Session 00-17, a Special meeting of the Homer City Council was called to order at 7:30 PM by Mayor Cushing at the Homer City Hall Council Chambers located at 491 E Pioneer Avenue, Homer, Alaska and opened with the Pledge of Allegiance.

PRESENT: COUNCILMEMBERS: WELLES, FENSKE, KRANICH, MARQUARDT, YOURKOWSKI, CUE

STAFF: CITY MANAGER DRATHMAN

DEPUTY CITY CLERK BENSON

AGENDA APPROVAL

Addition of items to or removing items from the agenda will be by unanimous consent of the Council. HCC 1.24.040.)

The agenda was approved by consensus of the Council.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Chris Rideout passed copies of a handout to the city council, city manager and deputy clerk entitled "Kenai Peninsula Borough Assembly Meeting Summary". He had some issues and concerns not addressed in the draft reply brief such as roads in Crossman Ridge neighborhood. He said the real issue there is that there is considerably less maintained roads, access and service than addressed in the petition. He said differential rates for those areas has not been addressed, however, acknowledged the resolution on the agenda tonight. He compared neighborhoods that are left out and put in the petition. He said he found no signs of urban development on Crossman Ridge by studying maps, traveling on foot and talking to people and that annexation of Crossman Ridge would cause a great tax disparity between services received and taxes paid. He said there are no signs or indications of commercial development in the area. He felt it reasonable annexing Crossman Ridge to protect the City's water and watershed, however, these powers are covered under extraterritorial powers by KPB in 1999. He felt that the City must not think this is important because they have not exercised these powers and that they erroneously think these powers are not very secure. He referred to the vote on this issue in the document he handed out. He felt the city needs to initiate dialog with annexed areas to address issues and concerns and that it be genuine in resolving issues. He felt that although he has approached the City on this issue, they have made no effort to follow through on this. He gave a list of binding conditions that will be requested of the Local Boundary Commission by the neighborhood if they are annexed. He said he'd also submitted on 8/28/00 a document for public record with additional concerns and an annexation plan that would be more beneficial and community-friendly than the current plan. He clarified that he is not pointing fingers, however, city management (Council) just pass on directions to the city manager to do. He felt that as a collective unit city management does not trust the public and public process. He stated that if anyone had any questions, please ask. None were asked.

Jim Reinhart said that he disagrees with the City Manager's quote in the Homer News saying that for more city residents see the logic of annexation than have spoken out. He gave a list of sources that he felt shows the same results- that all are adamantly opposed to annexation. He continued saying that every candidate for election or re-election is opposed to annexation with the exception of Homer's Mayor and council people. He pointed out that the State and Federal Government are planning financial assistance due to failing salmon runs where Homer is dealing with lower revenues by raising taxes. He urged the council to withdraw the petition.

Pete Roberts addressed Resolution 00-86, the one that would send the reply brief on to the Local Boundary Commission. He referred to governments all over the world falling because they lack consent of the people saying that the City does not have this consent either inside or outside City limits. He felt that there has been no real dialogue on the annexation issue of which he thought should have gone on for approximately a year. He referred to what he felt was the climate of distrust as being unbelievable. He felt there is no great support and referred to the process as a hostile action. He felt like he is being forced into prostitution to work for the City without the benefits and no say in the matter. He stated that although the process may be legal, he felt it isn't right referring to slavery being legal at one time and was done away with. He asked that the petition be withdrawn and called for a long dialogue. He thanked the council for their time.

Eileen Becker from Diamond Ridge started out by saying she is for annexation, however, felt that what the City has forced upon "us" is unexpected nor is it a natural thing. She felt she pays the price for living outside the City but that lifestyle is her choice and she wants to keep it that way. She felt that the annexation brief was of the poorest quality she'd ever seen saying it was rude and incorrect and divisive. She felt that there are no plans whatsoever to improve the annexed area. One of her main concerns was what the City was going to do with the secondary roads. She expressed concern for their maintenance in the wintertime especially. Ms Becker stated that she hasn't abused her radio station regarding annexation to this point however she will do so in the future. She felt the City has divided the community and forced this on her without a vote. She stated that the council might be glad to hear that the picketing is done. She warned that she is serious enough to go to court over this issue.

Sallie Dodd-Butters at 7-mile stated that she wished there were more city residents who cared that the council members are destroying the town. She challenged the public to express what they are thinking at the meeting because she felt the council wasn't doing anyone justice. She questioned why, if the Homer sewer system is able to accommodate all the new lines going in, does all the septic from port-a-potties go up the road to the Homer Honey Bear's private pits in Stariski at a higher cost while Kachemak City's septic goes into the Homer system? She quoted 75 hookups under contract and that many more this year for landowners and subdivision. She felt that her home ownership is on the line and she could prove that in court. She warned of the possibility of a class action lawsuit.

Wikima Butters states she is a lifelong resident and plans to eventually own land outside the city. She warned that if the petition passes she is not going away. She warned the council that if they're familiar with karma they should look out. She felt saddened that so many in the community are letting this go by unchallenged. She called for the public to stand up and tell the council members that this is inexcusable as it's "our" responsibility.

Marilyn Hendren said she is proudly from Anchor Point. She said she owns a business approximately 7 miles from Homer and received the "secret sheets" that went out. She pointed out that she has seen Anchor Point respond to emergencies near her business and that it wasn't until annexation came up that she realized she is in the Homer District. She said she came to the meeting because a Councilmember stated that this was the last time she could yell and scream. She felt that this meant that the council doesn't think much of the annexation.

Abigail Fuller addressed Resolution 00-86. Ms Fuller felt that because the request by the council to the city manager was not in the paper, there was not adequate notice. She alleged that the council was trying to get the petition out of their hands with as little public notice as possible. She felt that if word has not "leaked" out it would have been voted on before the public had any chance to review the plan and comment on it. She felt their intent was to release it on a Friday and vote on it the following Monday. She stated that the council never held any hearings to get the feedback they had called for in the mailings to the city residents. She felt the forums did not discuss anything but what would happen after annexation. She stated that any discussion of the petition or annexation itself was discouraged or out-right forbidden. She alleged that the documents the city used to prepare petition has been thwarted at every turn and court action was required to access papers she felt should have been made public with the petition. She felt the council has not shown that they have read the responsive briefs and comments. She felt there are many issues that have not been covered in the reply brief and have not been mentioned at any meeting. She felt that at the August 21^st meeting the reply briefs were not considered and that the public was not allowed to speak until a police officer arrived and then the council did not listen. She felt that the actions by the anti-annexation groups has been totally ignored by the council and that the petition has had no public input which means no public support for either the plan or city government.

Alan J. Parks stated that he would like to show some support in going forward with the annexation. He acknowledged that the process has been contentious and painful for the council to deal with and that the many public meetings have caused them to receive severe verbal punishment. He said he could appreciate the frustration of the folks outside the city in the annexed area and respectfully disagreed with their outlook on the issue. He felt he might be the only one at the meeting in favor of annexation, however, he thought there are folks out there that support the council. He said he'd heard dialogue regarding fire and EMS service areas which hold merit, however, he pointed out that the other services that the City provides was not addressed. He referred to the library and the animal shelter. He thanked the council for the work they've done and stated that he supports the annexation process.

Pamela Brodie stated she is a member of the Objective Annexation Review, which has submitted comments in writing. She pointed out a correction in the document asking them to insert the word "not" on page 6, second line on C1 and change to "this does not diminish".... She stated that she has been involved in government issues for more than twenty years and that she feels the reply brief is rude. She felt this was for the calculated purpose of getting votes. She pointed out that government has been formed because we must live together and we don't get a long very well. She felt that traditions formed by government to keep the peace work well even when someone loses. She felt the reply brief document seemed designed to inflame passions and insure animosity. She said she realized that the council was not going to withdraw the document, therefore she requested that council withdraw and change the tone of the document to a dispassionate presentation of evidence.

Margret Seelye said it seemed unlikely that the council was going to change anything. She felt that the council has done more to diminish public trust and increase public cynicism than any group she's seen. She felt the council should look at the reply brief and do something about the tone and change the very obvious mistakes.

Bob Barnett referred to his prior statements on the annexation issue saying that he wanted the man who had spoken for annexation earlier to know he's not alone. He said he still felt the council is doing the right thing and hoped the road for them would be a little smoother in the future.

Vi Jerrel, PhD. respectfully addressed the council, mayor, staff and public. She asked permission to read into the record a letter from Doris Cabana. She read that Ms Cabana wanted it to be noted that she and her attorney, Mr. Robert C. Erwin, former Supreme Court Justice, object to the way the reply brief is being handled. She read into the record a letter Ms. Cabana wrote to the Local Boundary Commission asking for extensions of time in which to respond to the "different" reply brief. She requested two to three weeks notice to the public beyond the time of her filed response. She asked for 30 days to reply to the new amended reply brief. She referred to the brief as "unprofessional". She asked that the commission respect the people of the area in this "no-vote" annexation. Ms. Cabana asked that the annexation be stopped. Ms. Jerrel then read into the record for the second time a letter, giving only the highlights, saying she is now representing Alaskans Opposed to Annexation. She stated that she, on behalf of Doris Cabana, Mr. Robert C. Erwin and Alaskans Opposed to Annexation, was objecting to the annexation petition and reply brief. She requested extra time (30 days) to respond to the amended draft reply brief. She asked for two to three weeks public notice beyond the time of her filed response. She objected to the petition going from one area to several. She stated that Mr. Erwin had instructed her to appear and state this. She further asked that the council withdraw the entire petition. Ms. Jerrel then stated she would read into the record a letter from herself personally. She said her letter was the same information she had just read and would not repeat all of it. She reiterated that she objected to the amended reply brief. She objected to the petition going from one area to several areas. She said Mr. Erwin of Erwin and Erwin Atty had asked her to state for the record that she objects and asked for the time she had prior stated. She then repeated her prior requests regarding time and withdrawing the annexation petition on her own behalf. She felt it is unconstitutional and requested to read into the record the Fourteenth Amendment stating that this includes "due process of law" and "proper notification" and "the right to be heard". She felt the public hasn't been heard. She stated that it was a secret petition without hearings. She said she understood the Local Boundary Commission has the legal right to "do this" however, she has been unable to find in the Alaska Constitution what gives them the right. She referred to the legality of this procedure in other states saying that it was her understanding that the legislature can overturn the decision of the local boundary commission. She called for a better procedure than what is being used now saying that this gives a public perception of dictatorship, reminding council that we live in a democracy. She said she wished to keep the Kenai Peninsula Borough as her government and again respectfully asked that the annexation petition be withdrawn. Ms. Jerrel talked about options to get money for the community and relayed a story of her role in the Bradley Lake Project and the University of Alaska Kachemak Bay Campus acquisition to the community. She felt that it is possible to work together on this and thanked the council for their time.

James Donally stated that he felt this issue is lacking "expertness". He gave a history of how the public obtained expertness stating that as time went on and people gathered in larger groups expertness became more complex. He said the next step was "swarm logic" referring to the way bees make decisions which is created from average intelligent. He went on to say that this country was the first to create a democracy as we know it and that relies on swarm logic, emphasizing that in this case everybody had input. He reiterated the lack of expertness saying it is not due to malice, but is due to inexperience. He recommended a swarm logic resolution to this issue, saying that everyone has a computer and that information should be gathered from a webpage. He stated that increasing the city's area of 400% is "unsmooth" and is a sign of inexpertness and that is what the public is uneasy about.

Bob Keyes said he wanted to make a point that he is not against annexation, however, he thinks the current plan is pretty bad even though there are areas that can benefit by this. He felt that the city has been derelict in not annexing the land around the water supply prior to this. He referred to people rowing boats and swimming in the reservoir. He felt it should be more controlled than what it is now. He stated that without exception, in the last 18 years all people who have stopped by his place of business looking for a place to live have decided to settle outside the city limits. He listed some of the problems as being the tax situation, planning and zoning and city government. He felt this is the basis of the whole opposition to annexation. He pointed out that if the city annexed some small parcels and proved they could provide services, the annexation issue would be more palatable. He said he felt city residents do not want the annexation under the current plan. He felt that police protection is inadequate, that public works can't keep up with services and expressed concern for the future.

Laura Barton thanked the council for another chance to speak. She said she did not feel very optimistic. She relayed the circumstances in which she had researched a prior fire service area vote. She found no vote was taken and felt the people who turned it down in 1998 were the people who wrote the report saying it would interfere with possible annexation. She said she was hopeful that the fire service area would pass on the October 3^rd ballot as she is willing to pay for that service contrary to services from City of Homer. She referred to abusive language being used during this issue and she apologized for both sides. She said that comments made on Pages 7 to 9 of the reply brief were said in ways she didn't talk. She took offense to being called a "foreign element". She referred to a disparity in information saying she heard that the city's finances were in trouble, yet the reports made during Mr. Drathman's contract renewal said the city is doing great. She said she still has a problem with the legality of a city annexing people who will then be held responsible for bonds they never had a chance to vote on, pointing out that bonds are always voted on. She said she wanted to state for the record that she is objecting to the reply brief and asked that the petition be withdrawn.

Dale Banks said he felt that boundaries are a big issue in annexation. He felt that the brief does not defend the boundaries as they are currently drawn but merely defends the city's reason for annexing an area around Homer. He said he felt that the Council's petition and study is based on concept and not a specifically defined area. He pointed out that the objections to the petition is to criticize annexation and the boundaries specifically and that the reply brief does not take these critiques as a whole. He felt that this has not had enough discussion and is omitted in the reply brief and should be addressed before being submitted.

Michael Kennedy said he is disturbed that everything is at the same place as when it all started. He felt that the council has to realize that the tide has turned more against the petition than in the beginning. He said he doesn't see the council addressing this. He reported that he is part of a group in town called OAR and reminded the council of poll the taken by his organization reporting that 2/3 of the people were against annexation. He felt the figures would be higher now. He, personally, said he only knows two people without bias that have spoken out for annexation. He said he felt opposition is being ignored. He reported that his group proposed a one sentence initiative to go on the fall ballot and they got back a 14 page legal reply denying the request. He said he felt the city is being very obstructionist about this and that mistrust of government has been generated. He offered that the council could put this on the ballot as an advisory vote, although he is not against a binding vote. He said he feels that we are one community, Kachemak Bay, not City of Homer and is most bothered about the fact that there is no vote on this issue.

Tod Sharp said he is a resident of Homer and believes that he is a member of Homer's silent majority who are in favor of annexation. He said he is not concerned about the financial effects of annexation; that his concerns are quality of life, honesty and integrity. He thanked the city manager, the council and the mayor for their hard work, civility and mostly for their ethics. He felt that if they were not ethical people they would have "bailed a long time ago".

Mayor Cushing called for a recess at 9:05 p.m., reconvening the meeting at 9:20 p.m.

RESOLUTIONS

A. Resolution 00-84, Of the City Council of Homer, Alaska Urging the Mayor to Appoint, Following Annexation, Residents of the Annexed Area to Vacancies on the City Boards and Commissions and Committing to the Establishment of an Annexation Transition Oversight Committee. Mayor

FENSKE/CUE -MOTION FOR ADOPTION OF RESOLUTION OF 00-84 BY READING OF TITLE ONLY.

Councilmember Fenske stated that he believes the Local Boundary Commission looks for followup commissions to perform the needed work and that he supports this resolution.

Councilmember Kranich voiced support. He stated this basic idea is what he brought up and is definitely needed. He asked that a typo be corrected in second paragraph changing "are" to "area". He felt that having these commissions will fit with the entire new city and felt our current code would not fit our new larger city. He felt this is a step in the right direction.

Councilmember Cue agreed that this is a step in the right direction and encouraged the people who are interested to become involved with city government especially following the decision by the Local Boundary Commission so that they can be involved in commissions that oversee the City of Homer. She pointed out two words that are part of this resolution - considerate and judicious. She felt these words were an attempt to consider the public and what they will be saying following the Local Boundary Commissions decision.

VOTE: YES: FENSKE, WELLES, YOURKOWSKI, MARQUARDT, KRANICH, CUE.

Motion carried.

B. Resolution 00-85, Of the City Council of Homer, Alaska Urging the Alaska Department of Community and Economic Development and the Local Boundary Commission to Review the Merits of Differential Property Taxation in the Territory Proposed for Annexation to the City of Homer. Mayor.

WELLES/CUE - MOTION FOR ADOPTION OF RESOLUTION OF 00-85 BY READING OF TITLE ONLY.

Councilmember Welles spoke in support of looking at differential tax rates to see what the Department of Community and Economic Development has to say.

Councilmember Kranich said he hoped that stepped implementation of at least a 2 year levy would be a part of differential tax rates on the mill rates so it would not be such a shock.

Councilmember Welles responded to Councilmember Kranich's concern saying that he had asked Dan Bockhorst about that. He relayed that this will be one of the things the staff will specifically look at and that they are required to do so.

Councilmember Marquardt stated that he agrees with Councilmembers Welles and Kranich adding that this is more than an issue about taxes and revenue. He said the annexation speaks to land use planning, distribute of expenses of the city to provide services and matters of health and safety. He felt the resolution speaks to the merits of not just grabbing money. He stated that the council is interested in easing the sticker shock of an increase and addresses the issue in a much broader context.

Councilmember Yourkowski supported the resolution and as a first step in right direction he felt the city could do some open space tax incentive programs and other ways of mitigating the effects of a large tax increase.

VOTE: YES: CUE, FENSKE, WELLES, YOURKOWSKI, MARQUARDT, KRANICH

Motion carried.

C. Resolution 00-86, Of the City Council of Homer, Alaska Forwarding the City's Reply Brief to the Local Boundary Commission without Amendment to the City's Annexation Petition. Yourkowski. Fenske.

CUE/ MARQUARDT-MOTION FOR ADOPTION OF RESOLUTION 00-86 BY READING OF TITLE ONLY.

Councilmember Cue stated she wants to move forward and get this to the Local Boundary Commission.

Councilmember Marquardt stated he wants to forward this also and would like to make an amendment to the reply brief on page 9 of draft 2 at top of page after "objection annexation review"

Discussion regarding the meaning of the resolution concluded that the "without amendment" wording only applied to the petition, not the reply brief.

MARQUARDT/FENSKE - MOVED TO STRIKE FIRST SENTENCE AND FIRST THREE WORDS OF SECOND SENTENCE AND INSERT "THIS ORGANIZATION FORMERLY KNOWN AS C.R.A.P.S. INCLUDED IN IT'S MEMBERSHIP MIKE KENNEDY, LARRY SMITH, PAM BRODIE AND DEAN TURNER(period)" AND THEN CONTINUE WITH THE EXISTING WORDING.

Councilmember Marquardt stated that his intent was to clean up the wording from the first draft and feels that the inflammatory language has been eliminated, however, this was the only wording in identifying parties that hadn't been changed. He felt this would clear up any issue the annexation review might have with the description of their group.

VOTE: YES: MARQUARDT, KRANICH, CUE, FENSKE, WELLES, YOURKOWSKI

Motion carried.

Councilmember Fenske asked for clarification on Page 32 where it deals with fire services regarding the tax cap of 1.0 mills instead of 1.75.

City Manager Drathman explained that this is a reply to the briefs that were filed and in the briefs that were filed, Ms. Griswold hypothecated that this could be a 1.0 mil-- which is on the ballot up to 1.75--but this is a response to her comments specifying 1.0 so it cannot be changed to 1.75.

Councilmember Kranich commented on Pages 7 to 9 regarding identification of parties. He pointed out that there is no mention of Margret Seelye being a member of the Trails Committee nor Sallie Dodd-Butters being a many year member of the Parks and Recreation Commission. He recommended that these comments be included or remove the comment regarding Bill Smith's service.

KRANICH/ MOVED TO DELETE ON PAGE 9 UNDER BILL SMITH "AND SERVES ON THE CITY OF HOMER PLANNING COMMISSION".

Motion died for lack of a second.

Councilmember Kranich stated that he is not happy with the general tone of the reply brief because it's not complementary. He felt that the council should respond to the briefs without being derogatory in any way even though the council may not agree.

Councilmember Marquardt stated that he felt the second draft cleaned up most of the inflammatory references. He felt that the first draft may have been a reaction to the derogatory and inflammatory language in the responding briefs. He thought that the brief was to the point and factual.

Councilmember Fenske related a comment by Dan Brockhorst regarding the fact that the Boundary Commission was one of the five original commissions in 1959 saying that wording was used "in their wisdom" and the procedures were set up knowing that very few people would vote themselves an increase in taxes. He stated that annexation is complicated and that there isn't an easy way to do it. Councilmember Fenske suggested that regarding the language used by both parties he felt this might be a tool used by people who want to be heard. He recognized that Homer is a very vocal community. He felt that the final draft is a good one and the council should move on.

Councilmember Marquardt commented on the suggestions that the final draft is inflammatory saying that he didn't hear any specifics. He stated that this is the way the process has gone, with broad references with no specific instances. He stated that he would appreciate having anyone point out derogatory or inflammatory language in the draft. He felt maybe he has a different perspective.

VOTE: YES: KRANICH, CUE, FENSKE, WELLES, YOURKOWSKI, MARQUARDT.

Motion carried.

COMMENTS OF THE AUDIENCE.

Pam Brodie stated she was not aware of a second draft of the reply brief with changes. She said she assumed the people who were complaining about the language were referring to the first draft. She said that the one person who knew about it said he could not get a copy of it earlier today. She said she looks forward to seeing the second draft saying she did not feel that would remove the tone of the first draft from people's consciousness. She thought maybe there could be an apology for past language.

Tom Ferguson said he is a veteran of the Vietnam War and what's going on here reminds him of that same conflict where somebody wants something that somebody doesn't want to give. He felt the council has no guts to put this issue up for a vote. He stated that now there is no more land to take from the Indians the government is taking land from the people by choice. He felt the council takes pride in weird things like failing in such endeavors as the sewer system. He referred to the incident of a business blowing up (Seward Fish) and reducing the city's water revenue as a reason for increased water rates. He felt the council was not listening to the constituents. He felt the council should rule for the people, not rule the people. He stated that everyone likes Homer the way it is. He asked how the council could think about services to other places when residents of Homer do not have it.

Sallie Dodd-Butters stated she has only 1 1/3 acres however, she resents the idea that the council should sit in judgement of whether a person's decision to keep larger tracts of land is justifiable or not. She referred to the statement that the LBC was one of the first commissions in the state asking if this was a badge of honor for men who failed in the statehood three or four times before they finally "flooded the state with military and bullied it through". She referred to the South Pacific islands as having a choice to join the states or stay the same saying AK and HI didn't have that choice. She told council not to brag to her about legal theft.

Amy Bollenbach asked if what she held was draft 2? She was told not and she asked if there was a reason the audience didn't have draft 2. City Manager Drathman explained that draft 2 incorporated the changes that were made at the last open meeting. He further explained that generally drafts don't go to the public and it was presumed the public wanted it so it was made available. He reiterated that the only changes that were made between the first and second draft were the ones made at the last open meeting. Ms. Bollenbach thanked him.

Margret Seelye said she felt it was typical that the public was commenting on a reply brief that they didn't know had been revised. She thought it would be helpful to have the changes made available for the public. She said she attended the last meeting and she still wasn't certain what changes were going to be made. She said that she never heard changes to the language being referred to except by the public which didn't appear to carry a whole lot of weight. She stated that in regards to the words "judicious and considerate" it would have been nice to have that before council voted instead of after. She said she was disappointed in people she thought were better than this.

Jim Reinhart said he's been to 3 or 4 council meetings since this issue came up. He said he's noticed that the six councilmen vote the same way. He quoted an old Chinese proverb saying "when everyone thinks the same, no one is thinking". He felt the council is not thinking, they are conniving.

Chris Rideout said he is a non-resident of the city. He said he was at city hall earlier asking about a second draft and was told there were some minor changes in it. He said he wasn't able to get a copy although someone told him they were checking on it, however, he never got a copy for whatever reason.

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans was not present.

COMMENTS OF THE CITY CLERK

Deputy City Clerk Benson announced that there will be a Council worksession on September 11^th at 6 p.m. here on Non-Profits, Grants, Homer Foundation and Criteria.

COMMENTS OF THE CITY MANAGER

City Manager Drathman had no comment.

COMMENTS OF THE MAYOR

Mayor Cushing said he wanted to take this opportunity to address the councils response to the fishing catastrophe. He stated that he has spent a good ½ hour on the phone with the owner of Northern Enterprises going over the "whopping" increase in taxes projecting several scenarios of boat sizes.

He said the results showed that the increase of tax with annexation due to boats and personal property tax on the boats wouldn't come close to the tax savings that we made borough wide and city wide when we went to flat taxes on boats. He wanted to point out that the flat tax borough wide was pretty much instigated by the city manager when he was acting as our borough assembly person with support from Drew Scalzi. He said at that time the City went to flat taxes on the boats, too. He said that Rep. Gail Phillips office has been contacted and the city has offered whatever assistance they can give at the state level.

Mayor Cushing addressed the "foreign element" statement saying he didn't think it was appropriate at the time. He apologized for it saying he never considered anyone a foreign element. He said he considers this the greater Homer area. He added that without the $100 million infrastructure of Homer that makes this area work and be able to support the population density it has, it would be another beautiful place like Stariski Creek.

He addressed questions on how the city is doing financially. He stated the city is doing well adding that the council cut the budget by 10% last budget cycle.

In addressing the question of why utilities are not higher on the list, he stated that the water tank is at the top of the list. He said the water tank is not a distribution portion of the utility, however, it is certainly the supply portion and he thought that the city has been very generous to the greater Homer area with water. He explained that the tank is to make surplus water safe.

He referred to the comment of the fire service area being turned down saying he felt that it never got to the ballot to be voted on.

He stated that he, personally, believes in karma. He said he thinks a lot of Councilmembers do and are in recognition of the ramifications of this issue in the future. He said he knew that the actions by council are not with malice and the judge on these actions may take 10 or 20 years, however, in the meantime the council must do what they believe in.

COMMENTS OF THE CITY COUNCIL

Councilmember Fenske referred to the statement regarding six people agreeing saying that as diverse as the six people are, for them to agree has to say something for what's being agreed upon. He said he doesn't think this is easy and he doesn't think the brief is that derogatory.

Councilmember Kranich referred to Resolution 00-35 saying he listened to the tapes of the March 13^th meeting. He said he was surprised at how long the discussion was on that issue because he felt that it was a brief discussion when, in fact, it was over an hour. Councilmember Kranich pointed out that Councilmember Yourkowski was the maker of the motion and within the first three minutes made the comment that this could be modified or amended at any time. He pointed out that Councilmember Fenske then stated that the petition could be stopped or thrown out at any time. He further pointed out that Councilmember Marquardt commented that we'd look at it however long it takes. He wondered if we all have the same understanding of the process now that we did then referring to resistence to making changes because it would cost time. He said it is his understanding

that the Local Boundary Commission will review the petition and come out with a preliminary finding and come back to the city. He felt that at that time council needs to look long and hard at amending boundaries and stepped annexation with differential taxes boundaries. He said he would introduce a resolution to forward a hand ballot for an advisory vote by the electorate of the city as to whether or not council should pursue annexation. He commented on the public liking the borough as their form of government saying that there was no vote when the borough was formed. He pointed out that nobody's screaming about that today even though it was a forced formation of the borough.

Councilmember Yourkowski added to Councilmember Kranich's comments saying that 96% of the governmental units in Alaska were not voted on. He thanked all of council for accommodating his schedule. He commented on taxes saying that right now if you live outside the city you pay 10.5 mills, road service area will increase by .5 mill. and if you add the fire service area it will increase 1.75 more, totaling 12.75 mills versus 15.5% in the city and that is pretty close. He pointed out that on a $100,000 house it would increase taxes by approximately $20 a month and that is not a lot to pay for such services as animal control, library and recreational services, etc. Councilmember Yourkowski acknowledged that the council did cut the budget, however, that can't be maintained. He said the council will have to spread out and maintain tax revenues for the city. He stated that his yes vote means that he wants to preserve the character of Homer. He said the Local Boundary Commission will be looking at what is the best way to provide essential community services and referred to some anti-annexation people who would prefer districts for services. He felt the city is better equipped to provide these services than districts. He said he appreciated the comments about expertness and smoothness saying the Local Boundary Commission has expertness.

Councilmember Kurt Marquardt stated that he was elected to protect the interests of the City of Homer and feels that maintaining the health of Alaska's cities is of particular interest to all. He said he believes that annexation is the most appropriate means to ensure that the City of Homer continues to fund essential services that benefit everyone. He added that absent annexation the city faces scaling back essential services and the degradation of quantity and quality of services to most of the residents. He said he has taken most of this from the draft and agrees with it. He stated that this is not the last frontier, yet has a small town atmosphere and he is trying to protect that. He said he personally moved to this area because of opportunities available and not because he was trying to get away from anything. He stated his attraction was a group of folks trying to make this area "something" and that's what he is trying to do.

Councilmember Cue said that the decision tonight has not been taken lightly. In regarding comments from the audience she referred to "who is working for whom". She acknowledged that the citizens of the City of Homer have been supporting this infrastructure of the community that supports the surrounding area. She addressed a comment in the newspaper regarding the time this issue is taking saying that the last six months have been necessary to meet the needs of the people now and in the future. She felt that the petition and the reply brief are clear and concise, issues are addressed and benefits being obtained from the growing population beyond the current city boundaries are defined. She stated that annexation is the tool that will distribute evenly the cost of services to the greater Homer area. She thanked the brave individuals who supported the petition acknowledging how difficult it is to walk into a room of hostile people and vocally oppose their views. She thanked the mayor, the council and the city manager for their work.

Councilmember Welles referred to several comments made regarding due process and the 14^th amendment to the constitution saying that he had three statements to read from 3 cases from the US Supreme Court in regard to this. He first read about a case in 1881 in Kelly vs City of Pittsburg in which a taxpayer claimed that the taxes assessed by the city into which his land had recently been annexed without his vote deprived him of his property without due process of law. He read the following "...portion of a state what be within the limits of a city and be governed by it's authorities and it's laws has always been considered to be a proper subject of legislation, whether territory be governed for local purpose by a county, a city or a township, organization is one of the most usual and ordinary subjects of the state legislation..." He then referred to another case in 1907 similar to this (Homer's) matter dealing with annexation in which was stated "municipal corporations are political subdivisions of the state created as convenient agencies for exercising such of the governmental powers of the state as may be entrusted to them. The number, nature and duration of the powers conferred upon these corporations and the territory over which they shall be exercised rests in absolute discretion of the state. The state, therefore, at it's pleasure, may modify or withdraw all powers, may take without compensation such property, hold for itself or vest it in other agencies, expand or contract territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation. All of this may be done conditionally or unconditionally with or without the consent of the citizens or even against their protest. In all these respects, the state is supreme, unrestrained by any provision of the Constitution of the United States." He then referred to a case in 1962 in Alaska regarding Fairview Public Utility District #1 vs City of Anchorage saying the primary sentence here is "the subject of expansion of municipal boundaries is legitimately the concern of the state as a whole and not just that of the local community. There has been no infringement or deprivation of rights protected by the 14^th amendment." He summarized that this authority has been in effect for well over a hundred years for the state to determine municipalities and is not protected by the 14^th amendment.

Mayor Cushing wanted to add that regarding his comments on Northern Enterprises, he didn't want to give the impression that they were racing through the projections and explained that they were not.

City Manager Drathman advised that everyone who has filed a responsive brief will get a set of the exhibits. He explained that they have not been available to this point due to possible changes and the cost of approximately $68 a set, however, they will continue to be available at city hall and the city library. He further explained that at the last meeting council decided to add photographs to the exhibits and staff is in the process of sorting these out. He felt it might take 2 or 3 pages to represent the photographs received.

Mayor Cushing thanked Sara Jackinsky and John Peterson for their input and the council for their work and for tackling this issue.

ADJOURNMENT

There being no further business to come before the Council the meeting was adjourned at 10:33 p.m. The next regular meeting is scheduled for September 11^th, 2000, at 7:30 p.m. There will be a worksession preceding the regular meeting at 6:00 p.m. on non-profits, grants, Homer Foundation and criteria.

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DEENA BENSON, DEPUTY CITY CLERK

Approved: ___________________________