Kenai staff present FY2026–2030 capital plan; $25 million FAA grant expected for runway work, adoption set for Jan. 15

City of Kenai staff on Wednesday presented a draft FY2026–2030 Capital Improvement Plan at a joint work session of the City Council and several advisory commissions, saying the plan will guide grant requests and the FY2026 operating budget and that formal adoption is scheduled for Jan. 15.

City Manager Terry said the document “serves as a foundation, for our efforts to solicit grant funds, both at the federal and state level,” and that the administration is targeting mid‑January for adoption to submit requests into the state CAPSIS system. Lee Fry, the city’s public works director, told the meeting the airport runway rehabilitation project is in design and that staff “are expecting around $25,000,000 of grant funds to be coming to us this fiscal year.”

Why it matters: the draft plan groups projects by fund (airport, general fund, water and sewer, and several smaller funds) and sets priorities that will determine which projects the city pursues with state and federal grant programs, local match funds and internal timing. Several large items are contingent on securing outside grants, staff said, which would delay construction if funding is not available.

Airport projects Lee Fry said the draft includes three near‑term airport priorities: completion of runway rehabilitation (design nearing completion), a taxiway rehabilitation project (design funded locally pending FAA grant timing) and a future roof replacement for the flight service/airport control building. Fry said the city anticipates adding local match funds to the runway project and is “expecting around $25,000,000 of grant funds” from the FAA this fiscal year. He also said the airport will not likely receive substantial FAA funding for terminal road and parking lot work because those assets generate revenue and the FAA typically limits funding for revenue‑generating surfaces.

Terry explained the funding relationships for airport‑site buildings that were constructed with different funding streams, saying the animal control shelter was built with airport funds on airport property while the FAA flight service station was constructed with general fund dollars. He noted the city currently charges interfund payments (described roughly as a small annual percentage of original construction and land value) and that responsibility for major building systems generally follows which fund paid for construction. Terry cautioned he could not recall the precise percentage and said “don’t quote me exactly on this percentage, it’s either 6 or 8%.”

Fry and Terry both described the FAA funding process as design→bid→final construction cost→grant request. Terry told council members that, if eligible and if FAA funding is available, the FAA will participate “at a maximum of 93.75% and we’re responsible for 6.25.” Several council members asked how staff would proceed if grants do not come through; Fry said the city could either fund projects locally if resources allow or delay the projects until funding is secured.

General fund priorities Staff outlined a set of street, drainage, building and parks projects proposed for FY2026. Key items discussed included: - Wildwood Drive rehabilitation: total project cost shown as $1,480,000; $280,000 in local funding already appropriated; staff proposing a $1,200,000 state grant request. Fry said the road’s condition is driven in part by traffic serving the Wildwood Correctional Facility and that the requested grant amount should be sufficient to complete the work. Council members asked whether lower‑cost design alternatives had been considered; Fry said preliminary discussions with the project engineer have explored less‑expensive options such as a shave‑and‑pave. - Aliax storm drain and paving repair: shown at a tentative $600,000, Fry said crews will camera the pipe this winter to refine scope and cost; full replacement and repaving is the high‑end scenario, but the number could be reduced depending on the camera results. - Citywide street condition assessment: staff proposed hiring a consultant to perform a pavement condition assessment of Kenai’s asphalt streets to update the city’s last formal assessment (noted in the discussion as dating to 2007) and prioritize future work. - GIS stormwater, lighting and road mapping: expand the city’s GIS inventories (already used for water/sewer) to include storm drains, street‑light wiring and other underground assets to improve dig‑line locates and asset management. - Downtown asphalt crack sealing: $200,000 proposed to perform mastic crack repairs on main‑street seams that have deteriorated. - Parking lot seal coating, City Hall design funds, parks pavilion replacements and parks equipment: smaller line items for routine preservation and park facility replacement. Fry said City Hall design funds would be used to investigate insulation, elevator repairs and ADA access needs with construction expected in a later fiscal year.

Water, sewer and utilities Staff said the water and sewer fund has several active projects under way and proposed a smaller set of FY2026 additions: design funds to evaluate on‑site disinfectant generation (as an alternative to hauling liquid chlorine), expanded GIS mapping for utility assets, replacement fencing at the water and wastewater treatment plants to improve security (staff noted internet limits at some sites that could constrain camera use), and insulation over a shallow sewer main on Trading Bay Road to reduce freeze risk. Fry also said the Broad Street lift station reconstruction and several other lift station projects have funds appropriated in earlier years and could move to construction in the coming season.

Other funds and facilities - Senior citizens fund: staff has no FY2026 capital requests; planned landscaping work was deferred pending results of a bluff erosion project and review of frontage. Staff said they will inspect the senior center entry structure and determine whether repair or a full rebuild is needed. - Congregate housing fund: staff proposed supplementing existing elevator maintenance funds (currently $50,000 appropriated) to reach an estimated $150,000 modernization cost for the most heavily used elevator; the draft proposes adding roughly $100,000 to complete the work. - Personal use fishery: staff said float and ramp repairs are under investigation, with potential float reconstruction and concrete ramp work to follow based on available funds.

Council and next steps No formal votes were taken at the joint work session. Staff said the administration plans to bring a resolution for council adoption of the FY2026–2030 Capital Improvement Plan at the Jan. 15 council meeting, and that the document will be used to submit state CAPSIS requests and to inform federal grant outreach. Several council members urged earlier contracting of the citywide pavement assessment so results would be available for summer work; staff said the General Fund could support an earlier supplemental appropriation if council wishes to accelerate the assessment.

The draft plan includes a mix of projects that staff said are largely grant‑dependent; Fry and Terry repeatedly cautioned that federal or state grant awards are not guaranteed and that projects would be delayed or require local funding if grants are not secured.