Kodiak Assembly keeps $12,600-a-year lease for road material storage

Service Area No. 1 taxpayers in Kodiak will keep paying roughly $12,600 a year to store road sand, gravel and salt on private land after the Kodiak Island Borough Assembly reached consensus at its Aug. 13, 2026 work session to continue a lease that several members had said last fall they wanted ended.

The borough manager told the assembly that the rental agreement for the lot at 3523 East Rezanof Drive was signed on Nov. 24, 2025, after the assembly authorized her to sign it, and that it runs through the end of 2029 as a one-year lease with successive extensions. The first year cost about $12,000; the 2026 figure is $12,600, and it rises by a set percentage annually. The cost falls entirely on Service Area No. 1 property owners through their mill rate, currently 1.5 mills against an adopted budget of $608,000.

Service Area No. 1 Chair Scott Arndt, who asked to address the assembly after seeing the item on the agenda, defended the arrangement on price and proximity. "So we are leasing approximately 20,000 square feet at roughly 5 cents a square foot, and anybody with any sense in the construction business or in business of any sort where you've got to pay for storage, 5 cents a square foot is unheard of," Arndt said. He said the contractor, AIM Maintenance, leases adjacent space, so the loaders sit next to the piles: "The other advantage of this location is that the contractor leases area adjacent and then also over at Napa. So the equipment is very close. We don't pay a mobilization fee." Under the contract, he said, the service area could be billed a two-hour minimum at $150 to $200 an hour per loader each callout. "I feel it will far exceed the $12,000 we're paying for the property," Arndt said.

Arndt told the assembly he had disclosed to the service area board his longstanding relationship with the property owner, describing a friendship between the Arndt and Fields families dating to 1964. He said Duncan Fields let the service district use the lot at no charge for five to six years before rising assessments prompted him to seek payment, and that the current arrangement has worked for roughly the last eight years.

Arndt, who served as borough mayor as recently as 2024, holds the Service Area No. 1 chair seat under the borough's board roster, with a term ending in 2026. Borough code requires service area boards to meet at least once a quarter; a 2025 review by KMXT found Service Area No. 1 had not held a regular meeting since March 2024. The manager said she attended a Service Area 1 board meeting on Aug. 11.

Not every member was satisfied. One assembly member said his recollection was that the assembly had reached at least a majority, if not consensus, last fall to end the lease, then agreed to delay so the contractor would not lose its materials over the winter. In the spring, he said, the service area reported the piles were frozen into the ground. Since then, he said, a substantial amount of gravel and, more recently, super sacks of salt have been added to the property, and he could not support keeping the lease on the grounds that the stored materials are too hard to move. He also said the borough still has not seen the alternative priced out, and asked staff to report back on available square footage at the borough's Dark Lake site, the cost of adding a light there, and historical mobilization invoicing. Four members nodded assent.

The decision lands on the residents who pay for it. The borough directs property owners with road problems to contact their road service area chairperson, and Service Area No. 1's mill rate covers both the storage lease and the winter maintenance it supports. Residents have also brought other maintenance concerns to the board this summer, including a formal drainage complaint filed Aug. 1 over flooding at a Lilly Drive property.

Jeremiah Gardner, a resident of the service district, said "let's, uh, let's squeeze the deal for as long as we can is what it kind of seems like to me." Arndt, looking ahead, said "the service district is aware that it won't last forever, and we will be looking into what options we would be coming forward to, to recommend, because there is other borough property that would potentially be better."