Session 08-33 a Special
Meeting of the Homer City Council was called to order on
PRESENT: COUNCILMEMBERS: HOWARD, LEWIS, NOVAK, ROBERTS, WYTHE, ZAK (telephonic)
STAFF:
FINANCE
DIRECTOR HARVILLE
PUBLIC
WORKS DIRECTOR MEYER
Councilmember Zak
has requested telephonic participation.
Council approved
Councilmember Zaks telephonic participation by unanimous consent.
Department Heads may
be called upon from time to time to participate via teleconference.
AGENDA
APPROVAL (Only those matters
on the noticed agenda may be considered, pursuant to City Councils Operating
Manual, pg. 5)
The agenda was approved
by consensus of the Council.
PUBLIC COMMENTS UPON MATTERS ALREADY ON THE
AGENDA
Gert Seekins, Vice President
of Homer Senior Citizens, advocated for $20,000 for the senior citizens. She
called Fred Laus facts impressive. The senior citizens have operated as a non
profit for 35 years, the senior citizens employ 50 people, 35
of those are full-time. Payroll is $125,500 each month, or $1,506,000 annual
payroll. They are local people spending money locally. The money the City gave
last year was used as matching funds for $253,286 from State and Federal
sources. Seventy percent of the funds generated by the senior citizens are
spent in Homer, or $1,834,732 per year.
VISITORS
PENDING BUSINESS
A.
2009 Budget
Proposals from Council for budget amendments
to the General Fund were provided. Port and Harbor fees and Planning fees have
proposed increases.
Council discussed water/sewer deficits and
the Homer Accelerated Water and Sewer Program (HAWSP). A 15% increase for
water/sewer rates is included in the 2009 Budget. City Manager Wrede
recommended against transferring money from HAWSP to the water/sewer depreciation
fund. It is still possible to keep HAWSP in mind when we decide how much
depreciation will be paid into the water/sewer fund. HAWSP has been subsidizing
the water/sewer fund for a while; including major repairs or replacement of equipment.
The water/sewer depreciation account has a $3.8M
balance. The HAWSP as approved does not imply it will be used for replacement
of existing facilities; it is to be used for new facilities. When people voted,
they voted to pay for infrastructure, not to pay for repairs. An enterprise
fund is supposed to generate enough revenue to support itself, but the Citys
does not.
Council discussed requirements of
depreciation funding. Resolution 06-100 states the City is to arrive at 40%
funding for assets. We barely have 10% of the 40% we are to have.
When setting the 15% rate increase, depreciation
expense was calculated at $708,000, even considering that the water/sewer fund
would have a $250,000 loss.
The consensus of Council was for no water
rate increase. HAWSP cannot be expected to operate as an enterprise system. The
rate payers should not be penalized with higher rates. The fire protection
system services the general public. A means to generate money to balance the
fund is needed.
HOWARD/ROBERTS - MOVED TO NOT RAISE THE WATER
Council plans to take a look at the rates mid
year.
VOTE: YES. ROBERTS, ZAK, HOWARD, NOVAK, LEWIS
VOTE: NO. WYTHE
Motion carried.
Port and Harbor proposes 10% fee increases.
The closest competition is Seward, who is higher priced. Council commented on
the wonderful service on the docks and the need to get the forklift back in the
budget.
Planning proposes fee increases for
Mayor Hornaday called for a recess at
Individual Councilmembers requests include:
Councilmember Wythe
Eliminate
funding to Homer Foundation
Reinstate
$12,500 to
Reduce
food and Council staples by $2,000
Add
$10,000 to Global Warming
Add
$5,000 to recycling
$500 for
public education
$36,359
for economic development
Councilmember Zak
Do not
exempt non prepared foods
No
increase in property taxes
Do not
cut nonprofits
Councilmember Lewis
New
position at HVFD for 24/7 coverage
Councilmember Roberts
Public
Arts Committee $2,500
Reinstate
$22,500 to
Global
Warming $15,000
Councilmember Novak
Reduction
of sales tax on nonprepared food to 3%
Reduction
of property tax by .5 mil
Reinstate
$22,500 to
Global
Warming $15,000
Councilmember Howard
Reduction
of funding to Homer Foundation of $22,500
Add $22,500
to
Amend
Ordinance 08-61 to transfer $455,000 from 2007 to the 2009 General Fund.
Unless oil prices go up, finances will be
worse next year. In some cities in the Lower 48 there are deficits in both
little and big towns. There are hiring freezes, no COLAs and reductions in
departments. Although in the past the City has froze
hiring, today they are in a good place in comparison to the Lower 48.
City auditors provided a recommendation for three
to six months income reserve. By resolution City Council decided to raise the
reserve to six months. Council should not have to come back to the reserve
account each year; they should be transferring money into the reserve account. To
date in 2008 the City has already used $200,000 more. There is currently four
and a half months reserve.
It was suggested funds be placed in a cost
overrun account. Final costs for 2008 are not known until the end of January.
Such an account would be similar to the States constitutional reserve, requiring
a super majority of City Council vote to spend funds.
With the country in a recession, it was
suggested we go back to 2005 and every time a position comes vacant, a
six-month period prior to replacement could be imposed. It would allow review
of staffing levels to keep the City functioning.
Discussion ensued on the exemption of sales
tax from nonprepared food items. The voters believe
they voted to eliminate the seasonal sales tax on food. Council is representing
the will of those people. It may require service cuts to keep the money in the
pockets of city residents. Council is elected to make tough choices, many
issues are controversial. They have to make tough calls that are best for the
community.
COMMENTS OF THE AUDIENCE
The audience had
no comments.
COMMENTS OF THE
The City Attorney
was not present.
COMMENTS OF THE
City Clerk Johnson
had no comments.
COMMENTS OF THE
City Manager Wrede verified Councils intent
to make no changes to the Port and Harbor budget.
COMMENTS OF THE MAYOR
Mayor Hornaday had
no comments.
COMMENTS OF THE
Mayor Pro Tempore
Novak and Councilmember Zak had no comments.
Councilmember Wythe commented all councilmembers make responsible decisions; they just have
different views of what those are. She cannot collect a sales tax people said they
do not want collected.
Councilmember Roberts
remarked on the much improved speaker system.
Councilmember Lewis
stated there is a lot to think about for the next week.
Councilmember Howard
commented it was a good meeting, with thanks to staff.
ADJOURNMENT
There being no further business to come before the Council the meeting
was adjourned at
______________________________
JO JOHNSON,
Approved: _____________________