The Alliance of Concerned Taxpayers (ACT) filed a referendum with the Kenai Peninsula Borough Clerk’s

office that would repeal “Revenue Enhancements” approved in June by the assembly as Ordinance 2005-09.  The ACT referendum has been certified by the Borough Clerk and will be placed on the October 2006 ballot unless the assembly takes action sooner. 

Soldotna, Alaska (November 30, 2005) –The Kenai Peninsula Borough Clerk recently certified an ACT referendum

that if approved by voters would repeal Ordinance 2005-09.  Ordinance 2005-09 was Mayor Bagley’s “Revenue

Enhancement” measure that included a sales tax increase, changes to the calculation formula for certain sales tax and

withdrawal of money from the borough’s land trust fund. 

“The land trust fund was established to receive money collected from the sale of borough lands.  Trust funds by design 

are set up to provide dividends long after the funding source is gone.  As such, a well managed trust fund may spend 

interest earned but never the principal.  This will guarantee future generations benefit from a finite resource.  To spend 

the principal now and establish a mechanism for future annual withdrawals is a short sighted fiscal plan and a breech of 

the assembly’s fiduciary responsibility to the public,” according to Mike McBride, ACT President.

The Borough Assembly now has three options available to them.  They can authorize a special election, repeal the

ordinance, or put it on the October 2006 ballot.  Ordinance 2005-09 can not take effect until one of the three options

has been exercised.  During this period of suspension, the assembly may not enact another ordinance substantially

similar to Ordinance 2005-09. 

If the assembly repeals the ordinance before a referendum election is held, this issue will not be put before voters and

the assembly will not be able to enact a similar ordinance for two years.  “The sky is not falling. The Borough now

spends about $2,000 per person, per year and that is plenty. The Land Trust fund should be reserved for future needs,

a sort of permanent fund for our kids" said ACT Board Member Ruby Kime of Ninilchik.

If the assembly chooses to use a special election to decide this issue, it will cost borough taxpayers about $45,000.  

This option is very expensive and the least desirable because of the extra cost to taxpayers.  If the assembly agrees to 

hold a special election and voters approve the referendum, then Ordinance 2005-09 will be repealed.  In this case the 

assembly will also have to wait two years before they can introduce a similar ordinance again.  

"As long as the assembly is allowed to pull money from the land trust fund principal, the fund will never grow to its full 

potential.  If the principal has been spent and all borough land sold there is little left for the future.  It is a very selfish 

“ME generation” practice that must be stopped NOW!  Ordinance 2005-09 must be repealed by voters in October 

2006, and one day your kids will thank you”, said John R. Midkiff, an ACT Board Member from Kenai

The third option is to put this referendum on the regular fall 2006 municipal ballot.  This option is less expensive than

holding a special election and results will be treated the same.  If voters repeal Ordinance 2005-09 in the fall 2006

election the assembly will have to wait two years before they can introduce a similar ordinance.

The assembly, using Ordinance 2005-09 and Ordinance 2005-37 has transferred $1,438,705 from the principal of 

the land trust fund to the general fund.  “What the assembly has done is like our state legislature raiding the principal 

of the Permanent Fund” said Fred Sturman an ACT Board Member from Soldotna.  ACT legal advisors say that what 

the assembly has done is a “gray area” that may have to be sorted out in court.  The ACT Board of Directors has 

decided to give the assembly a few weeks to repay this money before resorting to any stronger measures.

It has been a long time since voters of Kenai Borough have spoken so loudly.  It’s simple; borough spending must be cut before any new revenue sources are introduced!  It is always painful to accept reality and make cuts, but General Motors, Delta Airlines and Merck have done it and there is no reason why the Borough can’t do the same.  The People have spoken and our elected officials would be wise to listen” said Patricia Falkenberg, an ACT Board Member from Kenai.

“I am disgusted but not surprised the assembly grabbed money from the land trust fund when they found out the ACT referendum would prevent them from raiding this public trust fund. This is another reason why citizens must monitor the assembly’s activities very carefully and be ready to take immediate action.  This under-reported maneuver involving such a large amount of public money is unacceptable to everyone familiar with the issue”, said James Price the referendum Alternate Sponsor from Nikiski. 

 “There are some serious legal and policy issues with Ordinance 2005-09”, explained McBride.  “First the borough claimed they did not have to comply with state laws governing municipalities wishing to increase their sales tax rate, when AS 29.45.670 clearly said the public should have a vote.  Now the assembly has raided the land trust fund to avoid facing voters again.   Sooner or later the reckless actions of this assembly will catch up with them, because people don’t trust leaders that ‘shoot from the hip’ with our money”, McBride continued.   

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