Borough assembly mulls new buses

Mill rate decrease may be delayed

Posted: Thursday, May 23, 2002

Safety demands that 39 aging vans and full-size school buses be replaced as soon as possible, say three members of the Kenai Peninsula Borough Assembly, who announced Tuesday they are contemplating amending the proposed fiscal year 2003 budget to continue the boroughwide mill rate at 7 mills.

The resulting $2 million in revenue would be dedicated specifically to buying 24 small activity buses and eight full-size buses for use by schools across the district for many co-curricular activities, said assembly member Bill Popp of Kenai.

Assembly members Chris Moss of Homer and Ron Long of Seward concurred in the proposal.

No official amendment has been made. The budget ordinance gets one more full-day work session on June 3, prior to the expected approval at the regular assembly meeting June 4.

Meanwhile, assembly members and borough administrators said they would discuss options for funding the buses, including the idea forwarded by Popp and the others. Finance Director Jeff Sinz said there are other ways to fund the buses that could be explored that would not tie the expenditure directly to the mill rate.

The administration has expressed its desire to reduce the mill rate to 6.5 mills and to spend down the borough's $26 million fund balance -- its bank account -- which is considered bigger than necessary to meet unexpected contingencies.

Sinz suggested that the borough might move the needed money from the fund balance into an equipment replacement fund where it could be used to buy the needed vehicles. The school district could pay back to that fund over the life of the equipment, thereby preparing for the next time buses are needed.

That would essentially spend down the fund balance, but not tie the bus expenditure to the mill rate, he said.

He also said the borough could consider borrowing the money for the buses. Some of the vehicles are as much as 20 years old and prone to breakdown. The 15-passenger activity vans do not meet minimum federal transportation standards. Neither do equivalent vehicles available from retail car manufacturers.

Federal law prohibits replacing the 15-passenger vans with similar equipment. Instead, they must be replaced by sturdier, reinforced buses, according to Popp.

The district has proposed a plan to buy 12 small buses capable of carrying up to 15 people and eight large buses this year, and acquiring an additional dozen small buses and seven large buses the next, for a total of 39 vehicles. A district study estimated the total cost at approximately $2.54 million.

In a memo to the assembly, Popp, Moss and Long said the district's plan "made sense." They also said their idea for implementing it was "an acceleration of the schedule proposed by the school district" because it would involve buying all the needed smaller activity buses (24) in the first year along with eight of the full-size buses.

"We are concerned that the issue of safety should be addressed in the first year," they said. "We propose to keep the two-year replacement plan for the full-size buses."

The estimated $2 million in revenue available by not reducing the mill rate essentially would ensure another $500,000 or so from the state. The state taxes the oil industry assets at 20 mills and pays the borough back its equivalent mill rates for the borough and its service areas. If the borough mill rate is cut a half-mill, as proposed, the state continues to bill the oil companies at the 20-mill rate. It would simply send the borough less.

Popp reasoned that by keeping the mill rate at 7 mills, the state would return more of its tax revenue to the borough -- money that could be committed to the bus purchase.

Other members of the assembly, including Gary Superman of Nikiski and Grace Merkes of Sterling said the proposal was too new for them to jump on board immediately and said they wanted to study the issue further.

The assembly also replaced a proposed ordinance setting permit conditions for concentrated animal feeding operations with a substitute that is more restrictive. The latest version of Ordinance 2002-14 will get a hearing on June 4.

The issue of feedlots has become controversial largely over the potential for groundwater pollution and smell. The original ordinance, introduced May 7, proposed defining a concentrated animal feeding operation, or CAFO, as confining at least 2,500 swine.

The substitute lowers that threshold to 1,000 swine. The definition went on to apply other totals to cattle, horses, sheep, turkeys, chickens and other creatures.

To get a borough conditional-use permit under the proposed ordinance, operators would be required to have in hand all applicable state and federal permits and be able to handle animal wastes safely.

Soldotna resident James Fisher told the assembly it should not be considering a conditional-use permitting process for feedlot operations, but ban them altogether. He said he has been researching feedlots in other states for a couple of years since the businesses were first proposed for the peninsula. He warned there would be pollution detrimental to groundwater, and the smell would not enhance tourism.

"It will do a great deal of harm," he said.

In other business, the assembly introduced a pair of ordinances dealing with matters on the lower peninsula.

Ordinance 2002-20 would re-map the boundaries of the Kachemak Emergency Service Area, excising Miller's Landing and areas on the bluff above Homer that now are within the municipal borders.

The proposed ordinance also removes those areas from the Kenai Peninsula Borough Road Service Area. The city and the borough are working out details of a transition period during which the city will take over road maintenance duties in the new territory.

A public hearing on the ordinance is set for the meeting of June 18 in Soldotna. If adopted, its effective date will be retroactive to March 20, the date the annexation became state law.

The assembly also introduced ordinance 2002-21, which would establish the Anchor Point Port and Harbor Service Area. The measure gets public hearings on June 4 and June 18. If adopted by the assembly, voters would approve the exercise of powers by the service area board and elect board members in the October municipal election.

The ordinance permits a property tax levy up to 0.1 mills, with additional levies requiring voter approval.

The primary duty of the board will be to work with the Corps of Engineers and other agencies to fund and conduct a feasibility study on a proposed port and harbor and boat launch facility at Anchor Point. If the study establishes that such a facility is feasible and funding can be found to build it, the service area board would oversee its operation and maintenance.

If the feasibility study proves the project impractical, the service area would be dissolved, assembly members said.

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