Session 04-27, a Special Meeting of the Homer City Council was called to order at 7:00 p.m. by
Mayor James C. Hornaday at the Homer City Hall Council Chambers located at 491 E Pioneer Avenue, Homer,
Alaska, and opened with the Pledge of Allegiance.
PRESENT: COUNCILMEMBERS: BECK, McLAY, NOVAK, STARK, WYTHE, YOURKOWSKI.
STAFF: CITY MANAGER WREDE
CITY CLERK CALHOUN
FINANCE DIRECTOR BAUGH
PORT/HARBOR DIRECTOR DEAN
Department Heads may be called upon from time to time to participate via teleconference.
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. No items may be added, since this is a Special Meeting.
No items may be removed since this is a public hearing.
PUBLIC HEARING(S)
A. Ordinance 04-53(S), Of the Homer City Council Appropriating Funds for the Calendar Year 2005 for the
General Fund, the Water-Sewer Fund, the Port/Harbor Fund, Debt Funds, Capital Reserve Funds (Conditional
Expenditures). City Manager. Finance Director/Treasurer. (First Reading and Public Hearing November 22, 2004,
Public Hearing December 6, 2004, Public Hearing and Second and Final Reading December 13, 2004.)
Public testimony on Ordinance 04-53(S) and ensuing Resolutions. No action may be taken at this time.
A. 1. Resolution 04-94(S), Of the City Council of the City of Homer, Alaska Amending the City of Homer Fee
Schedule regarding Water Rates. City Manager. Finance. Fiscal Note: Changes addressed in budget. Follows same
schedule as Budget Ordinance.
A. 2. Resolution 04-95, Of the City Council of the City of Homer, Alaska Amending the City of Homer Fee
Schedule regarding Sewer Rates. City Manager. Finance. Fiscal Note: Changes addressed in budget. Follows same
schedule as Budget Ordinance.
A. 3. Resolution 04-96, of the City Council of Homer, Alaska Revising Certain Portions of the Port and Harbor
of Homer Terminal Tariff NO. 600. City Manager, Finance, Port and Harbor. Fiscal Note: Changes addressed in
budget. Follows same schedule as Budget Ordinance.
A. 4. Resolution 04-97, Of the City Council of Homer, Alaska Extending the City Attorney Contract with
Perkins Coie for the Period of January 1, 2005 through December 31, 2005 in the Amount of $7,650.00 per
Month for Forty Five Hours and Authorizing the Mayor to Execute the Contract. City Manager. Fiscal Note:
Budgeted in 100.100.5210, 2005 Budget addressed in budget document. Follows same schedule as Budget
Ordinance.
A. 5. Resolution 04-98, Of the City Council of the City of Homer, Alaska Amending the City of Homer Fee Schedule. City Manager. Finance. Fiscal Note: Changes addressed in budget. Follows same schedule as Budget Ordinance. Substitute available for Mayor, Council and Public Review.
Lloyd Moore, President of Moore and Moore Services, dba, Quick Draw Water, testified on the new water rates
that previously the water rates were based on a direct allocation of costs and that now it is being changed to the
average use of the residential water user. When this rate was figured out a few years ago there were a couple of
things figured out to help calculate the rate: 1. The monthly billing fee, the administrative cost of sending the bill,
some $4. He objected to being billed as if he were 300 and some customers, emphasizing that he is only one
customer. The City only has to send him one bill and use one stamp. He asked for that to be dropped out of his
rate. 2. Comparing he and his customers to a connected customer is somewhat flawed. Some of the rates were
figured on the Insurance Savings if hooked to the water system, the average savings is about $600.00 a year on
fire insurance, more than covering meter fees. His customers are not connected to the system and do not get that
benefit. He noted that it is what it is, the money is needed to operate the system. The problem is, he advised, that
this will run his water bill up to over $200,000.00 a year and at that price he needs to start looking for cheaper
water. He noted that the he and the City have had a good thing going, that he appreciates the water, but it has to
be where it is affordable for people. He informed the Council that people are having trouble paying their water bill
now, that he can show this to the Council on his accounts receivable, adding that people are having a tough time.
He voiced appreciation for the Council's time.
John Velsko, harbor user, commented on the proposed moorage rates for the port and harbor. In 1999 he was
paying a little more than $750.00 for a 36 foot boat. In 2004 he is paying over $1,100.00, almost a 35% increase,
acknowledging that this is due to some deferred maintenance and deferred cost where there was no increase in the
past. This is still almost 35% in the past five years. He noted that last year, based on the 2003 Consumer Price
Index (CPI), less than 2%, there was almost a 4% increase in moorage rates, and that his understanding, which
may have been wrong, was that there was not going to be another increase this year since that was double the
CIP. Now this year it seems like an increase of 3.6%, more than the CPI. He voiced his opinion that this whole
budget needs to go back to the Port and Harbor Commission, who needs to start looking back at the last five to
six years and let the public know what page this is on. Is it tied to the CPI or are numbers just being pulled out of
the air? That X amount of money is needed? That the reserve stall holders will be financing the cost of doing
business in the harbor? Mr. Velsko stated that eventually what is going to happen, if this trend continues with no
one looking into the rate model, is that Homer will drive the boat owners to remove their boats from the harbor
for year around business and people will only bring their boats in during the fishing/business season and the rest of
the year will take their boats up North. He encouraged revisiting of the rate model, which he believes to be
definitely flawed and voiced his suspicion that the water and sewer rate model is also flawed.
Marla McPherson, Vice President of the Pratt Museum Board, noted the big task that the Council has before them
and that she really respects all that they are doing. She thanked them for listening to all of the concerns of the City
residents and working on the budget to make it work for everyone. She emphasized that the Pratt Museum is a
fiscally conservative organization and has a fiscally conservative and responsible board of directors. The Museum
Board has taken a hard look at their budget over the last several years, being serious about the long term funding
and fiscal situation of the museum. She provided some history of City funding and how it has progressively
decreased, a 28% decrease since she has been on the board. Admissions have dropped; from 96 to 76 last year and
that over a five year time period a decrease of about $20,000.00, following a trend in tourism of the community.
She noted the reduction in some of the larger grants after the turn in the stock market, 2001 and 2002. There as
been a reduction in of $70,000.00 to $80,000.00 to the museum coffers since she has been on the board. The
Board worked to trim where they could and made some serious and hard decisions; staff reductions, staff
consolidations, staff paying into the health insurance, cut news letter the last two years, made sure that the salaries
are commensurate with the Alaska non profit median so that the employees are adequately compensated, but are
no where near the museum standard. The Board feels that the Museum budget is as trim as it can get. The next
step was where to raise money, special project grants, 2002 and 2003 cash raffle that raised $15,000.00 to
$20,000.00 per year, etcetera. She commented on the history of the City of Homer's commitment to the Museum,
67 agreement, 79 voter approval, 82 Resolution and monetary. Every dollar that the City gives is leveraged by a
hard working board and fiscally conservative organization to make it stretch. She emphasized the fabulous
private/public partnership and relationship that the Museum and the City have enjoyed. In 1991 the City gave
$126,000.00 to the museum. She pointed out that with the current proposal this equals a 70% cut, which is
unheard of and suggested that the Council consider what a cut of this nature would do to any department within
the City and how that would affect operations, that the department would fail. She urged the Council to restore
the funding to the Museum at a more historic level and to honor that commitment. She emphasized that the
museum pays property tax on the property they rent and voluntarily collects sales tax at their store. She
encouraged the Council to feel free to call upon any boardmember to answer any questions.
COMMENTS OF THE AUDIENCE
Audience comments upon any matter.
There were no comments.
COMMENTS OF THE CITY ATTORNEY
City Attorney Tans was not present.
COMMENTS OF THE CITY CLERK
City Clerk Calhoun had no comment.
COMMENTS OF THE CITY MANAGER
City Manager Wrede suggested that the Council consider cancelling the joint session with the Library Advisory
Board during their Committee of the Whole scheduled for December 13th and use the time for budget discussion.
He further suggested moving the joint session with the Library Advisory Board to the January 10th Committee of
the Whole.
After a brief discussion there was a majority in agreement with the Manager's suggestion and the Mayor ruled that
there would be a Committee of the Whole for the budget review on Monday, December 13, 2004.
Councilmember Yourkowski asked the Clerk to copy the Mayor and Council with the MOU on the new library
project, particularly regarding the proposed Resolution by Councilmember Stark requesting an appraisal for the
Hazel Avenue adjacent to the Library site.
COMMENTS OF THE MAYOR
Mayor Hornaday commented that the City does not have any money and everyone is mad, adding that he has been
getting a lot of phone calls. He stated that he does not have any answers and that he does not like cutting non
profits, adding that most of the Council belongs to non profits. He commented about his children going to the
Pratt Museum, watching the octopus get fed and all of that. He noted that the Pratt talks about a 70% cut,
pointing out that the City had a 100% cut of $800,000.00 in revenue sharing from the State. He advised the
Council that he is getting an awful lot of meetings and beginning to get conflicts, therefore, is putting the Mayor
Pro Tempore on notice.
COMMENTS OF THE CITY COUNCIL
Councilmembers Stark responded to the Mayor's comment that the City is in the hole and does not have any
money, that the suggested budget amendments increase revenues and take care of the more pressing issues of
funding the non profits, Pratt Museum and Community Schools. He advised that to him the glass is half full
instead of half empty. He commented on the growing and vibrant community of Anchor Point and the
development thereof. He voiced concern about the potential for Fred Meyer to locate there instead of Homer. He
saluted Anchor Point, adding that he thinks they are a wonderful community.
Councilmember McLay commented about some things said tonight that the next meeting needs to be targeted for
the budget and get it to the point that the least amount of people are hurt for the least amount, if any organization
has to be hurt. He voiced his opinion that the Council has worked real hard, they have done very well and that the
budget needs to be finalized. He encouraged the Council to feel that they have done a good job and the best they
can with what they have to deal with. He commended everyone for their hard efforts to make this happen and
voiced his hope that Council can accomplish it all next week.
Councilmember Novak asked that direction be given to the City Manager, as they have done, to cancel the
Executive Session and the Library Advisory Board joint session.
Mayor Hornaday and Councilmembers noted that the Executive Session, the Special Meeting at 5:30 p.m. is still on.
Councilmember Wythe noted that there are some issues that the Council really needs to discuss in Executive
Session that, in essence, could have a varying on the City's financial situation.
Mayor Hornaday ruled that there will be an Executive Session.
Council concurred and there were no objections.
ADJOURNMENT
There being no further business to come before the Council the meeting was adjourned at 7:30 p.m. The next
Regular Meeting is scheduled for Monday, December 13, 2004 at 7 p.m. The next Committee of the Whole
meeting is scheduled for Monday, December 13, 2004 at 4 p.m. A Special Meeting is scheduled for Monday,
December 13, 2004 at 5:30 p.m. 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: _______________
City Clerk's Office, clerk@ci.homer.ak.us, 235-3130.