City of Homer

LEASE COMMITTEE

March 14, 2008 3:00 pm

Cowles Council Chambers

Meeting Synopsis

Session 08-03, a Meeting of the Lease Committee was called to order at 3 p.m. on March 14, 2008 by Acting Chair John Velsko at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

PRESENT: Regina Harville, Finance Director; Beth McKibben, City Planner; Steve Dean, Port & Harbor Director; Philip Alderfer, public committee member; John Velsko, member of the Port & Harbor Advisory Commission

STAFF: Lisa Ellington, Port & Harbor Administrative Secretary

APPROVAL OF AGENDA

DEAN/MCKIBBEN APPROVE AGENDA AS WRITTEN.

No objection. Motion carried.

PUBLIC COMMENTS REGARDING ITEMS ON THE AGENDA –

Kevin Hogan spoke regarding the Executive Session item on the agenda. His preference would be that financial data in proposals be labeled as confidential and that they be given to the Finance Director only. He would like to see the Committee establish a policy to that effect and forward it onto the Council. He stated that regarding Agenda Item 8d under Pending Business, he was moving forward with Lot 12C development but the lease had not been signed. He asked that it be kept open but indications were that his proposal for lots 9A and 10A would be withdrawn before the next meeting. Another issue was that the re-platting of 9, 10 and 11 into 9 and 10 was never recorded. Mr. Hogan stated regarding Executive Session that the Lease Committee should clearly establish what would be considered confidential information and what wouldn’t. When he filed his proposal, he blacked out some information but since this was a public lease, as much information as possible should be open. As an applicant, he felt more comfortable having lease negotiations be conducted in the public forum by the Lease Committee as stated in the Code. He thanked the Committee for their time.

Acting Chair Velsko commented that he agreed that financial data should just go to the Finance Director. He didn’t need details, just some verification that the proposal was financially feasible. Ms. Harville agreed and added that she could follow up with the proposer if there were questions. Mr. Dean agreed but added that there were two reasons to go into Executive Session regarding financial issues; one was to protect the confidentially of the proposer and the other was to protect the best interests of the City. Ms. Harville suggested that we could eliminate one of those reasons by creating some sort of financial check sheet that she could create. Mr. Alderfer agreed that the check sheet would be helpful but with his fiduciary responsibility to the citizens of the City, he felt it would be important to take a look at the financial statements of the applicant. It would help him to understand the degree to which an applicant could make the project work. He was not sure if a summary sheet would be adequate. He also felt that the business plan was just as confidential as the financial information. Mr. Velsko suggested that the financial information be accessible to the Committee but not be taken home. Ms. McKibben agreed and added that she would like to look at the proposal as a whole including the financial information because it helped her assessment of the proposal by looking at the total presentation. She agreed with Mr. Alderfer that the business plan was just as confidential as financial information. It was initially handled as such in the Planning Department, business ideas were confidential until they went out to public hearing.

Mr. Velsko suggested an agenda item be added for the next meeting. Mr. Dean asked that it be delayed until later in meeting since we were still under Public Comments.

STAFF & COUNCIL REPORTS - None

PUBLIC HEARING – None

PENDING BUSINESS

a. Election of Chairman

Mr. Velsko asked to postpone the election of chairman until a full Lease Committee was seated (a member of the Economic Development Committee was appointed). The Economic Development Committee meeting scheduled for March was postponed due to lack of a quorum. Mr. Hogan added from the floor that he was a member of the Economic Development Committee and he would have to recuse himself because of his involvement with the Lease Committee.

Velsko/mckibben moved to elect a chairman at the next meeting regardless of an economic development member being present.

No objection. Motion Carried.

b. Discussion of guidelines related to use of Executive Session

Mr. Dean stated that the Committee had requested Executive Session guidelines from City Attorney, Gordon Tans. Written information on the Open Meetings Act and three paragraphs with specific answers to some of the questions posed to the attorney were handed out at this meeting. Mr. Tans was available by phone at 3:15 p.m. if there were questions from the Committee.

DEAN/ALDERFER MOTION TO ADJORN TO EXECUTIVE SESSION BASED ON THE IMMEDIATE KNOWLEDGE OF WHICH WOULD CLEARLY HAVE AN ADVERSE EFFECT ON THE FINANCES OF THE CITY OF HOMER FOR THE PURPOSE OF CLARIFYING THE USE OF EXECUTIVE SESSION BECAUSE OF THE CONCERN OF THE LEASE COMMITTEE OF POSSIBLY EXPOSING THE CITY TO LIABILITY ISSUES.

ROLL CALL VOTE: HARVILLE YES; MCKIBBEN YES; DEAN YES; VELSKO YES; ALDERFER YES.

Motion Passed.

Adjourned to go into Executive Session at 3:18 p.m.

Acting Chair Velsko reconvened the meeting at 3:50 p.m., Ms. McKibben was not present. Mr. Alderfer gave a summary for the record of what was discovered after talking to the City Attorney. Mr. Alderfer said that Executive Session should be used primarily and exclusively to protect the City’s financial interests. To the degree that discussing any applicant’s finances affected the City’s ability to negotiate successful lease arrangements, the applicant’s finances might fall under that umbrella of being confidential. There was no Executive Session protection for applicant financial information. Common sense says that financial information shouldn’t be discussed on the record. Mr. Velsko disagreed and stated he understood from the attorney that we didn’t have to go into Executive Session to discuss financial information or business plans. There was no protection for the applicants, it was an open process. Executive Session would only be needed if the discussions would affect the City’s finances or the character of a person. Common sense would prevail, but he would vote to keep the process open since it was not needed most of the time. When you apply for a lease, you were saying your finances and business plan would be open to public scrutiny but we would take that into consideration and do what we proposed to do and give the financial information to the Finance Director for her recommendation.

c. Proposal for Lot 9A Kenai River Seafoods

DEAN/HARVILLE MOTION TO BRING AGENDA ITEM TO THE TABLE.

No objection. Motion carried.

Mr. Dean said he has read the information provided by Kenai River Seafoods and he was prepared to make a motion. Ms. Harville agreed. Mr. Velsko wanted to discuss that on the original proposal an extension was granted and that there seemed to be some concern about that. Ms. Harville said that it was her understanding from the Executive Session that both proposals were given an extended period of time since both proposals were non-responsive. So we had a choice of sending it out for another RFP or asking for additional information to be able to make a recommendation. Mr. Alderfer added that, for the record, there were three proposals, one was clearly non-responsive and the other two were not fully conforming. These two were given an opportunity to resubmit information for the next meeting.

DEAN/ALDERFER THE LEASE COMMITTEE RECOMMENDS THAT THE HOMER CITY COUNCIL APPROVE THE PROPOSAL SUBMITTED BY KENAI RIVER SEAFOODS FOR A LONG TERM LEASE OF LOT 9A AND AUTHORIZES THE CITY MANAGER TO ENTER INTO LEASE NEGOTIATIONS.

ROLL CALL VOTE: HARVILLE YES; DEAN YES; VELSKO YES; ALDERFER YES.

Motion carried.

d. Proposal received for Lot 9A & 10A – Auction Block

DEAN/VELSKO MOTION TO DISCUSS ITEM 8D UNDER PENDING BUSINESS

No objection. Motion carried.

Mr. Velsko stated that even though he had some problems with Kenai River Seafood’s lease, what influenced his vote for Lot 9A was that Mr. Hogan was negotiating a lease for Lot 12C and it was in the City’s best interest to keep things moving on. For the record, there were some valid concerns that were brought up about the procedure and he hoped that the Committee was on the right track for straightening out the process. Mr. Dean stated that regarding 9A and 10A the information from Mr. Hogan given today was that there was progress on the lease negotiations for 12C. Neither party have signed a document but it appeared that the Lease Committee should take no further action at this time. We would not reject the proposal but make a motion for no further action. Mr. Velsko asked if negotiations for 9A with Kenai River Seafoods didn’t prove fruitful, what would happen to Auction Block’s proposal. Mr. Dean responded that the proposer could withdraw the proposal or activate the proposal and be further considered or the City could go out for another RFP to keep the lots active.

DEAN/HARVILLE THE LEASE COMMITTEE RECOMMENDS NO FURTHER ACTION ON THE PROPOSAL SUBMITTED BY AUCTION BLOCK INC. FOR DEVELOPMENT OF LOTS 9A AND 10A AT THIS TIME.

No objection. Motion carried.

NEW BUSINESS –

Mr. Velsko asked about adding as New Business a financial data policy stating the lease application financial data would only go to the Finance Director. Ms. Harville stated that after Executive Session she didn’t feel it was necessary. She thought the Committee needs to determine at this table what was discussed. Mr. Dean stated that as a procedural matter, when proposals were received following a RFP, the financial data was segregated from the rest of the data and was only provided to the Lease Committee members at the meeting unless otherwise directed. We have some guidance now on how to proceed in regard to Executive Session. A rating system was discussed with a suggestion that the entire proposal have a rating system with points assigned to the different criteria. Mr. Dean stated that a draft score sheet template will be prepared for the next meeting.

APPROVAL OF MINUTES – Synopsis of February 19, 2008

ALDERFER/DEAN MOTION TO APPROVE THE MINUTES AS WRITTEN.

No Objection. Motion carried.

COMMENTS OF THE AUDIENCE – Kevin Hogan stated that the punch list was already in the Lease Policy. He was unaware that the proposal for 9A and 10A was non-responsive, there was just one clarification item that they would withdraw proposal with the resolution of 12C. He felt the proposal for 9A and 10A was fully responsive. He agreed with the motion made for no further action. He stated that with regard to financial information, it only became a problem if it was abused and he would feel more comfortable if the information was only given to the Finance Director. Mr. Hogan further stated that contamination on any of the lots including 9 and 10 should be brought up. Oily water was present when there was standing ground water.

COMMENTS OF THE STAFF - None

COMMENTS OF THE COUNCILMEMBER (If one is assigned) – N/A

COMMENTS OF THE COMMITTEE –Mr. Alderfer stated that they would not be helping the City of Homer if we didn’t make clear what was for public consumption when evaluating leases and what would be held private. We will in future RFP’s clarify to lease applicants what will be public and what will not be public. Speaking personally, if he had a choice of leasing private land with an assumption of confidentiality or public lands without that assumption, he would choose the private lease. It was possible that the City was losing lease applicants in this scenario but he was not saying they were now. So, he appreciated the need to have public meetings to explain how and why the Lease Committee made their recommendations. He was less convinced that every aspect of the evaluation process be public. He felt that applicants deserve the Committee’s best efforts to keep their financial and business plan confidential until a recommendation was made. He encouraged the Committee to develop tools or score cards to help the process.

Ms. Harville agreed.

COMMENTS OF THE CHAIR – Mr. Velsko said that he still goes with what the City Attorney said. Let common sense prevail and keep it as open as you can because Executive Session can be tricky. It behooves everybody to keep as much out there as you can and keep as little as possible in Executive Session.

ADJOURN

There being no further business to come before the Committee, Acting Chair Velsko adjourned the meeting at 4:15 p.m.

     Lisa Ellington, Port and Harbor Administrative Secretary  

Approved: 10/9/08