Furthermore, the Charterers shall have the right to terminate this Charter Party after the Vessel's arrival 304 at the first loading port but not later than upon commencement of loading against payment of the applicable 305 amount stated in Box 24 plus compensation for all time spent at the first loading port at the demurrage 306 rate stated in Box 19 less any prepaid freight together with the actual expenses incurred by the Owners in 307 preparation for the loading. 300 (c) If Bev 2 is not f Iled m, this Claus 309 22. Liabilities and Indemnifies 310 (a) Definitions 311 For the purpose of this Clause "Owners' Group" shall mean: the Owners, and their contractors and sub- 312 contractors, and employees of any of the foregoing. 313 For the purpose of this Clause "Charterers' Group' shall mean: the Charterers, and their contractors, sub 314 contractors, co- venturers and customers (having a contractual relationship with the Charterers, always with 315 respect to the job or project on which the Vessel is employed), and employees of any of the foregoing. 316 (b) Knock for Knock 317 (i) Owners Notwithstanding anything else contained in this Charter Party excepting Clauses 24(b) 318 (Pollution), 29 (Both to Blame Collision Clause) and 30 (General. Average and New Jason Clause), the 319 Charterers shall not be responsible for loss of or damage to the property of any member of the Owners' 320 Group, including the Vessel.. any liability in respect of wreck removal and the expense of moving, lighting 321 or buoying the Vessel. any liability in respect of personal injury or death of any member of Owners' 322 Group, and any liability in respect of other cargo on board not the subject of this Charter Party, arising 323 out of or in any way connected with the performance of this Charter Party, even if such loss, damage, 324 injury or death is caused wholly or partially by the act, neglect, or default of the Charterers' Group, and 325 even if such loss, damage, injury or death is caused wholly or partially by unseaworthiness of any vessel: 326 and the Owners shall indemnify, protect. defend and hold harmless the Charterers from any and against 327 all claims, costs, expenses, actions, proceedings, suits, demands and liabilities whatsoever arising out 328 of or in connection with such loss, damage, personal injury or death. 329 (0) Charterers Notwithstanding anything else contained in this Charter Party excepting Clause 24(a) 330 (Pollution), 29 (Both to Blame Collision Clause) and 30 (General Average and New Jason Clause), 331 the Owners shall not he responsible for loss of or damage caused to or sustained by the Cargo or the 332 property of any member of the Charterers' Group, whether owned or chartered, any liability consequent 333 upon delay to the Cargo, any liability in respect of wreck removal and the expense of moving, lighting or 334 buoying the Cargo, any liability in respect of personal injury or death of any member of the Charterers' 335 Group, arising out of or in any way connected with the performance of this Charter Party, even if such 336 loss daage, liability, injurycor death js,causeo wholly or parjiaily by the act, ordefault of the 337 Owners) Group, and even if such lose' damage' liability injury or death is caused Whblry orpertra({y by the 338 unseaworthiness of any vessel and the Charterers shall indemnif protect, defend and hold harmless 339 the Owners- tronYdnyand'againsi clairis, costs;rexpenses, actionhyproceedings, suits, demands, 340 and liabilities whatsoever arising out of or in connection with such loss, damage, liability, personal injury 341 or death. 342 23. Consequential Damages 343 Neither party shall be liable to the other for any consequential damages whatsoever arising out of or in 344 connection with the performance or non performance of this Charier Party, and each party shall protect, 345 defend and indemnify the other from and against all such claims from any member of its Group as defined 346 in Clause 22. (Liabilities and Indemnities), 347 "Consequential damages" shall include, but not be limited to, loss of usa, loss of profits, shut-in or loss of 348 e shall be deemed to be deleted. 7 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party production and cost af insurance., whether or not foreseeable at the date of this Charter Party, 349 24. Pollution 350 (a) The Owners shall be liable for, and agree to indemnify, defend and hold harmless the Charterers against 351 all claims, costs, expenses, actions, proceedings, suits, demands and liabilities whatsoever arising out of 352 actual or threatened pollution damage and the cost of cleanup or control thereof originating from the Vessel 353 or other property of the Owners. 354 (b) The Charterers shall be liable for, and agree to indemnify, defend and hold harmless the Owners against 355 all claims, costs, expenses, actions, proceedings, suits, demands and liabilities whatsoever arising out of 356 actual or threatened pollution damage and the cost of cleanup or control thereof originating from the Cargo 357 or other property of the Charterers. 358 25. Bill of Lading or Cargo Receipt 359 The Owners and the Charterers shall agree and state in Box 25 whether a Bill of Lading or anon negotiable 360 Cargo Receipt will be issued by Owners upon loading of the Cargo. 361 (a) *Bello, Lading i r 362 f If as stated in Box 25 the'Owners have agreed to issue a Bill of Lading same shall be as per the 363 HEAVYCONBILL 2007 form which Shall incorporate all terms, conditions: liberties, clauses and exceptions 364 of this Charter Party, including the Dispute Resolution. Clause. Furthermore, the following Sub- clauses (a)(i) 365 (a)(111), which are not pad of HEAVYCON, shall be incorporated into the HEAVYCONBILL 2007. 366 (1) The Owners shall not be liable for any loss, damage or delay to Cargo in the period before loading and after discharge. (H) Unless otherwise agreed, the Cargo shall be shipped on deck. at Shippers' risk and the Owners not to 369 be responsible for any loss or damage or delay to the Cargo whatsoever and whether due to negligence 370 of whosoever or howsoever arising and by whosoever caused, and. the Bill of Lading issued hereunder 371 shall be so claused. 372 (iii) If the Cargo is shipped under deck, (1) The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 374 signed at Brussels on 25 August 1924 "the Hague Rules as amended by the. Protocol signed at 375 Brussels on 23. February 1968 "the Hague -Visby Rules and as enacted in the country of shipment 376 shall apply to this Contract. When the Hague -Visby Rules are not enacted in the country of shipment, the 377 corresponding legislation of the country of destination shalt apply, irrespective of whether such legislation 378 may only regulate- outbound shipments. 379 (2) When there is no enactment of the Hague -Visby Rules in either the country of shipment or in the 380 country of destination, the Hague Visby Rules shall apply to this Contract save where the Hague Rules 381 as enacted in the country of shipment or if no such enactment is in place, the Hague Rules as enacted 382 In the country of destination apply compulsorily to this Contract. 383 (3) The Protocol signed at Brussels on 2 December 1979 "the SDR Protocol 1979 shall apply where the Hague-Visby Rules apply, whether mandatorily or by this Contract. (4) The Carrier shall in no case be responsible' for loss of or damage to cargo arising prior to loading, after discharging, or while the cargo is in the charge of another carrier or with respe ,t to neck cargo (b) *Cargo Receipt If, as stated in Box. 25, the Owners have agree° to issue a non negotiable per the HEAVYCONRECEIPT form incorporating all terms, conditions, libe this Charter Party, including the Dispute Resolution Clause. o Receipt, same shall be as clauses and exceptions of 367 368 373 384 385 386 387 388 389 390 391 392 (i) It is expressly agreed that neither the Hague Rules nor the Hague-Visby Rules nor any statutory enactment 393 thereof shall apply to this Charter Party and to the Cargo. Receipt, unless compulsorily applicable, in 394 which case the Owners take all reservations possible under such applicable legislation, relating to the 395 period before loading and after discharging and while the goods are in the charge of another carrier, 396 and to deck cargo. 397 (11) Unless otherwise agreed, the Cargo shall be shipped on deck at the Charterers risk and the Owners not 398 To be responsible for any loss or damage or delay to the cargo whatsoever and whether due to negligence 399 26. PART 11 I EAVYCON 2007 Standard Heavylift Charter Party Of whosoever or howsoever arising and by whosoever caused, and the Cargo Receipt issued hereunder 400 shall be so claused. 401 (iii) If the Cargo is shipped under deck, the Cargo Receipt shall be claused as per sub- clause(ii) above. 402 (iv) The Cargo Receipt shall always be ciaused "All Risks Insurance has been placed for the full value of 403 this cargo by the Charterers and in the name of the Charterers and the Owners." 404 (c) Indicate alternative 25(a)(Bili of Lading) or 25(b)(Cargo Receipt), as agreed, in Box 25. 405 Insurance 406 (a) Without prejudice to the Charterers' obligations and liabilities under this Charter Party, the Charterers 407 shall ensure that there is taken out and maintained at all material times and throughout the duration of this 408 Charter Party a policy or policies of insurance in respect of all loss or damage to the Cargo up to the full 409 value of the Cargo including but not limited to a policy or policies comprising All Risks cargo cover and cover 410 against liabilities: to third parties (including liability in respect of death and injury and claims for consequential 411 loss), and wreck removal of the Cargo The Charterers shall arrange without cost fo the Owners that the 412 Owners shall be named as co insuied under the said policy or policies)of insurance and the Charterers shall 413 arrange that the underwriters,waive the right ol subrogation ag Amt o lHT AS, OHT :ache AS or 0 Et+ 414 Falcon AB. or OfiT'z=aW., At, A,.. a:,':appiap rate c €eaendmg 7xn perform i ng vess el:(Otwner)„ S a Ship Manage re €.e and Offshore Heavy Transpen P 3 anti the r sub contractors, servants and/ or The Charterers hereby agree to produce the original certificates of insurance maintained hereunder to the 415 Owners or their appointed representatives when requested so to do. 416 (b) The Owners shall arrange at their expense such insurance(s) as required to protect the Charterers 417 against the Owners' liabilities under Clause 22 (Liabilities and Indemnities). 418 The Owners hereby agree to produce the original certificate(s) of insurance maintained hereunder to the 419 Charterers or their appointed representatives when requested to do so. 420 27. Himalaya Cargo Clause 421 It hereby expressly agreed that no servant or agent of the Owners (including every independent contractor 422 from time to time employed by the Owners) shall in any circumstances whatsoever be under any liability 423 whatsoever to the. Shipper, Consignee or owner of the Cargo or to any Holder of the Bill of Lading for any 424 loss, damage or deiay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or 425 default on their part while acting in the course of or in connection with their employment and, but without 426 preJ uriire to the generality of the inn=aning previsions in this Clause every exe mption, limit .firm, rnnd¢'nn 427 and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever 428 nature applicable to the Owners or to which the Owners are entitled: hereunder shall also be available and 429 shall extend to protect every such servant or agent of the Owners acting as aforesaid and for the purpose of 430 all the foregoing provisions of this Clause the Owners are or shall be deemed to be acting as agent or trustee 431 on behalf of and for the benefit of all persons who are or might be their servants or agents from time to time 432 (including independent contractors as aforesaid) and all such persons shall to this extent be or be deemed 433 to be parties to this Charter Party. 434 The Owners shall be entitled to be paid by the Shipper. Consignee, owner of the Cargo and/or Holder of the 435 Bill of Lading (who shall be jointly and severally liable to the Owners therefor) on demand any sum recovered 436 or recoverable by e(ttier such Shipper, Consignee owner of the Cargo aril /ot,Hol der of the Bill rif Ladutg or 437 any othadirom such servant or agent of,the Owners for arty such loss, damage, delay 'or Otherwise 438 28. Salvage 439 The Owners shall waive their right to claim any award for salvage performed on property owned by or 440 contracted to the Charterers, always provided such property was the object of the operation the Vessel was 441 chartered for, and the Vessel shall remain on hire when rendering salvage services to such property, This 442 waiver is without prejudice to any right the Vessel`s. Master, officers and crew may have under any title. 443 If the Owners render assistance to such property in distress on the basis of "no claim for salvage', then, 444 notwithstanding any other piovisions contained in this Charter Party and even in the event of neglect or 445 default of the Owners, Master, officers or crew 446 (a) The Charterers shall be responsible for and shall indemnify the Owners against payments made, under 447 9 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party any legal rights, to the Master, officers and crew in relation to such assistance, 446 (b) The Charterers shall be responsible for and shall reimburse the Owners for any loss or damage sustained 449 by the Vessel or her equipment by reason of giving such assistance and shall also pay the Owners' additional 450 expenses thereby incurred. 451 (c) The Charterers shall he responsible for any actual or potential spill, seepage and /or emission of 452 any pollutant howsoever caused occurring within the offshore site and any pollution resulting therefrom 453 wheresoever It may occur and including but not limited to the cost of such measures as are reasonably 454 necessary to prevent or mitigate pollution damage, and the Charterers shall indemnify the Owners against 455 any liability, cost or expense arising by reason of such actual or potential spill, seepage and /or emission. 456 (d) The Charterers shall indemnify the Owners against any liability, cost and /or expense whatsoever in 457 respect of any loss of life, injury, damage or other loss to person or property howsoever arising from such 458 assistance. 459 29. Both -to -Blame Collision Clau"se 460 If the Vessel comes into collision :with anothervesselas a result of the negligence of the other vessefand any 461 pilot or the servants, o, the Owners in the navi ation or in the 462 act neglect[ o the Master, mariner, IS i ti g management of the Vessel, the owners of the 'cargo carved hereunder will Indemnify the Owners against all 463 loss or liability to the other or non carrying vessel or her Owners in so far as such loss or liability represents 484 loss of, or damage to, or any claim whatsoever of the owners of the said cargo, paid or payable by the other 465 or non- carrying vessel or her owners to the owners of said cargo and set -off, recouped or recovered by the 466 other or non- carrying vessel or her owners as part of their claim against the carrying vessel or Owners 467 The foregoing provisions shall also apply where the owners, operators or those in charge of any vessel or 468 vessels or objects other than, or in addition to, the colliding vessels or objects are at fault in respect of a 469 collision or contact, 470 30. General Average and New Jason Clause 471 General average shall be adjusted and settled in London unless otherwise stated in Box 26, according to the 472 York /Antwerp Rules, 1994, but if, notwithstanding the provisions specified in Box 26, the adjustment is made 473 in accordance with the law and practice of the United States of America, the following clause shall apply: 474 "In the event of accident, danger, damage or disaster before or after the commencement of the voyage, 475 resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequence 476 of which, Owners are not responsible, by statute, contract or otherwise, the goods, shippers, consignees or 477 owners of the goods shall contribute with Owners in general average to the payment of any sacrifices, losses 478 or expenses of a general average nature that may be made or incurred. and shall pay salvage and special 479 charges incurred in respect of the goods. If a salving vessel is owned or operated by Owners, salvage shall 480 be paid for as fully as if the said salving vessel or vessels belonged to strangers. Such deposit as Owners, 481 or their agents, may deem sufficient to cover the estimated contribution of the goods and any salvage and 482 special charges thereon shall, if required, be made by the goods, shippers, consignees or owners of the 483 goods to Owners before delivery". 484 31. War Risks (VOYWAR 2004) (a) For the purpose of this Clause, the words: 10 485 486 (i) "Owners shall include the shipowners bareboat charterers, disponent owners, rnanagers or other 487 operator's who are chargedwith the management of the and the Masterr snd ti 488 (It) "War shall .incldde any actual threatened or reported> 489 War; act of war; civil war; hostilities; revolution; rebellion; civil commotion; warlike operations; laying, of mines; 490 acts of piracy; acts of terrorists; acts of hostility or malicious damage; blockades (whether irnposed against 491 all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes 492 or crews or otherwise howsoever); by any person, body, terrorist or political group, or the Government of any 493 state whatsoever, which, in the reasonable judgement of the Master and/et Owners, may dangerous 494 or are likely to be or to become dangerous to the Vessel, her cargo, crew or ether persons on board the 495 Vessel. 496 (b) If at any time before the Vessel commences loading, it appears that, in the reasonable judgement of 497 the Master and /or the Owners, performance of the Charter Party, or any part of it, may expose, or is likely 498 to expose, the Vessel, her cargo, crew or other persons on board the Vessel to War Risks, the Owners may 499 PART!! HEAVYCON 2007 Standard Heavylift Charter Party give notice to the Charterers cancelling this Charter Party, or may refuse to perform such part of it as may 500 expose, or may be likely to expose, the Vessel, her cargo, crew or other persons on board the Vessel to War 501 Risks; provided always that if this Charter Party provides that loading or discharging is to take place within 502 a range of ports, and at the port or ports nominated by the Charterers the Vessel, her cargo, crew, or other 503 persons onboard the Vessel may be exposed, or may be likely to be exposed, to War Risks, the Owners 504 shall first require the Charterers to nominate any other safe port which lies within the range for loading or 505 discharging, and may only cancel. this Charter Party if the Charterers shall not have nominated such safe 506 port or ports within 48 hours of receipt of notice of such requirement. 507 (c) The Owners shall not be required to continue to load cargo for any voyage, or to sign Bills of Lading for 508 any port or place, or to proceed or continue on any voyage, or on any part thereof, or to proceed through 509 any canal or waterway, or to proceed to or remain at any port or place whatsoever, where it appears, either 510 after the loading of the cargo commences, or at any stage of the voyage thereafter before the discharge of 511 the cargo is completed, that, in the reasonable judgement of the Master and /or the Owners, the Vessel, her 512 cargo (or any part thereof), crew or other persons on board the Vessel (or any one or more of them) may 513 be, or are likely to be, exposed to War Risks. If it should so appear, the Owners may by notice request the 514 Charterers tg a safe. partjor the discharge of the cargo or any pa4 hereef and -48 hogs of 515 the receipt of ud notice, he Chafterprssshallrno mated suc a port (he OW/gets ma\' discharge 516 the cargo qY ag�y�ssare port bf firer Choi e1 IchLiimgq the of loading)! con plete fulfmerit of the Charter 517 Party. ThetOwn'ers shat+ be entrtledEto;recoverrfrom the�.Charterers the extra=eexpenaes such discharge 518 and, if the discharge takes place at any port other than the loading port, to receive the full freight as though 519 the cargo had been carried to the discharging port and if the extra distance exceeds 100 miles, to additional 520 freight which shall be the same percentage of the freight contracted for as the percentage which the extra 521 distance represents to the distance of the normal and customary route, the Owners having a lien on the 522 cargo for such expenses and freight. 523 (d) If at any stage of the voyage after the loading of the cargo commences, it appears that, in the reasonable 524 judgement of the Master and /or the Owners, the Vessel, her cargo, crew or other persons on board the Vessel 525 may be, or are likely to be, exposed to War Risks on any part of the route (including any canal or waterway) 526 which is normally and customarily used in a voyage of the nature contracted for, and there is another longer 527 route to the discharging port, the Owners shall give notice to the Charterers that this route will be taken. In 528 this event the Owners shalt be entitled, if the total extra distance exceeds 100 miles, to additional freight 529 which shall be the same percentage of the freight contracted for as the percentage which the extra distance 530 represents to the distance of the normal and customary route. 531 (e) (i) The Owners may effect war risks insurance in respect of the Hull and Machinery of the Vessel and 532 their other interests (including, but not limited to, loss of earnings and detention, the crew and their 533 Protection and Indemnity Risks), and the premiums and /or calls therefor shall be for their account. 534 (11) if the Underwriters of such insurance should require payment of premiums and /or calls because, pursuant 535 to the Charterers' orders, or in order to fulfil the Owners' obligation under this Charter Party, the Vessel is 536 within, or is due to enter and remain within, or pass through any area or areas which are specified by such 537 Underwriters as being subject to additional premiums because of War Risks, then the actual premiums and /or calls paid shall be reimbursed by the Charterers to the Owners within 14 days after receipt of the Owners' invoice. If the Vessel discharges all of her cargo within an area subject to additional premiums as herein set forth, the Charterers shall reimburse the Owners for the actual additional premiums paid which may accrue from completion of discharge until the Vessel leaves such area or areas referred to above. The Owners shall leave the area as soon as possible after completion of discharge. 538 539 540 541 542 543 (t) ThollVessel stialJShavellrb v r= n 'y 544 ej it F (i to comply with ail..orders directors re k. datr k awvice as to departure arnual, routes lsailing 545 M e. ra in convoy, ports of ca stoppages, destinations, di a r scharge of cargo, delivery o m any way wha'soever 546 which are given by the Government of the Nation under whose flag the Vessel sails, or other Government 547 to whose laws the Owners are subject, or any other Government which so requires, or any body or group 548 acting with the power to compel compliance with their orders or directions; 549 (ii) to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance; (iii) to comply with the terms of any resolution of the Security Council of the United Nations, the effective 552 orders of any other Supranational body which has the right to issue and give the same, and with national 553 laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions 554 11 550 551 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party of those who are charged with their enforcement; 555 (iv) to discharge at any other port any cargo or part thereof which may render the Vessel liable to confiscation 556 as a contraband carrier; 557 (v) to call at any other port to change the crew or any part thereof or other persons on board the Vessel when 558 there is reason to believe that they may be subject to internment, imprisonment or other sanctions; 559 (vi) where cargo has not been loaded or has been discharged by the Owners under any provisions of this clause, to load other cargo for the Owners' own benefit and carry it to any other port or ports whatsoever, whether backwards or forwards or in a contrary direction to the ordinary or customary route. (g) If in compliance with any of the provisions of sub clauses (b) to (e) of this Clause anything is done or not done, such shall not be deemed to he a deviation, but shall be considered as due fulfilment of the Charter Party. 32. Limitation of Liability Any provisions of this Chaiter Patty to the contrary notwithstanding, the Owners shall have the" benefit of all limitations of, and exemptions froret liability to the owners or chartered owners of vessels by any applicable statute or rule of law for the time being in ford and the same benerits`fo apply regardless of the form of signatures given to this Charter Party. 33, Interest If any amounts due under this Charter Party are not paid when due, then interest at the rate of 1.5% per month or pro rata for part of a month shall be paid on all such amounts until payment is received. 34. Agency The Vessel shall be addressed to Owners' agents at port(s) of loading and discharging. 35. Brokerage The Owners shall pay a brokerage at the rate stated in Box 2851 to the Broker(s) mentioned to Box 280i) on any freight, demurrage, mobilisation fee, demobilisation fee and /or termination fee paid under this Charter Party. If the full amounts as aforesaid are not paid owing to breach of this Charter Party by either of the parties, the party liable therefor shall indemnify the Broker(s) against his or their loss of brokerage. 36. BIMCO ISPS /MTSA Clause for Voyage Charter Parties 2005 (a) (i) The Owners shall comply with the requirements of the. international Code for the Security of Ships and of Port Facilities -and the relevant amendments to Chapter XI of SOLAS (ISPS Code) relating to the Vessel. and the Company" (as defined by the ISPS Code). If trading to or from the United States or passing through United States waters, the Owners shall also comply with the requirements of the US Maritime Transportation Security Act. 2002 (MTSA) relating to the Vessel and the "Owner" (as defined by the MTSA). p Security Certificate (or the Interim International Ship Security Certificate) and the full style contact details of the Company Security Officer (050). (iii) Lossl damages," expense or delay (excluding consequential damages, expohse or delay)`caused by failure on` the part of the' Ownerso(.'the {`Owna( to comply with thefequirenfentsofthe ISPS)Code/MTSA.orthis, Clause shall be for the Owners" account, except as otherwise provided in this Charter Party. (ii) Upon request the Owners shall provide the Charterers with a copy of the relevant International Shi (b) (i) The Charterers shall provide the Owners and the Master with thei full style contact details and, upon request, any other information the Owners require to comply with the ISPS Code /MTSA. (ii) Loss, damages or expense (excluding consequential loss, damages or expense) caused by failure on the part of the Charterers to comply with this Clause shall be for the Charterers' account, except as otherwise provided in this Charter Party, and any delay caused by such failure shall count as laytime or time on demurrage. 12 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 561 582 583 584 585 586 587 588 589 590 591 592 593 594 595 596 597 598 599 600 601 (c) Provided that the delay is not caused by the Owners' failure to comply with their obligations under the 602 PART 11 HEAVYCON 2007 Standard Heavyiift Charter Party ISPS Code /MTSA, the following shall apply: 603 (I) Notwithstanding anything to the contrary provided in this Charter Party, the Vessel shall be entitled 604 to tender Notice of Readiness even if not cleared due to applicable security regulations or measures 605 imposed by a port facility or any relevant authority under the ISPS Code /MTSA. 606 (ii) Any delay resulting from measures imposed by a port facility or by any relevant authority under the ISPS 607 Code(MTSA shall count as laytime or time on demurrage, unless such measures result solely from the 608 negligence of the Owners, Master or crew or the previous trading of the Vessel, the nationality of the 609 crew or the identity of the Owners' managers. 610 (d) Notwithstanding anything to the contrary provided in this Charter Party, any costs or expenses whatsoever solely arising out of or related to security regulations or measures required by the port facility or any relevant authority in accordance with the ISPS Code /MTSAincluding, but not limited to, security guards, launch services, vessel escorts, security fees or taxes and inspections, shah be for the Charterers' account, unless such costs or expenses result solely from the negligence of the Owners, Master or crew or the previous trading of the Vessel, the nationally ofthe crew or the identity of the Owners' managers All measures required by the Owners to, comply with the Ship Security Plan shal be'for the Owners' account (e) If either party makes any payment which is for the other party's account according to`this Clause, the other party shall indemnify the paying party. 38. Confidentiality All information or data provided or obtained in connection with the performance of this Charter Party is and shall remain confidential and not be disclosed without the prior written consent of the other party except as may be required by either party to comply with their obligations under this Charter Party. The parties shall use their best efforts to ensure thai such information shall not be disclosed to any third party by any of their sub contractors, employees and agents. This Clause shall not apply to any information or data that has already been published or is in the public domain. 13 The arbitration shati be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. 611 612 613 614 615 616 617 618 619 37. Double Banking 620 (a) The Charterers shall' have the right, where and when it is customary and safe for vessels of similar size 621 and type to do so, to perform the loading andior discharging operations while the Vessel lies or remains 622 alongside another vessel or vessels of any size or description whatsoever or to order such vessels to come 623 and remain alongside at such safe dock, wharf, anchorage or other place for transhipment, loading or 624 discharging of the Cargo. 625 (b) The Charterers shall pay for and provide such assistance and equipment as may he required to enable 626 any of the operations mentioned in this clause safely to be completed and shall give the Owners such advance 627 notice as they reasonably can of the details of any such operations. 628 (c) Without prejudice to the generality of the Charterers' rights under (a) and (b), it is expressly agreed that 629 the Master shall have the right<to refuse to allow the Vessel to perform as provided in (a) and (b) if in his 630 reasonable opinion it is not safe so to do. 631 (d) The Owners shall be entitled to insure any deductible under the Vessel's hull policy and the Charterers 632 shall reimburse the Owners any additional premium(s) stated in Box 27() required by the Vessel `s underwriters 633 and /or the costs stated in Box. 27r ii) of insuring any deductible under the Vessel's hull policy. 634 635 636 637 638 639 640 641 All infor and data provided by a party is and shall remainthe property of that party. r= 642 39. BIMCO Dispute "Resolution Clause i 643 (a) *This Charter Party shall be governed by and construed in accordance with English law and any dispute 644 arising out of or in connection with this Charter Party shall he referred to arbitration in London in accordance 645 with the Arbitration Act 1996 or any statutory modification or re- enactment thereof save to the extent necessary 646 to give effect to the provisions of this Clause. 647 046 649 The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its 650 arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint 651 Its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole 652 arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 653 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so 654 within the 14 days specified, the party referring a dispute to arbitration may, without the requirement of any 655 further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party 656 accordingly. The award ofa sole arbitrator shall be binding on both parties as it he had bocn appointed by 657 agreement, 658 Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the 659 appointment of a sole arbitrator. 660 in cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum 661 as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims 662 Procedure current at the time when the arbitration proceedings are commenced. 663 (5) *This Charter Party shall be governed by and construed in accordance with Title 9 of the United States 664 Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Charter 665 Party shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and 666 the third; by the two so ehosen, their decision Or that of any,.two of them shall be 5na* and for thepurpo's"es 667 of enforying any award, judgment may ba',entereb on an award by any court of competentjurisdiotion, The 668 proceedings shall be conducted in :accordance with the rules of the Society of- Maritime Arbitrators, inc. 669 In cases where neither the claim nor any counterclaim exceeds the sum of LIS$50,000 (or such other sum 670 as the parties may agree) the arbitration shalt be conducted in accordance with the Shortened Arbitration 671 Procedure of the Sodety of Maritime Arbitrators, Inc.. current at the time when the arbitration proceedings 672 are commenced. 673 (0) *This Charter Party shall be governed by and construed in accordance with the laws of the place mutually 674 agreed by the parties and any dispute arising out of or in connection with this Charter Party shall be referred 675 to arbitration at a mutually agreed place, subject to the procedures applicable there. 676 (6) Notwithstanding (rr b or L.O. above, the parties may agree at any time to refer to mediation any difference 677 and /or dispute arising out of or in connection with this Charter Party. 678 In the case of a dispute in respect of which arbitration has been commenced under (a), (b) or (c) above, the 679 following shall apply: 680 y) Either party may at any time and from time to time elect to refer the dispute or part of the dispute to 681 mediation by service on the other party of a written notice (the "Mediation Notice calling on the other 682 party to agree to mediation. 683 (ii) The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice confirm that 684 they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 685 calendar days, failing which on the application of either party a mediator will be appointed promptly by 686 the Arbitration Tribunal "the Tribunal or such person as the Tribunal may designate for that purpose, 687 The mediation shall be conducted in such place and in accordance with such procedure and on such 688 terms as the parties may agree or, in the event of disagreement, as may be set by the mediator. 689 (iii) If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal 690 and may be taken into account by the Tribunal when allocating the costs of the arbitration as between 591 the parties. 692 (iv) The mediation shall not affect the right of either party to seek such relief or take such steps as it considers 693 necessary to protect its interest 694 (v) Eitherpaity may advise the Tribunal that they have agreed to mediahoh.,=The procedure' shall 695 continue during the conduct of the mediation but fine Trnbunalmay take the mediation hime_table, into 696 account when setting the timetable for steps in the arbitration j 1 697 (vi) Unless otherwise agreed or specified in'th`e mediation terms, each party shalI it own costs incurred 698 in the mediation and the parties shall share equally the mediator's costs and expenses, 699 (vii) The mediation process shall be without prejudice and confidential and no information or documents 700 disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosabie under 701 the law and procedure governing the arbitration. 702 (Note: The parties should be aware that the mediation process may not necessarily interrupt time limits,) 703 If Box 29 is not appropriately filled in, sub- ciause fa) of this Clause shall apply. Sub-clause (d1 shall apply 704 In at cases. 705 14 PART 11 HEAVYCON 2007 Standard Heavylift Charter Party Sub clauses (a) (b) and are alternatives; indicate alternative agreed in Box74. 706 40. BIMCO Notices Clause 707 (a) All notices given by either party or their agents to the other party or their agents in accordance with the 708 provisions of this Charter Party shall be in writing. 709 (b) For the purposes of this Charter Party, in writing" shall mean any method of legible communication. A notice may be given by any effective means including, but not limited to, cable, telex, fax, e -mail, registered or recorded mail, or by personal service. 41. Entire Agreement 713 This Charter Party, including all Annexes referenced herein and attached hereto, constitutes the entire 714 agreement of the parties and no promise, undertaking, representation, warranty or statement by either party 715 prior io the date of this Charter Party stated in Box 1 shall affect this Charter Party. Any modification of this 716 Charter Party shall not be of any effect unless in writing signed by or on behalf of the parties. 717 15 710 711 712 Janet; Napoli taro Secretary, US Department of Flom and Security September 1, 2010 Page 2 If you or any of your staff need additional i.nfonnation please advise and we will provide mrediately. Sincerely, f D. jy S. Davis, CEO October 18, 2010 Mr. Richmond Beevers Regulation and Rulings U.S. Customs and immigration Mint Annex, 799 9 Street N.W. Washington, D.C. 20229 Re: Second Request for Ratif'ie ation of ones Act Waiver New Information: Original Vessel (Previously Granted Jones Act Waiver based upon th vessel) to Transport Jack -Up Rig to Alaska is W AVAILABLE and TO RE UTILIZED Dear Mr Beevers, This letter is to advise that the foreign vessel that was to transport the jack-up rig to Alaska pursuant to the Jones Act Waiver granted to E,scopeta Oil Company LLC in June of 2006 i.s now available. This vessel will be used to transport the rig. The vessel is the TAI AN ICJU, as stated in the June 27, 2006 Homeland Security Waiver letter, attached for your convenience. This letter is also to again request a ratification and reconfirmation of the existing Jones Act waiver to transport the jack -up rig from The Gulf f of Mexico to Cook Inlet, Alaska utilizing a foreign vessel, The rig will be scheduled to be loaded by February/March 2011 in time for drilling in Cook Inlet in the Spring, thus lime is of the essence, None of the route, departure, or destination information previously provided to you has changed. Based on this information, twe x1a ct t!.S. Customs and Ininrigration's approval to be mrnisteriail in nature and that the ratification will be forthcoming sI Sincet Danny 6:`1 ?avis, CIO Cc: JanetNapolitano Secretary US Dept, ofTlonreland iv—hi :9 Jeanne M, Grasso, Esq. Blank Rome LLP 600 New Hampshire Avenue, NW Washington, D.C. 20037 June 27, 2006 Serrrrttry U.S. Department of f3nmetand Securtly ;Fa ;It vion, DC 205 ?R Homeland Security Dear Ms, Grasso: Thank you for your May 19, 2006 letter wherein you requested, on behaif of Escopeta Oil Company, LLC "Escopeta a waiver of the Jones Act so that the TAI AN KOU, a foreign owned and foreign -flag vessel, may be used to transport a jack -up drilling rig (the "Tellus rig to Cook Inlet, Alaska, from Port Arthur, Texas. We requested the views of the Department of Defense, the Department of Energy, and the Maritime Administration with respect to your waiver request. Having carefully considered your request in light of the factual circumstances that have been presented, along with the views of these concerned Government entities, none of which have objected, and Congress we find that such a waiver is in the interest of national defense. Therefore, your request for a waiver of the Jones Act, as described below, is granted. In your correspondence, you described certain pertinent facts, including: e Due to the declining oil and gas production and supplies in Cook Inlet, there is a need for one time movement of the Tellus rig from Port Arthur to Cook Inlet to facilitate the exploration and production of natural gas; Fort Richardson and Eimendorf Air Force Base rely on Cook Inlet natural gas for power generation and heating; Esoopeta plans to transport the rig from Port Arthur to Cook Inlet by sailing around the tip of Africa, as the rig is too large to be transported through the Panama Canal; Only t f heavy-lift semi submersible vessels are currently active world -wide and that all of these vessels are foreign -owned and foreign- flagged; By using. the Tellus rig, Escopeta will try to address the anticipated energy shortage through exploration in several projects in the Cook Inlet area; The movement of the Tellus-rig is scheduled to begin in mid -July 2006 and to be completed in September 2006; and Senators Stevens and Murkowski and Congressman Young expressed support of the above facts in letters sent to the Secretary of Defense. copies of which we have received. Title 46, United States Code (U.S.C.) Appendix, section 883 (46 U,S_C. App. 883) provides in part that no merchandise shall be transported between points in the United States embraced within the coastwise laws, either directly or via a foreign port, or for any part of the w Page 2 transportation, in any vessel other than a vessel built in, documented under the laws of, and owned by citizens of the United.States. The coastwise laws generally apply to points in the territorial sea, which is defined as the belt, three nautical miles wide, seaward of the territorial sea baseline, and to points located in internal waters, landward of the territorial sea baseline. The navigation laws administered by U.S. Customs and Border Protection (including 46 U.S.C. App. 883) can only be waived under the authority provided by the Act of December 27, 1950 (Pub, L. 81 -891, 64 Stat. 1120; note preceding 46 U.B.C. App. 1). This statute provides that "[tjhe head of each department or agency responsible for the administration of the navigation and vessel inspection laws is directed to waive compliance with such laws upon the request of the Secretary of Defense [and] [t]he head of such department or agency is authorized to waive compliance with such laws either upon his own initiative or upon the written recommendation of the head of any government agency, whenever he deems that such action is in the interest of national defense." Thank you for your interest in the Department of Homeland Security. Sincerely,/ rr Michael Chertoff Michael f- i M r mn Administration Alice Lippert, Department of Energy Adam Yearwood, Department of Defense ITEM A: CALL TO ORDER AGENDA KENAI CITY COUNCIL REGULAR MEETING OCTOBER 6, 2010 7 :00 P.M. KENAI CITY COUNCIL CHAMBERS http://www.ci.kenai.ak.us I. Pledge of Allegiance 2. Roll Call 3. Agen.da Approval 4. Consent Agenda (Public comment limited to 3 minutes per speaker. Persons may give their time over to another speaker present, however no single speaker present may speak for more than 30 minutes combined on their own and on others' behalf) *All items listed with an asterisk are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. ITEM B: SCHEDULED PUBLIC COMMENTS Pu blic comment limited to Z0 minutes per speaker) ITEM C: UNSCHEDULED PUBLIC COMMENTS (Public comment limited to 3 minutes per speaker) ITEM D: PUBLIC HEARINGS (Testimony limited to 3 minutes per speaker. Persons may give their time over to another speaker present, however no single speaker present may speak for more than 30 minutes combined on their own and on others' behalf.) Ordinance No. 2513 -2010 Increasing Estimated Revenues and Appropriations by $3,300 in the General Fund for Police Forensic Equipment Reimbursements From Internet Crimes Against Children (ICAO). 2. Resolution No. 2010 -54 Rescinding and Replacing the City of Kenai Retention Schedule. 3. Resolution No. 2010 -55 Authorizing City of Kenai Administration to Submit to the State of Alaska an Application for a Federal Grant for a Historical Public Preservation Education Project for a Historic Restoration Project in the Townsite Historic District of Kenai, Alaska. 4. Resolution No. 2010 -56 Awarding a Contract to Alaskan Industries, Inc. for the Project Entitled "Kenai Recreation Center Gym Floor Replacement 2010" for the Total. Amount of $122,000.00. -26- 5. Resolution No. 2010-57 Adopting the City of Kenai Capital Improvements Plan Priority List for State and Federal Funding Requests for the Fiscal Year 2012. ITEM E: MINUTES 1. 'Regular Meeting of September 15, 2010. ITEM F: UNFINISHED BUSINESS ITEM G: NEW BUSINESS 1. Ratification of Bills 2. Approval of Purchase Orders Exceeding $15,000 3. *Ordinance No. 2514 -2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type III, IV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008. 4. *Ordinance No. 2515 -2010 Increasing Estimated Revenues and Appropriations by $3,600.00 in the General Fund for the Purchase of Land for a Public and /or Charitable Use. 5. Action /Approval Vintage Pointe Insurance Settlement Release 6. Discussion /Action Reschedule November 17, 2010 Council Meeting 7, Discussion Absentee Voting Procedures /Inconsistencies in City Election ITEM H: COMMISSION/ COMMITTEE REPORTS 1. Council on Aging 2. Airport Commission 3. Harbor Commission 4. Library Commission 5, Parks Recreation Commission 6. Planning Zoning Commission 7. Miscellaneous Commissions and Committees a. Beautification Committee b. Alaska Municipal League Report c. Mini -Grant Steering Committee d, Kenai Convention Visitors Bureau e. Reports of KPB Assembly, Legislators and Councils ITEM I: REPORT OF THE MAYOR -27- ITEM J: ADMINISTRATION REPORTS 1. City Manager 2. Attorney 3. City Clerk ITEM K: ADDITIONAL PUBLIC COMMENT 1. Citizen Comments (Public comment limited to 5 minutes per speaker) 2. Council Member Comments EXECUTIVE SESSION A matter, the immediate knowledge of which would clearly have an adverse effect upon the finances of the City of Kenai and to give direction to the City Manager in the handling of a specific financial and legal matter (location of graves at the Kenai Cemetery. ITEM L: PENDING LEGISLATION (This item lists legislation which will be addressed at a later date as noted.) ITEM M: ADJOURNMENT -28- ITEM A: Mayor Porter called the meeting to order at approximately 7:00 p. Chambers in the Kenai City Hall Building. A -1. A -2. 1 Joe Moore Robert Molloy Hal Smalley, Vice Mayor REMOVE: REPLACE: ADD TO: MOTION: MOTION: KENAI CITY COUNCIL REGULAR MEETING OCTOBER 6, 2010 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://www.ci.kertai.ak.us MAYOR PAT PORTER, PRESIDING CALL TO ORDER MINUTES PLEDGE OF ALLEGIANCE Mayor Porter led those assembled in the Pledge of A11egi ROLL CALL The City Clerk took roll. Present were: Barry Eldridge Mike Boyle 1 A quorum was present. Also present: Student Representative Hannah Coffman A -3. AGENDA APPROVAL The follounng changes were requested: ce. Ryan Marquis Pat Porter, Mayor Item D-3, Resolution No. 2010 -54 (to allow for several co and identification of corrections /changes. ecuons the Council Item G -1, Amended Purchase Orders Over $15,000 Item G -7, Discussion /Absentee Voting Procedures Memoranda Of City Clerk Freas and City Attorney Stearns Council Member Smalley MOVED for approval of the agenda as amended and requested UNANIMOUS CONSENT. Council Member Eldridge SECONDED the motion. -29- KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 2 Council Member Smalley MOVED to amend noting the list refers to Item D -3 and should be D -2 and requested UNANIMOUS CONSENT. Council Member Eldridge SECONDED the motion. VOTE ON AMENDMENT: There were no objections. SO ORDERED. VOTE ON AMENDED MOTION: There were no objections. 50 ORDERED. A -4. CONSENT AGENDA MOTION: Council Member Smalley MOVED to approve the consent agenda as presented and requested UNANIMOUS CONSENT. Council Member Eldridge SECONDED the motion. VOTE: There were no objections. SO ORDERED. ITEM 13: None. ITEM C: UNSCHEDULED PUBLIC COMMENTS (Public comment limited to 3 minutes per speaker) None. ITEM D: D -1. MOTION: SCHEDULED PUBLIC COMMENTS (Public comment limited to 20 minutes per speaker) PUBLIC HEARINGS (Testimony limited to 3 minutes per speaker. Persons may give their time over to another speaker present; however no single speaker present may speak for more than. 30 minutes combined on their own and on others' behalf) Ordinance No. 2513 -2010 Increasing Estimated Revenues and Appropriations by S3,300 in the General Fund for Police Forensic Equipment Reimbursements From Internet Crimes Against Children (ICAO(. -30- Moore Yes ;Eldridge Yes Marquis Yes alloy Yes :Boyle Yes Porter Yes Smalley Yes KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 3 Council Member Eldridge MOVED for adoption of Ordinance No. 2513 -2010 and Council Member Marquis SECONDED the motion. The floor was opened to public hearing. There being no one wishing to speak, the public hearing was closed. There were no Council comments. VOTE: Student Representative Coffman: Yes MOTION PASSED UNANIMOUSLY. D -2. Resolution No. 2010 -54 Rescinding and Replacing the City of Kenai Retention Schedule. Removed from the agenda. D -3. MOTION: Resolution No. 2010-55 Authorizing City of Kenai Administration to Submit to the State of Alaska an Application for a Federal Grant for a Historical Public Preservation Education Project for a Historic Restoration Project in the Townsite Historic District of Kenai, Alaska. Council Member Marquis MOVED for approval of Resolution No. 2010 -55 and requested UNANIMOUS CONSENT. Council Member Eldridge SECONDED the motion. The floor was opened to public hearing. Dorothy Gray /Holy Assumption Russian Orthodox Church Ms, Gray spoke in support of the resolution and reviewed efforts the Church had been making to acquire the funding to raise $37,000 to cover the costs of asbestos removal found to be needed during the restoration project. MOTION TO AMEND: Council Member Molloy MOVED to add "and serves a public purpose" in after "culture" in the fifth. whereas. Council Member Marquis SECONDED the motion. VOTE ON AMENDMENT: -31- Moore Yes Eldridge Yes j Marquis I Yes F Molloy Yes Boyle Yes j Porter Yes Smalley Yes f KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 4 Student Representative Coffman: Yes MOTION PASSED UNANIMOUSLY. VOTE ON MAIN AMENDED MOTION: There were no objections. SO ORDERED. D -4. Resolution No. 2010 -56 Awarding a Contract to Alaskan Industries Inc. for the Project Entitled "Kenai Recreation Center Gym Floor Replacement 2010" for the Total Amount of $122,000.00. MOTION: Council Member Molloy MOVED for approval of Resolution No. 2010 -56 and requested UNANIMOUS CONSENT. Council Member Marquis SECONDED the motion. The floor was opened to public comment. There being no one wishing to speak, the public hearing was closed. VOTE: There were no objections. SO ORDERED. D -5. MOTION: Resolution No. 2010 -57 Adopting the City of Kenai Capital Improvements Plan Priority List for State and Federal Funding Requests for the Fiscal Year 2012. Council Member Eldridge MOVED for approval of Resolution No. 2010 -57 and requested UNANIMOUS CONSENT. Council Member Marquis SECONDED the motion. The floor was opened to public comment. There being no one wishing to speak, the public hearing was closed. There were no Council comments. VOTE: There were no objections. SO ORDERED. ITEM E: MINUTES _32_ KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 5 E-1. agenda. *Regular Meeting of September 15, 2010 Approved by consent ITEM F: UNFINISHED BUSINESS None. ITEM 0: NEW BUSINESS G -1. Ratification of Bills MOTION: Council Member Smalley MOVED to ratify the bills. Council Member Eldridge SECONDED the motion and requested UNANIMOUS CONSENT. VOTE: There were no objections. SO ORDERED. G -2. Approval of Purchase Orders Exceeding $15,000 MOTION: Council Member Smalley MOVED to pay the purchase orders exceeding S15,000 and requested UNANIMOUS CONSENT. Council Member Eldridge SECONDED the motion. VOTE: There were no objections. SO ORDERED. G -3. *Ordinance No. 2514 -2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type III, TV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008. Introduced by approval of the consent agenda G -4. *Ordinance No. 2515 -2010 Increasing Estimated Revenues and Appropriations by $3,600.00 in the General Fund for the Purchase of Land for a Public and/or Charitable Use. Introduced by approval of the consent agenda. G -5. Action /Approval Vintage Pointe Insurance Settlement Release -33- KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 6 MOTION: Council Member Molloy MOVED to settle the city's claim for damages arising out of the December 2009 flood for a one -time payment of $175,000 (plus the $6,833.25 previously paid) and authorize the City Manager to sign a release of all claims between the City and Everest Indemnity Insurance Company and Alaska Automatic Fire Protection, Inc. Council Member Eldridge SECONDED the motion and requested UNANIMOUS CONSENT. VOTE: There were no objections. SO ORDERED. G -6. Discussion /Action Reschedule November 17, 2010 Council Meeting It was noted the regularly scheduled November 17, 2010 Council Meeting fell in the week of the Alaska Municipal League Conference and that a number of Council Members may be attending the conference. Council agreed to reschedule the November 17, 2010 Council Meeting to Tuesday, November 23, 2010. G -7. Discussion Absentee Voting Procedures /Inconsistencies in City Election City Attorney Stearns reviewed the informational memoranda provided by Clerk Freas and herself at the beginning of the meeting. She reported the discovery of an inconsistency between the City's and Borough's deadline for submitting applications for by -mail absentee ballots; research provided with regard to the deadlines; how the six affected ballots would be processed to assure they could be kept separate without prejudicing the voters' right to secrecy, etc. Stearns also noted another concern that came to light when it learned the postage -paid envelopes would not be cancelled by the Postal Service. Stearns noted there was no action Council would need to take. The issue was brought forward and publicly disclosed because of the importance of voting in our representational system of government and in the interests of conducting free and fair elections and to preserve public confidence in that process. Freas and Stearns were thanked for bringing the issue forward and for the amount of research provided. A request was made to include a discussion on the second December meeting to discuss amendments to the election code to bring it more up to date. ITEM H: COMMISSION /COMMITTEE REPORTS H -1. Council on Aging No meeting. Mayor Porter noted she received a verbal resignation from Ron Fullinck from the Council on Aging. Porter noted the -34- ICENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 7 application of Carolyn Unger included in the packet. Without objection from Council, Porter appointed. Unger to the Council on Aging. H -2. Airport Commission Council Member Moore reported the next meeting would be held on October 14, 2010. H -3. Harbor Commission Council Member Smalley noted the meeting summary of the September 13 meeting was included in the packet and reported the next meeting was scheduled to be held on October 11. He noted the Commission had a vacancy. A request was made to include the Commission's attendance record in the next Council packet. H -4. Library Commission Council Member Marquis reported the October meeting was cancelled and the November meeting was rescheduled to November 9, 2010, H -5. Parks Recreation Commission Council Member Boyle reported the next meeting of the Commission was scheduled for October 7, 2010. A brief report was given on the infoi national meeting held to discuss the development of a town park. H -6. Planning Zoning Commission. Council Member Eldridge reviewed the minutes of the September 22, 2010 meeting which were included in the packet. Council Member Molloy reported he would be unable to attend the October 13 meeting and that Council Member Eldridge would attend in his place. 11-7. Miscellaneous Commissions and Committees H -7a. Beautification Committee Mayor Porter reported the next meeti was scheduled for October 12. She reported she would be unable to attend and requested Student Representative Coffman attend in her place. H -7b. Alaska Municipal League Report Council Member Smalley reported he would attend a Board meeting to be held in Anchorage on October 8 and 9. He noted the AML Conference would be held in November. H -7c. Mini -Grant Steering Committee Council Member Moore reported on the meeting was held on October 4, 2010. H -7d. Kenai Convention Visitors Bureau. Council Member Smalley reported the art show would close on October 22 and gave a brief report on upcoming events. H -7e. Reports of KPB Assembly, Legislators and Councils Assembly Member Smalley reported the next meeting would be held on October 12, 2010. g ITEM I: REPORT OF THE MAYOR Mayor Porter noted the following: -35- KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 8 She attended the informational park development meeting. She made a presentation to Kaleidoscope school related to government ITEM J: ADMINISTRATION REPORTS J -1. City Manager City Manager Koch reported the following items: The water /sewer project along Bridge Access Road had been completed. Fourth Avenue was open again and the project had been completed. Researched information related to the proposed transfer of land to the Racing Lions Club. Plans to meet with the Governor later in October. A resolution was planned to be introduced to the Legislature related to the Kenai River Special. Management Area boundaries. He would be gone from October 15 to 20 (back in time for the Council Meeting). Ice would be in at the hockey rink by October 11. Because of the large amount of items stored at the Visitor Center, a suggestion was made the Center hire someone to inventory the items. A proposal for funding a position would be provided to Council in October. Questions from Council included: What would the free skate hours be at the rink? Koch reported it would be open all night When would asphalt cuts be repaired? Koch reported the cuts were being paved. J -2. Attorney Attorney Stearns reported the following items: She would be preparing information related to commission /committee attendance in the near future. Astounded in learning to know the immense amount of work coordinated and done through the Clerk's Office with regard to elections. She thanked Sheryl Oldham for her assistance while she was searching for an administrative assistant replacement. She would be attending the International. Association of Municipal Lawyers Conference leaving on Friday and returning the next Thursday. J -3. City Clerk Clerk Freas reminded all the Canvassing Board would be meeting on October 12, 2010. ITEM K: ADDITIONAL PUBLIC COMMENT K -1. Citizen Comments (Public comment limited to 5 minutes per speaker) Bob Peters, Old Town, Kenai Congratulated th.e candidates and urged purchase of tickets to the library fundraiser. -36- KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 9 K -2. Council Member Comments Porter Stated she would bring forward issues she gathered during her campaign and provide them to department heads. Boyle Congratulated the candidates and wished them good luck. Molloy Congratulated the candidates and thanked Freas and Stearns in protecting the integrity of the City's election process. Marquis Thanked Porter and Boyle for their spirited campaigns. Thanked Eldridge for his service to the City. Thanked Smalley for his years of service and for his future service to the Thanked all the candidates. City. Coffman Reported the football team would he playing in Anchorage at a playoff game, it was Red Ribbon Week at the school, and noted other events taking place at the school. Eldridge Congratulated Porter and thanked all the candidates and noted events that took place during his four years on the Council. Moore Congratulated the candidates and thanked Eldridge and Smalley for their years of service to the City. Smalley Congratulated the candidates and stated there were some issues of the campaign that he would comment on in written form. EXECUTIVE SESSION A matter, the immediate knowledge of which would clearly have an adverse effect upon the finances of the City of Kenai and to give direction to the City Manager in the handling of a specific financial and legal matter (location of graves at the Kenai Cemetery). MOTION: Council Member Smalley MOVED to convene in an executive session of the Council of the City of Kenai, concerning a matter, the immediate knowledge of which would clearly have an adverse effect upon the finances of the City of Kenai and to give direction to the City Manager in the handling of a specific financial and legal matter (location of graves at the Kenai Cemetery). Smalley requested City Attorney Stearns and City Manager Koch to attend. Council Member Moore SECONDED the motion. VOTE: Moore j Yes j Eldridge Yes Marquis Yes -37- KENAI CITY COUNCIL MEETING OCTOBER 6, 2010 PAGE 10 Molloy ;Yes Smalley Yes Boyle MOTION PASSED UNANIMOUSLY. CONVENED TO EXECUTIVE SESSION: 8:10 P.M. SACK TO ORDER: 8:40 P.M. Council Member Smalley reported that during the executive session the Council discussed with the City Manager and City Attorney an issue emanating at the Kenai Municipal Cemetery. MOTION: Council Member Smalley MOVED to authorize the City Manager to undertake ground penetrating radar to locate two specific graves in that cemetery and requested UNANIMOUS CONSENT. VOTE: There were 110 objections. SO ORDERED. ITEM L: PENDING LEGISLATION (This item lists legislation which will be addressed at a later date as noted.) ITEM M: ADJOURNMENT There being no further business to come before the Council, the meeting was adjourned at approximately 8:41 p.m. Minutes submitted by: Carol L. Freas, City Clerk Yes Porter Yes *The student may cast advisory cotes on all matters except those subject to executive session discussion. Advisory votes shall be cast in rotation with the official Council vote however advisory votes shall not affect the outcome of the official Council vote. Advisory votes shall be recorded in the minutes. A student representative may not moue or second items during a council meeting. -38- CL J U Z 0 U 0 W W 2 2 U P x o O N w O w O m 16 0 W b ac O O LL w W C7 Z O w O w W J S U V 2 O 0- 2 0 0 O 0 2 0 0 0 0 M N 0 N U w Z 5 z 0 O w o] 0.' the 4 of K NAL ALASKA Village with a Past, Cc 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: (907) 283 -7535, Ext. 2361 FAX: (907) 283 -3014 MEMO NDUM TO: Finance Department THRU: Rick Koch, City manager FROM: Kevin Lyon, Capital Projects Manager DATE: October 13, 2010 SUBJECT: Kenai Recreation Center Gym Floor Replacement 2010 Please Increase PO 94415 to Alaskan Industries by $2,830 for Amendment No. 1 to the contract for "Kenai Recreation Center Gym Floor Replacement 2010 During the contract execution process it was determined that the bonding requirements of AS 36.25.10 were omitted from the bid. This increase is to the address actual cost of this requirement For Council Approval: October 20, 2010 -40- with a Fgtare dr Q/ KENAI, ALASKA Visitor Center Fund Increase Estimated Revenues: Appropriation of Fund Balance ATTEST: Carol L. Freas, City Clerk /J f Approved by Finance: 1 CITY OF KENAI ORDINANCE NO. 2516 -2010 Increase Appropriations: Visitor Center Professional Services -41- Suggested by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA INCREASING ESTIMATED REVENUES AND APPROPRIATIONS BY 13,800 IN THE VISITORS CENTER FUND FOR PROFESSIONAL SERVICES TO PROVIDE A COLLECTION INVENTORY. WHEREAS, the Visitor Center maintains the City's extensive hi storical collection; and, WHEREAS, the current inventory is outdated and needs to be updated; and, WHEREAS, the KCVB Inc. has identified and will contract with a qualified individual to perform the inventory; and, WHEREAS, it is in the best interest of the City to have a complete and accurate inventory of its historical collection. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that estimated revenues and appropriations be increased as follows: PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. PAT PORTER, MAYOR New Test Underlined [DELETED TEXT BRACKETED[ 13,800 13,800 Introduced: October 20, 2010 Adopted: November 3, 2010 Effective: November 3, 2010 Nirneici KENAI, ALASKA MEMO: TO: City Council FROM: Rick Koch DATE: October 13, 2010 SUBJECT: Ordinance No. 2516 -2010, KCVB Professional Services to Provide a Collection Inventory The purpose of this correspondence is to recommend approval of the above referenced ordinance. This appropriation will provide funding for an individual with the appropriate education and experience to perform the tasks identified in the attached correspondence from Ms. Ala to me dated October 1, 2010. This process will also determine if items are surplus to the City's collection, and return items that have been loaned to the City. Thank you for your attention in this matter. "Viflaje with a Past, Gc with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 FAX: 907 283 -3014 -42- Convention Visitors Bureau, Inc. To: Rick Koch, Kenai City Manager From Natasha Ala, Executive Director RE: City of Kenai Collection Inventory Date: Friday, October 01, 2010 The below expenses relate to the cost of hiring Christine Conn, MA., History Museum Studies, to inventory all objects in the City's collection and perform the tasks described below relating to assessing the collection. Proposed timeline 10 weeks at 40 hours a week (400 hours) Costs Proposed per hour contractor fee at $15 per hour $6000.00 Housing for ten weeks $4800.00 Round trip Baltimore to Anchorage $700.00 Car Rental for ten weeks $2000.00 Supplies $300.00 Total Cost $13,800.00 The following are the tasks to be completed as part of a collections inventory and thorough reporting on the collection. Ascertain that artifacts are cataloged using standardized nomenclature systems to ensure consistency throughout collection, Assign catalog numbers to objects in a uniform manner and mark artifacts with numbers, Enter missing information into collections database system (updated contact information, valuations on collection for insurance purposes), Report current condition of artifacts and whether they are appropriate for exhibit display, Identify conservation concerns and recommend appropriate measures, www.visitkenai.com 11471 Kenai Spur Highway Kenai, Alaska 99611 (907) 2834991 Fax (907) 283 -2230 Email: info @visitkenai.com -43- Monitor environment conditions while inventorying artifacts, Make sure acquisitions fit with current collection policy (i.e. follow up on long-term loans) Photograph objects, Move and arrange objects in collection storage areas, Update accession filing system. The critical skills necessary to accomplish this project include' Understanding of handling procedure for a broad range of material culture objects, archival materials, and fine art collections Knowledge of collections registration and condition reporting methods, High level of organizational and tracking skills, Ability to research collections materials and people, comfort with contacting a broad range of individuals to update contact files and collections information. -44- Congregate Housing Capital Projects Fund Decrease Estimated Revenues: Restitution ATTEST: Carol L. Freas, City Clerk`) r Approved by Finance: CITY OF KENAI ORDINANCE NO. 2517 -2010 New Text Underlined [DELETED TEXT BRACKETED' -45- Suggested by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA DECREASING ESTIMATED REVENUES AND APPROPRIATIONS BY 58,1.67.75 IN THE CONGREGATE HOUSING CAPITAL PROJECT FUND DUE TO THE SE i'1'LEMENT REACHED WITH THE INSURANCE COMPANY. WHEREAS, the dry pipe fire suppression system at the Congregate Housing fac experienced a failure in December 2009; and, WHEREAS, Ordinance No. 2483 -2010 appropriated 5 190,000 for the repairs to the fa.cility from anticipated restitution; and, WHEREAS, the City has agreed to a settlement with the insurance company for $181,832.25; and, WHEREAS, the settlement amount is sufficient to complete the repairs at the Congregate Housing Facility but represents a reduction of $8,167.75 from what was originally anticipated. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA that estimated revenues and appropriations be decreased as follows: $8,167.75 Decrease Appropriations: Construction $8,1.67.75 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. PAT PORTER, MAYOR y Introduced: October 20. 2010 Adopted: November 3, 2010 Effective: November 3, 2010 To: Rick Koch, City Manager /1 From: Terry Eubank Date: October 14, 2010 Re: Ordinance 2517 -2010 "Village with a Past a with a Future FINANCE DEPARTMENT 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 ext 221 FAX: 907 283 -3014 The Vintage Pointe senior housing center experienced a failure in its newly installed dry pipe sprinkler system in December 2009. The City immediately filed claim with the installing contractor's insurance company seeking full restitution for the damages. Ordinance 2483 -2010 appropriated funds for repairs to the facility in the amount of $190,000 with restitution as the presumed revenue source. As reported, recommended by the administration, and subsequently approved by Council at the October 6, 2010 Council meeting, the contractor's insurance company has proposed full settlement of the claim for $181,832.25. As a result the City will receive $8,167.75 less restitution than previously estimated and appropriated. Ordinance 2517 -2010 seeks to reduce the prior appropriation to he settlement amount. Based upon project bid amounts there is sufficient budget at the settlement amount to complete the repairs absent any unforeseen damage yet to be discovered. -46- a< an KENAL.ALASKA CITY OF KENAI ORDINANCE NO. 2518 -2010 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, INCREASING ESTIMATED REVENUES AND APPROPRIATIONS BY $30,000 IN THE GENERAL FUND AND VINTAGE POINTE CAPITAL PROJECT FUNDS FOR NEEDED ADA IMPROVEMENTS. WHEREAS, water damage repair work is currently in progress at Vintage Pointe; and, WHEREAS, needed ADA improvements have been identified, not related to the water damage project; and, WHEREAS, it is in the best interest of the City to fund and complete these upgrades at this time providing contractor efficiency and to minimize disruption to occupants. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that estimated revenues and appropriations be increased as follows: General Fund Increase Estimated Revenues: Appropriation of Fund Balance Designated for Senior Programs Suggested by: Administration Increase Appropriations: Transfer to Vintage Pointe Capital Projects $30,000 Vintage Pointe Improvements Capital Project Fund Increase Estimated Revenues: Transfer from General Fund Increase Appropriations: Construction $30,000 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of October, 2010. -47- PAT PORTER, MAYOR $30,000 $30,000 Ordinance No. 2518 -2010 Page 2 of 2 ATTEST: Carol L. Freas, City Clerk Approved by Finance: aqua -48- Introduced: October 20, 2010 Adopted: November 3, 2010 Effective: November 3, 2010 Design $3,625.00 Project Management Administration $3,800.00 Construction $15,212.00 Flooring $2,000.00 Contingency $5,363.00 Total $30,000.00 the of K AL ALASKA Estimated project budget: l/i��age witti a Past, Gc with a Future' 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: (907) 283 -7535, Ext. 236 FAX: (907) 283 -3014 MEMO NDUM TO: Rick Koch, City Manager FROM: Kevin Lyon, Capital Projects Manager DATE: October 13, 2010 SUBJECT: Vintage Pointe Water Damage Vintage Pointe Apartment Renovation and ADA improvements. While working on the Vintage Pointe Water Damage project items have been identified that should be upgraded concurrent with the water damage project, these items were not damaged by the flooding but are adjacent to those repairs currently under way. This Ordinance provides funding for those upgrades including additional flooring and the design and construction for ADA compliance in unit 102 that are beyond the scope of the insurance settlement. Completing these upgrades at this time will provide efficiency and minimize occupant disruption. -49- 1992 KE AI, ALASKA MEMO 'Village with a Past, Gcty with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: (907) 283 -7535 FAX: (907) 283 -3014 www.ci.kenai.ak.us TO: Kenai City Council THRU: Rick Koch, City Manager FROM: Christine Cunningham, Assistant to the City Manager DATE: October 14, 2010 RE: Kenai Nikiski Pipe Line, LLC (KNPL) Lease Application Portion of Tract A, Plat No. 78 -111 Attached is the proposed lease for the referenced property, located outside the Airport Reserve. Kenai Nikiski Pipe Line, LLC (KNPL) applied to lease the property which is the site of an existing small concrete pad, an antenna tower and conduit for the concrete pad to an existing valve vault on an adjacent portion of property beneath Main Street Loop in Kenai. A Special Use Permit (SUP) entered into on October 19, 1998 for a term of ten (10) years granted Marathon Oil Company the right to install the concrete pad, antenna tower and conduit. KNPL is e subsidiary of Marathon Oil and it is operated by Marathon Pipe Line LLC. KNPL wishes to lease an approximately 22,575 square foot portion of the property as shown on "Exhibit A." The term of the proposed Lease is for twenty (20) years, commencing October 20, 2008, the date after which the SUP expired. Pursuant to KMC 21.15.120 Principles and policy of lease rates, the lease rate is determined based on 8% of the fair market value, and the proposed rent for the referenced parcel is $12,240.00 per year based on a value of $153,000.00 as concluded by the appraisal report prepared by Derry Associates, Inc. effective August 9, 2010. -50- The Planning and Zoning Commission reviewed KNPL's lease application at its meeting on October 14, 2010 where it found that the lease application conformed to the Comprehensive Plan and Zoning Code. The City Attorney has reviewed the attached lease and has no objections as to form. cc: Mary Bondurant, Airport Manager Greg Newman, Kenai Nikiski Pipe Line, LLC Attachments -51- f�ecify KENAI, ALASKA MEMO: Tillage with a Past, Ci with a Future" tII d ff II• 1991 210 FideIgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907 283 -7535 FAX: 907 283 -3014 TO: Christine Cunningham, Assistant to City Mnager FROM: Marilyn Kebschull, Planning Administrato DATE: October 14, 2010 —52— SUBJECT: Lease Application Kenai Nikiski Pipe Line LLC (KNPL) Portion of Tract A, Kenai Spur Airport Lease Property, Plat No. 78 -111 At their meeting on October 13, 2010, the Planning Zoning Commission reviewed the above referenced lease application. The Commission found that the lease conforms to the Comprehensive Plan and Zoning Code and recommended the City proceed with the lease. LEASE OF AIRPORT LANDS (Outside the Kenai Municipal Airport Reserve) THIS AGREEMENT, entered into this day of 2010, by and between the CITY OF KENAI., 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794, a home -rule municipal corporation of Alaska, hereinafter called "City and KENAI NIKISKI PIPELINE, LLC (KNPL) whose address is Attention Field Services, 539 South Main Street, Findlay, OH, 45840, hereinafter called "Lessee". That the City, in consideration of the payments of the rents and performance of all the covenants herein contained by the Lessee, does hereby demise and lease to the Lessee the following described property in the Kenai Recording District, Third Judicial District, State of Alaska; to wit: A portion of Tract A, Kenai Spur Airport Lease Property Plat No. 78 -111, NE1 /4, Section 5, Township 05 North, Range 11 West, Seward Meridian, City of Kenai, Kenai Recording District, Kenai Peninsula Borough, Alaska as shown on Attachment "A A. PURPOSE: The purpose for which the Lease is issued is: Location of a pipeline valve in a. concrete vault and concrete pad for antenna tower and small building. B. TERM: The term of this Lease is for twenty (20) years, commencing on the 20 day of October, 2008 to the 31" day ofiune, 2028. C. RENTAL PAYMENT: Subject to the terms of General Covenant No. 9 of this Lease, rental for the above- described land shall be payable as follows: 1. The annual rental rate shall be 8% of the fair market value (as set forth and defined in General Covenant No.9) of the demised premises. The rental effective October 20, 2008, shall be $12,240.00 per year, plus applicable sales tax, based on a value of $153,000,00, subject to redetermination pursuant to General Covenant No. 9. 2. Annual rent for the fiscal year beginning July 1 and ending June 30 shall be payable in advance on or before the first day of July of each year. If the annual rent exceeds $2,400, then the Lessee may opt at the time of the execution hereof or at the beginning of each new Lease year to pay rent in equal monthly installments, payable in advance on or before the first day of July and on or before the first of each month thereafter. 3. Rental for any period that is less than one (1) year shall be prorated based on the rate of the last full year. Lease of Airport Lands Page 1 of 17 -53- Lessor: Lessee: 4. In addition to the rents specified above, subject to General Covenant No. 9, Lessee agrees to pay to the appropriate parties all levies, assessments, and charges as hereinafter provided: (a) Taxes pertaining to the leasehold interest of the Lessee, (b) Sales tax now enforced or levied in the future computed upon rem payable in monthly installments whether rem is paid on a monthly or yearly basis. (c) Lessee agrees to pay all taxes and assessments levied in the future by the City of Kenai, as if Lessee was considered the legal owner of record of the leased property. (d) Interest at the rate of eight percent (8 per annum and ten percent (10 penalties of any amount of money owed under this Lease which is not paid on or before the date it becomes due. D. GENERAL COVENANTS: 1. USES: Except as provided herein, any regular use of lands or facilities without the written consent of the City is prohibited. This prohibition shall not apply to use of areas designated by the City for specified public uses, such as passenger terminals, automobile parking areas, and streets. 2. USES NOT CONTEMPLATED PROHIBITED: The promotion or operation of any part or kind of business or commercial enterprise, other than as specifically set forth herein, upon, in or above airport lands, without the written consent of the City is prohibited. 3. ASSIGNMENT OR SUBLETTING: Lessee with City's prior written consent, which will not be unreasonably denied, may assign or sublet, in whole or in part, its rights as Lessee hereunder. Any assignee of part or all of the leased premises shall assume the duties and obligations of the Lessee as to such part or all of the leased premises. No such assignment, however, will discharge Lessee from its duties and obligations hereunder. 4. COSTS AND EXPENSES: Costs and expenses incident to this lease, including but not limited to recording costs, shall be paid by Lessee. 5. TREATMENT OF DEMISE: The Lessee agrees to keep the premises clean and in good order at its own expense, allowing no damage, waste, nor destruction thereof, nor removing any material therefrom, without written permission of the City. At the expiration Lease of Ah'port Lands Page 2 of 17 -54- Lessor: Lessee: of the term fixed, or any sooner determination of the Lease, the Lessee will peaceably and quietly quit and surrender the premises to the City. 6. PAYMENT OF RENT: Checks, bank drafts, or postal money orders shall be made payable to the City of Kenai and delivered to the City Administration Building, 210 Fidalgo Avenue, Kenai, Alaska 99611. 7. CONSTRUCTION APPROVAL AND STANDARDS: Building construction shall be neat and presentable and compatible with its uses and surroundings. Prior to placing of fill material and /or construction of buildings on a leased area, the Lessee shall submit a plan of proposed development of property to the City, which shall be approved in writing for all permanent improvements. S. DEFAULT RIGHT OF ENTRY: Should default be made in the payment of any portion of the rent or fees when due, or in any of the covenants or conditions contained in the Lease or in any regulations now or hereinafter in force, then in such event the City shall by written notice give Lessee thirty (30) days to cure such default or defaults, after which if the default is not cured, the City may terminate the Lease, reenter and take possession of the premises, and remove all persons therefrom. 9. RENT ESCALATION: In the event this Lease is for a term in excess of five (5) years, the amount of rents or fees specified herein shall, at the option of either party, be subject to redetermination for increase or decrease based on the percentage rate (set in C.1 above) of fair market value. No increase or decrease in the amount of rents or fees shall be effective, until after thirty (30) days written notice. Fair Market Value is defined as "the highest price estimated in terms of money which a property will bring if exposed for sale on the open market allowing a reasonable period of time to find a purchaser who buys with knowledge of all the uses to which it is adapted and for which it is capable of being used This Fair Market Value will be based on the condition of the land on the date of this lease plus the value of improvements, if any, made by the City subsequent to the date of this Lease which would affect the value of the property. At each five (5) year interval, the City will have the fair market value determined by a qualified independent appraiser. 10. LEASE UTILIZATION: Leased lands shall be utilized for purposes within the scope of the approved application (made a part of this Lease and attached hereto), the terms of the Lease, the terms of the deed under which the land was granted to the City (and any releases pertinent thereto), in conformity with the ordinances of the City and Borough, with Kenai Airport Regulations, and in substantial conformity with the comprehensive plan. Utilization or development for other than the allowed uses shall constitute a violation of the Lease and subject the Lease to cancellation at any time. Failure to substantially complete the development plan of Lease of Airport Lands Page 3 of 17 -55- Lessor: Lessee: the land, consistent with the proposed use and terms of the Lease, shall constitute grounds for cancellation. 11. CONDITION OF PREMISES: The premises demised herein are unimproved and are leased on an "as is, where is" basis. 12. UNDERLYING TITLE: The interests transferred, or conveyed by this Lease are subject to any and all of the covenants, terms, or conditions contained in the instruments conveying title or other interests to the City. 13. RIGHT OF INSPECTION: City shall have the right at all reasonable times to enter the premises, or any part t thereof, for the purposes of inspection. 14. INDEMNIFICATION AND INSURANCE: Lessee covenants to indemnify, defend, save and hold the City, its elected and appointed officials, agents and employees harmless from all actions, suits, liabilities, or damages, or liability of any nature, kind or character, including costs, expenses and attorney's fees resulting from or arising out of any acts of commission or omission by the lessee, his agents, employees, customers, invitees, or arising from or out of the Lessee's occupation, or use of the premises demised, or privileges granted, and to pay all costs connected therewith. Lessee, at the expense of Lessee, shall keep in force, during the tern of this agreement, insurance issued by responsible insurance companies authorized to do business in Alaska, in forms, kinds and amounts as determined and directed by the City for the protection of City and/or Lessee, Insurance requirement hereunder shall be subject to the sole determination of the City. Said insurance may include, but need not be limited to insurance coverages commonly known as, or similar in kind to, public liability, products liability, property damage, cargo, aircraft, fire, workmen's compensation, comprehensive, builders risk, and such other insurance coverage as deemed required in the sole determination of the City. All policies or endorsements thereto shall in all cases where possible name City as Additional Named Insured thereunder and shall contain a waiver of subrogation against the City. All insurance shall be by a company /corporation currently rated "A or better by A.M. Best. Upon approval by City of all insurance required, in the forms, kinds and amounts directed to be procured, Lessee shall deliver all policy originals or duplicate originals and endorsements thereto to the City for incorporation within this agreement as attachment thereto. In any event, Lessee is not to commence to exercise any of the rights and privileges granted under this agreement until such time as all insurance directed and required to be furnished by Lessee is in full force and effect. Lease of Airport Lands Page 4 of 17 -56- Lessor: Lessee: Lessee expressly understands and agrees that any insurance protection furnished by Lessee hereunder shall in no way limit its responsibility to indemnify and save harmless Lessor under the provisions of this agreement. No policy of insurance shall be cancelled or amended with respect to the City without thirty (30) days written notice by registered or certified mail to City by the insurance company. Until otherwise directed in writing by the City Manager, Lessee shall provide certificates of insurance within thirty (30) days of the date hereof as follows: Comprehensive General Liability Combined Single Limit (Bodily Injury and Property Damage): $1,000,000 Workmen's Compensation Statutory Limits Notwithstanding anything to the contrary, if Lessee fails or neglects to secure required insurance or if said policy or policies are terminated, altered, or changed in any manner not acceptable to the City, then and in that event this lease may be cancelled and terminated, without penalty, on five (5) days written prior notice to Lessee. The City may approve a self- insurance program in lieu of the insurance requirements in this section, if the City finds in its sole discretion that such self insurance program adequately protects the City. The typical amount of insurance coverage required is subject to review and adjustment at the discretion of the City at each five (5) year renegotiation of the lease. 15. COLLECTION ION ON UNPAID MONIES: Any or all rents, charges, fees, or charges, consideration which are due and unpaid at the expiration of voluntary or involuntary termination or cancellation of this Lease, shall be a charge against the Lessee and Lessee's property, real or personal, and the City shall have such lien rights as are allowed by law. 16. EASEMENT GRANTS RESERVED: City reserves the right to grant and control easements in, or above the land leased. No such grant or easement will be made that will unreasonably interfere with the Lessee's use of the land, and Lessee shall have free access and use of any and all parking and loading rights, rights of ingress and egress now or hereafter appertaining to the leased premises. 17. LEASE SUBORDINATE TO FINANCING REQUIREMENTS: Lessee agrees that City may modify this Lease to meet revised requirements for Federal or State grants, or to conform to the requirements of any revenue bond covenant. However, the Lease of Airport Lands Page 5 of 17 -57- Lessor: Lessee: modification shall not act to reduce the rights or privileges granted the Lessee by this Lease, nor act to cause the Lessee financial loss. 1 SURRENDER ON TEICN41NATION: Lessee shall, on the last day of the term of this Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises into the possession and use of City without fraud or delay in good order, condition, and repair, except for reasonable wear and tear since the last necessary repair, replacement, restoration or renewal, free and clear of all lettings and occupancies unless expressly pennitted by the City in writing, and free and clear of all liens and encumbrances other than those created by and for loans to City. Upon the end of the term of this Lease or any earlier teuuination thereof, title to the buildings, improvements and building equipment shall automatically vest in City without requirement of any deed, conveyance, or bill of sale thereon, However, if City should require any such document in confirmation hereof, Lessee shall execute, acknowledge, and deliver the same and shall pay any charge, tax, and fee asserted or imposed by any and all governmental units in connection herewith. Provided, however, that Lessee shall retain title to and remove from the Premises at the Lessor's sole expense, any building, other improvement, or building equipment that the City has determined in writing to the Lessor: I) has exceeded its useful life; 2) is damaged beyond reasonable repair; 3) is a hindrance to the future use of the Premises; and 4) is of negligible value. 19. AIRCRAFT OPERATIONS PROTECTED: (a) There is hereby reserved to the City, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface and all improvements approved by the City of the premises herein conveyed, together with the right to cause in said airspace such noise as may be inherent in the operation of aircraft, now or hereafter used for navigation of or flight in the air, using said airspace for landing at, taking off from, or operating on the Kenai Airport. (When the City approves plans for improvements pursuant to paragraph 7, the City to the extent of those improvements releases the easement here expressed.) (b) The Lessee by accepting this conveyance expressly agrees for itself, its representatives, successors, and assigns, that it will not erect nor permit the erection of any structure or object, nor permit the growth of any trees on the land conveyed hereunder, which would be an airport obstruction within the standards established under the Federal Aviation Administration Regulations, Part 77, as amended. In the event the aforesaid covenant is breached, the City reserves the right to enter on the land conveyed hereunder and to remove the offending structure or object, and to cut the offending tree, all of which shall be at the expense of the Lessee or its heirs, successors or assigns. Lease of Airport Lands Page 6 of 17 -58- Lessor: Lessee: 20, RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION: City hereby agrees and covenants that the Lessee, upon paying rent and performing other covenants, terms, and conditions of this Lease, shall have the right to quietly and peacefully hold, use, occupy, and enjoy the said leased premises, except that any inconvenience caused by public works projects in or about the leasehold premises shall not be construed as a denial of the right of quiet or peaceable possession. 2L LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and assessments which, during the term hereof may become a hen upon or which may be levied by the State, Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee may have in or to the property by reason of its use or occupancy or the teens of this lease, provided however, that nothing herein contained shall prevent Lessee from contesting any increase in such tax or assessrnent through procedures outlined in State statutes, 22. SPECIAL SERVICES: Lessee agrees to pay the City a reasonable charge for any special services or facilities not provided for herein if requested by Lessee in writing, and if the City agrees to provide such services or facilities. 23. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that the City shall not he construed or held to be a partner or joint venturer of Lessee in the conduct of business on the demised premises; and it is expressly understood and agreed that the relationship between the parties hereto is, and shall at all times remain landlord and. tenant. 24. DEFAULT BANKRUPTCY, ETC.: If the Lessee shall make any assignment for the benefit of creditors or shall be adjudged a bankrupt, or if a receiver is appointed for the Lessee or Lessee's assets, or any interest under this Lease, and if the appointment of the receiver is not vacated within thirty (30) days, or if a voluntary petition is filed under Section 18(a) of the Bankruptcy Act by the Lessee, then and in any event, the City may, upon giving the Lessee thirty (30) days' notice, terminate this lease. 25. NONDISCRIMINATION: The Lessee, for himself, his heirs, personal representatives, successors in interest, and assigns, as a part of the consideration hereof, does hereby covenant and agree as a covenant running with the land, that: (a) No person on the grounds of race, color, or national origin shall be excluded from participation in, denied the benefits of, or be otherwise subjected to discrimination in the use of said facilities; (b) In the construction of any improvements on, over or under such Land and the furnishing of services thereon, no person on the grounds of race, color, or Lease of Almon Lands Page 7 of 17 -59- Lessor: Lessee: national origin shall be excluded from participation, denied the benefits of, or otherwise be subjected to discrimination; (c) The Lessee shall use the premises in compliance with all other requirements imposed by or pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally- assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. (d) In the event facilities are constructed, maintained, or otherwise operated on the said property described in this Lease, for a purpose involving the provision of similar services or benefits, the Lessee shall maintain and operate such facilities and services in compliance with all other requirements imposed pursuant to Title 49. Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally- assisted Programs of the Department of Transportation Effectuation of Title VI of the Civil Rights Act of 1964, and as said Regulations may be amended. 26. PARTIAL INVALIDITY: If any term, provision, condition, or part of this Lease is declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining terms, provisions, conditions, or parts shall continue in full force and effect as though such declaration was not made. 27. MODIFICATIONS: No lease may be modified orally or in any manner other than by an agreement in writing, signed by all parties in interest or their successors in interest. Any such modification shall require Council approval. 28. WARRANTY: The City does not warrant that the property which is the subject of this Lease is suited for the use authorized herein, and no guarantee is given or implied that it shall be profitable or suitable to employ the property to such use. 29. RIGHT TO ADOPT RULES City reserves the right to adopt, amend, and enforce reasonable rules and regulations goveming the demised premises and the public areas and facilities used in connection therewith. Except in cases of emergency, no rule or regulation hereafter adopted or amended by the City shall become applicable unless Lessee has been given thirty (30) days notice of adoption or amendment thereof. 30. NON- LIABILITY: City shall not be liable to Lessee for any diminution or deprivation of possession, or of Lessee's right hereunder, on account of the exercise of any such right or authority as provided in this or the preceding section, nor shall Lessee be entitled to terminate the whole or any portion of the leasehold estate herein created, by reason of the Lease of Airport Lands Page 8 of 17 -60- Lessor: Lessee: exercise of such rights or authority, unless the exercise thereof shall so interfere with Lessee's use and occupancy of the leasehold estate as to constitute a termination in whole or in part of this lease by operation of law in accordance with the laws of the State of Alaska and of the United States made applicable to the states. 31. FINANCING: (a) For the purpose of interim or permanent financing or refinancing from time to time of the improvements to be placed upon the leased premises, and for no other purpose, Lessee, after giving written notice thereof to the City, may encumber by mortgage, deed of trust, assignment or other appropriate instrument, Lessee's interest in the leased premises and in and to this Lease, provided such encumbrance pertains only to such leasehold interest and does not pertain to or create any interest in City's title to the leased premises. If such mortgage, deed of trust, or assignment shall be held by a bank or other established lending or financial institution (which terms shall include an established insurance company and qualified pension or profit sharing trust) and such institution shall acquire the Lessee's interest in such Lease as a result of a sale under said encumbrance pursuant to a foreclosure or other remedy of the secured party, or through any transfer in lieu of foreclosure, or through settlement of or arising out of any pending or contemplated foreclosure action, such lending institution shall have the privilege of transferring its interest in such Lease to a nominee or a wholly owned subsidiary corporation with the prior consent of the City, provided, however, such transferee shall assume all of the covenants and conditions required to be performed by the Lessee, whereupon such lending institution shall be relieved of any further liability under such Lessee from any default after such transfer. Such lending institution or the nominee or wholly owned subsidiary corporation to which it may have transferred such Lease, or any other lending institution which may at any time acquire such lease shall be relieved of any further liability under such lease from and after a transfer of such lease. (b) A leasehold mortgagee, beneficiary of a deed of trust or security assignee, shall have and be subrogated to any and all rights of the Lessee with respect to the curing of any default hereunder by Lessee. (c) If the holder of any such mortgage, or the beneficiary of any such deed of trust, or the security assignee shall give the City before any default shall have occurred in the Lease, a written notice containing the name and post office address of such holder, the City shall thereafter give to such holder a copy of each notice of default by the Lessee at the same time as any notice of default shall be given by the City to the Lessee, and the City will not thereafter accept any surrender or enter into any modification of this Lease without the prior written consent of the Lease of Airport Lands Page 9 of 17 -61- Lessor: Lessee: holder of any first mortgage, beneficial interest under a first deed of trust, or security assignee, in this Lease. (d) If, by reason of any default of the Lessee, either this lease or any extension thereof shall be terminated at the election of the City prior to the stated expiration therefor, the City will enter into a new Lease with the leasehold mortgagee for the remainder of the term, effective as of the date of such termination, at the rent and additional rent, and on the terms herein contained, subject to the following conditions: (e) If a l institution or i ts n o m inee or wholly owned subsidiary corporation shall hold a mortgage, deed of trust, or similar security interest in and to this Lease and shall thereafter acquire a leasehold estate, derived either from such instruments or from the City, and if such institution, nominee, or corporation shall desire to assign this Lease or any new Lease obtained from the City (other than to a nominee or to a wholly owned subsidiary corporation as permitted by the above provisions) to an assignee who will undertake to perform and observe the conditions in such Lease required to be performed by the Lessee, the City shall not unreasonably withhold its consent to such assignment and assumption, and any such lending institution, nominee, or subsidiary shall be relieved of any further liability under such Lease from and after such assignment. If the proposed assignor shall assert that the City is unreasonably withholding its consent to any such proposed assignment, such dispute shall be resolved by arbitration. Lease of Airport Lands Page 10 of 17 (1) Such mortgagee, beneficiary or security assignee, shall make written request to the City for such new Lease within twenty (20) days after the date of such temtination and such written request shall be accompanied by a payment to the City of all sums then due to the City under this Lease. (2) Such mortgagee, beneficiary, or security assignee, shall pay to the City, at the time of the execution and delivery of such new lease any and all sums due thereunder in addition to those which would at the time of the execution and delivery thereof be due under this Lease but for such termination, and in addition thereto, any reasonable expenses, including legal and attorneys' fees, to which the City shall have been subjected by reason of such default. (3) Such mortgagee, beneficiary, or security assignee shall, on or before the execution and delivery of such new Lease, perform all the other conditions required to be performed by the Lessee to the extent that the Lessee shall have failed to perform such conditions. -62- Lessor: Lessee: 32. HAZARDOUS MATERIALS AND HAZARDOUS WASTE: City and Lessee agree that each shall comply with all applicable laws and regulations concerning hazardous chemicals and other hazardous materials, and shall properly store, transfer and use all hazardous chemicals and other hazardous materials and not create any environmental hazards on the lands leased herein. Should any hazardous chemicals or hazardous materials of any kind or nature whatsoever, or hazardous wastes to be released by Lessee upon the subject lands during the term of this lease, Lessee shall immediately report such release to the City Manager or other appropriate City official and to any other agency as may be required by law, and Lessee shall, at its own cost, assess, contain and clean up such spilled materials in the most expedient manner allowable by law, City and Lessee agree to hold harmless and indemnify the other from, and to assume all duties, responsibilities and liabilities at the indemnifying party's sole cost and expense (for payment of penalties, sanctions, forfeitures, losses, costs or damages), for responding to any action, notice, claim., order, summons, citation, directive, litigation, investigation or proceeding which is related to (i) failure to comply with any local, state or federal statutes, regulations, or ordinances pertaining to hazardous chemicals, hazardous materials, hazardous wastes, or any environmental conditions or matters as may now or hereafter be in effect, and (ii) any environmental conditions that arise out of or are in any way related to the condition of the property or activities conducted by the party thereon, unless the environmental conditions that are caused by the other party. The indemnifications of this paragraph specifically include reasonable costs, expenses and fees incurred in connection with any investigation of property conditions or any clean-up, remediation, removal or restoration work required by any governmental authority. The provisions of this paragraph will survive the expiration or termination of this right to terminate this Lease upon notice to the City of Kenai. Interference is defined as anything that prohibits the uses specified in Section 3 of this lease. As used herein, "hazardous chemical" means a chemical that is a physical hazard or a health hazard.. As used herein, "hazard material" means a material or substance, as defined in 49 C.F.R. 171.8, and any other substance determined by the federal government, the state of Alaska or City of Kenai, to pose a significant health and safety hazard. As used herein, "hazardous waste" means a hazardous waste as identified by the Environmental Protection Agency under 40 C.P.R. 261, and any other hazardous waste as defined by the federal government, the state of Alaska or City of Kenai. The covenants and obligations described in this article shall survive the termination of this lease. Lease of Airport Lands Page 11 of 17 -63- Lessor: Lessee: Notwithstanding anything to the contrary, in order to aid the Lessee in the financing of the improvements to be situated herein, City agrees that in the event the proposed mortgagee, beneficiary, or security assignee under any interim or permanent loan on the security of the leasehold interest of the Lessee and the improvements to be situated thereon so requires, the City will make a reasonable effort to amend this Lease in order to satisfy such requirements upon the express condition and understanding, however, that such variance in language will not materially prejudice the City's right hereunder nor be such as to alter in any way the rental obligations of the Lessee hereunder nor its obligations to comply with all existing laws and regulations of the City relating to the leasing of airport lands, and to all applicable Federal statutes, rules and regulations, and all covenants and conditions of the deed by which the City holds title to the land. 33. COMPLIANCE WITH LAWS: Lessee shall comply with all applicable laws, ordinances, and regulations of public authorities now or hereafter in any manner affecting the leased premises or the sidewalks, alleys, streets, and ways adjacent thereto or any buildings, structures, fixtures and improvements or the use thereof, whether or not any such laws, ordinances, and regulations which may be hereafter enacted involve a change of policy on the part of the governmental body enacting the same. Lessee agrees to hold City financially harmless: (a) From the consequences of any violation of such laws, ordinances, andlor regulations; and (b) From all claims for damages on account of injuries, death, or property damage resulting from such violation, (c) Lessee further agrees it will not permit any unlawful occupation, business, or trade to be conducted on said premises or any use to be made thereof contrary to any law, ordinance, or regulation as aforesaid with respect thereto, including zoning ordinances, rules and regulations. 34. CARE OF PREMISES: Lessee, at its own cost and expense shall keep the leased premises, all improvements which at any time during the term of this Lease may he situated thereon, and any and all appurtenances thereunto belonging, in good condition and repair during the entire term of this Lease. 35. SAN[TA PION: The Lessee shall comply with all regulations or ordinances of the City that are promulgated for the promotion of sanitation. The premises of the lease shall be kept in neat, clean, and sanitary condition, and every effort shall be made to prevent the pollution of water 36. LESSEE'S OBLIGATION TO REMOVE LIENS: Lessee will not permit any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable or Lease of Airport Lands Page 12 of 17 -64- Lessor: Lessee: available under the then existing laws, to stand against the leased premises or improvements for any labor or material furnished to Lessee or claimed to have been furnished to Lessee or to the Lessee's agents, contractors, or sublessees, in connection with work of any character performed or claimed to have been performed on said premises or improvements by or at the direction or sufferance of Lessee, provided, however, Lessee shall have the right to provide a bond as contemplated by Alaska law and contest the validity or amount of any such lien or claimed lien. On final determination of such lien or such claim for lien, Lessee will immediately pay any judgement rendered with all proper costs and charges and shall have such lien released or judgement satisfied at Lessee's own expense. 37. CONDEMNATION: In the event the leased premises or any part thereof shall be condemned and taken for a public or a quasi- public use, then upon payment of any award or compensation arising from such condemnation, there shall be such division of the proceeds, such abatement in rent payable during the term or any extension of the term hereof, and such other adjustments as the parties may agree upon as being just and equitable under all the circumstances. If the City and Lessee are unable to agree within thirty (30) days after such an award has been paid into Court, upon what division, annual abatement in rent, and other adjustments are just and equitable, the dispute shall he determined by arbitration. 38. PROTECTION OF SUBTENANTS: To protect the position of any subtenant(s) hereafter properly obtaining any interests in the leasehold estate granted Lessee hereunder, City agrees that in the event of the cancellation, termination, expiration, or surrender of this Lease (the ground lease), the City will accept the Subtenant, its successors and assigns, as its lessee for a period equal to the full unelapsed portion of the term of the sublease, including any extensions or renewals thereof, not exceeding the term of this Lease, upon the same covenants and conditions therein contained, to the extent that said covenants and conditions are not inconsistent with any of the terms and conditions of this Lease, provided such subtenant shall make full and complete attornment to the City for the balance of the term of such sublease so as to establish direct privity of estate and contract between the City and the subtenant with the same force and effect as though such sublease was originally made directly between the City and such subtenant; and further provided such subtenant agrees to comply with all the provisions of the ground lease and all the terms of any mortgage, deed of trust, or security assignment to which such leasehold estate is subject, except the payment of rent under the ground lease and the payment of any debt service under any such mortgage, deed of trust, or security assignment. 39. SUCCESSORS IN IN 1 This Lease shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto, subject to such specific (imitations on assignment as are provided for herein. 40. GOVERNING LAW: This indenture of Lease shall be governed in all respects by the laws of the State of Alaska. Lease of Airport Lands Page 13 of 17 -65- Lessor: Lessee: 41. NOTICES: (a) Any notices required by this Lease shall be in writing and shall be deemed to be duly given only if delivered personally or mailed by certified or registered mail in a prepaid envelope addressed to the parties at the address set forth in the opening paragraph of this lease unless such address has been changed pursuant to sub paragraph (b) hereafter, and in that case shall to the most recent address so changed. Any notice so mailed shall be deemed delivered on the date it is deposited in a. U.S. general or branch post office. The City shall also mail a copy of any notice given to the Lessee, by registered or certified mail, to any Leasehold lender (mortgagee, beneficiary of a deed of trust, security assignee) who shall have given the City notice of such mortgage, deed of trust, or security assignment. (h) Any such addresses may be changed by an appropriate notice in writing to all other parties affected provided such change of address is given to the other parties by the means outlined in paragraph (a) above at least fifteen (15) days prior to the giving of the particular notice in issue. 42. RIGHTS OF MORTGAGEE OR LIENHOLDER: In the event of cancellation or forfeiture of a lease for cause, the holder of a property recorded mortgage, deed of trust, conditional assignment or collateral assignment will have the option to acquire the Lease for the unexpired term thereof, subject to the terms and conditions as in the original lease. 43. ENTRY AND RE- ENTRY: In the event that the Lease should be terminated as hereinbefore provided., or by summary proceedings or otherwise, or in the event that the demised lands or any part thereof should be abandoned by the Lessee during said term, the Lessor or its agents, servants, or representatives may, immediately or any time thereafter, re- enter, and resume possession of said lands or such part thereof, and remove all persons and property therefrom, either by summary proceedings or by a suitable action or proceeding at law without being liable for any damages therefor. No re -entry by the Lessor shall be deemed an acceptance of a surrender of the Lease. 44. RETENTION OF RENTAL: In the event that the Lease should be terminated because of any breach by the Lessee as herein provided, the rental payment last made by the Lessee shall be retained by the Lessor as partial or total liquidated damages for said breach. Lease of Airport Lands Page 14 of 17 -66- Lessor: Lessee: 45. WRITTEN WAIVER: The receipt of rent by the Lessor with knowledge of any breach of the Lease by the Lessee, or any default on the part of the Lessee in observance or perfonnance of any of the conditions or covenants of the Lease, shall not be deemed to be a waiver of any provisions of the Lease. No failure on the part of the Lessor to enforce any covenam or provision therein contained, nor any waiver of any right thereunder by the Lessor, unless in writing, shall discharge or invalidate such covenants or provisions, or affect the right of the Lessor to enforce the same in the event of any subsequent breach or default. The receipt, by the Lessor, of any rent or any other sum of money after the termination, in any manner, of the term therein demised, or after the giving of the Lessor of any notice thereunder to effect such termination, shall not reinstate, continue, or extend the resultant term therein demised, or destroy, or in any manner impair the efficacy of any such notice of teuination as may have been given thereunder by the Lessor to the Lessee prior to the receipt of any such sum of money or other consideration, unless so agreed to in writing and signed by the Lessor. 46. BUILDING AND Z.ONTNG CODES: Leased lands shall be utilized in accordance with the building and zoning ordinances and rules and regulations of said authority. Failure to do so shall constitute default. 47. FIRE PROTECTION: The Lessee will take all reasonable precautions to prevent, and take all necessary action to suppress destructive or uncontrolled fires and comply with all laws, regulations, and rules promulgated and enforced by the City for fire protection within the area wherein the leased premises are located. 48. PERSONAL USE OF MATERIALS: All coat, oil, gas and other minerals and all deposits of stone or gravel valuable for extraction or utilization are excepted from the operation of a surface Lease. Specifically, the Lessee of the surface rights shall not sell or remove for use elsewhere any timber, stone, gravel, peat moss, topsoil or any other material valuable for building or commercial purposes; provided, however, that material required for the development of th leasehold may be used if its use is first approved by the Cit Manager. 49. MUTUAL CANCELLATION: Leases in good standing may be cancelled in whole or in part at any time upon mutual written agreement by Lessee and the City Council. 50. UNLAWFUL USE PROHIBITED: Lessee shall not allow the leasehold premises to be used for an unlawful purpose. 51. APPROVAL OF OTHER AUTHORITIES: The issuance by the City of leases does not relieve the Lessee of responsibility of obtaining licenses or permits as may be required by duly authorized Borough, State or Federal agencies. 52. REQUEST TO PURCHASE: If the tract of land proposed to be sold is leased land where the lease sets forth a development schedule, the lessee may request the sale of said land at not less than fair market value. The current lessee obtains the right to request a sale Lease of Airport Lands Page 15 of 17 -67- Lessor: Lessee: only after, to the satisfaction of the City Manager, completed development as detailed in the development schedule that has been incorporated into the lease agreement. The decision whether or not to sell the property rests within the sole discretion of the City. 53. NOTICE OF CONSTRUCTION: Lessee agrees to notify the City in writing three days prior to cotmnencing any construction project valued in excess of $1,000.00 upon the property. Lessee agrees to assist in the posting of a notice of non responsibility and maintenance of the notice upon the property during construction. Lessee agrees that in the event of the Lessee's failure to notify the City as provided above, Lessee shall indemnify the City against any rnaterialmen's liens as defined in AS 34.35.050 which arise as a result of construction upon the premises. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and year stated in the individual acknowledgments below. (If Lessee is a Corporation) ATTEST: Name Title Lease of Airport Lands Page 16 of 17 LESSOR: CITY OF KENAI By: Rick R. Koch City Manager By: -68- Lessor: Lessee: STATE OF ALASKA THIRD JUDICIAL DISTRICT ss. THIS IS TO CERTIFY that on this day of 2010, Name: Title: of being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said corporation. STATE OF ALASKA ss. THIRD JUDICIAL DISTRICT THIS IS TO CERTIFY that on this day of 2010, Rick R. Koch, City Manager of the City of Kenai, Alaska, being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said City. Approved as to lease form by City Attorney: Approved by Finance Director: Lease approved by Council on Carol Freas, City Clerk Lease of Airport Lands Page 17 of 17 -69- Notary Public for Alaska My Commission Expires: Notary Public for Alaska M.y Commission Expires: Lessor: Lessee: LEGEND 1 Bo r Scale io oiics 0 Scale: 1" 50' II meta/ balding KENAI RECORDING DISTRICT Wag C 7'29'00 "E 163.52' 16 N43'2937 "E 181.04' e senatt d/k'e 30' Access Easement 547'29'00 "W 6 foot chain link fence 0 Rebar (found) o steel tower F.B. 2010 -2 PG: 69,70 Tract A $4728'00'/@ 18.88' (7 lease pa ce( 35.6 X IBIT A Kenai Spur Highway 230' ROW NOT A VALID COPY WITHOUT A SEAL Date: 16 Agq,,,2010 Tic UNE TABLE LINE BEARING L1 938'19'32 "w L2 N51'52'57 "W L3 L4 L5 L6 L7 L8 L9 L10 N50'54'41 "W N39'54'22E S54'05'47 "E N39'39'23 "E S50'50'58`E S39 55 1 14' 3 9 "E LENGTH 20.19' 30.11' 30.59' 34.03' 38,92' 15.28' 8.48' 7.22' 12.32' 238'29'18 "W 23.60' Plat: 78 -111 I Surveyea: June 28, 2010 Drawn: SH File: 210069 Kenai 0.210069 Sour Airport Property INTEGRITY SURVEYS, INC. 43335 K -Beoch Rd. Ste. 10 Soidotna, AK 99669 SURVEYORS PHONE (907) 262 -5573 PLANNERS FAX (907) 262 -5574 2010 I hereby certify that this survey is a representation of the conditions that were found at the time of the field survey which was performed on: Tract A Kenai Spur Airport Lease Property and that this document does not constitute a boundary survey and is subject to any inaccur- acies that a subsequent boundary survey may disclose. The information contained on this drawing shall not be used to establish any fence, structure or other improvements. Exclusion Note: It is the responsibility of the Owner to determine the existence of any easements, covenants, or restrictions which do not appear on the recorded subdivision plot. METES AND BOUNDS DESCRIPTION FOR PROPOSED LEASE PARCEL ON TRACT A Located within Tract A of Kenai Spur Airport Lease Property Plat No. 78 -111, NE1 /4, NE1 /4, Section 5, Township 05 North, Range 11 West, Seward Meridian, City of Kenai, Kenai Recording District, Kenai Peninsula Borough, Alaska More particularly described as follows; Beginning at the most northerly corner of Tract A, common with Tract B and Tract C, also being the TRUE POINT OF BEGINNING; Thence, S42 °3 1'00 "E 148.19 feet adjoining common lot line of Tract A and Tract B to a point; Thence, S43 °29'3 7 "W 162.51 feet to a point common with the Main Street right of way; Thence, 137.14 feet adjoining said right of way along a non tangential curve concave to the southwest having a radius of 1386.20 feet, with a cord bearing of N51 °19'39 "W and a cord distance of 137.08 feet, to a point common with Tract C and Tract A; Thence 35.48 feet adjoining the common lot line of Tract C and Tract A along a tangential curve concave to the east having a radius of 20.00 feet, with a cord bearing of NO3 °20'21 "W and a cord distance of 31.01 feet to a point; Thence N47 °29'00 "E 163.52' adjoining common lot line of Tract A and Tract C to a point common with the most northerly corner of Tract A, also being the TRUE POINT OF BEGINNING. Described area is 26,636 square feet more or less. Exhibit A is attached here to. Exhibit A is a drawing showing the conditions on site at the time the field survey was performed. -71- CITY BOARDS, COMMISSIONS COMMITTEES CURRENT LIAISON ASSIGNMENT Council on Agin• Council Member Mike Boyle Airport Commission Council Member Joe Moore Harbor Commission Council Member Hal Smalley Library Commission Council Member Ryan Marquis Council Member Mike Boyle Parks Recreation Commission Planning Zoning Commission Council Member Bob Molloy Alternate: Council Member Barry Eldridge Beautification Committee Mayor Pat Porter Council Member Joe Moore Mini -Grant Steeriria Committee Advisory Cemetery Committee j Council Member Barry Eldridge OTHERS: Kenai River Special Management Advisory Board (KRSMA) Public Works Director Wayne Ogle I Alternate: City Manager Rick Koch John Mellish. John J. Williams Council Member Hal Smalley Economic Development District (EDD) Cook Inlet Regional Citizens Advisory Council )CIRCAC) Kenai Visitors Convention Bureau Board Kenai Economic Development Strate: Barry Eldridge /Mayor Porter Alaska Municipal League Council Member Hal Smalley r 1 2010 -2011 CITY OF KENAI BOARDS, COMMISSIONS COMMITTEE CURRENT LIAISON ASSIGNMENTS -72- (1/29/2010) KENAI HARBOR COMMISSION MEETING OCTOBER 11, 2010 CITY COUNCIL CHAMBERS 7:00 P.M. PENDING APPROVAL AGENDA ITEM 1: CALL TO ORDER ROLL CALL ITEM 2: AGENDA APPROVAL ITEM 3: APPROVAL OF MEETING SUMMARY September 13, 2010 ITEM 4: PERSONS SCHEDULED TO BE HEARD a. City Manager Rick Koch Commission Duties and the Relationship between Commissions, Administration and Council ITEM 5: OLD BUSINESS a. Discussion On -Site Survey Forms b. Discussion Update on SY2010 Municipal Harbor Facility Grant c. Discussion Town Hall Meeting Topics ITEM 6: NEW BUSINESS a. Discussion Kenai River Recreation Study Draft ITEM 7: REPORTS a. Director b. City Council Liaison ITEM 8: NEXT MEETING ATTENDANCE NOTIFICATION a. November 8, 2010 ITEM 9: COMMISSIONER COMMENTS /OUESTIONS ITEM 10: PERSONS NOT SCHEDULED TO BE HEARD ITEM 11: INFORMATION a. Kenai City Council Action Agendas of September 1 and 15, 2010. ITEM 12: ADJOURNMENT -73- Commissioners present: Commissioners absent: Staff/ Council Liaison present: A quorum was present. ITEM 2: MOTION: MOTION: KENAI HARBOR COMMISSION MEETING OCTOBER 11, 2010 CITY COUNCIL CHAMBERS 7:00 P.M. VICE CHAIR BILL OSBORN, PRESIDING AGENDA APPROVAL MEETING SUMMARY ITEM 1: CALL TO ORDER ROLL CALL Vice Chair Osborn called the meeting to order at approximately 7:07 p.m. Roll was confirmed as follows: -74- P. Morin, B. Osborn, W. Nelson, R. Peters W. Niederhauser, T. Thompson Public Works Director W. Ogle, Council Member H. Smalley Commissioner Peters MOVED to approve the agenda as presented and Commissioner Nelson SECONDED the motion. There were no objections. SO ORDERED. ITEM 3: APPROVAL OF MEETING SUMMARY September 13, 2010 Commissioner Peters MOVED to approve the meeting summary of September 13, 2010 and Commissioner Nelson SECONDED the motion. There were no objections. SO ORDERED. ITEM 4: PERSONS SCHEDULED TO BE HEARD 4 -a. City Manager Rick Koch Commission Duties and the Relationship between Commissions, Administration and Council City Manager Koch reviewed the Capital Improvement Plan and the Harbor Master Plan. Commission requested a work session be scheduled for October 25, 2010 at 6:00 p.m. to discuss the Capital Improvement Plan and the Harbor Master Plan. ITEM 5: OLD BUSINESS 5 -a. Discussion On -Site Survey Forrns There was general discussion; Commission would be discussing two fo ins at its next meeting. (November 8, 2010) 5 -b. Discussion Update on SY201.0 Municipal Harbor Facility Grant Public Works Director Ogle reviewed the Municipal Harbor Facility Grant application. 5 -c. Discussion Town Hall Meeting Topics General discussion occurred. Commission discussed the following issues: Increase parking for personal use fishery. Training for personnel on the oil spill containment boom. These issues would be discussed at the October 25, 2010 work session. ITEM 6: NEW BUSINESS 6 -a. Discussion Kenai River Recreation Study Draft Commission requested information from the City Manager, including who would be attending the KRSMA meeting on October 14, 2010. The study would be reviewed at the November 8, 2010 Harbor Commission meeting. ITEM 7: REPORTS 7 -a. Director Ogle reported the gate for Boat Launch Road would be fabricated by Fireweed Fence and installed north of the bird viewing platform. 7 -b. City Council Liaison Council Member Smalley reviewed the City Council action agenda items included in the packet. ITEiva 8: NEXT iiiEETIN6s' A T T ENDA NCE NOTIFICATION 8 -a. November 8, 2010 No Commissioners noted they would be absent from the November 8, 2010 meeting. ITEM 9: COMMISSIONER COMMENTS /QUESTIONS Morin inquired if Jack Sinclair would be discussing the Drift Boat Launch in connection with the Kenai River Recreation Stu.dy draft. ITEM 10: PERSONS NOT SCHEDULED TO BE HEARD None ITEM 11: INFORMATION 11 -a. Kenai City Council Action Agendas of September 1 and 15, 2010. -75- HARBOR COMMISSION MEETING OCTOBER 11, 2010 PAGE 2 ITEM 12: MOTION: ADJOURNMENT Commissioner Peters MOVED to adjourn and Commissioner Morin SECONDED the motion. There were no objections. SO ORDERED. There being no further business before the Commission, the meeting was adjourned at approximately 9:18 p.m. Meeting summary prepared and submitted by: Lorene Hall, CMC, Deputy City Clerk -76- HARBOR COMMISSION MEETING OCTOBER 11, 2010 PAGE 3 Commission Member Name and Address Home Phone Business Phone Email Address Term Ends William R. Nelson Harbor Commission 209 Susieana Lane Kenai, AK 99611 283 -5194 wrnelson@gci.net 2013 "Bill N. Osborn Harbor Commission P,O. Box 3003 Kenai, AK 99611 263 -7936 2013 Vacant Kenai, AK 99611 2012 Bob Peters Harbor Commission P.O. Box 24 Kenai, AK 99611 283 -9106 2011 Phillip Morin Harbor Commission 1608 Tanaga Avenue Kenai, AK 99611 283- 7603 2011 William Niederhauser Harbor Commission 645 Sandpiper Lane Kenai, AK 99611 283 -3495 394 -3495 big fish4all(rlhatmeil.com 2012 *Tom Thompson Harbor Commission 111. Paula Street Kenai, AK 9961.1 283 -4358 262 -5731 kreta4slalaska.net 2012 Council Member Hal Smalley City of Kenai 105 Linwood Lane Kenai, AK 99611 283 -7469 hvsmalleyh)yahoo.com Council Liaison HARBOR COMMISSION Meets Monday Following First Council Meeting Kenai City Council Chambers 7:00 p.rn. +Chair =Vice -Chair -77- (10/14/2010) AGENDA ITEM 1: CALL TO ORDER ROLL CALL ITEM 2: AGENDA APPROVAL ITEM 3: APPROVAL OF MEETING SUMMARY August 5, 2010 ITEM 4• Pt.RSONS SCHEDULED TO BE HEARD ITEM 5: OLD BUSINESS a. Discussion Community Playground Update ITEM 6: NEW BUSINESS a. Discussion Commission Duties and the Relationship between Commissions, Administration and Council ITEM 7: REPORTS KENAI PARKS RECREATION COMMISSION OCTOBER 7, 2010 CITY HALL COUNCIL CHAMBERS 7:00 P.M. a. Commission Chair b. Director c. City Council Liaison PENDING APPROVAL ITEM 8: NEXT MEETING ATTENDANCE NOTIFICATION a. December 2, 2010 ITEM 9: COMMISSION QUESTIONS COMMENTS ITEM 10: PERSONS PRESENT NOT SCHEDULED TO BE HEARD ITEM 11: INFORMATION a. City Council Action Agenda Items from September 1 and 15, 2010. b. Beautification Committee Meeting Summary of September 14, 2010. ITEM 12: ADJOURNMENT -79- ITEM 1: CALL TO ORDER ROLL CALL Chair Sandahl called the meeting to order at approximately 7:05 p.m. Roll was confirmed as follows: Commissioners present: Commissioners absent: Staff /Council Liaison present: A quorum was present. ITEM 2: AGENDA APPROVAL The agenda was approved by unanimous consent. ITEM 3 Commissioner Hull requested the following addition: Include in section 6 -b that Administration would be handling cemetery concerns expressed by Mrs, (Vinzarrd Spillman. MOTION: KENAI PARKS RECREATION COMMISSION OCTOBER 7, 2010 CITY HALL COUNCIL CHAMBERS 7:00 P.M. CHAIR DALE SANDAHL, PRESIDING MEETING SUMMARY A. Hull, D. Sandahl, J. Beeson, B. Gilman K. McDonald, G. Oliver (excused, N. Kiefer Parks and Recreation Director R. Frates, Council Member M. Boyle APPROVAL OF MEETING SUMMARY August 5, 2010 Commissioner Hull MOVED to approve the meeting summary of August 5, 2010 as amended and Commissioner Beeson SECONDED the motion. There were no objections. 50 ORDERED. ITEM 4: PERSONS SCHEDULED TO 13E HEARD None ITEM 5: OLD BUSINESS 5 -a. Discussion Community Playground Update Frates thanked Commission members for their participation in the September 21, 2010 playground work session, noting the next step would be for Casey Planning and Design to complete conceptual designs which would be brought back to the Commission for input. -80- ITEM 6: NEW BUSINESS 6 -a. Discussion Commission Duties and the Relationship between Commissions, Administration and Council Rick Koch, City Manager Koch reviewed Chapter 19.05 of the City Code pertaining to the Parks and Recreation Commission, specifically duties and powers. Koch spoke to the relationship between master planning, the City Comprehensive Plan and establishment of a Capital Improvement List and made suggestions for a process to best accomplish this, including timelines. A copy of suggested timelines for recommended capital improvements for FY2012, 2013 and 2014 was reviewed and discussed. Commissioners requested a work session to be held on October 21, 2010 to discuss development of a master plan, to be followed by a work session on December 2, 2010. ITEM 7: REPORTS 7 -a. Commission Chair None 7 -b. Director Frates reviewed work on the Recreation Center gym floor, dune walkways, Multipurpose Facility lighting project, and the Kenai River Marathon. 7 -c. City Council Liaison Council Member Boyle reported on a suggestion made to him regarding parking on South Spruce Street and providing shuttle bus service for a fee during dip net season. ITEM 8: NEXT MEETING ATTENDANCE NOTIFICATION 8 -a. December 2, 2010 No Commissioners noted they would not be able to attend the December 2 meeting. ITEM 9: COMMISSION QUESTIONS COMMENTS None ITEM 10: PERSONS PRESENT NOT SCHEDULED TO BE HEARD None ITEM 11• INFORMATION 11 -a. City Council Action Agenda Items from September 1 and 15, 2010. 11 -b. Beautification Committee Meeting Summary of September 14, 2010. ITEM 12: ADJOURNMENT MOTION: Commissioner Hull MOVED to adjourn and Commissioner Gilman SECONDED the motion. There were no objections. SO ORDERED. PARKS RECREATION COMMISSION MEETING OCTOBER 7, 2010 PAGE 2 -81- There being no further business before the Commission, the meeting was adjourned at approximately 8:08 p.m. Meeting summary prepared and submitted by: Corene Hall, CMC, Deputy City Clerk PARKS RECREATION COMMISSION MEETING OCTOBER 7, 2010 PAGE 3 -82- October 09, 2010 To: Mayor of Kenai Patricia Porter City of Kenai Planner Marilyn K. Kebschull City of Kenai Clerk Carol Freas 210 Fidalgo Avenue Kenai, Alaska 99611 OCT 11 2010 KENAI CITY CLE From: Roy A. Wells City of Kenai Planning and Zoning Commissioner With deep regret, I am resigning as Planning and Zoning Commissioner City of Kenai, Alaska effective November 1 2010. 2009's and 2010's travel schedules resulted in my missing over half of the P Z meetings. 2011's travel will be the same or more. I have enjoyed serving the city in this capacity. I am highly impressed with Marilyn and her breath of P &Z knowledge. Staff recommendations are well researched and provide in -depth data for considering each motion and. vote. The current commissioners are top- notch, I will miss them all. A P &Z commissioner's decision is not always appreciated but t believe commissioners continually try to be objective, fair and sincere in weighing the issues prior to voting. I personally never took any vote lightly. Thanks for the opportunity, Roy Wells 410 Lawton Drive Kenai, AK 99611 HM Phone: 907- 283 -1029 WK Phone: 907 -283 -5646 Cell: 907- 252 -0120 -83- OCT-OR 2007 12:51 PM PENINSULA MEM. CHAPEL.e. 19 72 6116 P.01 4 DATE: J6 NAME; Resident of the City of Kena Residence Address _LW 6 L A 1 11Ler Mailing Address SW ?ti e c O Horne Fax No 24-Z -6 //F., Business Fax No _2,24 617L May we include your contact info include? EMPLOYER .C NAME OF SPOUSE: 1rr Past organisational memberships• s f. a, WHY DO Current membership in organisations: L' o v, CITY OF KEN AI "Village with a past —City with a future." BACKGROUND AND PERSONAL DATA CANDIDATES FOR APPOINTMENT COMMITTEES AND COMMISSIONS COMMITTEES OR COMMISSIONS IN WHICH YOU ARE INTERESTED: OU WANT TO BE INVOLVED WITH THIS COMMIS ,v. �,C.k n .r.17 0 L �l^� y:_rN eP WHAT BACKGROUND, EXPERIENCE, OR CREDENT COMMIS ON OR COMMITTEE MEMBERSHIP -2 „y- C n ,J)) kit—, Home Telephone Noh 1� Business Telephone No_ 2£r t .z Email Address: 7 r r P information on our web page? ALL ✓If not all, what information may we Signatut4 Haw long? 3 l7 nL ON OR COMM RETURN TO: KENAI CITY CLERK 210 FIDALGO AVENUE KENAI, AK 99611 PHONE: 283. 7535, EXT. 231 FAX: 283.6068 Job Title r P w Q r C f /Of ye) DO YOU POSSESS TO BRING TO THE BOARD, DATE: NAME: How long? Residence Address !s /V d, fz /7.0 j c Resident of the City of Kenai? COM Mailing Address X. Q /i WC. Home Telepho Home Fax No. Business Telephone No Business Fax No. Email Address '7%/`n t// May we include your contact information on our web pagerALL.) If not all, what include? CITY OF KENAI "Village with a past City with a future." BACKGROUND AND PERSONAL DATA CANDIDATES FOR APPOINTMENT COMMITTEES AND COMMISSIONS PHONE: 283 -7535, EXT. 231 FAX: 283 -5068 EMPLOYER: /t-% L t'Z"." U, 2 Job Title NAME OF SPOUSE: Current membership in organizations: w7 C FVr. 3 6'L gig Z. z 5 //Z Lc/c-- 5 Past organizational memberships: EES OR COMMISSIONS IN WHICH YOU ARE INTERESTED: RETURN TO: KENAI CITY CLERK 210 FIDALGO AVENUE KENAI, AK 99611 WHY DO YOU WANT TO 13E INVOLVED WITH THIS COMMISSION OR COMMITTEE? -85- neNo. 3i` V 2,3 6 3 3 onnation may we WHAT BACKGROUND, EXPERIENCE, OR CREDENTIALS DO YOU POSSESS TO BRING TO THE BOARD, COMMISSION OR COMMITTEE MEMBERSHIP? 6 rcour.f /4 ?644../3& LCCc4C tSu,SiArc 5 /1--2 .f.Lcc DATE: NAME: the dy KENN, ALASKA u Resident of the City of Kenai? Residence Address )-(r j, 61 Horne Fax No. lv /Cl Business Fax No. May we include your contact information on include? EMPLOYER ft e 9 NAME OF SPOUSE: /'I flg dig Current membership in organization CITY OF KENAI "Village with a past City with a future." BACKGROUND AND PERSONAL DATA CANDIDATES FOR APPOINTMENT COMMITTEES AND COMMISSIONS RECEIVED OCT 10 2010 KENAI CITY CLERK 'FPM /t4) /L Home Telephone No Business Telephone No /-74 Email Address: h our web page? ALL If not all, what formation may we Job Title Past organizational memberships: COMMITTEES OR COMMISSIONS IN WHICH YOU ARE INTERESTED: J''G/i7.��✓I� -L- c< ?ZJ .w J�L WHY DO YOU WANT TO BE INVOLVED WITH THIS COMMISSION OR COMMITTEE? .44/ ter 71 /Vf,"i 5'1] Se. C hilt; L4S4n c 7 N711l r 5 5 1 In- Ft fli, i7 1_1 `Tt 7r) WHAT BACKGROUND, EXPERIENCE, OR CREDENTIALS DO YOU POSSESS TO BRING TO THE BOARD, CO ISSIOJ OR COMMITTEE MEMBERSHIP 2 ��p�� i n C ni5S /0-0 n c !t Cr. 2hfh� t) -f'4 RETURN TO: KENAI CITY CLERK 210 FIDALGO AVENUE KENAI,AK 99611 PHONE: 283 -7535, EXT. 231 FAX: 283 -5068 /S n 7 —tyr 6 o-')Z /e/e47 EA /7 seiry ITEM 7: REPORTS KENAI BEAUTIFICATION COMMITTEE OCTOBER 12, 2010 7:00 P.M. KENAI COUNCIL CHAMBERS PENDING APPROVAL AGENDA ITEM 1: CALL TO ORDER ROLL CALL ITEM 2: AGENDA APPROVAL ITEM 3: APPROVAL OF MEETING SUMMARY September 14, 2010 ITEM 4: PERSONS SCHEDULED TO BE HEARD ITEM 5: OLD BUSINESS a. Discussion Flowerbed Tour ITEM 6: NEW BUSINESS a. Discussion Commission Duties and the Relationship Between Commissions, Administration and Council a. Committee Chair b. Parks Recreation Director c. Kenai City Council Liaison ITEM 8: NEXT MEETING ATTENDANCE NOTIFICATION a. January 11, 2011 ITEM 9: COMMITTEE MEMBER QUESTIONS AND COMMENTS ITEM 10: PERSONS NOT SCHEDULED TO BE HEARD ITEM 11: INFORMATION a. Kenai City Council Action Agendas of September 1 and 15, 2010. ITEM 12: ADJOURNMENT -87- KENAI BEAUTIFICATION COMMITTEE OCTOBER 12, 2010 7:00 P.M. KENAI COUNCIL CHAMBERS CHAIR PRO TEMPORE SUSAN LOVETT, PRESIDING MEETING SUMMARY There being no chair or vice chair, the Committee elected Susan Lovett chair pro tempore. ITEM 1: CALL TO ORDER ROLL CALL Chair Pro Tempore Lovett called the meeting to order at 7:10 p.m. Roll was confirmed as follows: Members present: Members absent: Staff/ Council Liaison present: No quorum was present. M. Dimmick, L. Gabriel, S. Lovett M. Manzek, P. Baxter, T. Canady Parks and Recreation Director R. Frates ITEM 2• AGENDA APPROVAL ITEM 3: APPROVAL OF MEETING SUMMARY September 14, 2010 ITEM 4: PERSONS SCHEDULED TO BE HEARD ITEM 5: OLD BUSINESS 5 -a. Discussion Flowerbed Tour ITEM 6• NEW BUSINESS 6 -a. Discussion Commission Duties and the ReIat_onship Between Commissions, Administration and Council ITEM 7: REPORTS 7 -a. Committee Chair 7 -b. Parks Recreation Director 7 -c. Kenai City Council Liaison ITEM 8: NEXT MEETING ATTENDANCE NOTIFICATION 8 -a. January 11, 2011. ITEM 9: COMMITTEE MEMBER QUESTIONS AND COMMENTS -88- ITEM 10: PERSONS NOT SCHEDULED TO BE HEARD ITEM 11: INFORMATION 11 -a. Kenai City Council Action Agendas of September 1 and 15, 2010. ITEM 12: ADJOURNMENT Due to lack of quorum, the meeting was adjourned at approximately 7:15 p.m. Meeting summary prepared and submitted by: Lorene Hall, CMC, Deputy City Clerk -89- BEAUTIFICATION COMMITTEE MEETING OCTOBER 12, 2010 PAGE 2 Alaska Municipal League Board Meeting- Oct 9 -10 Hal Smalley, Trip Report Routed from borough Clerk g ybe to: Assembly members u wee s Amain 1 10 11 6 The purpose of the Oct. AML Board meeting is to finalize preparation for the Annual AML meeting in November. The meeting started with the usual review and approval of the previous Board minutes, financial report and a brief comment by President Cottle. During the Executive director's report there was a discussion of a statewide program to assist in statewide coordination of the 911 program. This would be a federally funded program to the state through Grants. State legislation called for a coordinator position to be hired and the program would mostly be to coordinate the 911 program in rural Alaskan areas. There was a brief discussion of the Policy statement booklet with the comment that at the November Annual meeting there would be no word smithing and changes must be ready for submission (in writing prior to discussion in committee, unless it comes from the floor. The policy statement will be review with possible changes and approved on the floorat the November Annual Meeting, The Board reviewed the AML Federal Priorities lists, previously submitted and available as a handout at the Oct. 12 Assembly meeting. There was one addition and that was to include funding for the Denali Commission. The Board Reviewed the AML Statewide legislative priorities. Although there was no specific prioritization the list will be reconfigured as follows. Revenue Sharing, Unfunded mandates, Energy, PERS issues, and Transportation. Listing will be available at Oct. 12 Assembly meeting. The federal and statewide legislative priorities will be reviewed, possibly amended and appiuved on the floor at the November Annual Meeting. Three of the four AMLJIA Trustee appointments were made from the three members seeking reappointment and Mr. Sprague's seat will be selected at the November meeting. The three recommend members for the AMLIP Board were approved. They are Vickie Lausen Denali Borough; Karleton Short Kodiak Island Borough; Craig Chapman-Kenai Peninsula Borough. The final item for discussion was a review of the November AML Annual Meeting agenda. -90- 10/12/201B 11:42 9e7- 463 -5480 AML t1 /as k a ALASI A 'JNICIPAI: LEAGUE no lapin' 217 Second Street, Suite 200 Juneau, Alaska 99801 Tel (907) 586 -1325 Fax (907) 463 -5480 www.akmLorg DRAFT ALASKA MUNICIPAL LEAGUE 2011 FEDERAL PRIORITIES PAYMENT IN LIEU OF TAXES (PILT): We support full funding of the PILT prograrn, to the authorized levels of P.L. 103- 37S (over 300 million nationwide). e SECURE RURAL SCHOOLS AND COMMUNITY SELF DETERMINATION ACT (SRS/ TIMBER RECEIPTS): We support the reauthorization and enhancement of the Secure Rural Schools program (PL 110 -343), Reauthorization should maintain coupling between payments to boroughs and active natural resource management; and the connection between sustainable naturel resource management and the stability and well being of forest boroughs and communities. CLEAN WATER ACT: We support Clean Water Act provisions that protect wetland habitats and rivers and streams of Alaska; but do not support federal efforts to change the definition: of and Clean also opposes navigable to further expand the authority at and and pp responsibilities of the federal agencies in regard to these waters, ARCTIC ISSUES: We support ratification of the United Nation's Convention on the Law of the Sea. Until that ratification takes place, the US cannot participate in deliberations which affect the national security; environmental concerns relating to the use of the seas; and to economic development for Alaska's coastal communities. LAND USE DESIGNATIONS: We oppose decisions on land use designations that are not completely vetted through the proper Congressional system already in place. ENERGY EFFICIENCY GRANTS: We support full funding of the Energy Efficiency and Conservation Block Grant (EECBG) Program to state and local govemments. DENALI COMMISSION: We much needed infrastructure hroug out th the especially ally nh and improve rural areas Member of the National League of Cities and the National Association of Counties -91- 10/12/2010 11:42 907 -463 -5480 I,r ALA$KA MUNICIPAL LEAGUE A1t+,7 .a,, c€ z,j:ltltti u AML PAGE 01/02 217 Second Street, Suite 200 Juneau, Alaska 99801 Tel (907) 586 -1325 Fax (907) 463-5480 www,akml.org DRAFT ALASKA MUNICIPAL LEAGUE 2011 STATEWIDE PRIORITIES REVENUE SHARING: We recommend the Governor include in his budget recommendation, a one -time COLA to Revenue Sharing, based on the cumulative Anchorage CPI for 2007 through 2010, with appropriation of said funds, a UNFUNDED MANDATES: We believe that any state or federal legislation, or rule, that requires an implementation or operation cost, shall be fully funded by the implementing agency. This includes an "optional" exemptions handed down to local governments that will diminish the local tax base. s ENERGY: We believe the Legislature must aggressively facilitate affordable energy for all Alaskans through: 1. The support of oll and gas. as it remains the primary source of energy for most of Alaska; 2. The encouragement of connectivity between communities, as well as incentives for energy project funding; 3, An actual time certain process that selects and prioritizes projects; 4. Full funding of the PCE (Power Cost Equalization) Endowment fund through joint congressional and state appropriations; 5. The clarification of RCA's role and authority, as well as direction for RCA to adhere to their structured purpose. PERS: We support a sustainable salary base to pay off the PERS unfunded obligations. AS 39.35.625, and any other similar statutes or regulations that require termination studies, should be repealed. Simply following AS 39.35.255(3)(2), amended with inflation adjustment language, will provide a more efficient, cost effective and equitable method of ensuring that the required PERS salary base is maintained. TRANSPORTATION: We believe the Legislature should implement 1. The dedication of funds for the Alaska Transportation Infrastructure Fund; 2. A matching grant component for acquiring federal funds and to help local governments to develop otherwise financially difficult projects; 3. A local government seat at the table during allocation considerations of the Transportation Infrastructure Fund, Member of the National League 01 Chiasand the National Association of Counties MINI -GRANT STEERING COMMITTEE MEETING MONDAY, OCTOBER 4, 2010 4:00 P.M. CLERK /COUNCIL CONFERENCE ROOM KENAI CITY HALL AGENDA ITEM 1: CALL TO ORDER ROLL CALL ITEM 2: AGENDA APPROVAL ITEM 3: MEETING SUMMARY May 21, 2010 ITEM 4: OLD BUSINESS ITEM 5: NEW BUSINESS ITEM 6: ANNOUNCEMENTS a. 9/13/2010 D. Wann.amaker letter returning grant funds. ITEM 7: ADJOURNMENT -93- PENDING APPROVAL a. Review of Applications MAPP Partnership /Central Peninsula Community Health Celebration b. Approval /Final Grant Award 1. Donna Niebauer /Sprucewood Beautification 2. Steve Schoessler /KCHS Workforce Development Center /Steel Salmon MINI -GRANT STEERING COMMITTEE MEETING MONDAY, OCTOBER 4, 2010 4:00 P.M. CLERK /COUNCIL CONFERENCE ROOM KENAI CITY HALL CHAIR PAT PORTER, PRESIDING MEETING SUMMARY ITEM 1: CALL TO ORDER ROLL CALL Chair Porter called the meeting to order atapprorimately 4:00 p.m. Roll was confirmed as follows: Members Present: P. Porter, T. Wisniewski, C. Bannock, P. Carty Member Absent: J. Beeson Council Liaison: Council Member J. Moore A quorum was present. ITEM 2: MOTION: AGENDA APPROVAL Member Carty MOVED to approve the agenda as presented and Member Bannock SECONDED the motion. There were no objections. SO ORDERED. ITEM 3• MEETING SUMMARY May 21, 2010 MOTION: Member Bannock MOVED to approve the meeting summary of May 21, 2010 as presented and Member Carty SECONDED the motion. There were no objections. SO ORDERED. ITEM 4: OLD BUSINESS None. ITEM 5: NEW BUSINESS 5 -a. Review of Applications MAPP Partnership /Central Peninsula Community Health Celebration Members reviewed the MAPP Partnership application which was included in the packet. Comments included, the group was not located in Kenai and there would be no long -term effect for citizens. MOTION: -94- Member Wisnewski MOVED to approve the MAPP Partnership application and Member Carty SECONDED the motion. Member Carty SECONDED the motion. VOTE: I Porter Beeson MOTION: MOTION FAILED UNANIMOUSLY. MOTION: No Absent Wisniewski Carty 5 -b. Approval /Final Grant Award -95- I No No Bannock No 5 -b(I). Donna Niebauer /Sprucewood Beautification Membership reviewed the Mini -Grant Report Form for the Sprucewood Beautification project, which if approved, would remit the remaining ten percent (10 of the $500.00 grant pursuant to the Mini -Grant procedures. Member Wisniewski MOVED to approve the Mini -Grant Report Fo iu submitted by Donna Niebauer for the Sprucewood Beautification project. Member Carty SECONDED the motion, There were no objections. SO ORDERED. 5 -b(2). Steve Schoessler /KCHS Workforce Development Center /Steel Salmon Membership reviewed the Mini -Grant Report Form for the KCHS Workforce Development Center Steel Salmon proiect, which if approved, would remit the remaining ten percent (10 of the $500.00 grant pursuant to the Mini -Grant procedures, Member Wisniewski MOVED to approve the Mini -Grant Report Foim submitted by Steve Schoessler for the Steel Salmon project. Member Carty SECONDED the motion. There were no objections. SO ORDERED. ITEM 6: ANNOUNCEMENTS 6 -a. 9/13/2010 D. Wannamaker letter returning grant funds. ITEM 7: ADJOURNMENT MOTION: Member Bannock MOVED for adjournment and Member Wisniewski SECONDED the motion. There were no objections. SO ORDERED. MINI -GRANT STEERING COMMITTEE MEETING OCTOBER 4, 2010 PAGE 2 There being no further business before the Committee, the meeting was adjourned at approximately 4:18 p.m. Summary prepared and submitted by: Carol L. Freas, City Clerk MINI -GRANT STEERING COMMITTEE MEETING OCTOBER 4, 2010 PAGE 3 -96- REPORT OF CITY MANAGER (ht CIfr !JI' KEMAL ALASKA U -98- CAPITAL PROJECT MANAGER MID -MONTH REPORT October 2010 The status of the projects is as follows; Kenai Community Library Expansion Project Architecture by ECl/Hyer, Inc. Construction contract was awarded to Blazy Construction, 'Inc Notice to proceed was issued on April 19. Construction is progressing on schedule with the building dried in, work is under way on the mechanical and electrical with boiler startup scheduled for later this month. The re- roofing of the exiting library is substantially complete with work continuing on the soffits. Bridge Access Road Water Sewer Main Extension Engineered by Wm. J. Nelson Associates. The Construction Contract was awarded to North Star Paving and Construction Inc. The notice to proceed was signed on January 18,, 2010. Construction is currently under way with the water project at 99% complete and the sewer project at 95% complete the water system is currently operational with sewer waiting for Homer Electric service installation. Lawton Drive Water Extension 'Project Engineered by Wm. J. Nelson Associates. The Construction Contract was awarded to North Star Paving and Construction Inc. The Notice to Proceed was issued on February 16, 2010. All piping is installed and road reconstruction and seeding is complete, final punch have been completed and closeout documentation is under way. Water Treatment Facility (Arsenic Ground Water Study) Engineered by HDL with Pilot studies by HDR. The Well 2 Aquifer Study report is complete. And the Arsenic Ground Water Study has come to completion. The design of the facility was awarded to HDL at the September Is` Council Meeting, Civil and Environmental design are under way. South Beach Dunes Fencing —This is an American Recovery and Reinvestment Act (ARRA) funded project administered by U.S. Fish and Wildlife Service. The contract was awarded to Holden Company on May 19 for $62,028.00. The project was completed on July 9, prior to the opening of Dip Net Season. Final close out paperwork is under way. Multi Use Facility Lighting Upgrade This is an American Recovery and Reinvestment Act (ARRA) funded project administered by Department of Energy. Bid documents were released and bids were opened on June 9, 2010 with 6 bids received. The contract was awarded to Kachemak Electric on June 16 for $58,587.00. The project followed the construction schedule; the new lighting is operational, replacement of the emergency lighting is awaiting delivery. Water and Sewer Rate Study Update —The Notice to Proceed was issued on March 15, 2010. Documents requested have been provided to the consultant for analysis. Togiak to Beaver Loop Water Extension Project Engineering by Wm. J. Nelson Associates. This is the continuing extension of the Lawton Drive Project. Currently the NEPA process is underway; as required by the State and Tribal Assistance Grant (STAG), with the design drawing necessary for the NEPA process completed and under review the initial 30 day comment period on scoping started August 6 once the NEPA process is approved, and permits are received in late November, the Work Plan will be submitted to the EPA Project Officer. Once the Work Plan is approved the project will be put out to bid. Personal Use Fisheries Capital Project Funded by approval of Ordinance 2481 -2010 on May 5, 2010. The pedestrian barrier and the Meeks Trail upgrade have been completed. The additional restrooms plans and wavers have been submitted to ADEC and permit should be issued by September 20 The project will be put out to bid with the Daubenspeck Family Park restroom later this year, with construction completed for summer use. The replacement bridge for the trail is on site with installation scheduled for later this year Vintage Pointe Water Damage Project Funded by approval of Ordinance 2483 -2010 on May 19, 2010. The design contract was issued June 7 to Klauder Company Architects, Inc. The Project was bid on July 27 and the contract was awarded to Holden Company on August 2 for $142,486.00. Notice to proceed was issued on August 26 Construction is scheduled to begin on October 18`" City Facility Wind Generation Study- Engineering by RSA Engineering, INC, Preliminary data gathering is complete with site specific analysis and additional data gathering underway. Sites under analysis are Beacon, Kenai Visitor Center, Senior Center Vintage Pointe, Waste Water Treatment Plant, Multi -Use Facility Challenger, and Well 2. Draft report is scheduled for mid to late October. Baron Park Drive (Kenai: Various Road Improvements)- Engineering by HDL, Bid by ADOT &PF on August 20. five bids were received with the low bid of $775,607.00 by Alaska Road Builders, NTP is expected in early October. Draft SWPPP was submitted to DOT and returned with comments; clearing is scheduled to begin in late winter. Main Street Reconstruction Engineered by Wnr. J. Nelson Associates. The Contract was initiated on August 11, 2010. Boring is scheduled to occur in Mid October concurrent with Baron Park Drive Boring. This project also included road boring geo -tech on First Street. Central Heights Roadway Lighting Storm Water Improvements Engineered by Wm. J. Nelson Associates. The Contract was initiated on August 31, 2010. Boring started on October 12"' concurrent with Main street Reconstruction Boring. Marathon Park Phase 1 Daubenspeek Family Park) Engineered by Wm. J. Nelson Associates. The Contract was initiated on August 31., 2010. Surveying and design are underway, electrical service installation is scheduled for late October. Kenai Recreation Center Gym Floor Replacement Contract was awarded to Alaskan Industries, Inc. at the October 6 Council Meeting, Notice to proceed is scheduled for October 14. Project is scheduled for completion prior to November 27' -99- the KENAL ALASKA PARKS RECREATION MID -MONTH REPORT OCTOBER 2010 The Parks Recreation Department has been busy winterizing facilities and equipment in preparation for the winter season. A large portion of this work involves a cleanup of all facilities and equipment, turning off water and drainage of water lines and tanks, organizing and storing equipment, winterizing irrigation equipment, wrapping trees, removing outdoor volleyball nets along with banners, benches and flower boxes. Additionally, all summer flower bulbs have been dug up, potted and stored inside for next season's use. Kenai Welding has completed constructing the raised dune walkways which are currently stored near the new Meeks Trail bridge in the north beach parking lot. We anticipate beginning the walkway installation toward the end of this week. The lighting upgrade has been completed at the Multi- Purpose Facility. Skating started up again Monday, October 11 The Kenai River Marathon was held September 26 This year's event had a little more than 200 participants. Director Frates has been spending a significant amount of time collecting data from daily time card entries and work orders from this summer's maintenance program. Data collected will be entered onto a spreadsheet and used as part of the park planning process. A recommended CIP list is being developed as well for the Parks Recreation Commission's input as well as the Beautification Committee. Tri -City construction is currently wrapping up the installation of 305' LF of a new sidewalk addition to Leif Hansen Memorial Park. The gymnasium floor replacement project is moving forward with delivery of material expected by the end of next week. tle KENAI, ALASKA To: Rich Koch, City Manager Prom: Rachael S. Craig, Senior Center Director Date: October 5, 2010 Total September Meal Count 2010 Served: Total Congregate Meals Served: 1,281 Total Home Meals Served: 1,735 Total September Meal Count 2009 Served: Total Congregate Meals Served: 1,300 Total Home Meals Served: 1,657 We were not rented in September. There were 877 volunteer hours for September. -1 01 KENAI SENIOR CENTER OCTOBER REPORT The Director attended an area -wide senior center director's meeting in Seward. It was announced at this meeting that the Kenai Senior Center would host the 1 Marathon Oil Thanksgiving Dinner for the Peninsula seniors on November 23. Marathon Oil are planning to have their volunteers to set up and serve the congregate meal at the center but will be having volunteers assist meal drivers in delivering home meals to Kenai, Soldoma, Nikiski and Sterling Seniors. Marathon Oil has provided a monetary donation for food. The annual Peninsula Wide Senior picnic is scheduled for June 24, 2011 and will be held this year at the Kenai Park Strip, In years past this has been held at the Soldotna. Park. I am pleased it will be in Kenai. Directors who have NTS grant programs will be in Anchorage the first week in November for the "Logic Model Training" and a training day of nutrition and menu planning. In March 2011, we will reapply for the three year NTS grant and will use the Logic Model for evidence based goals and outcomes. The Administrative Assistant and one senior volunteer will attend the Medicare counselor training October 20 through October 22 in .Anchorage. United Way began their annual fundraising campaign. Black -Out Season is from September 15 through October 31. Campaign brochures and pledge sheets will he included in the employee paychecks at the end of the month. Mayor Porter, past Senior Center Director, spent a morning in the kitchen with Missy cooking up a delicious meal. She shared a Stuffed Pepper recipe of her mother's, Doddie Dennis, who lives in Vintage Pointe Manor. She assembled the stuffed peppers and assisted with dishing up and sealing 65 home meals for the day. A favorite activity of the seniors this month was the Pet Parade. There were 16 dogs who were shown off by t heir senior owners and 32 seniors observed the parade. 18 Unocal Retirees enjoyed a luncheon and presentation at the senior center this month. A presentation was presented by Director and her Assistant. They presented the Home Meals Program DVD as well as providing new Medicare information. KENAI, ALASKA To: Rick Koch, City Manager From: Terry Eubank, Finance Director Date: October 13, 2010 Re: Monthly Report FINANCE DEPARTMENT MID -MONTH REPORT October 2010 A draft of the FY2010 Comprehensive Annual Financial Report has been completed and is being reviewed by the City's auditor. Presentation to the Council should be at the second meeting in November or at a December Council meeting. Much work continues on the City fees schedule and in preparation for amending the KMC for the administration's proposed change in fee administration. Information is being provided to the City attorney for preparation of an ordinance or ordinances to effect the proposed change. The department is working to understand recent changes in credit Card acceptance rules and craft a credit card acceptance policy utilizing these recent changes. A new plan with financial impacts will be presented at the November work session. he city v f KENAI, ALASKA 2010 2009 STRAY 91 98 Dogs 57 52 Cats 34 42 Other Species 0 4 RELEASED BY OWNER 57 20 Dogs 24 12 Cats 33 8 Other Species 0 0 D.O.A. 11 7 Dogs 5 3 Cats 6 2 Other Species 0 2 TOTAL ANIMALS 159 125 Borough Animals Total Dogs Total Cats Total Other Species ANIMAL CONTROL MID -MONTH REPORT September 2010 ADOPTED Dogs Cats Other Species CLAIMED Dogs Cats Other Species EUTHANIZED Dogs Cats Other Species Other Disposition 38 23 Field Investigations 86 67 Volunteer hours 73 52 Total phone 0 6 Kennel Permits 2010 2009 55 49 30 27 25 22 0 0 30 22 29 19 1 3 0 0 61 45 22 20 39 25 0 0 2 2 105 118 99 86 540 664 0 0 Community Involvement Projects: 9/22/2010 Kaleidoscope Charter School brought a class for a field hip and to interview an. Animal Control Officer. -103- KEN ASS A TO: Rick Koch City Manager FROM: Gus Sandahl Police Chief I* DATE: 10/13/10 POLICE DEPARTMENT MID -MONTH REPORT -104- September 2010 SUBJECT: Police Communications Department Activity September 2010 Police handled 573 calls for service (down from 612 in September 2009). The Communications Center received 248 emergency 9 -1 -1 calls (162 from cell phones). Approximately 3,096 administrative calls were processed by Communications personnel. Officers made 53 arrests and wrote 334 reports. Traffic enforcement resulted in 124 warnings, 16 speeding tickets, 6 seatbelt tickets, 12 citations for equipment violations, and 25 citations for "other" traffic violations. There were 4 DUI arrests. Police investigated 12 vehicle crashes (3 injury crashes). Five of the crashes involved moose and one involved a caribou. On September 7, Officer Paul Cushman started work with the Kenai Police Department. Officer Cushman is a lateral transfer from a larger department in Michigan. On the last weekend in August, a' Kenai officer on the AST SERT team responded to Hoonah with other team members to assist with apprehending the subject who killed two Hoonah police officers. On Sept. 4, Sgt. Kelly George traveled to Anchorage to participate in a vigil watch of the fallen officers. On September 8, Officers Levi Russell, Jayms Harris, and Morgan Tuttle traveled to Hoonah to attend the Memorial Service for the two fallen officers. On September 11, Officer Levi Russell attended a one -day seminar on Fetal Alcohol Spectrum Disorders at the Challenger Center. On the evening of September 13, Sgt. Ben Langham attended a pipeline safety event at the Challenger Center. On September 18, Investigator Jeff Whannell, along with Dispatchers Stacey Day and Nancy Wiles, participated in the Lowes Safety Day event, providing crime prevention and safety information to shoppers /attendees. On September 24, nine officers played dodge ball with kids at the Boys and Girls Club as part of a monthly Police Athletic League (PAL) event. On September 25, Officer Levi Russell facilitated the National Pharmaceutical Drug Take -Back day at the Kenai Police Department. Several people contributed a total of 12 pounds in unwanted /unused medications. On September 25 -26, Kenai officers helped with the local Marathon by providing a safety briefing, and also by providing traffic control. From September 28 -30, the Kenai Police Department hosted a drug interdiction class at the Kenai Visitor's Center. The class was attended by 36 officers from around Alaska. Airport Manager's Report For October 2010 1 Airport Proiects: Apron Rehabilitation: The Contractor is shutting down for the winter. The apron was opened up in its entirety on Monday, October 11. The Contractor will return in the spring for runway painting, miscellaneous paving projects, etc. Float Plane Basin Facility Improvement Project: The Phase 1 Design process will be performed over the winter by Wince Corthell- Bryson. Master Plan City Administration will be meeting on Thursday, October 14, to discuss the process. Annual Snow Removal Operations Meeting: All airports subject to icing conditions or annual snowfall of 6 inches or more are required by part 139 to have a Snow and Ice Control Committee and a written Snow and Ice Control Plan that focuses on topics improving operational safety. A plan requirement is an annual preseason planning meeting to address needs of airport users and improve runway safety and communications between various offices involved or impacted by a storm event. All tenants and users are invited to this meeting at 8:30a.m. on Thursday, October 14 in Council Chambers. Lease Lot Inspections: The Airport Manager and Assistant to the City Manager are inspecting lease lots inside the perimeter fence in accordance with grant assurances and lease compliance. Thank you to Kenai Aviation, Baldwin Butler, and Aero Maintenance for i❑ t accommodating us on Monday, October 11. Letters w... be sent notifying tenants of any noncompliance lease issues when all the inspections are complete. Airport Emergency Control Plan (AECP): An Airport Emergency Plan Advisory Circular issued on June 19, 2009 required all part 139 airports to revise their existing Airport Emergency Control Plans (AECP) based on the new standards and submit to the FM by June 19, 2010. The FAA recognized this effort as a significant workload for certificate holders. Based on recommendations from FAA Airport Certification Inspectors the deadline was extended to December 31, 2010 and a grant was secured under the FAA Airport Improvement Program for the re- write. The Airport Manager and Fire Chief are working very closely with DOWLHKM and expect to have the Airport's rewrite completed by December 31, 2010. New Air Traffic Manager: Shahid Gill (likes to be called "Gill is the new Air Traffic Manager in the Kenai Tower. He has worked in the lower 48 for SERCO; but most recently carne from Dubai. Airport Administrative Assistant Lori Holleman, Administrative Assistant, at the Airport is retiring. Her last day will be Friday, October 29. Please stop by and wish her well. The vacancy will be advertised the end of October. 2010 -10 -105- he city of KENAI, AlA SKA September Circulation Figures Adult Fiction 2,11 Internet Access 1,460 Adult Non- Fiction 1,451 Music 155 Periodicals 88 Puzzles 0 Juvenile Fiction 677 Videos 275 Juvenile Non Fiction 240 DVDs 2,376 Easy Fiction 1,248 Audio books 265 Easy Non Fiction 263 Miscellaneous 44 Interlibrary Loan 27 Computer Programs 6 Total Print Total Circulation 10,689 In -House circulation 95 Library Door Count 7,332 Downloadable Audio 291 Downloadable EBooks 14 The library will be closed on Monday, October 18 for Alaska Day and on Tuesday, October 19 for construction activity. HEA will be working on the power to the building and there will not be any electricity. Income r uic� 41 A.V J9 Xerox 56.25 Lost /Damaged 164.28 Test Proctoring Fee 20.00 Printing 419.25 Total income 09/10 1,750.17 KENAI COMMUNITY LIBRARY MID -MONTH REPORT OCTOBER2010 Adult Programs 4 Persons 4 Children's Family Programs.... 14 Attendees 247 6,108 Total Non -Print 4,581 -106- Library Cards Issued September 2010 Internet Only 12 Kasilof 5 Kenai 60 Moose Pass 1 Nikiski 9 Ninilchik 2 Soldotna 20 Sterling 7 Non Resident 1. Organization Other 5 Total 122 r. cety of HE Al, TO: Rick Koch, City Manager FROM: Wayne Ogle, Public Works Director DATE: October 12, 2010 SUBJECT: Mid Month Report; Public Works Department PUBLIC WORKS DEPARTMENT OCTOBER 2010 REPORT Public Works Operations: Equipment is readied for snow removal operations. Sand is being stockpiled for winter sanding. Airport is hosting a meeting on October 14"' for all personnel who will provide services to the Airport snow removal effort. This will include some Public Works personnel. Streets Department prepped concrete pad foundations for two picnic pavilions at the new Daubenspeck Municipal Park. The Rotary Club provided the labor. The Shop Department is purchasing new software to improve control of shop repair tickets and vehicle maintenance records. Status of Projects: Kenai Municipal Airport Rehabilitate Apron 2009 -2010 Alaska Road Builders is the general contractor Wince Corthell provides Construction Management. The project is winding down for the winter. The ARRA portion of the project is complete. All paving is complete. Some apron painting is being completed as weather permits. The complete painting of runway 1L-19R and other markings will be done during spring 2011. Final project completion is June 15, 2011. Kenai Municipal Airport Master Plan Work is underway to complete a Professional Services Agreement between the City and Wince- Corthell- Bryson for this project. Kenai Municipal Airport Float Plane Basin Development Phase 1. Project will realign 4th Ave. Access Road into the Float Plane Basin parking area and the City water tank, constructing additional 2,800 linear feet paved taxiways "S" and "T grading for drainage approximately 350,000 square feet of lease lot area, security fencing gates, painting taxiway marking, taxiway lights and signage providing for installation of natural gas electrical power utilities. Provisions for future installation of water, sewer telecommunications utilities are also to be provided. The Contract Agreement for Professional Services with Wince Corthell -Bryson is complete. Preliminary site examination is being done. Kenai: Various Road Improvements 2009 (Baron Park Lane HEA Access). The Alaska Department of Transportation (ADOT) has issued a Notice of Award to Alaska Road Builders, The contract is worth $575,000. Construction will commence in spring 2011. Fourth Avenue Culvert Replacement Project was funded by a grant to the Kenai Watershed Forum to replace a failing culvert on Fourth Avenue. This failed culvert inhibited the passage of fish. The design and construction management was provided by Nelson Engineering. The City funded Additive Alternate One extended a 10" water main down Spruce Street and replaced an existing 2 IA" service line that services two apartment buildings. Change Order One moved the tie -in about 75' east along Fourth Avenue. This planned tie in point was 17' below grade. The new location will be 11' which will facilitate future water main maintenance or repair work. Foster Construction was the contractor, Project is complete. Funds are being held by the Watershed Forum to ensure the late hydro- seeding is effective in spring 2011. Kenai North Dunes Elevated Light Penetrating Walkways /Ramps Supply Related Appurtenances Kenai Welding supplied fabricated (from design documents) the necessary materials to elevate the two existing walkway gratings on the North Dune. The City will install the gratings and walkways to their design elevation. Estimated completion is end of October. Small Projects: Recreation Center: Three roof areas which have had leaks have been repaired. A project is underway to replace the teen center carpeting and repair the cabinets in the kitchen. City Hall: Carmody Masonry will construct a brick veneer wall to decorate the front hallway. Public Safety Building and City Hall: Preferred Plumbing will flush out the heating system piping. Boat Launch Road a new gate will be installed north of the bird viewing platform to allow access to the platform but close off the dock area. -107- E, C October 26 For purposes of discussion I suggest a timeline as follows: idalggo Avenue,. Kenai, Alaska 99611 -7794 none: 907-283-7535 Fax: 907 233- 3014 tlwww.ci.ke nai.ak. us —108— Task Submit annually to the City Manager and Council, not Tess than ninety (90) days prior to the beginning of the budget year, a list of recornmended capital improvements, which in the opinion of the Commission, are necessary or desireable to be constructed during the forthcoming three (3) year period. Such list shall be arranged in order of preference, with recommendations as to which projects shall be constructed in which year (KMC 11.10,010(a)(2)) City Manager Proposed Work Scineduie In order for capital projects to be considered in the following year's budget, Administration must receive any recommendations by January 15 in other words, if the Harbor Commission has projects that it wishes the Administration and Council to consider for the FY12 budget, those recommendations must be received by January 15, 2011, Harbor Commission Work Session. Administration submits capital projects recommendations to harbor Commission. Commission discusses Administration recommendations and may delete or add projects. Oct 27- -Nov 1 Administration refines scope of work and cost estimates, including Commission projects added at previous work session. November 8 Harbor Commission Meeting. Commission drafts capital improvement project lists for FY12, FY13 FY14, and prioritizes lists for submission to Planning Zoning Commission. ber 8 Planning Zoning Commission Meeting. New Business- Discussion item. Comments to be provided to Harbor Commission, December 13 Harbor Commission Meeting. Consider P Z comments, if any, and finalize capital project lists and priorities. Jan 5, 201.1 Submit Recommended Capital improvements List to City Council and City Manager. 0 a 0 co c 2 E 0 E fi E N It" LL G m k co E CO 10 ID 0 co -109- O 1 Chapter 11,10 OR COMMISSION Sections: /1,10.010 Duties and powers. (3 1L10,011 t duties aaBd p,rwe so (a) The Commission shall be required to do the following: (1) Develop, adopt, alter, or revise, subject to approval by the City Council, a roaster plan for the physical development of harbor or port facilities for the City. Such master plan with accompanying maps, plats, chars, descriptive, and explanatory matter, shall show the Commission's recommendations for the development of the City Harbor facilities may include, among other things: (i) development of the type, location, and sequence of all public harbor facilities; (ii) the relocation, removal, extension, or change of use of existing harbor facilities; (2) Submit annually to the City Manager and Council, not less than ninety (90) days prior to the beginning of the budget year, a list of the recommended capital im- provements which, in the opinion of the Commission, are necessary or desirable to be constructed during the forthcoming three (3) year period. Such list shall be arranged in order of preference, with rec- ommendations as to which projects shall be constructed in which year. Make investigations regarding any matter related to City harbor facilities, tide or submerged lands. Make recommendations to the Council relative to the care, con n and development of tide and sub- merged lands. 165 -1 1 0- 11.10.010 (4) Act in the capacity as directed and autho- rized by a tidelands ordinance adopted by the City. (5) Review all City leases of City owned tide, submerged, and lands or navigable waters within the City, and as to the planned improvements proposed and mane recommendations to the City Colin- (6) Make and prepare reports and plans for approval by the City Council. (7) Coordinate public efforts, individual and group, to the effectuation of approved plans. (8) Shall act in advisory capacity in the se- lection of a Harbor Director should such a position be created by the City Council. (Crds. 474, 1161, 1802 -98) (t!eoai 5- 21 -99) 1.90.010 STANDARD P`s:tOCEDURES FOR BOARDS, C4sMMISSIIDNS AND COMMITTEES Sections: 2.90.010 1,90.020 1.90.030 1.90,040 1.90.050 11.9060 Chapter L9 Creation. Duties. Qualifications. Terms. Proceedings. Specific requirements of boards, commissions and committees, 1.90.01.0 Creation. All boards, commissions and committees cre- ated by the Council of the City of Kenai, shall con- sist of seven (7) members who shall be nominated by the I4ayor and confirmed by the City Council from applications submitted to the City Cleric A chairman and vice chairman shall be selected an- nually and shall he elected from and by the ap- pointed members. The Mayor and one Council Member elected by the Council as ex- officio mem- bers and as consultants of any board, commission or comrnittee, may attend all meetings, but shall have no voting power on the board, commission or committee. A member of Council or City adminis- trative staff shall attend all meetings of boards, commissions and committees and supply staff sup- port. 1,.90.020 Duties. (a.) Members of boards, commissions and com- mittees shall he required to establish policies relating to their respective organization. They shall act in an advisory capacity to depart- ment heads within the City Administration if there are such departments in the City organi- zation that directly relate to the board, com- mission or committee. (b) if the board, commission or committee has income stated within the City of Kenai annual budget, said board, commission or committee shall work with the City Manager to establish (Kenai Supp, No, 93, 10.08) 34 expenses projected for the year for approval by the City Council. L9x.030, Qualifications. (a) A member' of a board, commission or com- mittee must be a resident of the City of Kenai, unless the board, commission or committee is specifically exempted by Council from this requirement. The member cannot he an offi- cer or employee of the City of Kenai. I€ any member should move his or her residence from the corporate limits of the City of Kenai (if applicable), is an officer or employee of the City of Kenai, or shall be elected or ap- pointed as an.officer or employee of the City of Kenai, the service of such member shall terminate immediately. He or she should be aware that he or she will serve without salary, but will be reimbursed for all reasonable ex- penses incurred in connection with this ser- vice, only after approval by Council (b) The Beautification Committee, and Harbor, Library, and Parks and Recreation Commis- sions may at the discretion of the Council have (1) up to two (2) non- resident members each; or (2) have one (1) member who does not. reside in the City but works at least one half time within the City. (Ords. 1948 -2002, 2320 -2008) 1.94IS4© )terms. (a) A member of a board, commission or com- mittee shall serve for a term of three (3) years, unless the board, commission or com- mittee is specifically exempted by Council from this requirement. At renewal date, the Mayor, with consent of the Council, can re- appoint the member or recommend a re- placement. The terms of the initial board, commission or committee member shall be staggered so that three (3) members will be appointed for one (1) year; two (2) members will be appointed for two (2) years; and two (2) members will (b) -112- 1.90.050 Proceedhrtgs. (a) All boards, commissions and committees will have regularly scheduled meetings which shall be open to the public. Exceptions to the meeting requirements shall be established by Council. Permanent records or minutes shall be kept of all proceedings and such minutes shall record the vote of each member upon every question. Every decision or finding shall immediately be filed in the office of the City Clerk and shall be a. record open to inspection by any person. All acts of boards, commissions and committees are sub- ject to the paramount authority of the City Council. If the commission, committee or hoard mem- ber shall be absent, without the body excusing the absence for good cause, from more than one -half of all the meetings of his or her com- mittee, commission or board, regular and spe- cial, held within any period of three (3) con- secutive calendar months, he or she shall thereupon cease to hold the seat. A commis- sion, committee or board member may not have more than three (3) excused absences during a twelve (12) month calendar year. (c) In all matters of parliamentary procedure, Robert's Rules of Order as revised shall be applicable and govern all meetings, unless as specified in Y.MC 1.15.060 motions; ICMC 1.15.100, speaking; and KMC 115.1 vot- ing. (d) The responsibility of insuring that all mem- bers of boards, commissions and committees xeceivea copy of the.Standaad_Procedures of Boards, Commissions and Committees lies with the City Clerk. (Ords. 1610 -94; 2017 -2003; 2050 -2004; 2140- 2006) (b) be appointed for three (3) years. Terms shall commence on January l st of each year. 34 -1 -113- 1.90.040 11.90.060 Specific requirements of boards, cnmm ftaslons and cnan rnntlees. Requirements of boards, conunissions and committees as set forth in KMC 1.90 are general requirements and shall be followed to the extent that they do not conflict with specific requirements found in code sections specifically pertaining to individual boards, commissions and committees. (Ords. 1223, 1239) (Ktnal Stipp. No 93, 10 08) EAUT RRCAT •N C•MM TTEE EC MMENDED CAPITAL IMPROVERS 1 =S FOR FISCAL YEARS 2012, 2013 2014 Task Submit annually to the City Manager and Council, not less than ninety (90) days prior to the beginning of the budget year, a list of recommended capital improvements, which in the opinion of the Committee, are necessary or desireable to be constructed during the forthcoming three (3) year period. Such list shall be arranged in order of preference, with recommendations as to which projects shall be constructed in which,year. City Manager Proposed Work Schedule In order for capital projects to be considered In the following year's budget, Administration must receive any recommendations by January 15 In other words, if the Beautification Committee has projects that it wishes the Administration and Council to consider for the FY12 budget, those recommendations must be received by January 15, 2011. For purposes of discussion I suggest a timeline as follows: November 9 Beautification Committee Meeting. Administration submits capital projects recommendations to Beautification Committee. Committee discusses Administration recommendations and may delete or add projects. Nov 10 -Dec 1 December 8 December 28 /llfa e with a Past elf with aFf4iit 210 Fidalgo Avenue, Kenai, Alaska 99611 7794 Telephone: 907 283 -7535 Fax: 907- 283 -3014 www.ci.kenai.ak.us Administration refines scope of work and cost estimates, including Committee projects added at previous work session for submission to Planning Zoning Commission. Planning Zoning Commission Meeting. New Business- Discussion Item. Comments to be provided to Beautification Committee. Beautification Committee Meeting. Consider P Z comments if any, and finalize capital project lists and priorities. Jan 5, 2011 Submit Recommended Capital Improvements List to City Council and City Manager. -114- 7!' A. ROLL CALL Council approved the change. R. PERfota1M PRESERT SCHEDULED TO BE GEARD 0..1 Tim Wisssiewskj Beautification Committee Mr. WLanieweaki noted he was requesting a Commission„ not a OOmsiittes. n feu' citizens of the area get to- gether and felt a Commission, was necessary and thew are some things that are not being„ taken ce.r.¢ of. Purposes of the Commission seen y. To establish an on -going plan„ to enhance the beauty of the City. 2 she Commission will bring vlolatoxs to the City for enforcement and adopt e new Ordinance and encourage local enforcement, of local litter Laws. ,a. Merchants in the City and the Municipal govt. provide litter barrels. 4. Saturate the area with anti Litter sign. S, Organise a recycling program and educate our youth, Make available trash liners and litter bags for public use, They nre asking the Mayor to appoint a Commission. Councilman Mueller noted the Ordinance would have to be brought before Council. Also, sows times anti= litter sign can be more problem than the litter. Councilman. Malaton said this is e worthwhile effort, an organized plan has an effect on people's attitudes, Councilman Wagoner noted it is not as easy as it seems to work on violations within levels of govern ment. Mr. Wisniewski conceded all who have tried have run into red tape, but we should start some place. Mayor O'Reilly asked, who empties the barrels placed by the Lions? Public Works Director Kornelis replied, there is a schedule, he will check. Mayor O'Reilly explained to Mx. Wiseniewski, ordinarily these projects team as Committees, then can become Commissions if warranted.. Councilwoman GLiek noted they will have to go through planning fr toning and jointly recommend to Council. Councilman Wagoner suggested Kayos O'Reilly and Mr. Wisnimaialti meta together. Mayor O`StaiI.ly asked Atty. belahay to est tap a. Resolution. Present. .Betty Glick, Ron Moisten, Ray Measles. maick Mueller. TOm. Wagoner, John Wise, Vincent 0 °E6illy Absents gone AGWtM'R& APPROVAL 1, ideyor O'Reilly asked thine itmas G-7, Ordinance 79Q -02 be postponed till next meeting 0-21-92 -115- KENAI PARKS AND RECREATION COMMISSION Page 3 Regular Meeting, September 14, 1982 Suggested items included water and sewer to the ball fields adjoining Gusty Subdivision for a concession stand and restrooms, enclosed dugouts for girls softball, and a continuation of the bike trails from Tinker to Swires, a distance of 2 miles. 7, NEW BUSINESS None 8, COMMISSION COMMENTS AND QUESTIONS Commissioner Seibert asked for information concerning the Beautification Committee, Mr. Meallivrary stated that it was not actually formed yet. Comments followed by all Commissioners regarding a possible overlap and budget problems between the two entities as well as what good ideas could come of the two bodies working jointly. Mr. McGillivrary was asked about the floors at the racquet ball courts. With a new attorney coming on with the City, the problem will have to wait a while longer. 9, ADJOURNMENT There being no further business, the meeting was adjourned. The next meeting was set for Tuesday, October 5, 1982 at 7:00 p.m, at the Kenai City Hall, Council Chambers. Respectfully submitted Ct 21/11 L416.-0 r e 0 (24-1-2) Pr s" i rtin /1, kr) sUrR. LeAf fru?, -116- 1 BEAUTIFICATION COMMITTEE Organizational Meeting January 11, 1983 ROLL CALL Present: Tim Wizniewski, Annette Jackson, Richard Hultburg, Rose Ann Sheldon., Candy Nugent, Louisa. Miller 2, An opening statement was made by Mayor O'Reilly who indicated his appreciation of the time, efforts, and interest of those persons present to the beautification of the City. Mayor O'Reilly further described the organic relationship with Parks and Recreation and how the two organizations could work together to get the job done, including the Public Works department and their ability to lend assistance. Mayor O'Reilly asked for questions, the main question appeared to be funding for whatever recommendations the Committee came up. with, It was suggested that two main approaches could be made; 1) draw up a. list to identify projects then set up and request a budget for those projects or, 2) set up overall budget aimed at general plans. each member was asked to come up with their suggestions for beautifi- cation. It was determined that the highest priority went to clean up and beautification of the strip along the Spur. Highway from the Katmai Rotel to approximately Spruce Street, The Committee concluded that since this was a large area with several projects within it, they would go ahead with this as their priority item and aim for completion of this project before going on to other areas of conern, and further to draft a budget which would be suffi- cient to cover the project with the help of the Parks Recreation Commission and the Public Works Department, Several suggestions were made which includedn write letter to Arco to inquire about obtaining trees of a fairly large size investigate setting up a recycling center contact schools about coming up with an animal mascot for cleanup campaign elicit help from media to find more volunteers The Committee set the date ef January 20th for budget session and asked that Kayo McGillivray, Parks Recreation director be present, Gandy Nugent was assigned the task of• finding information pertaining to signs from DEC or forestry, Richard Nuitburg volunteered to. find out about kids creating the mascot for the cleanup campaign, Louisa Miller will write the letter to Arco and Tim Wizniewski will sign it Adminstration to see about a water supply from the Chamber building to the strip and for public works to remove sandy soil from the strip and replace with top soil, Janet Loper, Secretary 4■11 e ea e ttr 10 ILA) zit 00 #77t,f,e „si -118- (,'"S@ 7Binti ©l N©, 96 -12 in SU Cbiidrrenn Trust, 4. Rgoolution No. via-a9 Changing Appropriat..ioflls by $2,D00 in the Non Depart terntai Department Al Order to Pay for a Civil Rights and Anti-Discrimination Seminar. I ©a©i tion Ng., 96 =2© In Support of the Kenai Peninsula Borough North Zone All- Hazard Emnergency Response Plano 6, Riagma ti©Th N©. Recognizing the Social and Economic Import.axace of the Tourism Industry and Sports Fishing to the Kenai Peninsula 7, wAirofl.t s riQ. 96 -22 Changing Appropria b $8 it the Shop Department of the General Fend B. a9 Liquaz LiOOMAP. C©mtanL.SN is ye ETate4pltz '?rS°l'EDRI`PrRL BPOE Elks Lodge #2425 Club. NS9V3.97 Liquor Live n r!& a®nuwel Upper Deck Tourism/Beverage Dispensary. D. CCU b fl O1 CO *fl. i Coennci] one Aging 2. Airport Commission 3, Harbor Commission 4, Library Commission 5, Parks Recreation Commission 6. Planning Zoning Commisszarr€ 7, Miscellaneous Commissions and Committees a. Beautification Committee b. Historic District Board c, Challenger Steering Committee d. Kenei Vieitcrs Convention Bureau Board -119- t the Alaska 1.90.010 C1apter ST. ANUDARD PROCEDURES FOR B lnl")S, MI IISS`ION SS AND COM M IT n E ES Sections: 1.9 .030 11.99.150 1.90,0160 Creation. Duties. Qualifications. Terns. Proceedings. Specific requirements is cif cards, co9ttnndSsiotos and committees. 1.50.010 Creation: All boards, commissions and committees cre- ated by the Council of the City of Kenai; shall con- sist of seven (7) members who shall be nominated by the Mayor and confirmed by the City Council from applications submitted to the City Clear_ A chairman and vice chairman shall be selected an- nually and shall be elected from and by the ap- pointed members. The Ivfayor and one Council Member elected by the Council as ex- officio mem- bers and as consultants of any board, commission or committee, may attend all meetings, but shall have no voting power on the board, commission or committee. A member of Council or City, adminis- trative staff shall attend all meetings of boards, commissions and. committees and supply staff sup- port. 1 90.020 Duties. (a) Men xbers of boards, commissions and com- mittees shall be required to establish policies relating to their respective organization. They shall act in an advisory capacity to depan- ment heads within the City Administration if there are such departments in the City organi- zation that directly relate to the board, coon- mission or coirunittee. (b) If the board, centrists n or committee has income stated within the City of Kenai annual budget, said board, commission or committee shall work with the City Manager to establish (Kenai Supp. N.. 93, 10 -08' 34 (b) -120- expenses projected for the year for approval by the City Council. 1 X0.030 Qualifications. (a) A member of a hoard, commission or com- mittee must he a resident of the City of Kenai, unless the board, cerami.ssion or committee is specifically exempted by Council. from this requirement. The member cannot be an offi- cer or employee of the City of Kenai. I[f any member should move his or her residence from the corporate limits of the City of Kenai (if applicable), is an officer or employee of the City of Kenai, or shall be elected or ap- pointed as an.ofcer or employee of the City of Kenai, the 'service of such member shall terrninate immediately. He or she should be aware that he or she will serve without salary, but will be reimbursed for all reasonable ex- penses incurred in connection with this ser- vice, only after approval' by Council. (o) The Beautification Committee, and Harbor, Library, and Parks and Recreation Commis- sions may at the discretion of the Council ave (1) up to two (2) non-resident members each; or (2) have one (1) member who does not reside in th.e City but works at least one half time within the City. (Grads. 1948- 2002, 2320- 2008) 11.90.040 Terms. (a) A member of a board, commission or com- mittee draft serve for a terra" -of three (3) years, unless the board, commission or catn- mittee is specifically exempted by Council from this requirement. At renewal date, the Mayor, with consent of the Council, can re- appoint the member or reconnnend a re- placement. The terms of the initial board, commission or committee member shall be staggered so that three (3) members will. be appointed for one (1) year; two (2) members will be appointed for two (2) years; and two (2) members will F he appointed for three (3) years. Tern commence on January 1st of each year. 2.90.05O Procaedings, (a) AU boards, commissions and committees will have regularly scheduled meetings which shall be open to the public. Exceptions to the :meeting requirements shall be established by Council. Permanent records or minutes shall be lcept of all proceedings and. such minutes shall. record. the vote of each member upon. every question. Every decision or findssag shall immediately he filed in the office of the City Clerk and shall be a public record open to inspection by any person. All acts of boards, commissions and committees are sub- to the paramount authority of the City Council. (b) If the commission, committee or board mem- ber shall be absent, without be body excusing the absence for good cause, from more than one -half of all the meetings of his or her com- mittee, colnimssiorior board, regular and spe- cial, held within any period of three (3) con- secutive calendar months, he or she shall. thereupon cease to hold the seat. A commis- sion, commit or board member may not have more than three (3) excused absences during a twelve (12) month calendar year. (c) in all matters of parliamentary procedure, Robert's Rules of Order as revised shah be applicable and govern alter-lettings, unless as specified in KWIC 1.15.060 motions; $RISC 1.15.100, speaking; and P ie1C 1.15.110, vot- ing. (d) The responsibility of. ;itsu that all mem- bers of boards, commissions and committees receive a.copy .of _the..Standard Procedrzres..of Boards, Commissions and Committees lies with the City Clerk. (ends. 1610 -94; 2017 -2003; 2050 2004; 2140.. 2006) 34 -1 -121- 1.90.040 13910160 Specific rrequiremi eats of hoards., commissions aasd committees. Requirements. of boards, commissions and committees as set forth in KMC 1.90 are general requirements and shall be followed to the extent that they do not conflict with specific requirements found in code sections specifically pertaining to individual boards, commissions and committees. (Ords. 1223, 1239) (K emai Su,4p.No. 93, 10 -08) Chapel ➢3o615 PARKS AN C➢ IIPEC WUEATILOF? SI[ON 9oU iI0 Cream 19.05 °6110 Duties and powers. 119.0i1.031) 'reams sand mm oumrnumemis as 10.056l140 QuurO,taosilitemrs Commtiismrumim members. 291.5„051i ii?rmieetli:rngs sof Comm ,:suer lis.06S10 Cs -magma, (Ord, 416, selealet 1161) 19.05,5110 Duties mod legman. The Commission shall l e required to do the S evelop, adopt, alter, or revise st:Ppjec2 tr ap- proval by the Cary Council, a master plan for the physical development of recreation facilities for the City. Such master plan with accompany ing maps, piaas, charts, descriptive, and explan- atory matter, shall show the Commission's recommendations for she development of the City's recreation facility may include, among outer things: (1) Development of the type, location, and sequence of all public =matron facilities; and (2) The relocation, removal, extension, or change of use eof existaaag rrecreatioa fadlli- Submit annually to the City Manager and Cothrhdl, root less. than ninety (90) days prior to the beginning of the budget year, a list of r:c- ommended capital improvements, which in the opinion of the Commission, are necessary or desirable to he constructed dun ng the forth- coming three (3) year period. Sash list shall he arranged in order of preference, with recom- mendations as to which projects shall be con- structed in which year. 353 -122- (e. ':�I Make lIIrvmsYigaCn ®IDiS regarding any matter relat- ed to City recreation. (d) Make and prepare reports and plans for approv- al by the City Council. (e) Shall act in advisory capacity in the selection of a Director of Parks and Recreation. (Ords. 416, 1161) 19 %,091j3© Ter oms and api mnnftumemts to vaucaa1m.ude"o. (Girds. 416, 430, repealed 1161) 1 19s05,84o Quaeaidoune of Commis members. (O 416, 619, revealed 1 l61) 1c9.05. 1156 Prom Gmuenvnrncasneam. (Ord. 416, repealed 1161 .9.05,010 T GOAL A: Continue planting street trees (Canada Red Cherries) along prominent corridors Objectives: 1. Coordinate with Airport for additional tree plantings (4 total) fronting airport terminal along Wiilow St. 2. Plant 4 trees at approx. 40' spacing on green strip fronting Home depot. 3. Plant 2 trees on Blue Star greenstrip. 4. Plant 2 trees along Airport Way fronting old Hertz building. 5. Continue marketing "Trees on Willow" program and target the following areas Tesoro (1), Regal Theaters (2), Don .loses (1), Country Foods (1), ofd AlH building (2). STREET TREES �w u mil; a P 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 AFI rB ell Telephone: 907-283-7535 FAX: 907- 283 -sr01 4 T�� yea fdflcatton Committee FROM DATE; SUBJECT: Roibert J, Frates, Parks at Recreation 0orector F tebruary 26, 2010 O �S OBJECTIV ES 2015 -123- with a G i4f,ure It is time once again to update our goals and objectives for the upcoming year. Attached is a list of suggested beautification goals objectives for discussion. Once finalized, 1 will forward them to the Parks Recreation Commission for review. Please bring forward any ideas you have to our next regular meeting of March 9, 2010. GOAL B: improve streetscape elements along prominent corridors for visual appeal during winter months. Objectives: t. Continue with efforts to get power to corner of Spur Hwy and Bridge Access /IViain St. Loop to accommodate static display. 2. e xpand static iisplays to Leif Hansen Memorial Park, as budget infrastructure allows. G OAL A; improve streetscape elements along prominent corridors tor summer use. Objectives: 1. Develop short- term /Fong -term master plan for bench and trash receptacle placement. 2. For planning purposes, assess style, function, maintenance and cost, STREET MAAPCES, GOAL C: biective GOAL D: Objectives: Continue identifying and planning for future areas Note: 2009 piantincs Spur Hwy /Bowling Alley (3 trees) Main St. Loop /Parkstrip (2 trees) Spur t vvy /Blockbusters (2 trees) 2008 lantinoe Willow St (near airport) (12 trees) 2007 biantin ps Animal Control (5 trees) Willow St. 6 trees eplace cid wooden flower boxes. Seek volunteer labor to construct new boxes. Expand location of street pole banners t. install banners along Bidarka Ave. 2. install banners along Marathon Rd. -124- G OAL A: Control spread of invasive plants in Kenai park Bands and rdgh't- of-ways. Objectives: 1. Continue working with local Cooperative. Extension Service. 2. Provide staff training on ldenfifdcation of invasive plants in Kenai area. 3. Coordinate volunteer weed pulling day (along Spur Hwy). GOAL A: Create aesthetically pleasing planters with full range of color, texture and height Objectives: 1. Majority of plants shall be large plant material (4" pots or larger). GOAL A: install underground sprinkler system to Erik Hansen Scout Park. Objectives: I. Provide for staff tra' i€ng so systems can be instalied in- house. G xi LN 'AME WEEDS FMK HAN"SEN SCOUT P K UPGRADE GOAL 3: Objectives: VOLUW EER1'SSMI GOAL A: Objectives: CW CLE PLANTERS Upgrade fiower bed. 1. Convert shrub bed utilizing ninebark, rocks, and bark. Seek contractor to perform work. Continue to support volunteerism through the annual Volunteer Pant Day. 1. Coordinate P schedule Volunteer !Plant Day for „lune 5 H 2. identify and plan for beds to be planted by volunteers. 3. Continue to promote programs such as Adopt -a -Park, Adopt-a Bench, Adopt -a- Garden, Adopt -a- Trail. -125- GOAL A: Add additional sidewalks Objectives: 1. Secure funding and bid project. 9 ,2 COLUMISARIUM 730AL A: Objectives: BLUFF OVERLOOK UPGRADE GOAL 2. Majority of plants shalt be flowering at time of panting. 3. Add poppies for visual appeaL 4. Secure vendor to perform work. Extend Iffe of existing cemetery through use of a Coiumbariurn. 1, deritify location and pursue unding for a Co Jun with room to expand as needed. Upgrade 'Nutt overlook area (East of Senior Center). Objectives: j 1. Add elements of visual appeal and functionality to area, i.e., parking bollards, brush removal along parking lot, pathway to gazebo, benches. 2. Evaluate area for more frequent mowing and better turf care. 3. Plant grass seed in disturbed areas from gazebo project. LH MEMORIAL PARK Stai ADEMON -126- I City of Ken& Commissions Schod°uls fov Submission of Capital ltl"1prP_tUQl` ent R'@comF7i(r'iOd&lons to CF_T"1n r °1 A i i +f L.11,t> FY2012, FY2013, FY2014 Menigadi kenuepTh iagwddaa iagmaAokl .IagotdoI iaagtualdaS Split Summary External Milestone Page 3 �I usiul� 4LIS /1 PaM 0121/01 and 01 /11I1 uolP! Mg)/ I. and 0L /6 /1L and Ol /121 PaM 0 t/821 Pa Tue 12121/10 Tue 12/28/10 !l /S/1 PaM 04/62/21 PaM vets OL21 /01 an! 0121/01 efJ. Wed 10/13110 I I 012/11 001 01-16/1 I- oak 01/121 PaAM 0L /HiZI faM 011LZ/ZL an 01/8221 and Wed 12/29/10 L Wed 1/5/11 uOgeing step Z9 88p 1. slop 21.1 !keg I. Aep Aep I. Aep ALT 1 j AeP L i A Task Name Beautification Committee Recommended CIP List CM Meet with Commikae Admin. Prepares Info for Committee Admin Info submitted to Committee Commttee Meeting (Draft Final List) Submit CIP List to P &Z Commission P&Z Commission Meeting P&Z b Z_ Comments submitted to Committee Commission Commission p8eeting -Final CIP List Submit GIP List to Administration Submit CIP List to Council Project: 10 -11 -10 Recommended CIP L Date: Inc 10/12/10 I CH 63 OE L£ N t£ C.8 92 LE M iM 1 -127- City of Kenai Commissions Schedule for Submission of Capital improvement Recommendations to Counciihfittimfirilteireiden FY2012 F 2210 3, FY2014 ro a II luemga_i I nienuep tagwaaeC .1egwan0t,1 I iagoingl taptualcaS Split Summary las^ External k lestone I Progress 'sg5, V ll 2. Project Summa [MacRae C7 Page 1 Vh g ene �O O m h. M O i I �'D 1 I O c- r RI O O ID O N C' i N O i0 O I O a o 1�- N S a e- o Ca O O_ 1 O I O 1 ti N O ID co N i K 10 CO 1 I RI VVed 12/29/10 Thu 176(51 /11 Fri 1(7/11 1/19/11 uogeing I tT !a iM it i !r n nn c Iti '6 ewe1V Y >e1 Parks Flee Recommended CEP List CM Meet with Commission Admin. Prepares Into for Commission Admin Into submitted to Commission CIP List Work Session Admin. Refines Scope Estimates Admin Info submitted to Commission Commission Meeting (Draft Final List) Submit CIP List to P&Z Commission P&Z Commission Meeting (Comments) &Z mm FEZ Comments submitted to Commission Commission Meeting -Final CIP List Submit CIP List to Administration 1 n Submit CIP List to Council w I 1 -128- 1 a l E 0 00 0 z co O ID ro Lt) a` o H kg 5 O E q E I O 1 -129- D N E 0 U N a 0 r L 0) N O N. E 0 0 P N N wo N a C 'Village with a Past, Cc y with a Future' -130- 210 Fidalgo Avenue, Kenai, Alaska 99611 -7794 Telephone: 907- 283 -7535 Fax: 907- 283 -3014 www.ci.kenai.ak.us PARKS RECREATION COMMISSION RECOMMENDED CAPITAL IMPROVEMENTS FOR FISCAL YEARS 2012, 2013 2014 Task Submit Annually to the City Manager and Council, not less than ninety (90) days prior to the beginning of the budget year, a list of recommended capital improvements, which in the opinion of the Commission, are necessary or desireable to be constructed during the forthcoming three (3) year period. Such list shall be arranged in order of preference, with recommendations as to which projects shall be constructed in which year (KMC 10.05.010(b)). City Manager Comment In order for capital projects to be considered in the following year's budget, Administration must receive any recommendations by January 15 In other words, if the Parks Recreation Commission has projects that it wishes the Administration and Council to consider for the FY12 budget, those recommendations must be received by January 15, 2011. For purposes of discussion I suggest a timeline as follows: Meeting. Administration submits capital Oct 25-Oct 29 P R CommissionNIGGIII II� mini$ i�auvn Suui nit$ Capi�ai p "vjciw is recommendations to Parks Recreation Commission. Commission discusses Administration recommendations and may delete or add projects. Nov 1 -Nov 12 Administration refines scope of work and cost estimates, including Commission projects added at previous meeting. Nov 22 -Nov 26 P R Commission Meeting. Commission draft capital improvement project lists for FY12, FY13 FY14, and prioritizes lists. Dec 8 Planning Zoning Commission Meeting. New Business Discussion Item. Comments to be provided to Parks Recreation Commission. Dec13 -Dec17 P R Commission Meeting. Consider P Z comments, if any, and finalize capital project lists and priorities. Jan 5, 2011 Submit Recommended Capital Improvements List to City Council and City Manager. 1.90.013 Chapter L90 STMT PROCEDURES FOR COMMISERONS AND COMMITTEE: 1.90.010 1.90.020 L.90.03® 1.90,0 0 190,050 1,90.060 Creation. Duties. Qualifications, Term. Proceedings, Specific requdretrnents of boards, conor esions and committees. 1.9 ©,On Creation, Ali boards, commissions and committees cre- ated by the Council of the City of Kenai, shall con- sist of seven (7) members who shall be nominated by the Mayor and confirmed by the City Council from applications submitted to the City Clerk, A chairman and vice- chairman shall be selected an- nually and shall be elected from and by the ap- pointed members. The Mayor and one Council Member elected by the Council as ex- officio mem- bers and as consultants of any board, commission or committee, may attend all meetings, but shall have no voting power on the board, commission or committee. A member. of Council or City adminis- trative staff shall attend all meetings of boards, commissions and committees and supply staff sup- port. 1.90.020 Danes. (a) Members of hoards, commissions and com- mittees shall be required to establish policies relating to their respective organization. They shall act in an advisory capacity to depart- ment heads within the City Administration if there are such departments in the City organi- zation that directly relate to the hoard, com- tnission or committee. (b) if the board, commission or committee has income stated within the City of Kenai annual budget, said board, commission or committee shall work with the City Manager to establish (Kt nei Sunp. No. 93, 10.03) 34 1030,3130 Qualifications. (a) A member of a. board, commi or co tn- mi.ttee must he a. resident of the City of Kenai, unless the board, cornrnission er committee is specifically exempted by Council from this requirement. The member cannot be an offi- cer or employee of the City of Kenai. if any member should move his or her residence from the corporate limits of the City of Kenai (if applicable), is an officer or employee of the City of Kenai, or shall be elected or ap- pointed as an officer or employee of the City of Kenai, the service of such member shalt terminate immediately. I ?e or she should be aware that he or she will sense without salary, but will be reimbursed for ali reasonable ex- penses incurred in connection with this ser- vice, only after approval by Council. The Beautification Committee, and Harbor, Library, and Parks and Recreation Commis- sions ma.y at the discretion of the Council have (1) up to two (2) non resident members each; or (2) have one (1) member who does not reside in the City but works at least one half time within the City. (Drds. 1948 -2002, 2320 -2008) (b) Terms. A member of a board, commission or com- mittee shall serve for a term of three (3) years, unless the board, commission or com- mittee is specifically exempted by Council from this requirement. At renewal date, the Mayor, with consent of the Council, can re- appoint the member or recommend a re- placement. (b) The terms of the initial board, commission or committee member shall be staggered so that three (3) members will be appointed for one (1) year; two (2) members will be appointed for two (2) years; and two (2) members will 1.90.040 (a) -131- expenses projected for the year for approval by the City Council. 1,90.0r v0 Praceedh gs. (a) All boards, commissions and committees will have regularly scheduled meetings which shall be open to the public. Exceptions to the meeting requirement's shall be established by Council. Permanent records or minutes shall he kept of all proceedings and such ;minutes shall record the vote of each member upon every question. Every decision or finding shall immediately be filed in the office of the City Clerk and shall be a public record open to inspection by any person. All acts of boards, commissions and committees are sub- ject to the paramount authority of the City Council. (b) If the commission, committee or board mem- ber shall be absent, without the body excusing the absence for good cause, from more than one -half of all the meetings of his or her com- mittee, commission or board, regular and spe- cial, held within any period of three (3) con- secutive calendar months, he or she shall thereupon cease to hold the seat. A commis- sion, committee or hoard member may not have more than three (3) excused absences during a twelve (12) month calendar year. ¢n. g matters of parliamentary procedure, Robert's Rules of Order as revised shall be applicable and govern all,treetings, unless as specified in 111.1C 1.15,060 motions; KMC 1.15.100, speaking; and Ytl'VEC 1,15.110, vot- ing. (d) The responsibility of insuring that all mem- bers of boards, commissions and committees receive-so copy of the.Standar&Procedures of. Boards, Commissions and Committees lies with the City Clerk. (Ords. 1610 -94; 2017- 2003; 2050 -2004; 2140- 2006) (c) be appointed for three (3) years. Ternas shall commence on January 1st of each year. 34 -1 -132- 1.90.04 0 1, Specific t -egn rerneatts of boards, commissions aM1ad commlit tteea. Requirements of boards, commissions and committees as set forth in KMC 1.90 are general requirements and shall be followed to the extent that they do not conflict with specific requirements found in code sections specifically pertaining to individual boards, commissions and committees, (Ords. 1223, 1239) (Kenzi Supp. Ne. 93, (0-08) Sections: 19.05.010 Creation, 19.05.010 Duties and powers. 19.05.030 Terms and appointments to vacancies. 19.05.040 Qualifications of Commission members. 19.05.050 Proceedings of Commission. Chapter 19.05 PARKS AND RECREATION COMMISSION 19.05.010 Creation. (Ord. 416, repealed 1161) 19.05.010 Duties and powers. The Commission shall be required to do the following: Develop, adopt, alter, or revise subject to ap- proval by the City Council, a master plan for the physical development of recreation facilities for the City. Such master plan with accompany- ing maps, plats, charts, descriptive, and explan- atory matter, shall show the Commission's recommendations for the development of the City's recreation facility may include, among other things: (1) Development of the type, location, and sequence of all public recreation facilities; and (2) The relocation, removal, extension, or change of use of existing recreation facili- ties. Submit annually to the City Manager and Council, not less than ninety (90) days prior to the beginning of the budget year, a list of rec- ommended capital improvements, which in the opinion of the Commission, are necessary or desirable to be constructed during the forth- coming three (3) year period. Such list shall be arranged in order of preference, with recom- mendations as to which projects shall be con- structed in which year. (a) (b) 353 -133- 19.05.010 (c) Make investigations regarding any matter relat- ed to City recreation. (d) Make and prepare reports and plans for approv- al by the City Council. (e) Shall act in advisory capacity in the selection of a Director of Parks and Recreation. (Ords. 416, 1161) 19.05.030 Terms and appointments to vacancies. (Ords. 416, 430, repealed 1161) 19.05.040 Qualification of Commission members. (Ords. 416, 619, repealed 1161) 19.05.050 Proceedings of Commission. (Ord. 416, repealed 1161) REPORT OF THE CITY CLERK 1 04- �the G£y ti/ KENAI, ALASKA r_u Attachments Mayor /Council Members `Village with a Past, Cr'ty with a Faturen 210 FideIgo Avenue, Kenai Alaska 99611 -7794 Telephone: (907) 283 -7535 FAX: (907) 283 -3014 www.ci.kenai.ak.us MEMORANDUM TO: FROM: Carol L. Freas, City Clerk DATE: October 8, 2010 RE: MINI -GRANT PROJECT UPDATES As required by the Together We Can! City of Kenai Mini -Grant Procedures, attached is a final project report for the following completed mini grant(s): Grant No. 4 KCHS Workforce Development Center Steel Salmon Grant No. 14 Donna Niebauer /Sprucewood Beautification The final project reports include the description of the project, costs involved and how the mini -grant funds were used. -135- 4. Who assisted with your project? The students in the KCHS Welding classes Signature: (Print): Date: Return this form /receipts to: Kenai City Clerk 210 Fidelgo Avenue Kenai, AK 99611 -7794 -136- City of Kenai Mini -Grant Report Form (Due within 30 days of project completion.) Grant Number: 2fi Date Received: 77a3, /2.oio Name of Group /Individual: KCHS Welding Classes Contact Name: Steve Schoessler Mailing Address: 9583 Kenai Spur Hwy. Kenai, AK 99611 Phone: [907)283-2140 Email: sschoesslerfatkpbsd.k12.ak.us 1. Describe the completed project. Attach photo and documentation. Steel Salmon decorative ornaments were made to place around the city of Kenai. 2. How did you use the grant funds? The grant funds were used to purchase 16 gage steel and rebay. A portion of the funds were used to offset the costs of cutting gases, welding wire, power wire brushes and grinding wheels. 3. How successful was your project? The project was fairly successful. We had equipment problems that delayed the completion, but the students got to learn skills that can transfer to real working situations. Statement: Following submittal of the brief written report and all expense receipts being /turned i�'tq /the city of Kenai's Mini -Grant Steering Committee, the final gran 1 en parte4t, 10 will be paid. 714-69SE„ KEENA I1 PEN I NSUL A EAR SCH 1111• 42 NOETH S MILEY SOLDOIMP" PIK 99669 16 G'4"Vtf, 4.‘ert:".‘ nt-Tn- CIC''''Impit'aliS4-174C6-51a4; *-44-44 5' 4 ,A $4:le?.-Thr r4- 0trartt 4 Race IsEreal PEER n Reg Ell E 9 AT Pr a)p-n 1 d 5,c) 1 1 ebEl) Ea Oh: 7,31c).:H br-f. 31 4er A 'it.) HE FLEET 1 4 X 2 11 21111 Ell(lBES 1 /2 X 2 t/a t."0-7:, 6 X EQO )7, c...um BAD 1./6 XI) )5/ 1,0" DELI WEI') Tip KENAI HIGH SCHOOL WELD SHOP PITOD ELEV.): ErE,1 0 a lame CS a, a 11 -4t,r, -137- 1200 Wes- owling Road Addhorage, Alaska 99518-1517 (907)561-1188 FAX (907)561-2935 Kenai, Alaska (907)253-3880 FAX (907)2833759 Fairbanks, AlaSka (907)456-2719 FAX (907)45-0449 KENAI CENTRAL. 3. 2 IE111( SCHOOL, DELIYER• TO EHE METAL SHOP 53131 CEMPT 111000 0 3E 4E2/4, 535 �Jrrela 01811, TEEL CO GAJAFt TRIP ;1 ?5CL4 K, D• P 0100177 °.i,■.• 1200 West bowling Road Anchorage, Alaska 99618 -1517 (907)561 -1188 FAX. (907)561 -2935 Kenai, Alaska (907)283 -3880 FAX (907)283 -3759 Fairbanks Alaska (907)456.2719 FAX (907)451-0449 RLA51(A STEEL KENAI 1200 W DOWLING RD ANCh3RAGE AN 99518 907 283 3880 5210308004084 5 EL l i1 1 hl'tI IJL4, E'itlf-; mT,r1 C440P certe :,P5(Lt) P fl HItGH SCH01 4 nC C*l Ht i~i Cji 1 L :0 12:0$:42 p�.lwt�l47 I' t7.1 °,01 Y 93GL.fi' BLS I. 48 NORTH O St4r F_E ALASKA STEEL KENAI 0 1200 N DOWLING RD ANCHIX7AGE AK 99518 901 283 3880 5270300024084 Sale ID: 5811700352502 044547 Batch A: 0053 %TERCf Total: Customer Come 25 RPPr Code: 016781- lmoiceo. 0 Ref R: 1702 IOF� 12:11:37 10: SR11700352502 0445107 Batch 11: STERCRRD azaaaaa:e284311 1nua, 000804 Ref t 1825004 PAAMti Tax. 102 —138— Co me ID: SR1700352502 044447 Batch N: 0852 Total: ALASKA STEEL KENAI 1200 W DOWLING RD x ANCHORAGE AH 99518 907 203 3880 5270308804084 Sane IASTERC C as aa28401 (07 Code. 892327 InvaiceR: Ref t 11024012 lax. 14:50:23 City of Kenai Mini -Grant Report Form )Due within 30 clays of project completion.) /2 /,t7/ 0 Grant Number: Date Received: Name of Group /I ividual: t LfllJ Contact Name: s1 Mailing Address: 5.0 -O 5 c 19 i/ (n`7 Phone: C/ ?`i0 ..Sy Email: -2±± Describe the completed projep A t Attac]l photo and docum qq let c io How successful was your project? Return this form /receipts to: Kenai City Clerk 210 FidaIgo Avenue Kenai, AR 99611-7794 Statement: Following submittal of the brief written report and all expense receipts being turned in to the city of Kenai's Mini -Grant Steering Committee, the final grant jten percent, 10%J will be paid. S, (Prin Date: HENALALASKA an un •e saving. e doing;" MICHAEL OLSON -STORE MANAGER KENAI AK 907 283 -2228 HOURS:6 -10 MON -SAT 6 7-8 SU 8938 00001 08795 07/13/10 02:18 PM CASHIER KAY KIM229 099713911765 6FT T POST <A> 52.83 905.87 099713031272 WELDED WIRE <A> 41.00 SUBTOTAL SALES TAX TOTAL XXXXKXXXXXXX2027 DEBIT AUTH CODE 232421 93.83 5.63 $99.45 99.46 3 I 11111 IIII I I I lUll I ll Il IIII I RETURN PO ICY DEF NITION POLICY ID DA POLICY EXPIRES I ON A 1 THE HOME DEPOT RESERVES THE R GHT TO LIMIT DENY RETURNS. PLEASE EE THE RETURN POLICY SIGN IN STORES FOR DETAILS. G LOOK N FOR D HUNDREDS OF LOWER PRICES STORE WIDE XXVXM ;%Ft VV K V x%% WX*XWWX WV XV R >'x%<'kXFrx ENTER FOR A CHANCE T WIN A $5 000 HOME DEAPRODT GIFT Share Your Opinion With Us! Complete the brief survey about your store visit and enter for a Chance to win at www.homedepot..com /opinion iPARTICIPE EN UNA OPORTUNIDAD DE GANAR UNA TARJETA DE R DE $5 DE 000 HD iComparta Su Opinion! Complete la breve encuesta sabre su visita a la tienda y tenga la oportunidad de ganar en: www.homedepot.com /opinion User ID: 25817 17880 Password: 10363 17879 Entries must be entered by 08/12/2010 Entrants Se omplete website. N purchase necessary. -140- ore saving. ore doing." MICHAEL OLLSON -STORE MANAGER KENAI AK 907- 203 -2.22t HOURS:6 -10 MOM C/T E 7 -8 SU 8938 00099 96620 06/16/10 09:01 AM CASHIER MEGAN ML54182 572365 F£BAR TIWIRE <A> 4.10 099713911475 POST DRIVERR <A- 28.00 099713911765 EFT T POST <A> 12@5.87 70.44 099713031326 WELDED WIRE <A> 99,00 037103188007 SNIPS <A> 15.37 SUBTOTAL 216.91 SALES TAX 13.01 TOTAL $229.92 XXXXXXXXXXXX1005 VISA 229.92 AUTH CODE 00585C/3992027 TA I iillllI HMI III! 8!38 99 0 662 06/16/20 0 0166 RETURN OL CY DE I I IONS POLICY ID D Y5 LICY EXPIRES UN A 1 90 9/14/2D10 THE HOME DEPOT RESERVES THE RIGHT TO LIMIT DENY RETURNS. PLE SE SEE THE RETURN POLICY SIGN IN S ORES FOR DETAILS. GUARANTEED LOW PRI ES LOOK. FOR HUNDREDS OF LOWER PRICES STORE WIDE X:XtxXXxX1rXMXXx XWXXXXxXICXXxX xtttXx Xx ENTER FOR A CHANCE TO WIN A $5,000 HOME DEPOT GIFT CARD! Share Your Opinion With Us! Complete the brief survey about your store Visit and enter for a chance to win at: www.homedepot.com/ppinion LPARTICIPE EN UNA OPORTUNIDAD DE GANAR UNA TARJETA DE REGALO DE THD DE $5,000! iComparta Su Opinion) Complete la breve encuesta sabre su visita a Is tienda y tenga la oportunidad de ganar en: www,honedepot.com /opinion User ID: 202467 193628 Password 10316 193529 Entries must be entered by 07/16/2010. Entrants must be 18 or older to enter. See complete rules on website. No purchase necessary. -141- LODE'S HOHE CENTERS, INC. 291 MARATHON ROAD KENAI, AK 99611 (907) 335.7100 SALE SALES S2710411 1406150 06-12-10 57949 2.25 GAL PRUNUS SANDCHERR 15.49 SUBTOTAL: 19,48 TAY.: 1.16 INVOICE 19017 TOTAL: 20.64 CASH 20.65 7 CHANGE: 0.01 STORE: 2710 TENTH L: 19 06/12/10 16:05:18 it OF ITEMS PURCHASED: 1 E7 LUDES FEES, SERVIC S AND SPECIAL ORDER ITEHS milling Rim iggimingimg H K YO F SHOPPI 5 LO '5. SEE R ERSE SID FOR RETURN 'POLICY. 5 ORE R NAa R: ROSE OUHMAR HAVE A CO RENT DR F- EDBACK, LET 5 KH05 AT: WWW.LOWES,COM /FEEDBACK STORE CODE: 27100 61210 19017 DE HAVE THE LOOEST PRICES, OUARRATEED! IF YOU FINN A LOWER PRICE, WE WILL BEAT IT BY 101. SEE STORE FOR DETAILS. LOWE'S HOME CENTERS, INC. 201 MARATHON ROAD KENAI, AK 99611 (907) 335 -7700 SALE SALES 4: 52710911 1466157 06 -11 -10 57943 2.25 GAL PRUNUS SAHOCHERR 36.96 2 19.48 SUBTOTAL: 36.96 TAX: 2.34 INVOICE 19690 TOTAL: 41.30 VISA: 41.3D 0158:41005 AHOUNI:41.3C AUTHCO:01549C REM:604017229 06/11/10 12:14:20 t-2„ q 1 ST0RET2710 T 9M100L: 19 06!11110 12:14:42 4t OF ITEMS PURCHASED: 2 EXCLUDES FEES S A ICES AND SPECIAL ORDER ITEMS 111111111111111111111111 JIf9 RIINK 1 Vf N O G 0 E s S 3300 SN31] 83080 1tlI33d5 CNtl 53CIDS3S X333 5300 ,3Y.3 TN NK YOU FOR HOPP: G 0 S S :0 .3SUH38Od S 13J I dO a SEE R' VERSE SIDE OR RETURN OLICY. IE =12:21 01/100 6L :7861 d31 OILZ :38015 STORE X8880157: ROSE OUMMAP, —1 '7 `f i HAVE P CUMENT OR 11068[57% LE US K11019 A1: WWW.LOWES.COM /FEEDBACK p STORE CODE: 27100- 61110 -19890 91 :02 :Z 0 L 1 3LISZCZG3H1n8 zl'•6 IF YOU FIND A LOWER PRICE, WE WILL BEAT IT BY 10%. :8318 SEE STORE FOR DETAILS. Z01 16961 3310081 4E HAVE THE LD8EST PRICES, 9UARANTEEDI :18101603 YOUR OPINIONS COUNT! REGISTER TO 110 A t2500 LONE'5 GIFT CARD fREGISTRESE PARA GAM UNA NUTS DE RESALO LOWE`S REGISTER ONLINE OR 9Y PRONE BY COMPLETING A GUEST SATISFACTION SURVEY ANYTIME DURING THE NEXT 3 DAYS; http :J /webuiew4.isacorp.com /lnwes OR 1 -566- 362 -3677 YOUR 18 A 19890 2710 162 NU PURCHASE NECESSARY TO ENTER OR 8IN. MAIL-IN ENTRY IS AVAILABLE. SEE 0601116,1 RULES AT: http: /isurueyweb.con /!awes /rules/ GIFT CARD WINNER BILL HE NOTIFIED WITHIN 120 DAYS. STORE: 2710 TERMIIIAL: 19 06/11/10 12:14:42 -142- '5176130 803 38015 33S 4A It 1830 11I8 3M '33I6d 83001 8 0813 DOS 31 10331888800 '93318d 153801 301 30866 30 16861-01119 -00112 :3000 32101S Y0tl90333/WOT S3MEIMMM :18 ADO. 30 131 0080031d 80 103403 6 3064 888800 3508 :8396109W 38015 'A3110d 11861138 803 30IS 3593838 33S '0.31401 BNIddONS 808 nu XNBNi il'A6 11'66 95'5 VS'SS 3NBM0 0906 301d 169 S'S 00LOL'. 81'6 0 7L'LE M 80130118 060 311386 011 059501 01-11-90 LSL9017■ 13301L23 :K 93185 3 DOLL-SEA 8L06) 0.966 NC ^,81435 0808 6H1580W 181 '3N1 '3831839 3808 53001 ore saving. ore doing;" MICHAEL OLSON -STORE MANAGER KENAI AK 907 -283 -2228 HOURS:6 -10 MON-SAT 8 7 -6 SU 8938 00013 78447 06/11/10 12:46 PM CASHIER JASON JG9103 047985105559 2CF SM BARK <A> 285,77 11.54 072547095245 SUPERSOIL CA> 6,97 230363 TREE <A> 2 068.00 196.00 SUBTOTAL SALES TAX TOTAL XXXXXXXXXXKX1005 VISA AUTH CODE 045670/8134566 1 1111111 I ill VIII 111111111 III 214.51 12.87 $227.357 227.36 TA 893 13 78447 06/1 0.0 2116 RETURN POLICY DEFINITION POLICY ID DAY POL' Y EXPIRES ON A 1 90 9/09/2010 THE HOME DEPOT RE ERVES HE RIGHT TO LIMIT DENY RETURNS. PL.. SE SEE THE RETURN POLICY SIGN IN S ORES FOR DETAILS. GUARANTEED LOW PR ES LOOK FOR HUNDRED OF LOWER PRICES STOREWIDE X%%XXX %XXX%XX%XMWXWMXX XX*Xww*x7c *XX ENTER E WIN A CHANCE $5,000 TO HOME DEPOT GIFT CARD! Share Your Opinion With list Complete the brief survey about your stare visit and enter for a chance to win at: www.homedepot.com opinian iPARTICIPE EN UNA OPORTUNIDAD DE GANAR UNA TARJETA DE REGALO D5 ,0000 HD iComparta Su Opinidnl Complete is breve encussta sabre su visits a le tienda y tenga le oportunidad de ganar en: www.homedepot.cam /opinion User ID 166121 157196 Password: 10311 157183 Entries must be entered by 07/11/2010.. Entrants must be 18 cr alder to enter. See complete rules on website. Dio purchase necessary, ore saving. ore doing OLSON-STORE MANAGER KENAI AK 907 -283 -2228 HOURS:6 -10 MON -SAT 5 7 -6 SU 8938 00013 78249 06/11/10 11:28 AM CASHIER KIRK KDM6664 047985105559 2CF SM BARK =A> 048307800725 PLANT TIE <A> 072547095245 SUPERSOIL <A> 215122 TREE <A> 2048.00 5.77 2.97 6.97 96.00 SUBTOTAL 111.71 SALES TAX 6.70 TOTAL $118.41 XXXXXXXXXXXX1005 VISA 115.41 AUTH CODE 025900/8134554 TA 'I 1 11 8938 11 11 111 I II I I I I i 1 I i 010 1 11 1 6 i I RETURN POLIO DE'INI _0N5 POLICY ID DA POLI EXPIRES ON A 90 09/09/2010 THE HOME DEPOT RESERVES T E RIGHT TO LIMIT DENY RETURNS. PLEASE SEE THE RETURN POLICY SIGN IN STORES FOR DETAILS. GUARANTEED LOW PRICES LOOK FOR HUNDREDS OF LOWER PRICES STOREWIDE .n w wrwyeXXW %X#Y.rVMS k%%tX'NXXXX %X%H' ENTER FOR A CHANCE TO WIN A $5,000 HOME DEPOT GIFT CARD! Share Your Opinion With Usi Complete the brief survey about your store visit and enter for a chance to win at: www.homedepot.com /opinion iPARTICIPE EN UNA OPORTUNIDAD DE GANAR UNA TARJETA DE REGALO DE THD DE $5.000! 1Comparta Su Opinion! Complete la breve encueste sabre su visite a la Benda v tenga la oportunldad de ganar en: www.hamedepat.cam /opinion User ID: 165725 156800 Password 10311 156787 Entries must be entered by 07/11/2010. Entrants must be 18 or older to enter. See complete rules on website. No purchase necessary. INFORMATION ITEMS INFORMATION ITEMS KENAI CITY COUNCIL, MEETING OCTOBER 20, 2010 1. 10/20/2010 Purchase Orders Between $2,500 and $15,000 for council review. 2, Budget Transfer in Capital Projects in excess of 5,000. 3. City of Kenai Building Permits /Third Quarter 2010. 4. Planning Zoning Commission Resolutions /Third Quarter 2010. 5. 10/14/2010 Kenai River Special Management Area Advisory Board. Meeting Agenda and minutes of September 9, 2010 meeting. -145- W CC w J O 0 O LL O O O O O to o O 0 O (V 0 N N N t9 III D7 u o W 0 w CO LL co 0 cc W Z w Z OL O w j U O ci 0 z Z 0 U Q Z 0 0 0O N- 0 0 O m 0 1 O (o O O r- 4 'J 6 (D 0 0 M `7 M 0 (0 W 0 0 LO 2 O .ci. la M 6■ 0 CO CD 0 (D Q lD 7 N h N CJ (V N 46 d' 1- 1- 0 W z a 0 w c LL 0 0 0 0 0 2 H a ll W d W CC c c w Q to 2 cc W S a w co w H- o 2 O Z U 2 cc m —146— nc 0 0 ec 0 0 0, o 0 o 0 0 o 0 0 0 0 o ai o d op tri 0 d a En ro- no co w• 10 a 09 a op c t'i "..'s .c. cr- g 0) T:i O' T) 5 a “\ri l' a w a u_ 0 o co -c =fa co "c r% t 1 6 Tt 1" 2's *t.S 7-2 6 2 a "0 -0 c 7) o co a) .1 0 15 ,r V I N_ co 0 a CO D 0 0-5, z timt 2 a Q 6) E 0 CO v CM1 0 tt .C 5 9 M1 Ca- 0 v az oVZ.ctloo-...c C o 2 rI M14 CO r 0 t c) o 0- 1 2 o CI) td V) 1 0 a 2 0 Ta 2 5 t iv 00 0) CI) t o o =4) co co o o 0 0) iii In CO 0 Cn 'Cr h-• C d" cc 0 t c a) -147- ca co tra o, 0' CO CO 0M1 h. h. 04 V 0' V V CO CIO CO CO 0 0 0 0 0 0 0 04 -Q! 00 (V 01 01 M1. 0 CO CO 0 0)6 tO C M1- 0-- 0-O R: aa t -a 2 a r), ed M1- 00 M1- V CO U O 0 G1 0 O O C) CN Pc- 0 o To 0 o. T N E E D o c N t E E C O` o o o G o a to G Q O to G 0 N C O 0 o J N f- a lL N N CO 0 o d N M at VY E4 -148- O o oo 0 Y r CJ O a c O o E E 2 m a• LL0 0 o N vc m 0 c CN N CO co to a" ti 0 m m E a Y W -149- <7, CN tc ct o uo o o C 1 to t-- H H H H 03 CO CO CO .ri m O .47 f.0 4ic N re: k W S j3 0 CO N cq CO a 04. t 0, CO N- la. c 2 c o 2 E '5 0 .c-- o 3c E E 8 0 ii, U r... 0 c,. o° a L v -0 0 03 0 co co Z c> 72 o c0 tic Ean 7t 22 <_0 0 L o .L>- ■-•C' .;3 (C/ 00 -150- PZ eso hons Third O er 2010 TYPE OF PERMIT Administrative Exemption Amend KMC Conditional Use Permit Encroachment Permit Landscape/Ste Plan Preliminary Plat Rezone October 01, 2010 Frill Rcso iutio TYPE 201035 2.4" Side Yard Encroachment 201025 14.20.050 Non- conforming 201029 12.10 Nusenoes 201038 3.05 3.15 Animal Conrol 201023 Mobile Food Vendor 201027 Front/Side Yard Setbacks 201030 O'Reilly Auto Parts 201032 ACS Outlet Store (Walk/tart) 201034 Tony Stanley -151- MEETING DATE ACTION 8/3/2010 Approved 7/28/2010 Approved 8/11/2010 Approved 9/22/2010 Postponed 7/28/2010 Approved 8/11/2010 Approved 8/5/2010 Approved 8/4/2010 Approved 8/2/2010 Approved 201031 Inlet Woods SD 2010 Replat 8/11/2010 Approved 201033 Ross Street Subdivision 8/11/2010 Approved 201039 Central Heights SD Adamson Repiat 9/22/2010 Approved 201021 General Commercial to Limited Commercial 7/28/2010 Approved 201026 RR IH 8/11/2010 Approved 201036 II-18C 9/8/2010 V'/ithdrawn Page 1 of 2 TYPE OF PEJZA:: Variance a Resoluth TYPE 201028 Front/Side Yard Setbacks Friday, Oeeaber 01, 2010 Page 2 o j 2 -152- MEETING DATE ACTION 8/11/2010 Approved KENAI RIVER pecial Management Area "Working together...for the river" CALL TO ORDER A. Roll Call; B. Minutes Approval C. Agenda Changes and Approval II, Public Comments /Presentations Doug WVhittaker— Kenai River User Study James King Division's Direction III. REPORTS A. Agency and Government Reports a. State Parks Sinclair, Russell b. DEC- Stevens a ADF &G- Mania/ Begich/ d. USF&WS- Schmidt e. USFS /Chugach- Skibo f. City of Kenai- Ogle g. City of Soldotna- Micciche h. Kenai Peninsula Borough- Carey 8. Committee Reports a. President's Report b. Guide Advisory c. Habitat d, River Use e. Permits f. Legislative /Government Activities g. Board Development h. Agenda /Board Structure /Housekeeping IV. OLD BUSINESS A. Board Seat Nominations V. NEW BUSINESS VI. CORRESPONDENCE VII. PUBLIC COMMENT Kenai River Special Management Area Advisory Board Meeting Agenda" Thursday, October 14, 2010 5:30 p.m. Gilman River Center VIII. ADJOURNMENT A. Board Comments B. Date /Agenda of Next Meeting November 11, 2010 at 5:30 p.m. !r`�� Dl��� 5t 1LPL Li RECEIVED OCT :6 2010 KENAI CITY CLERK Kenai Area Office, PC Box 1247, Soleotna, AK 99669, 907- 262 -5581 Kenai Peninsula Borough, 144 N. Sickle Soldotna, AK 99659 907- 262 -4441 Gilman River Center 514 Funny River Road, Soldotna, AK 99659, 907- 260 -4882 Alaska Division of Parka and Outdoor Recreation. Department o6Nalural Recourses, in cooperation with the Kenai Peninsula Borough KENA1 1\LE 3 j oar f K rL), CALL TO ORDER 25 Kenai River Special Management Area Advisory Board Minutes Gilman River Center Thursday, September 9, 2010 A. Members Present: Joe Connors, Ted Wellman, Brenda Trefon, Carol Padgett, James Czarnezki, Teri Carter, David Carey, Peter Micciche, Wayne Ogle Janet Schmidt, Bobbie Jo Skibbo, Jack Sinclair, Tim Stevens. B. The Minutes for May 13, 2010 were approved as written. C. The Agenda for September 9, 2010 was approved as written. 11. Pubiic Comments /Presentations !I!. REPORTS A. Agency and Government Reports a. State Parks —Pam Russell, distributed the 2010 Commercial Operators Trends and Numbers and the Additional Statistics information. The numbers for the 2010 season reflect a decline of 22 guides from 2009. In 2010 there were 316 fishing guides, which is the lowest number in 16 years or since 1995. In other areas such as non- fishing, resident or non resident the numbers have seen very little change. A reminder letter will be sent to all the guides that have not taken the guide academy course and also to some of the companies that may be hiring new employees for the upcoming season. There are approximately 66 guides left that need to take the course before May 2011 or they will be unable to register for the 2011 Kenai River guides season. Carol Padgett stated she has been receiving feedback about when the classes are offered and wondered if there was a way to offer more classes in the spring to help accommodate the non resident who need to take the course. Joe Connors stated that it is difficult to have the instructors teaching the course in May because many of the instructors are guides and their work season has started. The statistics show that 80% percent of the guides have taken the course. Tim Stevens asked if the class size has a limit or can it be 'increased. Jack Sinclair stated that the max is Jack Sinclair reported that it was a busy season even with the light fishing. There was an extra ranger on staff during the month of July and the Coast Guard patrolled with park rangers for two weeks on the river. A meeting took place with Kenai Peninsula Borough, state parks and other area residents about the problems that have been occurring at Rapids Avenue by Binds Landing State Recreation Site. Some of the main issues were parking, trespassing and safety. It is going to take a huge concerted effort by the borough, the legislature and several state agencies to fix the problems. There is a huge demand for parking there, with anglers encroaching on private property and illegally parking in fire lanes. State Farks has funding for some bank restoration and the trail rerouting, but not enough to fix the overall problems. Joe asks who would need to submit a proposal to the legislation to help fix this problem. Jack said it would probably need to originate from the legislature at this time. b. DEC- Tim Stevens, in June DEC submitted their integrated water body report; it is a biannual report to EPA about the conditions of the state waters. In that report DEC notified EPA that they moved the Kenai River from 4B water which was one that was impaired with plan to fix the impaired status to a category 2 meaning the standard for that pollutant which is hydrocarbons have been met at this time. Second, DEC had awarded two grants for the Kenai River to the Kenai Watershed Forum; one was to finance their hydrocarbon sampling of the Kenai once in July and once in Agri!. The second grant is for the third year of turbidity monitoring in the lower Kenai River to help establish natura{ conditions. Carol Padget ask why the third year of turbidity study. Tim stated that DEC needs a minimum of two years and one of those two years was a high water year. They did not want the data to be skewed. so they thought a third year would be beneficial in establishing the data Kenai River Special Management Area Advisory Board Minutes September 9, 2010 Page 1 of G -154- c. ADF&G-Torn Vania, not present. d. USF &WS, -Janet Schmidt -The Refuge had a successful year, the campgrounds were full. Staff for ;he summer season went from nine to 90 for the 2010 season. At this lime the refuge is regraveling the Russian River parking lot area starting September 9 and should be completed before the snow arrives. e. USFSIChugach- Bobbie Jo Skibo, The Russian River season was pretty slow. There were no major incidents and there were no known bears shot in defense of life or property. There was an article in the Anchorage Daily news highlighting why the Russian River had such a successful year with human and bear interaction. It is believed that education played a huge role in that process. Stream Watch had 65 volunteers for the 2010 season. Bobbie Jo with her staff patrolled much of the Russian River area with very little people interaction. Most of the violations were food storage tickets and fishing violation. A bear wounded by a bigger boar around the falls area has stilt been seen in the area. There were two orphan baby hears sighted, not sure where the sow went. They were captured and sent to the Anchorage Zoo. One issue that was noted at the Russian River is that Kenai River dip netters were using the Russian River for flaying there personal use caught fish. People were using Sportsman's, the bridge in Cooper Landing and the Russian River ferry cleaning tables to clean large quantities of fish, In regard to the Collaborate Public Process, the forest service in partnership with The Russian River coordination group which is the interagency group has secured the funds to hire a facilitator from the institute for Environmental Conflict Resolution to help the group go through a process from September 2010 to November 2011 to look at a five years plan to work on Bear and Human interaction on the Russian River. The Kenai River Clean up is September 11, 2010 with the Alaska Fly fisherman association; it will include the Upper River all the way down to Skilak Lake. City of Kenai, Wayne Ogle- Things were not dull in Kenai this year. The personal use fishery was a success with the highest revenue in the history of the dip net fishery season, This is in part due to the raise in fees. The revenue is used for police and other services, such as bathrooms and dumpsters. The good news is there were not a lot of problems. For a three -week crunch everyone seems to buck up and get along. More fencing went in on the south beach of the Kenai River there is one area that is not fenced because of tidal influence. On the north beach side the city has extended the fence approximately 100 feet for which they negotiated with the private land owner to put the fence in that area. The City is ready to put permanent outhouses at the end of Kenai Avenue along the beach on the North side, to replace the existing bathrooms. A bridge will be put it across Meeks Creek after freeze up Bobbie Jo asked if there were fish cleaning tables available at the dip net fishery. The City of Kenai does provide fish cleaning tables at the dip net fishery. There is a volunteer beach cleaning group that has the beach clean up pretty much taken care of by the end of the dip net fishery. Terri Carter asked about the enforcement of regulations in the area and who is responsible for that. Wayne responded that any time he was down in the boat launch area, he would ask pointed question of people with out -of -state plates. The City of Kenai enforces laws on the beach, but does not enforce fish and game regulations. Tom Vania and Robert Begich both from Fish and Game were both down at boat launch enforcing regulation and citing people. g, City of Soidotna, Peter Micciche- the city is getting ready to start construction on Soidotna Creek Park September 15, with a new parking lot, landscaping, and revegetation of the area. There has been some heavy use of the park this year with the new piayg_round, additional fishing, festivals and the bathrooms are now permanent which has helped to eliminate pressure of surprises along the bank. The city had a good year with revenue. The overall 10 percent decrease this year has had very little effect on the economy There have been some complaints from citizens about the inaccurate King salmon counts by the Department of Fish and Game. The city of Soldotna teamed up with Paul Gray and created a video to see if they could spread out some of the July impact by giving people outside some of the other activities that are available outside the July 7 to July 30 King salmon period in the area h. Kenai Peninsula Borough, Dave Carey, the first phase of the KPB 21.18 is completed. There were two areas that were controversial; they are the angle of the slope and the grandfather rights. These were put aside and will be put before us this year. There is a phase two of the more technical area and we would appreciate everyone's participation, There was an anficipation of some money for a grant for helping with the second phase of 21.18, but that money was net received, which leaves some budget issues but 21.18. is still moving forward. Dave reported as a member of the beluga whale stakeholders group, the federal body which had a meeting in the spring and plans another meeting this winter. Proposals for the $800,000 grant from RCAF to the borough should be out the third week in September. We made a commitment to share the proposal with all the user groups before it goes out for input. Regarding the Kasilof River: there was a good meeting with agencies to talk about the issues earlier this summer. There is a collective will to help fix the issue. There has not been one agency identified that Kenai River Special Management Area Advisory Board Minutes September 9, 2010 Paget of4 -155- B. Committee Reports a. President's Report Members of the board welcome back for another year and thank you for all of your time and effort. One issue before us is board membership. There are six positions that are currently open and we need to get some more applications in. The application period has been extended to the 24 of September. Please encourage people to apply. Over the years the board has been able to keep a balance with the people who serve. Commit yourself and if you serve on the board you need to serve on a least one committee if not two committees. b. Guide Advisory did not meet. c. habitat discussed the symposium and drafted a letter to support the continued KPB 21.1E process IV. OLD BUSINESS can provide the leadership to get anything accomplished. The borough requested the governor to identify one agency that will take the leadership role in getting the problems resolved. The commissioner has offered the borough the ownership of Niniichik harbor. With a chunk of money to run it and the borough has turned it down. Rapids Avenue residents for years has been putting up with a big distortion of the quality of life that they have every right to enjoy. Some of the problems are when people 'believe that they have the right to go any where and do anything. Ted commented that the area has been a problem for a long time', could the area be closed down to fishing? Dave said that is being proposed and that people still will do anything to get down there. State Parks proposed to the Design and Construction group is to bring a road across from the Bing's Landing area so no one has to some down through the subdivision area. Create a parking area and move the latrines closer to the area. In order to close the access area you have to show you are created another access area. There would be no access from Rapids Avenue. d. River Use did not meet. e. Permits did not meet. f. Legislative/Government Activities did not meet, Dave gave some suggestion that the board or this committee would like to look at. Regulation or statutory changes that could help this body. is year ths body talk in Kasilof area and some possible regulatory changes that could be made, Every about enforcement, could an impact for more funding be made in Juneau. This could be a year to use the resources of the 'board. Prioritize what areas need improvement, Board Development State Parks will distribute another media release for more applicants for the Board member. It would be ideal to have three applications for each seat that is open. The deadline has been extended to September 24, 2010. h. Agenda /Board StructurelHousekeeping did not meet. Reconvene the meeting starting in October. 9. V. NEW BUSINESS A. Distribution of Draft 2009 KR User impact Study Everyone can have a hardcopy of the study and we also have them on disk that contains seven addendums for review. This is a draft that is for public review for thirty days and final document will be available in October. VI. CORRESPONDENCE -The letter that went out to HEA members e -mail poll. It went out with the majority consent to HEA board, Ten clearly wanted it and one requested reconsideration before we forwarded the letter. VII. PUBLIC COMMENT -Niki Pereira, Rapids Avenue resident, Bing s Landing Subdivision. We are residents of the Rapids avenue area Niki email address is niklnuk@aci.net. Niki has a couple of questions, one is how can this area be called accessible? How does the public access the area? Many users trespass, going through the orange fence putting up lawn chairs, campers. Tne intent of the area was to be a boat launch for the community. This area was not established to create more access to the river. Any day in July there are 3D to 80 cars parked along the road. There is no enforcement. How can we consider this an access area? More parking would give people more access. The State Troopers have stated that they would no longer respond to Bings landing for problems. State troopers do not need to enforce anything. Nobody wants to take responsibility, How do we entertain putting in more parking? Kenai River Special Management Area Advisory Board Minutes- September 9, 2010 Page3 of -156- Jack responded that this is an 80 foot access easement for public use, There is only one fishing closure just below the boat launch, downstream from that the bank and the river is open to legal fishing_ VIII. ADJOURNMENT A. Board Comments Bobbie Jo will help co -chair the River Use committee, Dave said people join groups for two reasons: because they are very upset or something they want done. He invited those attending to consider this and perhaps apply for a seat on the board. Jack announced the 40 anniversary posters', each board member may have one poster each James Oz. interns at the Kenai watershed forum developed a video on the sewage treatment plant. Ted the last meeting been there 15 years, sitting in the audience. We don't have more authority, still advisory and push away by politics. Should the structure of this body be changed to have more authority? Ted believes it should. B, Date /Agenda of Next Meeting October 14, 2010 5:30 p.m. Kenai River Special Management Area Advisory Board Minutes- September 9, 2010 Page 4of -157- CITY OF KENAI NOTICE OF ORDINANCES AND RESOLUTIONS ADOPTED AT THE KENAI CITY COUNCIL MEETING OF OCTOBER 20, 2010 NOTICE IS HEREBY GIVEN the City of Kenai Council passed the following Ordinance(s) and /or Resolution(s) at the above referenced meeting. Ordinance No. 2514 2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type III, IV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008. 2. Ordinance No. 2515 2010 Increasing Estimated Revenues and Appropriations by $3,600.00 in the General Fund for the Purchase of Land for a Public and /or Charitable Use. 3. Resolution No, 2010 58 Authorizing the Purchase of Approximately 4.234 Acres of Property Described as Government Lots 131, 165 and 166, Section 31, Township 6 North, Range 11 West, Seward Meridian, Kenai, Alaska from the State of Alaska for $3,500.00 for a Municipal Production Well Site and Wellhead Protection Area, Greenbelt, Pedestrian Pathway and Conservation and /or Other Public Recreation Purposes. 4, Resolution No. 2010 59 Approving the Budget Transfer of $25,000 for a Snowplowing /Sanding Service Contract for Services at the Airport Terminal Building, Kenai Flight Service Station and the Alaska Fire Training Center. 5. Resolution No. 2010 60 Supporting the Use of Funding Provided Through the Economic Recovery Act for Buccaneer Alaska and Possibly Other Companies to Acquire a Jack -Up Drill Rig for Use in Cook Inlet. Copies of the ordinances and /or resolutions are available in the Office of the Kenai City Clerk. Please be advised, subject to legal limitations, ordinances and /or resolutions may have been amended by the Council prior to adoption without further public notice. cr ems Carol L. Freas, City Clerk Posted: October 21, 2010 Carol L. Freas, City Clerk Posted: October 15, 2010 NOTICE OF PUBLIC HEARING OCTOBER 20, 2010 CITY OF KENAI COUNCIL MEETING NOTICE IS HEREBY GIVEN the City of Kenai will conduct a public hearing on the following Ordinance(s) and /or Resolution(s) on the above -noted meeting date, 1. Ordinance No. 2514 -2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type III, IV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008. 2. Ordinance No. 2515 -2010 Increasing Estimated Revenues and Appropriations by $3,600.00 in the General Fund for the Purchase of Land for a Public and /or Charitable Use. 3. Resolution No. 2010 -58 Authorizing the Purchase of Approximately 4.234 Acres of Property Described as Government Lots 131, 1 and 166, Section 31, Township 6 North, Range 11 West, Seward Meridian, Kenai, Alaska from the State of Alaska for $3,500.00 for a Municipal Production Well Site and Wellhead Protection Area, Greenbelt, Pedestrian Pathway and Conservation and /or Other Public Recreation Purposes. 4, Resolution No. 2010 -59 Approving the Budget Transfer of $25,000 for a Snowplowing Sanding Service Contract for Services at the Airport Terminal Building, Kenai Flight Service Station and the Alaska Fire Training Center. 5. Resolution No. 2010 -60 Supporting the Use of Funding Provided Through the Economic Recovery Act for Buccaneer Alaska and Possibly Other Companies to Acquire a Jack -Up Drill Rig for Use in Cook Inlet. The public hearing will commence at 7:00 p.m., or as soon thereafter as business permits, in the Kenai City Council Chambers, 210 Fidalgo Avenue, Kenai, Alaska, 99611. All interested persons are invited to attend the meeting and participate in the public discussion. Written comments may be sent to the Kenai City Council, c/o Kenai City Clerk, 210 Fidalgo Avenue, Kenai, AK, 99611. Copies of the ordinances are available in the Office of the Kenai City Clerk and will be available at the meeting for public review. Please be advised, subject to legal limitations, ordinances and /or resolutions may be amended by the Council prior to adoption without further public notice. AGENDA KENAI CITY COUNCIL REGULAR MEETING OCTOBER 20, 2010 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://www.ci.kenai.ahus ITEM A: CALL TO ORDER 3. CERTIFICATION OF ELECTION 4. ADMINISTER OATHS OF OFFICE 5. ELECTION OF VICE MAYOR ITEM B: SCHEDULED PUBLIC COMMENTS (Public comment limited to 10 minutes per speaker) 1. Vincent Goddard Public Safety Concerns Related to the Proposed Natural Gas Storage Facility in Kenai. 2. John O. Robertson, PhD, P.E. Expert Witness Testimony Regarding Public Safety Concerns Related to the Geology and Seismic Factors for the Proposed Natural Gas Storage Facility in Kenai. ITEM D: PUBLIC HEARINGS (Testimony limited to 3 minutes per speaker. Persons may give their time over to another speaker present, however no single speaker present may speak for more than 30 minutes combined on their own and on others' behalf) 1. Ordinance No. 2514 -2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type 111, IV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008. 2. Ordinance No. 2515 -2010 Increasing Estimated Revenues and Appropriations by 53,600.00 in the General Fund for the Purchase of Land for a Public and /or Charitable Use. 3. Resolution No. 2010 -58 Authorizing the Purchase of Approximately 4.234 Acres of Property Described as Government Lots 131, 165 and 166, Section 31, Township 6 North, Range 11 West, Seward Meridian, Kenai, Alaska from the State of Alaska for $3,500.00 for a Municipal Production Well Site and Wellhead Protection Area, Greenbelt, Pedestrian Pathway and Conservation and /or Other Public Recreation Purposes. 4, Resolution No. 2010 -59 Approving the Budget Transfer of 525,000 for a Snowplowing /Sanding Service Contract for Services at the Airport Terminal Building, Kenai Flight Service Station and the Alaska Fire Training Center. 5. Resolution No. 2010 -60 Supporting the Use of Funding Provided Through the Economic Recovery Act for Buccaneer Alaska and Possibly Other Companies to Acquire a Jack -Up Drill Rig for Use in Cook Inlet. ITEM F: UNFINISHED BUSINESS ITEM G: NEW BUSINESS 1. Ratification of Bills 2. Approval of Purchase Orders Exceeding 515,000. 3. *Ordinance No. 2516 -2010 Increasing Estimated Revenues and Appropriations by 513,800 in the Visitors Center Fund for Professional Services to Provide for a Collection Inventory. 4. *Ordinance No. 2517 -2010 Decreasing Estimated Revenues and Appropriations by $8,167.75 in the Congregate Housing Capital Project Fund Due to the Settlement Reached With the Insurance Company. 5. *Ordinance No. 2518 -2010 Increasing Estimated Revenues and Appropriations by 530,000 in the General Fund and Vintage Pointe Capital Project Funds for Needed ADA Improvements. 6. Approval /Action Approval of Lease to Kenai Nikiski Pipe Line, LLC (KNPL) for an Approximate 22,575 Square Foot Portion of Tract A, Plat No. 78 -111. 7. Discussion/ Action Council Commission /Committee Assignments EXECUTIVE SESSION None Scheduled. ITEM M: ADJOURNMENT The public is invited to attend and participate. Additional information is available through the City Clerk's office at 210 Fidalgo Avenue, or visit our website at http: /www.ci.kenai.ak.us. Carol L. Freas, City Clerk D/211 UNITED STATES OF AMERICA, STATE OF ALASKA Denise Reece being first duly sworn, on oath deposes and says: That 1 am and was at all times here in this affidavit mentions, Supervisor of Legals of the Peninsula Clarion, a news- paper of general circulation and published at Kenai, Alaska, that the Council Agenda PO #93476 a printed copy of which is hereto annexed was published in said paper one each and every day for one successive and consecutive day in the issues on the following dates: October 18, 2010 /r X F�-�a +'ur r /r..r'j el ,e, SUBSCRIBED AND SWORN to me before 28th da of October 2010 NOTARY PUBLIC in favor for the State of Alaska. My Commission expires 26- Aug -12 PUBLISHER'S AFFIDAVIT SS: AGENDA KENAI CITY COUNCIL REGULAR MEETING OCTOBER 20, 2010 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http:/lwww.ci. kenai.ak.us ITEM A: CALL TO ORDER CERTIFICATION OF ELECTION 4. ADMINISTER OATHS OF OFFICE ELECTION OF VICE MAYOR ITEM B: SCHEDULED PUBLIC COMMENTS (Public comment limited to 10 minutes per speaker) Vincent Goddard Public Safety Concerns Related to the Proposed Natural Gas Storage Facility in Kenai. 2. John O. Robertson, PhD, P.E. Expert Witness Testimony Regarding Public Safety Concerns Related to the Geology and Seismic Factors for the Proposed Natural Gas Storage Facility in Kenai. ITEM D: PUBLIC HEARINGS (Testimony limited to 3 minutes per speaker Persons may give their time over to another speaker present, however no single speaker present may speak for more than 30 minutes combined on their own and on others' behalf.) 1. Ordinance No. 2514 -2010 Amending KMC Chapter 4.30.015, Local Amendments to the National Electrical Code 2008, to Allow the Use of Non Metallic Cable in Type III, IV, and V Construction as Otherwise Permitted in 334.10(3) of the National Electrical Code 2008. 2. Ordinance No. 2515-2010 Increasing Estimated Revenues and Appropriations by $3,600.00 in the General Fund for the Purchase of Land for a Public and /or Charitable Use. Resolution No. 2010 -58 Authorizing the Purchase of Approximately 4.234 Acres of Property Described as Government Lots 131, 165 and 166, Section 31, Township 6 North, Range 11 West, Seward Meridian, Kenai, Alaska from the State of Alaska for $3,500.00 for a Municipal Production Well Site and Wellhead Protection Area, Greenbelt, Pedestrian Pathway and Conservation and /or Other Public Recreation Purposes. 4, Resolution No. 2010 -59 Approving the Budget Transfer of $25,000 for a Snowplowing /Sanding Service Contract for Services at the Airport Terminal Building, Kenai Flight Service Station and the Alaska Fire Training Center. 5. Resolution No. 2010 -60 Supporting the Use of Funding Provided Through the Economic Recovery Act for Buccaneer Alaska and Possibly Other Companies to Acquire a Jack -Up Drill Rig for Use in Cook Inlet. ITEM F: UNFINISHED BUSINESS ITEM G: NEW BUSINESS 1. Ratification of Bills 2. Approval of Purchase Orders Exceeding $15,000. 3. 'Ordinance No. 2516-2010 Increasing Estimated Revenues and Appropriations by 513,800 in the Visitors Center Fund for Professional Services to Provide for a Collection Inventory. *Ordinance No. 2517 -2010 Decreasing Estimated Revenues and Appropriations by $8,167.75 in the Congregate Housing Capital Project Fund Due to the Settlement Reached With the Insurance Company. *Ordinance No. 2518-2010 Increasing Estimated Revenues and Appropriations by $30,000 in the General Fund and Vintage Pointe Capital Project Funds for Needed ADA Improvements. 6. Approval /Action Approval of Lease to Kenai Nikiski Pipe Line, LLC (KNPL) for an Approximate 22,575 Square Foot Portion of Tract A, Plat No. 78 -111. 7. Discussion /Action Council Commission /Committee Assignments EXECUTIVE SESSION None Scheduled. ITEM M: ADJOURNMENT The public is invited to attend and participate. Additional information is available through the City Clerk's office at 210 Fidalgo Avenue, or visit our website at http: /www.ci.kenai.ak.us. arol L. Freas, City Clerk 0446/211