Session 03-23, a Special Meeting of the Homer City Council was called to order at 5:01 p.m. by Mayor Jack Cushing at the Homer City Hall Council Chambers located at 491 E Pioneer Avenue, Homer, Alaska, and opened with the Pledge of Allegiance.

Worksession on December 1st called to order at 2:07 p.m. to 500 p.m. The Regular meeting as recessed on November 24, 2003, is scheduled to reconvene at 7 p.m.

PRESENT: COUNCILMEMBERS: FENSKE, LADD, NOVAK, STARK, YOURKOWSKI.

STAFF: CITY MANAGER WREDE

CITY CLERK CALHOUN

CITY ATTORNEYS KRIEGER AND TANS (telephonically)

FINANCE DIRECTOR BAUGH

PUBLIC WORKS DIRECTOR MEYER

ABSENT: COUNCILMEMBERS: BECK (excused)

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 as submitted.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Angie Newby commended the Mayor and Council for their perseverance and their time today, noting that the Council has been meeting all afternoon and that she anticipated that they would be meeting until the wee hours of the morning. She noted that she had emailed the Mayor and Council. She reiterated the position taken by all of the participants in the Ocean Drive Loop Bluff Erosion Control Improvement Assessment District that the Council not enact Resolution 03-143(S) today. She noted the letters from property owners and that virtually every participant in the LID has written in objection to this final assessment roll and that there is a group letter to the Mayor and Council that was signed by everyone in the district. Ms. Newby reported that the letters and emails don't only deal with objections to the forty percent increase in cost to each household and that the letters and emails express concerns about the projects itself:

The sea wall not being built according to the design build contract.

Materials that were guaranteed to have a fifty year life are now a patchwork of wood band aids on top of a damaged wall.

Every property owner has raised concerns during construction and still raising concerns.

This project should never have been accepted as complete by the City.

The design build contractor should never have been paid in full after everyone knew the wall had failed and had been patched at least twice.

A significant contingency should have been held.

Ms. Newby stated that she and her husband's concerns are that instead of holding the design builder accountable the Resolution 03-143(S) is putting the entire burden on the property owners. She asserted:

That this is an LID formed with one hundred percent property owner participation.

The LID authorized $450 per lineal foot ⁽¹⁾ plus a fifteen foot contingency that is $517.50.

The property owners supported the LID, because they were told that the seawall had a material life of fifty years.

The property owners never voted on increasing costs, or in accepting a wood based wall.

She inquired as to the amount of the performance bond posted by Phukan Engineering and the purpose of having this bond. She asked if the City has, through the Attorney, made any claims against the contractor/engineer or the product manufacturer. She recalled that the City has taken legal action on several construction issues in the past and has been successful such as in the TAMS case in the 80's when the Fish Dock had failure, that resulted in a two million dollar award to the City. She asked:

Why the City did not consider bond anticipation notes, that would have precluded a check being written from the General Fund.

Had the City considered financing options if there was a dispute about the wall.

Why did the City pay the whole cost when there were known defects and the project material had failed after only two weeks of installation.

Why hasn't the City looked at the LID and neighborhood concerns.

She stated that the neighborhood was concerned before "this" was ever finalized about the boundaries, the participants and the correct assessment roll. She stated that properties that were originally included are now excluded or modified, the original LID was for 2,009 feet at $450 plus 15% for an overall project cost of $1,039,875.00. She stated that there are now 1,643 lineal feet, 366 less feet and the total assessment is still the same. She suggested that it should be $189,400.00 less now that the wall has been constructed. She voiced concern that the City lost some leverage when they took the project and now are really concerned that if the Council ratifies the assessments no effort will made to go after the Phukan or the manufacturer. She listed the following:

This LID was not formed properly.

The project exceeded authorization and should not have gone forward.

The product failed.

Maintenance issues are now a huge unknown.

Insurance is a major issue.

The cost to each household is over forty percent what the property owners approved.

Ms. Newby noted that there is time and leverage to remedy the situation, that they all appreciate the Finance Department's concern to reimburse the General Fund and that they are disappointed that bond anticipation notes were not issued which would have solved the cash flow problems. She relayed that according to City Manager Wrede the pressure is somewhat off in rushing to bond in order to cover the City costs because the eighteen month bond period did not start until July 2002, therefore, the City can still be protected under a bond issue to reimburse themselves for their costs through to the end of 2004. She advised the Council that the LID participants feel it is imperative to continue discussions with the City and the design builder:

The contractor was not just an engineer.

Sought out the fifty year material.

Designed a pile driven installation modified to a deep trench to save him money.

Installed two wood skirts one of which failed immediately and the second one now, after one year in place is showing signs of deterioration.

Ms. Newby emphasized that conversations need to take place with the private manufacturer, the design builder and the City prior to ratifying the assessment district. She pointed out that there are seven property owners out of town, the property owners are a cohesive group and are one hundred percent behind asking for postponement of this Resolution until spring, which will allow plenty of time for conversations to move forward. She thanked the Council for their consideration and support of this request.

Findlay Abbott, lives on Yukon Island, advised that he has a building on a lot on Ocean Drive Loop that is sort of hanging over the edge, which was seventy five feet back from the edge when he built it. He commented about the activities at the seawall last Monday or Tuesday, wishing that the Council had been there to watch the high tides, adding that it is a wild place. He commented on his written report to the Council, who confirmed receipt of the report. Mr. Abbott reported on the abrasion damage happening at the bottom of the wall that is hidden by the gravel continually being washed back up to the wall, and this damage contributes to catastrophic failure. He noted another critical issue is that the seawall is sinking, and recommended that a surveyor take some elevations, that Phukan said the wall was built at a thirty foot level. However, according to Mr. Abbott, there is no place on that wall that is still thirty feet, in some places has sank as much as four feet, at some places the old level of the ground is visible and the seawall was at that level, and that in two days it dropped down about six inches or more. He told the Council that he did not want them to think he only has negative things to say and advised them about his letter to the Parks and Recreation Commission suggesting, with copies to the Council, public amenities and future planning for that area. He stated that Phukan's letter has a lot of incorrect things in it, starting out with saying that the seawall sustained minor abrasion damage in 2002, which was actually major and when it collapsed with all the water behind it. Mr. Abbott reported that there is a considerable glacier on the seawall right now, due to the broken water pipe on the corner of Lake Street and the wall location, and Public Works has not been able to stop the leak so it has been running for four days. He voiced concern that the water from the water leak is saturating the gravel and the effects of an ice land will be seen. He commented the following with regarding to Phukan's letter:

The wood is covering some of the abrasion damage.

Some of the new wood is the same as the two inch stuff that came off before and is not sturdier.

Every home owner is responsible for diversion of drainage from their lot and that something has to be done so that drainage from the lot does not fall behind the seawall, which is almost impossible

A surveyor is needed as soon as possible regarding the sinking of the wall.

Material placed at the toe of the wall, was not material provided by Phukan.

Any disputes are to be resolved by binding arbitration. Mr. Abbott voiced his hope that the City has not agreed to any binding arbitration or committed the property owners to this. This is like giving away the property owner's rights.

Mr. Abbott relayed a quote in the Homer Tribune that Phukan said the storm in October 2002 was a hundred year storm, which was more like a one or two year storm that happens more than one of in a year, period. He shared some information that he has going back to Phukan's original proposals and alternatives, that he has a design high water at 22.5 feet. Mr. Abbott pointed out that there are numerous tides, every month or so, that can get up to 23 feet and higher. He stated that Mr. Phukan has an absurd wave height of five feet. Mr. Abbott referred to the plan he put together at the time this was approved and that it might actually be the thing that still needs to be done, to put an armor rock "thing" on the outside of the seawall, which would correspond to Phase II of the Abbott Plan. Mr. Abbott commented that he would like to see a coastal trail at that location. He shared his research, that he had done, on the availability of armor rock, for half the price of the seawall the project could have had five hundred tons of armor rock per lot, some lots may need more, that would have stabilized "it". He emphasized that all in all the fact is that this seawall is just about to catastrophically collapse, preparations need to be made or all the gravel will be washed out that cost probably around $100,000.00 to $200,000.00 to place that material. He suggested tightening seatbelts and getting ready for the ride. Mr. Abbott stated that this seawall is not performing as advertised and is precarious and short lived. He voiced concern about the seawall surviving the big tides in December, adding that it only takes an eighteen or nineteen foot tide to do serious damage to the bottom of the seawall. He voiced appreciation that the City wanted to help them and that he hoped this lemon could be turned into lemonade.

Paula Dickey, on behalf of absent home owners, advised that the home owners group is unified and appreciative of the Council's help in trying to resolve this big dilemma. She commented on the letter submitted to the Council on November 19, 2003 and that they also signed the group letter that is in the Council's packet. She noted that the points made in the letters have been stated many times and emphasized that they are not ready to accept this project, because there are too many unanswered questions. She stated that one of the major questions is the lack of a fifty year warranty, which is the basis of what everyone is talking about and that they do not expect this seawall to withstand the turbulence that it does receive every day of high tides and winds. She stated they are not at a point where they can accept the Resolution 03-143(S).

NEW BUSINESS

A. Memorandum 03-203, from City Clerk, Re: Request for Executive Session Pursuant to AS'44.62.310(c)(1), Matters, the Immediate Knowledge of Which Would Clearly Have an Adverse Effect Upon the Finances of the Government Unit. Ocean Drive Loop Bluff Erosion Control Assessment District.

Recommendation: Approve the request for Executive Session and conduct immediately.

FENSKE/STARK - MOVED TO APPROVE THE RECOMMENDATION OF MEMORANDUM 03-230.

VOTE: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

Mayor Cushing recessed the meeting to Executive Session at 5:22 p.m. reconvening the Special Meeting at 6:42 p.m.

YOURKOWSKI/NOVAK - MOVED TO RECESS THIS MEETING UNTIL AFTER THE CONCLUSION OF TONIGHT'S REGULAR MEETING.

There was no discussion.

VOTE: (recess) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Mayor Cushing hit the gavel for recess at 6:43 p.m.

Mayor Cushing called the Special Meeting back to order at 1:11 a.m.

LADD/NOVAK - MOVED TO RECONVENE THE EXECUTIVE SESSION TO FURTHER DISCUSS RESOLUTION 03-143(S).

Mayor Cushing restated the Title of Memorandum 03-203.

VOTE: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Mayor Cushing recessed the Special Meeting to executive session at 1: 13 a.m.

Mayor Cushing reconvened the Special Meeting at 1: 55 a.m.

RESOLUTION

A Resolution 03-143(S), Of the City of Homer, Alaska, Approving and Confirming the Final Assessment Roll for the Ocean Drive Loop Bluff Erosion Control Improvement/Assessment District, Created and Established for the Purpose of Paying the Cost of Certain Improvements in the City of Homer, and Levying and Assessing the Amount Thereof Against the Lots, Tracts, Parcels of Land and other Property Shown on Said Roll. Finance. City Clerk. Fiscal Note: Total project cost: $1,039,875.00. 100% assessed to the property owners, amount allocated per bluff front foot or $632.91 per bluff front foot. Recommend adoption.

Corrected Assessment Roll

Memorandum 03-188, from Public Works and Finance as backup.

FENSKE/LADD - MOVED FOR THE ADOPTION OF RESOLUTION 03-143(S).

LADD/FENSKE - MOVE TO AMEND RESOLUTION 03-143 (S) BY CHANGING THE TOTAL AMOUNT TO BE ASSESSED IN THE FINAL ASSESSMENT ROLL FROM $1,039,875.00 TO $1,014,032.00. CHANGES NEED TO BE MADE TO THE TITLE, BODY, AND FISCAL NOTE). DIRECT MANAGER TO MAKE CHANGES TO THE RESOLUTION AS AMENDED AND ADJUST THE ASSESSMENT ROLL ACCORDINGLY.

There were two brief comment questions.

VOTE: (primary amendment 1.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

LADD/FENSKE - MOVE TO AMEND RESOLUTION 03-143(S) BY DIRECTING THE CITY TO ASSUME AN ASSESSMENT FOR 60 FEET OF ROAD ROW ( LAKE ST.) AND 30 FEET OF PEDESTRIAN EASEMENT THAT HAVE FRONTAGE ALONG THE SEAWALL AND ARE PROTECTED BY IT. DIRECT MANAGER TO MAKE CHANGES TO RESOLUTION AS AMENDED AND MAKE THE CORRESPONDING ADJUSTMENTS TO THE FINAL ASSESSMENT ROLL.

There was no discussion.

VOTE: (primary amendment 2.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

LADD/FENSKE - FURTHER RECOMMEND TO MOVE TO DIRECT THE CITY MANAGER TO TAKE THE FOLLOWING ACTIONS AS QUICKLY AS POSSIBLE AND TO INFORM ALL PROPERTY OWNERS OF THIS COUNCIL ACTION IN WRITING.

1. THE MANAGER IS DIRECTED TO INVESTIGATE OR HAVE INVESTIGATED THE CURRENT PERFORMANCE OF THE SEAWALL UNDER STORM AND NORMAL CONDITIONS TO DETERMINE THE EFFECTIVENESS OF THE DESIGN AND THE CORRECTIVE WORK AND TO DETERMINE WHETHER A NOTICE OF DEFECT SHOULD BE GIVEN TO THE DESIGN-BUILDER.

2. THE MANAGER IS DIRECTED TO WORK WITH DR. PHUKAN AND INVESTIGATE OPTIONS FOR DEDICATING A PERCENTAGE OF ANY RECOVERY OR SETTLEMENT MONIES DR. PHUKAN MAY RECEIVE FROM THE MANUFACTURER TO A SPECIAL FUND DEDICATED TO ROUTINE MAINTENANCE OF THE SEAWALL.

3. THE MANAGER IS DIRECTED TO INFORM PROPERTY OWNERS WITHIN THE ASSESSMENT DISTRICT THAT THE CITY WILL ASSESS ITS OPTIONS AND ACTIONS AVAILABLE TO IT IF THE SEAWALL FAILS OR THE WARRANTY TAKES EFFECT.

4. THE MANAGER IS DIRECTED TO INFORM THE PROPERTY OWNERS THAT THEY ARE THE PRINCIPLE OWNERS OF THE SEAWALL.

5. THE MANAGER IS DIRECTED TO INFORM THE PROPERTY OWNERS THAT THEY HAVE PRIMARY RESPONSIBILITY FOR ROUTINE MAINTENANCE AS THOSE COSTS ARE DEFINED IN THE NOVEMBER 7, 2003 LETTER FROM THE CITY TO THE PROPERTY OWNERS. IN ADDITION, THE CITY WILL PAY ITS PROPORTION OF OWNERSHIP SHARE OF THOSE COSTS.

6. THE MANAGER IS DIRECTED TO INFORM THE PROPERTY OWNERS THAT THEY HAVE PRIMARY RESPONSIBILITY FOR THE COST OF INSURANCE AND THAT THE CITY WILL PAY ITS PROPORTION OF OWNERSHIP SHARE OF THOSE COSTS.

7. THE MANAGER IS DIRECTED TO INFORM THE PROPERTY OWNERS THAT THEY ARE STRONGLY ENCOURAGED TO FORM A HOMEOWNERS ASSOCIATION SO THAT THE CITY HAS A LEGAL ENTITY WITH WHICH TO CONDUCT TRANSACTIONS AND ENTER INTO WRITTEN AGREEMENTS.

There was no discussion.

VOTE: (primary amendment 3.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

There was no discussion.

VOTE:(main amended motion.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

COMMENTS OF THE AUDIENCE

There were no audience comments.

COMMENTS OF THE CITY ATTORNEY

City Attorneys Tans and Krieger participated during the Executive Session telephonically.

COMMENTS OF THE CITY CLERK

City Clerk Calhoun had no comment.

COMMENTS OF THE CITY MANAGER

City Manager Wrede had no comment.

COMMENTS OF THE MAYOR

Mayor Cushing had no comment.

COMMENTS OF THE CITY COUNCIL

Councilmembers had no comments.

ADJOURNMENT

There being no further business to come before the Council the meeting was adjourned at 2 05 a.m. The next Regular Meeting is scheduled for Monday, December 8, 2003 at 7 p.m. The next Committee of the Whole is scheduled for Monday, December 8, 2003 at 4 p.m. The meetings are scheduled to be held in the Homer City Hall Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska. All meetings scheduled to be held in the Homer City Hall Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

_____________________________________

MARY L. CALHOUN, CMC, CITY CLERK

Approved: __________________________

1. Actually per bluff front foot.