Session 08-06, a Regular Meeting of the Economic Development Advisory Commission was called to order by Acting Chair Scarpitta on September 9, 2008 at the City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

PRESENT: COMMISSIONERS ERICKSON, NEECE, RAVIN, SCARPITTA

COUNCILMEMBER WYTHE

ABSENT: COMMISSIONERS HOGAN (Excused), YAKUNIN

STAFF: SPECIAL PROJECTS COORDINATOR HOLEN

DEPUTY CITY CLERK JACOBSEN

CITY PLANNER ABBOUD

APPROVAL OF THE AGENDA

ERICKSON/RAVIN MOVED TO REMOVE HOMER PORT AND HARBOR REVENUES.

There was discussion that this is to be discussed at the October worksession.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

RAVIN/ERICKSON MOVED TO APPROVE THE AMENDED AGENDA

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

PUBLIC COMMENTS REGARDING ITEMS ON THE AGENDA

There were no public comments.

RECONSIDERATION

There were no items for reconsideration.

APPROVAL OF MINUTES

A. Regular meeting minutes of August 12, 2008

RAVIN/NEECE MOVED TO APPROVE THE MINUTES AS WRITTEN.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

VISITORS

Louie Flora from Representative Seaton’s office addressed the Commission regarding what legislature has been doing with Net Metering and Renewable Energy Projects. He explained that net metering is a program set up in 42 other states that allows those utility customers that want to generate their own electricity with renewable energy source to inter-tie into the grid, meter down their home consumption and sell their excess back onto the grid at either wholesale or retail rates. Mr. Flora said a bill was introduced last winter to allow the homeowner to generate up to 25 kilowatts of electricity by renewable sources and sell excess back out to the grid at retail rate. It met with some pretty stiff resistance from the utilities in Juneau and the bill didn’t go anywhere. At the same time, the Regulatory Commission was working on a docket that included net metering. They concluded not to adopt the federal definition of net metering, but they were going to work on a more Alaska specific definition in the future. At the same time as all that, the Homer Electric Utility has been working on a similar alternative proposal called the Sustainable Natural Alternative Program. The program has a group of people who do voluntary contributions into a pool of money to support those homeowners who install renewable technology. Those homeowners would sell it back out onto the grid. Representative Seaton commented to the Regulatory Commission that we need to have the homeowner be allowed to meter down their home energy consumption prior to selling it back to the grid. HEA modified their tariff revision request, so they are going forward with a program in Homer that is a lot like net metering. He is unsure of the timeline it will be available but anticipates early next year. He said they will probably be introducing something in the future statewide that takes a comprehensive look at it and for other utilities as well.

Mr. Flora spoke briefly about the weatherization energy rebate and renewable energy grants. The Alaska Housing Finance Corp (AHFC) rebate program currently addresses residences, but may be broadened in the future to look at businesses. The program funding was recently increased by legislature. The program is based on income requirements and provides direct compensation for weatherization improvements in homes.

Lastly, Mr. Flora spoke regarding the renewable energy grant program. He said 100 million dollars are available, with the ultimate size being 250 million dollars. It is limited to cities electric utilities, independent power producer, local government, or a government entity. The RFA for these proposals just opened September 3^rd and it was broken into two different programs. One is for the programs that are further along toward completion and the other is for those in the planning stage.

The Commission thanked Mr. Flora for attending. It was suggested that they invite Bryan Hirsch to talk to the Commission. Councilmember Wythe said Joe Gallagher is the point of contact at HEA for their renewable energy program.

Bill Smith, Borough Assembly member, commented regarding tidal power. He spoke with Public Works Director Meyer, who in turn was going to look in to it. Mr. Smith said he also spoke to Kris Holderied with NOAA as manager of the Kasitsna Bay Laboratory, about studying tidal currents. She said she could do it but would need some extra support from the City in the form of a letter. They could probably tell us what kind of currents we have which could serve as a base for an engineer to translate that into the potential for power generation. A tide gauge is on the Cities CIP list and it is something that electronically looks at the water. It broadcasts to the internet and NOAA has a system so ships at sea can look and see a visual representation of the stage of the tide, winds, temperatures, and so forth, and it would also provide knowledge of the current. There are currently gauges in Seldovia and Anchorage. Mr. Smith said he would keep in touch with the Commission regarding a letter of support.

Mr. Smith commented regarding the resolution on the agricultural zone. He thinks it is an interesting concept but it needs to be developed a little more. He suggested more research be done on discriminating taxation schemes based on origin. When you say something is free of any form of taxation, it is kind of broad, so the scope should be focused on what you can actually do, like focusing on City taxes or a recommendation on how to go to the Borough with something similar. The resolution linking the signage area to solar collectors is an interesting concept but he thinks when looking at signage in the area, if there is no particular limit on signage, then one business attempts to out shout the other. In rational terms, business owners need identification and attraction for the customers, and currently everyone competes on the same basis. In Homer we have a fairly liberal sign area allowed. To try and take that off because they have a solar collector on the roof, he doesn’t feel is appropriate. If they changed the look of the town because of the signage area, you would have a negative effect on the business climate here because the business wouldn’t be as attractive.

STAFF REPORT & COUNCIL REPORT

Special Projects Coordinator Holen reported that the VISTA application has been submitted. She heard from the VISTA coordinator at UAA in Anchorage that there have been cutbacks in the program and the soonest we could get a VISTA would be January. It is more competitive now, but he was optimistic about Homer’s chances based on the project that was defined. She asked if the Commission would like information to be provided at the meeting regarding the status of the Chamber EDC. Ms. Holen reminded the Commission about having a representative from the group attend one of the City Council meetings each month to report on what they are doing. Councilmember Wythe recommended they attend the second meeting of the month. Comment was made that it would be sufficient to have the Chamber EDC minutes included in the packet. Acting Chair Scarpitta said he could give a brief 60 to 90 second report.

Councilmember Wythe reviewed the actions that were taken at the September 8^th City Council meeting. She suggested the Commission receive a copy of the Ethics Ordinance that was passed as there is information specific to the Commissions included.

PUBLIC HEARING

There were no items for public hearing.

PENDING BUSINESS (suggested time limits in parentheses)

A. Strategic Planning

RAVIN/ERICKSON MOVED TO ADOPT THE STRATEGIC PLAN.

There was discussion that the Commission did not ask that the sentence, “Initiate a carbon footprint tax and a way to pay for incentives to use renewable resources.” be included in the strategic plan.

RAVIN/ERICKSON MOVED TO AMEND AND STRIKE THAT SENTENCE FROM THE STRATEGIC PLAN.

There was brief discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT.

Motion carried.

Regarding the business ambassador, Commissioner Ravin noted that the City of Seward has a point of contact advertised on their website for new or incoming business ventures in their city. He asked if Homer has a point of contact. Special Projects Coordinator Holen responded that in Seward it is the Community Development Coordinator. There isn’t anyone filling that roll in the City of Homer. It was noted that is something the Commission is working toward.

NEW BUSINESS (suggested time limits in parentheses)

A. Review of Planning Commission issues:

1. Retail store size recommendations
2. Comprehensive Plan, Chapter 8: Economic Vitality

There was no discussion on retail store size recommendations.

They discussed the Planning Commission schedule for review of the Comprehensive Plan. Suggestion was raised for the EDC to have a joint worksession with the Planning Commission. City Planner Abboud commented that the review schedule has been amended and he will work with Special Projects Coordinator Holen to establish a date. Worksession audios can be posted on line and Planning Commission agendas can be emailed to the EDC members. Councilmember Wythe recommended that if they are going to have a joint worksession the EDC should do their homework in advance, read it, and prepare comments to bring to the meeting so that they are very prepared for it to be a two way conversation.

B. Chamber of Commerce video (Stephen Scarpitta)

The Commission watched Acting Chair Scarpitta’s DVD that was produced as a demo for the Chamber of Commerce as a possible strategy for encouraging winter tourism.

Acting Chair Scarpitta commented that they just got this going last winter with the website myhomeralaska.com. The video is designed to look at peoples reasons for coming to Alaska. This is the kind of thing that can be expanded to an image piece in Homer. He thinks there needs to be several of these on any presentation DVD that we have. We need to present the concepts of why businesses should relocate here, and give them reasons to come look at the location. It helps handle concerns and objections that people have that there is snow and igloos. A lot of people consider winter the most beautiful season here. If we are working to bring businesses here, winter weather is one of the preconceptions of Alaska. Because this is available and can be re-done it can help Commissioner Neece with what he had suggested months ago at a meeting regarding marketing Homer. It is cheap to send out, and not that costly to produce if we do a lot it ourselves.

Question was raised what the Chamber is doing for relocation of business to Homer and if it is something this Commission needs to pursue. Acting Chair Scarpitta said the Chamber doesn’t have the funds to do some of the promotions they would like; most of what they are doing is supporting the existing businesses in Homer rather than attracting them.

Commissioner Erickson expressed her opinion that there are a lot of things the Commission needs to get in place and firm up, including working with the port to try to get more business, among other things. Special Projects Coordinator Holen commented that if it is intended as a City project, there needs to be fiscal information included for Council to consider.

Discussion ensued on the possibility of establishing a Committee with two City EDC members, two Chamber EDC members, and a few public at large members to look at the project and develop the fiscal aspects of it. That would give them a better idea of what they are working with. Commissioner Neece once that idea is in place there are other vehicles for promotion like the internet and they could continue to work through it. They talked about the most appropriate way to bring this to the attention of the Chamber group without violating the Open Meetings Act. Mr. Neece said he would contact Tina Day about it.

C. Enterprise zone concept (Dean Ravin)

RAVIN/NEECE MOVED TO BRING TO THE FLOOR.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

Commissioner Ravin offered an example of a commodity, a bushel of potatoes grown a few miles from your front door is infinitely more valuable than the same product grown 3000 miles away. He recognized that the proposal can use some fine tuning and suggested the exemption from any form of taxation could be confined to retail sales tax. His goal is an agricultural tax exemption and it speaks to the fact that local production of food resources are valuable to the community and should have some manner of economic incentive.

Discussion ensued and the following points were raised:

· The first two whereas clauses aren’t necessary, people accept that.

· It is broad to have the Kenai Peninsula Borough as the boundary. That would be something separate as this seems to be relevant to the City.

· As a Commission we need to be aware that the City of Homer needs income and the cost of this proposed exemption to the City needs to be considered.

· This would be moot if the proposition on the Borough Ballot is passed.

· If the collection of taxation changes at the Borough the mechanism is for non processed foods that qualify for food stamps as it is a pre-established scope of product.

· If the City has a sales tax that is different than the Borough, the City has to get authorization from the Borough for an exception to the sales tax. The City would have to provide a mechanism for those people collecting the tax to differentiate these products from other products they sell.

· This resolution would add 7.5% incentive to local agriculture.

· Maybe it makes more sense for the Council to have a resolution that makes this statewide.

NEECE/ERICKSON MOVED TO POSTPONE THIS UNTIL AFTER THE ELECTION.

Commissioner Ravin asked the Commissioners if they have interest in the concept to mark it up with their changes to bring back for discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

Councilmember Wythe commented that the flushing out of this will include doing homework. If it sent to Council without information on how it is going to work, there won’t be any way for them to take action and it will come back to the Commission. It needs to explain how one would go about collecting taxes; it would need to be refined to retail sales as opposed to sales in general, because you don’t want to lose the landing taxes for fish that we are trying to recapture. It needs to be that far defined and clear when it goes forward.

D. Renewable energy incentives (Dean Ravin)

RAVIN/ERICKSON MOVED TO DISCUSS.

There was no discussion.

VOTE: NON OBJECTION: UNANIMOUS CONSENT

Motion carried.

Discussion ensued and the following comments were made:

· Allowing signage area equal to the active surface area of solar panels could be an enormous area of sign. It isn’t a bad idea, but there needs to be a limit.

· There are practical limits on signage, like lot size. The area where solar panels have access to the sun is limited, they have to look south. The chance of a solar panel farm in the City is vanishingly small.

· A personal property credit that affects a businesses bottom line might be a better consideration in relation to making the investment.

· This was presented in manner that wouldn’t cut into City revenues.

· If the City came to a point where they could offer an incentive, it would inevitably cost the City some money. It could be directed as an incentive for new environmentally friendly future construction as opposed to people retro-fitting existing properties for environmentally friendly things.

· When researching this, explore industries that collect carbon footprint offsets who are looking for places like Homer that want to put in place a program where they send the offsets for funding.

· This is good in that it starts the debate and conversation for this. It would be good to take into a worksession of what the Commission is doing in their overall plan.

E. Homer Port & Harbor revenues

This agenda items was removed under agenda approval.

INFORMATIONAL MATERIALS (for discussion only)

A. Newly revised EDC Bylaws

B. VISTA recruitment application

C. City of Seward website: “How To Do Business”

The Commission discussed how beneficial a point of contact person would be a good first step for the City of Homer. Commissioner Ravin read an excerpt from the City of Seward web site:

“If you are interested in expanding your business or starting a new business in the City of Seward, we invite you to submit a letter to the Community Development Director at the address shown below describing your business and intent to locate to the City of Seward. A pre-application meeting will be arranged within five (5) working days of receipt of your request. This meeting may include the Community Development Director and may involve the city manager or designee, Chamber of Commerce, building, planning, fire, harbor, public works, electric or other departments to help guide and direct you through the appropriate process.”

Commissioner Ravin said that is extremely proactive to bring business into the community. He noted the company that designed and developed the site and questioned if they are an Alaska company. Special Projects Coordinator Holen commented that in 2009 the City will be redesigning their website to make it more attractive and user friendly. She suggested that whoever does the improvements take input from staff, advisory bodies, and people who use the site on features to include, what to avoid, and so forth. They talked briefly about the similarities between Homer and Seward.

Acting Chair Scarpitta said he is interested in having an area on the agenda for progress reports on things like this and information like what Commissioner Neece is finding out from the Chamber on the DVD project.

Council member Wythe advised the Commission that City Planner Abboud has an economic development background. She suggested they might want to consider having an agenda topic and inviting him to come and visit with the Commission about what to do, what not to do, and how we could reach out more. Commissioner Neece said that would be a good worksession topic.

D. City and Borough of Juneau: July 2008 draft Comprehensive Plan, Economic Development

E. Items from Aug. 25 and Sept. 8 City Council meeting packet: Manager’s Reports; Ordinance 08-16(S) re residency incentive payments; Ordinance 08-18 re temporary sales tax adjustment; Ordinance 08-22(A) re Homer Spit Comprehensive Plan; and Resolution 08-95 re Sterling Highway National Scenic Byway

Commissioners expressed appreciation for having the Manager’s report in the packet. There was discussion regarding Ordinance 08-16(S) residency incentive payment. Point was raised that:

· If they are going to give anything back it needs to be to property owners. We are getting a lot of free money and even the $1200 energy rebate is affecting people who are getting subsidies for low income housing and adding more to it is going risk losing funding.

· There are a lot of outlying areas with people who come to the City to do business with local business owners and shop in our stores. Taking the money they bring in and give back to City residents who haven’t participated in that business is wrong. A City cannot do this.

· The City of Homer is serving its residents, and that is what this Ordinance is doing. In its current form the ordinance needs substantial modification, but it is an interesting start for something that might come down the road.

Councilmember Wythe commented that this ordinance, along with the sales tax ordinance, and the scenic byways have been postponed pending financial review and the election in October.

F. Homer News article: “Growth, revenues slowing, says city’s finance director”

Comment was raised that handling this problem belongs with everyone, but particularly with the Commission. They have to address how to get things going and how to get money for the City.

COMMENTS OF THE AUDIENCE

Bill Smith commented that it has been interesting conversation tonight. Regarding City sales tax, there is a portion of that tax that is designated for the HART program, and also a portion designated to the water and sewer fund. Even if there is a reduction in the general sales tax we still have to have the tax for those funds and we have to look at what the effects would be to the general fund. He was glad to hear Commissioner Ravin’s comment that Seward has maintained a good looking place because an issue is wanting new business to come and build here, but you also owe some allegiance to the people who invested their lives and money here. It ties into Mr. Ravin’s point of maintaining the qualities that you have. In thinking about trading credits for solar panels to make a larger sign, it is like well- if you put in a solar panel you can make our town more ugly. He doesn’t think they should go there. Mr. Smith said he liked looking at their goals and tasks. He said one thing he sees is something that allows a particular business sector to flourish is referred to as industry specific critical mass. The critical mass relies on a synergy of related businesses needed to do business. He used the example of boat building and the other supply business, like steel, wood, engine supplier, electronics, canvass, and so forth that are needed to support it. One of the Commission’s strategies could be to identify those businesses that have the critical mass or find the holes in the critical mass and fill them out. That would allow a more focused plan for building here. Regarding sales tax exceptions, Mr. Smith gave a brief over view of the different kinds of municipalities we have in the state. He said general law municipalities, like Homer, are permitted to do whatever State law says they can do. State law tells us that the city has to tax the same things as the Borough. The City can ask the Borough to tax additional things the Borough does not, but it is not clear that you can say we don’t want to tax something that the Borough taxes. It is not so simple to ask for an exemption as you may not get it and it may not be legal. Regarding discussion on the OMA, the AML has discussed the issue of advisory Commissions and there has been conversation of the AML recommending amendments to the Legislature.

Commission discussion ensued on preparation for the upcoming worksession on the Lease Policy and if the Lease Committee should be involved. Deputy City Clerk Jacobsen noted that the discussion in the minutes from the July meeting referenced inconsistencies between the lease policy and HCC section 18 and the ordinance is the prevailing law and that the City needs to have a simplified set of rules that everyone can follow. The Commission agreed that at this point it is just discussion of the policy itself.

COMMENTS OF THE CITY STAFF

Special Projects Coordinator Holen advised the Commission that she will be absent in October. The Commissioners thanked her for the information she provided.

COMMENTS OF THE COUNCIL MEMBER

Councilmember Wythe thanked staff for their work with the Commission. She commented that the Commission has a lot of things coming up that are conceptual at this point and she is looking forward to seeing them lock in to some of them and moving forward and flushing them out. She thinks in that lies their success.

COMMENTS OF THE CHAIR

Acting Chair Scarpitta apologized for running a little late. He hopes he handled things okay in Chair Hogan’s absence, he will be happy to have him back. He continues to be excited about working with the Commissioners.

COMMENTS OF THE COMMISSION MEMBERS

Commissioner Ravin suggested starting the next meeting with the call to order and then make a pizza order. He thanked staff for all their work with the Commission. He really appreciates it.

Commissioner Erickson asked that everyone read through the lease stuff before the worksession so they can go through it concisely, systematically, and quickly. She asked they go back and read City Manager Wrede’s information about the leases in existing buildings. She noted there are leases on vacant lands and leases for existing buildings. Special Projects Coordinator Holen asked if they would like her to invite the City Manger to the worksession. The Commission agreed.

Commissioner Neece echoed comments about staff. He said it would be good to have help with technical questions and if the City Manager would attend it would be great. There was brief discussion about including Port and Harbor Director Hawkins since a majority of the leases are on the spit.

ADJOURN

There being no further business to come before the Commission the meeting was adjourned at 8:37 p.m. The next Regular Meeting is scheduled for October 14, 2008 at 6:00 p.m. in the City Hall Cowles Council Chambers. There is a Worksession scheduled for October 23, 2008 at 6:00 p.m. in the City Hall Cowles Council Chambers.

MELISSA JACOBSEN, CMC, DEPUTY CITY CLERK

Approved: