Session 09-05, a Regular Meeting of the Economic Development Advisory Commission was called to order at 6:00 p.m. by Chair Hogan on June 9, 2009 at the City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

PRESENT: COMMISSIONER ERICKSON, HOGAN, NEECE, RAVIN

COUNCILMEMBER: WYTHE (Absent)

STAFF: SPECIAL PROJECTS COORDINATOR HOLEN

VISTA REPRESENTATIVE BEVIS

APPROVAL OF THE AGENDA

The agenda was approved by consensus of the Commission.

PUBLIC COMMENTS REGARDING ITEMS ON THE AGENDA

Mako Haggerty commented that he has owned his water taxi service since 1996. It runs year round and is supported by a lot of local residents, as well as tourists from all over the country and international as well. He supported the Jet Ski ban when it first came out and still supports the ban. This is a big planet; there is a lot of water on it, big lakes, and a huge ocean. Kachemak Bay is just a small piece of water. It is a critical habitat and it makes it special that there are no jet skis in the bay. If we can just have one place on this planet that doesn’t have jet skis it gives it a certain quality. His clients are very happy there are no jet skis here; they are into quiet sports, kayaking, bird watching, hiking, camping, all the things that give people relief from all the noise of normal civilization and he supports the Jet Ski ban for that reason. It makes Homer and Kachemak Bay a special place. We don’t have to appeal to everyone because as soon as we do, we appeal to no one.

Question was raised how many people he employs at the peak of his season and the slowest point. Mr. Haggerty responded 4 and a half at the peak and 2 in the winter.

Mike Arno is a local business owner. He does not reside inside city limits but has been in the area for 49 years. One of his businesses is Arno construction, an excavating company and one is Peninsula Power Sports which sells ATV’s, snowmobiles, and outboards. He said he has always been in awe of the jet ski ban that has taken place because you can run any other kind of hull type in the bay with any kind of horse power, but because of the hull style they way you sit in it or on it affects whether you use it or not. It makes zero sense to him. You can run a tractor jet out here which runs approximately 18 barrels per second of water through it, which will suck up anything close to it; you can run a 40 foot seiner with two tractor jets in it at 15 to 20 knots, but you can’t run a jet ski, and he is unsure why. He doesn’t understand the purpose of the ban other than a few people got together and decided they didn’t like it. He doesn’t know the difference between using a different powered boat and a jet ski, other than the type of recreational use they are used for. He feels we are losing a lot of people coming down as he gets calls asking if he sells jet skis. He explains that they are illegal on Kachemak Bay and some people are disappointed because they planned to come and ride on here. He doesn’t understand how some people like it without jet skis, but be okay with a tractor jet going by them with a big diesel engine blowing smoke. He has heard about the wild life it disturbs and endangers. He thinks he would stay a lot farther from wildlife on a jet ski than on a big boat powering through the bay. The danger of hitting an otter would be more dangerous to him if he were on a jet ski. He thinks jet skis on the bay would add to his business, add another employee to his company, and he supports it.

Question was raised regarding the estimated sale of units for a similar sized dealership in a similar sized town, and his employee count. He responded that a comparison to ATV’s and snow machine sales he estimated anywhere from 15 to 30. Perhaps not that many at first but would increase as it caught on. Sale’s aren’t as important to his business as the maintenance, repair, and parts and service are. His Power Sports store employs three people year round.

Dave Aplin, city resident, said he is an active recreational user of the spit and Kachemak Bay. He said his brother is a little unfair about jet skis, in that they are like herpes. They always appear at the wrong time in the wrong place. He upholds some of the same perspective on the sport. He appreciates Mr. Arno’s comments and how he differentiates the hull designs and style. Mr. Aplin said in the past his experience has been that no other boat has circled him, created a wake, and harassed him while he was engaged in another activity where as jet skis have. He doesn’t want to differentiate kinds of users, but that vehicle lends itself to the kind of behavior that is disruptive to other users. In his opinion opening up jet skiing as a regular recreational past time around the spit and in the bay would be the same as encouraging smoking in a restaurant because you might bring in more customers, because many of the customers that are already there, smoking is something that might disturb, distract, and drive them away from showing up at that restaurant. He believes there are some definite negatives about creating an atmosphere that includes that vehicle type in Kachemak Bay and he encourages the City or anyone making that decision to maintain the prohibition.

Question was raised if Mr. Aplin rides in airplanes and has employees in Homer. He responded that he does and he has never had an airplane circle him, dive at him, or try and disrupt him from doing something. He does not have employees but he lives here and spends most of his money here.

Corbin Arno commented that allowing jet skis would bring more revenue to Homer; it would bring more people in, more fuel sales, more taxes, more money. To bring the Wet Dog race to Kachemak Bay would bring people in to see it. There are a lot of benefits to that.

John Mouw, city resident, commented that there were several years of public input and huge controversy that led up to the Jet Ski ban. He thinks they need to remember that Kachemak Bay is a critical habitat area that has a management plan and it was determined that jet skis conflict with that management plan. Kachemak Bay is a special place and there is a management plan in place.

RECONSIDERATION

There were no items for reconsideration.

APPROVAL OF MINUTES

A. May 12, 2009 Regular Meeting Minutes

The minutes were approved by consensus of the Commission.

VISITORS

A. Bryan Zak – Alaska Small Business Development Center, Southwest Region

Mr. Zak commented that he is the new director of the Small Business Development Center (SBDC), he started in March. One unique thing that started is that they offer small business development counseling in Homer two or three days a week now, depending on the need and the demand in Kenai, Soldotna, and Seward. He mainly helps small businesses get started. Many people just have a concept or idea that they want to start a small business, but have no idea what it might entail, so he helps them with information about a business plan, what their marketing strategies might be, employees, revenue, insurance, and so forth. It generally leads to discussion about financing. Alaska SBDC is also funded as part of the small business administration so they are connected and know what Small Business Administration loans are available. They network with local banks so he helps facilitate those relationships as well. Right now, because of the Economic Stimulus Package from the government there is a lot of SBA money available and the SBA loan programs are being guaranteed now more than they ever have, up to a 90% guarantee and the rates are lower. The unfortunate thing is that many of the people he counsels wouldn’t qualify for an SBA loan, so other arrangements have to be figured out to help those people. He is looking for new and fresh ways to help those people with good business ideas but need a little extra help. Mr. Zak noted that there are loan opportunities for businesses that have shown a profit and have good credit. There was brief discussion regarding details of the community express loan. He provided the SBDC Success Story Guide and reviewed some of that information. He commented about how they track businesses and number of jobs. He said he has things he reports to the Mayor on which are jobs created, capital infusion that new business owners have created, money put into the economy that is acquired through the banks, business start ups, new business licenses, and government contracts. He told them about PTAC, 10 steps to becoming a government contractor; a program called TRANS which connects businesses with bids from government contractors. Buy Alaska is a program of Alaskans helping Alaskans and information is available down at the Chamber of Commerce. APEX is a program that helps Cities do things smarter and spend a little less money in some areas but still provide exceptional quality of service. There is a two day workshop that falls out of APEX called profit mastery which will be offered in Homer in the fall. He outlined his schedule for counseling and when classes will be available. Mr. Zak commented that economic development isn’t just numbers but also a lot of other considerations that go into making decisions for businesses. In Homer we have had a difficult time trying to find a balance and this Commission is there in the front. With the bay we have an incredible resource and economic development in Homer. It will all balance out. The spit comprehensive plan could help open things out there. He recognizes that leases on the spit can be complicated and, and that the Commission is working toward making that an easier process.

Question was raised whether he is seeing more people coming in now that he is here twice a week and what the Commission could do to help reduce road blocks and help start facilitating progress. Mr. Zak said the City providing some funding to have a counselor here is a step in the right direction. He is seeing repeat clients and walking them through the steps and making headway. Right now is an excellent time to take advantage of these opportunities. They are doing more to get information out and as this relationship builds it will take all of us working together. The SBDC provides the business counseling but there are great ideas for business incubators and taking people to the next level in business counseling. Roadblocks include things like issues with leases, getting the word out, personal issues with folks wanting to start up businesses, the City not having funding for matching grants, and the effect of water and sewer costs to businesses. A suggestion was raised for Mr. Zak to be at the high school when students have free periods to teach them about business. Point was raised that workforce development seems to be focused more on resource development, never on other programs and that it would be really beneficial to have something along the lines of an AVTEC here locally.

B. Brenda Hays – Wet Dog

Brenda Hays commented that it’s her intention here tonight to help the Commission and people of Homer, especially the businesses community, understand the economic value of allowing personal watercraft in Kachemak Bay. She expressed her opinion that the banning of the watercraft is more than questionable and expressed her view of the ban. In 1999 the effort to outlaw personal watercraft was based on repulsion toward these crafts from a minority of people within certain areas of our bay who in turn, contacted their friend at the time, Governor Tony Knowles. The Governor then called Alaska Department of Fish and Game, Department of Natural Resources, and the State Parks Advisory Board to begin drafting laws to ban personal watercraft in our area, i.e. critical habitat and state park area. Together these agencies banned type A craft namely, jet skis, wave runners, and personal watercraft. This was done with very little, if any input from anyone other than those who sought their ban. Only in Kachemak Bay and the Ports of Homer and Seldovia are these crafts discriminated against. Also there are no reported problems with their usage in recreational areas. The repulsion against these crafts was based on a minority opinion that these boats were disruptive, dangerous, noisy, and harmful to the environment and marine wildlife. This law was not put to a vote, not many complained, unfortunately the law just slipped into effect. Now almost 10 years later, these craft have changed tremendously. They are now considered green machines, they don’t pollute, they are quiet enough to carry on a full conversation standing right next to them, they are fuel efficient four stroke engines with a low rpm gear that prevent wakes in the harbors and when they are going slow. When used on the ocean they must follow the same laws and equipment as all boats, namely lights, horns, radios, fire extinguishers, lifejackets, and abide by the international rules of the road or face severe consequences. She found it interesting that the average age of new buyers of these craft is between 40 and 60 years old. They range in price from $7,000 to $14,000. No one here would think of outlawing a noisy, smoky, seine skiff. Presently there are plans being made for a world wide competition in Alaska. A 2000 mile water race on personal water craft called the Alaska Wet Dog race. People from all over the world have shown interest in entering this race, including a handful of accomplished Alaska sportsmen. The Wet Dog race coordinators estimate there could be a thousand competitors and up to 120 support vessels along their route. The support vessels would cost over $1 million according to John Lang, the Alaska Wet Dog race founder. Recently the Paving the Way Ambassadors were making their way through the determined course. Ms. Hays said she had the pleasure of escorting these Wet Dogs around Homer to the various stores and shops when the came into the Anchor River for a layover. In a three day period she saw three Wet Dogs spend thousands dollars on parts, food, fuel, entertainment, and tips while staying at her B&B. The following two weeks, the Wet Dogs spent their way through Kodiak City and other small villages on the island. On their route there will be approximately 23 check points along Alaska’s coast, with Homer and Seldovia being the only ports where type A boats are not allowed entrance. Check point locations will house racers, reporters, friends, relatives, volunteers, and well wishers, who will spend money on food, lodging, fuel, laundry, internet cafés, moorage, car rentals, air charters, gifts, and crafts. The economic value to Homer could be huge, especially if the race was to start or finish here, which could be a possibility with the rewording or changing of some present laws. The fastest, easiest, and most economical way is for the City of Homer to directly petition the Governor to revisit these laws with ADF&G, DNR, and State Parks to make necessary addendums. Ms. Hays said she is not asking that these craft take over the Bay, she is asking that they be allowed to launch in and out of the Homer Harbor as a gateway to other areas. The Jet Ski club of Anchorage and the Star Bound Tours of Wasilla offer multi multi-day tours on personal watercraft (PWC) and would use Homer immediately if they could, bringing more Alaskan tourists to our area. Today, our tourist related businesses are suffering from lack of visitors. In the name of economics in Homer, it is now that we must evaluate this unfair policy and come up with new laws for these craft. The climate for such political change is perfect. Why would Homer want to avoid this revenue is her question to the Commission tonight. She proposes that the Commission petition the City of Homer to lift the ban on personal watercraft. In closure, she is has been a licensed mariner in Alaska for the last 30 years. She cares greatly about her home in Kachemak Bay. Preserving nature and wildlife and boating safety issues are issues she is truly concerned with. These craft are not a nuisance. They would add enjoyment to our fabulous paradise as they do so in many other locations. These craft are widely accepted by those that have a thorough knowledge of watercraft and waterways. There are many applications beyond their use as recreational pleasure craft. Because of their unique abilities on the water PWC are used in rescue missions all over the world. Bottom line, they would offer Homer added revenue, just by their presence.

In response to questions, Ms. Hays responded she has 4 employees for the charter business and 1 at the B&B. The B&B is open year round and the charter from March 15 through October 15. The age trend of purchasers of the PWC is mimicked in her clientele. Regarding bookings she said in 2008 they were up, but this year she is down 75% on both businesses. The Wet Dog’s are doing the paving the way tour currently which ended tonight. They recently were gone for two weeks, circumnavigated Kodiak and made it as far as Shelikof before they encountered 40 knot winds, driving rain, and were forced to take shelter in an unprotected bay for five days. They had to cut their tour short but will be completed later in the summer as she understands. The race is going to happen, perhaps not until 2011. With this tour they have done a great deal of filming which will be used for promos to advertise the race. There has been a great deal of interest in the race and has the potential to be as big, if not bigger than the Iron Dog or even the Iditarod. There is so much interest because it is in Alaska and covers such a long distance in Alaska. Currently the founder is John Lang and more information can be found at www.wetdograce.com.

STAFF AND COUNCIL REPORT

Special Projects Coordinator Holen commented that the Capital Improvement Planning Process has been launched and all of the Commissions are invited to provide input. She noted they need to schedule the attendance for the August through December City Council meetings.

VISTA Representative Bevis commented that she is getting to know Homer. She has been doing a lot of research and she is enjoying her involvement with the communities’ project. She explained that it is a map project for the Kenai Peninsula and a process for community input. It was initially through the Public Health folks, but broadened it to include everyone. In her interviews she found that they were asking a lot of the same questions so she is working with them to compile and summarize their research.

PUBLIC HEARING

There were no items for public hearing.

PENDING BUSINESS

A. Lease Policies

The Commission reviewed and adopted suggested amendments from their previous worksession.

Chapter 11.2

C. The exercise of any option shall be dependent upon lessee not being in breach of any provisions of the lease at that time.

RAVIN/ERICKSON MOVED TO ADOPT THE CHANGES AS WRITTEN ON CHAPTER 11.2 (C)

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

11.2

I. New leases will be subject to a probationary period of up to 5 years. Failure to demonstrate commercial activity on the property will constitute grounds for revocation of the lease.

HOGAN/RAVEN SO MOVED.

There was discussion that it be reviewed by the City Attorney.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

11.2

F. Lease Renewals: The City Council, after reviewing a recommendation from the Lease Committee, may elect to not require a competitive bidding process for a property whose lease has expired (including all options) if it finds that it is in the best interest of the City to enter into a new lease agreement with the current lessee. If the current lessee is interested in entering into a new lease agreement, he/she must indicate so in writing to the City Manager at least 12 months prior to the expiration of the lease and submit a formal lease application/proposal for evaluation by the Lease Committee. The City will review the application but is under no obligation to enter into a new lease. If the Council chooses to approve such a new lease without a competitive process, it must approve such new lease by resolution within six months that includes a finding that it is in the public interest to do so, after consideration of relevant facts including, but not limited to, the following:

RAVIN/HOGAN MOVED TO DELETE 11.2 F

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

13.3 items need to be numbered instead of letters.

RAVIN/ERICKSON MOVED TO NUMBER THE SEPARATE POINTS RATHER THAN LETTERING.

There was brief discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

14.3

C. The City Council may shall approve assignments of a lease to banks or other financial institutions for financing or other reasons if it determines that to be in the best interest of the City.

RAVIN/NEECE MOVED TO INCORPORATE 14.3 C.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

14.3

D. Before the term of the lease is up and the business is sold, it will come to immediate assurance of renewal to make it part of the sale.  The buyer shall file a new lease application to start a new lease to extend the lease to make the business continue as viable. 

ERICKSON/NEECE I MOVE TO ACCEPT 14.3 D

There was lengthy discussion about the wording and issues with the marketability of a development on a lease property under current rules. The need was expressed for the City Attorney to review.

HOGAN/NEECE SO MOVED TO ADD 14.4A IN ORDER TO SECURE FINANCING IF A BUSINESS IS BEING SOLD IT WILL COME TO IMMEDIATE ASSURANCE OF RENEWAL.

There was brief discussion of the intent that 14.3D is gone although no vote was taken.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

15.1

It is the policy of the City of Homer to require lessees to carry general public liability insurance, environmental insurance if appropriate, workers compensation insurance, and any other insurance coverage determined to be necessary by the City in order to protect City assets and the public interest and any other insurance coverage to that industry standards, determines what is necessary to protect City assets and the public interest.

ERICKSON/NEECE MOVED TO AMEND TO INSERT REVISED LANGUAGE.

There was brief comment that this is an important revision as there are numerous businesses that are not covered for the activities they are engaged in.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

B. 2 Instead of the City, it needs to be industry standards will determine whether environmental insurance is necessary.

ERICKSON/RAVIN SO MOVED TO AMEND.

It was clarified that City is crossed out and insert industry standards. The intent is to get rid of frivolous insurance that isn’t needed.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

18.2

Add

F. With respect to permanent building the leaseholder will have the following options at the end of the lease:

a. Sell the business, renegotiate with the City and start a new lease (preferable)

b. City may buy the asset at a negotiated value of the structure

c. Offer leaseholder option to buy land at a fair market value

HOGAN/RAVIN MOVED TO AMEND TO ADD ITEM F.

There was brief discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

B. CEDS Development

ERICKSON/NEECE MOVED TO POSTPONE CEDS DEVELOPMENT.

There was no discussion.

VOTE: NON OBJECTION UNANIMOUS CONSENT

Motion carried.

NEW BUSINESS

A. Transportation Infrastructure

RAVIN SO MOVED TO DISCUSS.

There was no discussion.

VOTE: NON OBJECTION UNANIMOUS CONSENT

Motion carried.

Chair Hogan commented that Patty Boily has brought up the bluff erosion that is starting to threaten the Sterling Highway. We are in danger of losing the Sterling Highway in the next 18 months. There are at least 4 places between Homer and Stariski that we could lose the road totally and this needs to be moved rapidly up to the top of the list. The City needs to start beating the drum on this.

NEECE/RAVIN MOVED TO BRING TO THE COUNCILS ATTENTION AS THERE IS A FEDERAL EMERGENCY TEAM IN PLACE LOOKING AT YUKON RIVER VILLAGES DOING ASSESSMENTS AND THIS WOULD FIT INTO THAT CRITERIA TO FUNNEL SOME PEOPLE TO ADDRESS THE ISSUE WHILE THEY ARE STILL IN STATE.

It was recognized that it is a State project, but it affects this city’s livelihood.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

INFORMATIONAL MATERIALS

A. Alaska Economic Reports

B. KPEDD Executive Director Report

C. Items of possible interest from recent City Council Meeting Packets

D. Email from Frank Mullen Re: Keeping Jet Ski’s out of Kachemak Bay

Commissioner Erickson requested that the jet ski issue be on the next agenda for discussion. Chair Hogan commented that he has checked with the marine fisheries service and they have no record of marine mammal mortality from personal watercraft. In looking at history of the sea otter population in the state there is about 800,000 mortality due to kayaks. That is how the fur trade hunted sea otters.

COMMENTS OF THE AUDIENCE

There were no audience comments.

COMMENTS OF CITY STAFF

There were no staff comments

COMMENTS OF THE COUNCIL MEMBER

Councilmember Wythe was absent.

COMMENTS OF THE CHAIR

Chair Hogan noted there is not a quorum for July and the next meeting will be in August.

COMMENTS OF THE COMMISSION MEMBERS

There were no Commission comments.

ADJOURN

There being no more business to come before the Commission the meeting was adjourned at 8:31 p.m. The next regular meeting is scheduled for August 11, 2009 at 6:00 p.m. in the City Hall Cowles Council Chambers.

MELISSA JACOBSEN, CMC, DEPUTY CITY CLERK

Approved: