Session 06-31, a Regular Meeting of the Homer City Council was called to order at 7 p.m. by Mayor James C. Hornaday at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska, and opened with the Pledge of Allegiance.

PRESENT: COUNCILMEMBERS: HEIMBUCH, NOVAK, ROBERTS, SHADLE (telephonically), STARK, WYTHE.

STAFF: CITY CLERK CALHOUN

DEPUTY CITY CLERK JOHNSON

CITY MANAGER WREDE

CITY PLANNER McKIBBEN (part)

FINANCE DIRECTOR HARVILLE (part)

FIRE CHIEF PAINTER (part)

LIBRARY DIRECTOR HILL (part)

PERSONNEL OFFICER HOBBS (part)

POLICE CHIEF ROBL (part)

PORT/HARBOR DIRECTOR DEAN (part)

PUBLIC WORKS DIRECTOR CAREY (part)

Council met as a Committee of the Whole from 4:02 p.m to 5:23.5 p.m. in the Homer City Hall Cowles Council Chambers, agenda item was the Regular Meeting agenda, which includes the 2007 Budget and associated Resolutions.

Council conducted a Budget Worksession from 5:37.5 p.m. to 6:13 p.m. in the Homer City Hall Cowles Council Chambers.

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 City Council with the Substitute minutes from November 27, 2006, which contains no textural changes; substitute 911 Contract for Resolution 06-143; Proposed Budget Amendments; Additional backup information for Resolution 06-and City Attorney 1989 contract and the deletion of Resolution 06-164 from the Agenda in entirety, with the note that it this Resolution is no longer timely.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Public may comment on any matter on the agenda, 3 minute time limit, Except Public Hearing items: Ordinance 06-62, 2007 Budget; Ordinance 06-63, Amending Homer City Code Marine Commercial District Permitted and Conditional uses and structures and Dimensional requirements; Ordinance 06-64, Police grant; Ordinance 06-65, Gates Construction Settlement; Ordinance 06-66, EOP Grant; and Ordinance 06-67, Fuller Settlement.

Leah Jenkin, resident of the City, stated that it is a pleasure to be at the meeting and commented on Ordinance 06-71. She advised that when the state forced her to sell her land they promised that she would have a much better situation, the addition of a landing pad on the top has been quite an improvement. However, the landing pad created quite a slope and the state, acknowledging that it was a bit of a danger, put up some guard rails. Noting that the Ordinance is for summer maintenance, she added that the winter maintenance is what would really alleviate the problem, that is the potential for the accidents that can, and have, occurred there. She pointed out that Williams Place, across from Adams Street, is maintained and that it seems that it would not be too much addition to the budget to just cover another couple of hundred feet down that hazardous hill to resolve the problems there. She thanked the Mayor and Council.

Bruce Elkins, also a resident and husband of Leah Jenkins, addressed the Council regarding Ordinance 06-71 stating the following: Aware that the City has never plowed Adams Drive. The City should be aware that things have changed this year, with the public park at the end of the street that is used daily - some look at the view and others, later in the evening, visit the park. There is a subdivision that has been platted and lots for sale. People are coming to look at the lots. Street is now open to year round traffic. Last year, before the park was open, the street stopped at his driveway, the City placed a road closed sign and a barrier to stop traffic, but this year the City said that it is a public road and therefore cannot be closed to the public. He noted that the banks of the street are, in places, 10 feet deep with a 50 degree slope, noting the potential for auto damage. He told the Council that six of the seven conditions for maintenance have been met, the exception being the condition of density, for a home or business every 300 feet. He stated that this requirement is actually met since their driveway is within 300 feet of the right of way of East End Road, and that it is illegal for him to plow the City street, but that he must do this to gain access to his home. He reported that the City, in the past, has directed him where to put the snow or complained about where he put it, therefore he is in essence working for the City to keep the road up, without a formal agreement or protection from civil liability. He advised the Council that his wife is disabled and has serious health problems that could, at any time, require emergency care, which means that access to their property must be maintained at all times. Emergency vehicles cannot get to their house if Adams Street is not plowed, therefore, the City should start maintaining Adams Street immediately.

Frank Griswold, City Resident, commented on Resolution 06-162 the City Attorney Contract that it should be negotiated and not just rubber stamped. The mis information that was provided by the City Manager could adversely effect the finances of the City and to the tune of $50,000.00 or more and an Executive Session would have been and still may be appropriate. Council does not have sufficient information to make a sound decision. No fiscal note has been attached to this resolution, therefore the Council does not know how it will effect the budget. According to Mr. Griswold his research shows that the going rate for Municipal Attorneys is $175 per hour. Paying more than that is not justified and gives the appearance of buying justice. What is so magical about 45 hours? The current contract is conflicting, by saying that the services are to be provided as needed yet the City pays for 45 hours whether needed or not. He stated that he has not seen any other contract that has this. He reported that Soldotna uses their attorney sparingly, adding that the City spent more on the Ethics Hearing than Soldotna spent on attorney fees in nine months. A good contract would eliminate the 45 hour minimum and would have a flat rate of $175 per hour, like most other municipal contracts. The contract should specify a rate for para legals, associates, senior associates and other partners. The way written the City might have to pay $200 an hour for all Perkins Coie staff. Most other City contracts do not provided for standby time or travel time, unless the Attorney is actually doing work for the City. He also commented on Ordinance 06-58, amending the zoning map to rezone Beluga Lake Lodge parking lot. The good information was provided October 9th, the things that need to be reviewed are the public need and justification, the effect on public health, the effect on the change in the district and surrounding property, and the relation to the Comprehensive Plan. The applicant stated that the public purpose for this rezone was to make it consistent with the existing use. It is consistent with the existing use and if it weren't that would not be a legitimate zoning objective, it can't be a public purpose to eliminate split lot zoning if it were split lot zoned in the first place to avoid this very rezone. It's a spot zone. The petition is insufficient. He noted that he has not seen a legal opinion on the Conditional Use Permit (CUP).

Larry Goode, Homer resident at 1065 Krueth Way, addressed the Council regarding Ordinance 06-53, and about the Ocean Drive Loop Bluff Erosion Control, seawall, noting that he is a neighbor involved in this project. He, his friends and neighbors and their attorneys do not believe the special tax district is legal. He advised the Council, as leaders of the City, that he wants to make sure they understand that the seawall neighborhood have always wanted to do the right thing, that several weeks ago they met with the City Manager and spoke to him about coming up with a settlement that would be fair to them and the City. It is a bit disheartening, when both parties meet to work out their differences, when it feels that they, the neighborhood, are the only ones trying to work out something. When going into negotiations it's a little difficult to try to settle something when all one hears is, "No", every time all the time, instead of, "Well, what if we tried this?". It is time to get this matter resolved, noting that they have tried and would be delighted to keep trying if the City Manager would give them some ideas and feed back from the City on a settlement that would work for all parties involved. It is simply untrue that they have tried to delay this and not pay the City back. They have always been ready and willing to pay their share, of what is fairly owed. They have always felt that the City was their representative in the construction of the seawall and when major failures began to show up immediately the City did not throw on the brakes, pronto, and make the manufacturer and engineer not continue until the folks paying for seawall got what they were paying for, which did not happen. Not only did they not get what they were paying for, but the City assessed, basically, another $80.00 per foot for the project. Emphasis on the fact that the property owners in the district are paying 100% of the costs. He asked the Council, if they were in the property owner's shoes, what they would do? He relayed that the property owners felt they had no choice but to file a lawsuit and that if this situation continues that down the road, without both parties coming to the table and agreeing on what is fair to both parties, the lawsuits will continue. He urged the Council to come to the table with the property owners to work out an agreement that is fair to everyone and get on with the City business and so that both, the City and property owners, can quit wasting money on attorney fees. He advised that they are ready to get this resolved and suggested that if common ground cannot be found that possibly an arbitrator, or mediator or some of help might be sought to get this resolved. Negotiations are two sided. He told the Council that they know "their number", that the neighborhood would love to hear from the Council and would love to talk about this and get this thing figured out. He thanked the Mayor and Council and wished them a Merry Christmas.

Chris Newby, resident of the City and member of the Seawall neighborhood, reaffirmed what Mr. Goode said and addressed the new Ordinance, 06-53(S). Reading the new Ordinance briefly, he stated that it appears as though it is another example of where the City is saying that it wants their input, wants to bill them for everything, but that they have absolutely no say. He noted the talk of an advisory committee. He advised the Council that this is basically the way, unfortunately, that the project was put together. As it unfolded, the property owners raised issues about the unsuitability of the process and low and behold their cries were not listened to. He stated that, personally, they are willing to come to the table with the City and, hopefully, meet at some point wherein it is equitable to all, not a new Ordinance that basically says, "Hey the City will get charged effectively on a tax levy basis, which is very minimal, and we're paying for this based on a front footage basis." It just does not seem to be fair and reflects what has gone on to date. He expressed his hope that Council would take this into consideration and can find someway to gather around the table and resolve this.

John Szajkowski, resident of the City of Homer and of the Ocean Drive Loop Erosion Control LID, stated that he wants to remain optimistic about the possibility of the property owners and the City reaching a settlement on the various and complex issues surrounding the seawall project and still look forward to a response to their settlement proposal made on November 20th. Regarding ⁽¹⁾Resolution 06-53(S), he encouraged the Council to postpone action for the following reasons: To the best of his knowledge, they are still in the process of negotiating an agreeable settlement. In its current format revenue is generated by taxing the property owners on the assessed value of the property behind the wall rather than the linear feet of the wall. The seawall assessments have always been based on linear feet not property behind the wall. It makes no sense to collect taxes based on that rational. The Most serious reason for recommending postponement is that the Special Service District is created for special services being provided by the City to the property owners. It is not very clear what this service is. In proposed Homer City Code 15.l0.050 item b. the City is not authorized to make expenditures of taxes or revenues collected. Mr. Szajkowski inquired what then is the exact service that the City is providing, noting that it is not very clear. Therefore, taxing the property for it does not seem appropriate and could be questionably legal. He stated that he would hate to see the City spend valuable time and costly legal expenses realizing that this Resolution was not a good idea. He thanked the Mayor and Council for the opportunity to speak to the topic.

Don McNamara wished the Mayor and Council a Merry Christmas and thanked them for working so hard on the budget today. He asked the Council to reconsider 06-53(S), that he thinks it is just set up the wrong direction, taxing by the mill rate instead of the lineal footage. If a person has no value on their real estate they would be, basically, paying the lowest amount for the same amount of footage on the seawall, each lot having about 100 feet. He asked if the Council could see the rationale. He suggested that, maybe after the budget, "we" should all get together and have a meeting and kind of talk story about the seawall and see if "we" can make some sort of an agreement. He expressed his thought that this is a win/win situation that would close this thing up so they can get on with the rest of "our" lives. He thanked the Mayor and Council for their time.

Ray Kranich, City resident and Chairman of the Planning Commission, spoke to the Council pertaining to Ordinance 06-58, rezone of a partial lot from Rural Residential to GC1. He commented about the City Planner being present and that in her Memorandum 06-206 on page 253 of packet, in the third paragraph, she goes pretty extensively into legal definitions of spot zoning. He drew the Council's attention to HCC 21.070.010(c) wherein it sets expansion of a zoning district aside from spot zoning in the fact that it says, "except for the extension of existing district boundaries", which is what is in Ordinance 06-58, "no change to zoning map will be considered, which contains an area less than one acre." The Homer City Code definitely sets the expansion of a zone aside from other zoning action, i.e., like creating an island of a different zone out in the middle of what would not be the same totally around it. The Planning Commission reviewed this quite extensively and, obviously, they supported it or it would not be the Council's desk today. He thanked the Mayor and Council, very much.

RECONSIDERATION

None scheduled.

CONSENT AGENDA

(Items listed below will be enacted by one motion. If separate discussion is desired on an item, that item may be removed from the Consent Agenda and placed on the Regular Meeting Agenda at the request of a Councilmember.)

A. Homer City Council unapproved meeting minutes of October 27, 2006 Special Meeting, November 20, 2006 Special Meeting, November 27, 2006 Regular Meeting and December 4, 2006 Special Meeting. City Clerk. Recommend approval.

B. Ordinance 06-69, Of the City Council of Homer, Alaska Authorizing the City to Enter into a Loan Agreement with the Alaska Department of Environmental Conservation (ADEC) through the Drinking Water (DW)/Clean Water (CW) Revolving Loan Fund Programs to Finance the Ocean Drive Loop Sewer and Kachemak Drive Phase I Water and Sewer Projects and Design of Kachemak Drive Phase II Water and Sewer Project in the Amount of $470,000.00 from DW and $3,250,000.00 from CW and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Fiscal Note: $3,720,000 Loan, 20 years, plus interest. Recommend first reading and introduction and conduct Public Hearing and Second Reading on January 8, 2007.

C. Ordinance 06-70, Of the City Council Authorizing the Sole Source Purchase and Emergency Procurement of Emergency Rescue Tool Upgrades to Arctic Fire and Safety of Fairbanks, Alaska in the Amount of $25,595.00 and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Fiscal Note: Account 151-736 Fire Department Small Grants $ 25,595.00, expenditure same fund for the Purchase of Rescue Tool Upgrades $ 25,595.00. Recommend first reading and introduction and conduct Public Hearing and Second Reading on January 8, 2007.

Memorandum 06-198, through City Manager, as backup.

D. Ordinance 06-71, Of the City Council Amending the Official Road Maintenance Map of the City of Homer by Adding 1400 Lineal Feet or .265 Mile of Rural Road, Adams Street, for Summer Maintenance Only City Manager. City Clerk. Fiscal Note: Additional summer maintenance costs. Recommend first reading and introduction and conduct Public Hearing and Second Reading on January 8, 2007.

Memorandum 06-199, through City Manager, as backup.

E. Resolution 06-139, Of the City Council of Homer, Alaska Awarding the Contract for the Kachemak Drive Phase One Water and Sewer Project to Herndon Construction, LLC, of Homer, Alaska in the Amount of $937,705.25 and Authorizing the City Manager to Execute the Appropriate Documents. City Clerk. Fiscal Note: Account Number: 215-826. Recommend adoption.

Memorandum 06-200, from Public Works as backup.

F. Resolution 06-143, Of the City Council of the City of Homer, Alaska Authorizing the City Manager to Execute a Contract (no defined term)with the Kenai Peninsula Borough for Emergency Management Communications Services and Related Matters (911 Dispatch Services) in the Amount of $48,000.00. City Manager. HPD. Fiscal Impact: $48,000 per year plus 1% increase per year up to $52,800. Recommend adoption.

G. Resolution 06-160, Of the City Council of Homer, Alaska Establishing the 2007 Regular Meeting Schedule for the City Council, Economic Development Commission, Library Advisory Board, Parks and Recreation Advisory Commission, Advisory Planning Commission, Port/Harbor Advisory Commission, Transportation Advisory Committee and the Public Arts Committee. City Clerk. Recommend adoption.

Placed under Resolutions as Item D.

H. Resolution 06-161, Of the City Council of Homer, Alaska Authorizing Participation in a Harbor Expansion Feasibility Study with the US Army Corp of Engineers and the Alaska Department of Transportation and Public Facilities and Authorizing the City Manager to Execute any and all Appropriate Documents. City Manager. Fiscal Note: Estimated $88,000. Special Projects Fund 158-375. Recommend adoption.

Placed under Resolutions as Item C.

I. Resolution 06-165, Of the City Council Confirming the City Manager's Appointment of Steve Dean as the Acting City Manager for Calendar Year 2007. City Manager. Recommend confirmation.

J. Resolution 06-166, Of the City Council of Homer, Alaska Designating Signatories of City Accounts and Superseding any Previous Resolution so Designating. City Clerk. Recommend adoption.

K. Memorandum 06-201, through City Manager, Re: Request for Installation of Street Light for Hillfair Court. Requested by Mayor and Council. Fiscal Note:100.173.5202 Installation.100.173.5217 monthly fee. Recommend adoption and/or approval.

L. Memorandum 06-202, from Mayor, Re: Appointment of David Scheer to fill the Pfeil Vacancy on Planning Commission and Appointment of Gaye Wolfe to fill the Parson Vacancy on Public Arts Committee. Recommend confirmation.

Councilmember Wythe asked that Item H. Resolution 06-161 be pulled off of the Consent Agenda and placed under Resolutions as item C.

Councilmember Stark asked that Item G. Resolution 06-160 be pulled off of the Consent Agenda and placed under Resolutions as item D.

NOVAK/WYTHE - MOVED FOR THE ADOPTION OF THE CONSENT AGENDA AS READ.

There was no discussion.

VOTE: (Without items G. and H.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VISITORS

A. Paint a Thon, Charlotte Christiansen. (15 minutes)

Charlotte Christiansen presented the concept of Paint a Thon Program in Homer. She distributed a paper copy of her presentation. She advised that she is the public relations coordinator for the Homer Board of the Church of Jesus Christ of Latter Day Saints (LDS) and that this is a project that they would like to get it running this year and do it every year. The purpose is to provide a useful service to the elderly or handicap individuals within the City limits of Homer. The recipients would be any senior or handicap person or family that has a valid need. The participants would be the City of Homer leadership, local Homer businesses and any volunteers. She advised that "they" went through the Homer Economic Development Committee and that Gloria Corey (Commissioner) recommended that she come and talk to the Mayor and Council. She stated what "they" would like:

Approval of the program or any comments or guidance.

Like the Mayor and Council to help them receive applications of the needy and to review and select the projects to be completed.

Get together some local Homer businesses to help donate supplies and support.

Put together volunteers to help determine the needs for the selected projects.

Notify of the participating businesses of the needs.

Create work groups to be administered by a member of the LDS church.

Accomplish or complete each project to the satisfaction of the recipient.

She relayed their proposed schedule: December 2006 approval of the program by the City Management.

January 2007 create publicity, disseminate information, crate and disseminate application forms.

February 2007 continued publicity, receipt of applications begin solicitation of local businesses.

March 2007 Recipients/projects reviewed and or visited.

April 2007 selection of five projects to be completed in 2007.

May 2007 crate work groups, determine needs, needs submitted to participating businesses.

June 2007 complete projects. Pictures taken to promote interest for following years.

Specifics of the programs:

First year only five projects are to be selected to ensure accomplishment to the satisfaction of the recipients.

Homer Management determine the criteria for selection.

Date of Paint a Thon to be established by Homer Management, hopefully scheduled yearly. Recommend the third Saturday of June.

All projects would be to the exterior.

Some sample projects: Prep and paint a small house, minor repairs, prep and paint a porch or porches, clean up and repair and paint a fence, create and paint a small porch or patio, and build and finish exterior stairs.

Mayor Hornaday stated that it sounds like a good project, suggested setting up a meeting with the City Manager, and that it may take a City Resolution.

She responded to a question of the Mayor that the LDS church has the liability insurance and that she would have to check on the specifics.

Mayor Hornaday noted that the Ministerial Association put together a similar program, solicited the City's input about what certain projects needed to be done, but that the City had no direct responsibility. He recommended that she discuss this idea with the Ministerial Association, because they already have a process set up for this sort of thing.

ANNOUNCEMENTS/PRESENTATIONS/BOROUGH REPORT/COMMISSION REPORTS

A. Memorandum 06-203, from Councilmember Roberts, Re: Juneau AML Conference Travel Report

B. Mayor's Letter to Borough Assembly President Long and Assembly, Re: Placing the South Peninsula Hospital Expansion before the voters.

Francie Roberts expressed her appreciation to the City for sending her to the AML Annual Conference, emphasizing how much she benefitted from the AML training.

Mayor Hornaday commented about B. that the letter requests the Borough Assembly to put the proposed additional Hospital Expansion before the voters.

There were no objections to the Mayor sending the letter.

PUBLIC HEARING(S)

A. Ordinance 06-62, Of the City Council of Homer, Appropriating Funds for the Calendar Year 2007 for the General Fund, the Water - Sewer fund, the Port/Harbor Fund, Debt Funds, and Capital Reserve Funds (Conditional Expenditures). City Manager. Fiscal Note: General Fund $10,521,747.00, Water-Sewer Fund $3,343,780.00, Port/Harbor Fund $3,275,528.00 Capital Projects $2,519,372.00, Internal Service Funds $1,524,000.00, Total Expenditures:$21,184,427.00 (First Reading and Introduction November 20, 2006, Public Hearings November 20, 27 and December 4, 11 2006, Second Reading December 11, 2006.)

Sue Mauger greeted the Mayor, Council and Manager and noted that she is the current President of the Friends of the Homer Library and that she spent three years on the Library Advisory Board during the Capital Campaign for the new building. She reported, having just returned to Homer after a month in South America, that it is difficult to shake some of the images of poverty seen while traveling. There are many ways to measure the differences in wealth between the US and poorer nations. The difference was most heart breakingly clear in the five year old shoe shine boys that roamed the streets begging her to let them shine her shoes. Their future is bleak and their expectations of life are very low. It seems that the United States and communities like Homer are richest when measured by the commitment to providing education and opportunity to the youth. As the Mayor and Council consider the many demands of the City and make decisions about present and future priorities, she asked that they honor both the commitment the City of Homer made to major funders during the Capital Campaign and the commitment to Homer's youth. Funders like the Rasmuson Foundation made it clear that they were only interested in giving their money for the new library building if the City of Homer was committed to providing the necessary maintenance and operational funding for the long term. The City gave the strong assurances that this would be creating a community space for the future that would be funded locally in the years to come. Now is the first opportunity to follow through with that commitment. The new library has seen increases in circulation, the numbers of new library cards, the attendance, and most excitingly, greatly increased usage by youth. The library staff must be increased accordingly. The Friends of the Homer Public Library will do all they can to recruit volunteers to assist the library staff, volunteers can be an important component of an efficiently run library, but cannot replace trained staff. She asked that the Mayor and Council include the request for new staff at the library in the 2007 budget.

Councilmember Wythe disclosed a potential conflict of interest with regard to her husband being an employee of the City at Public Works with regard to Amendments 5 and 8 and any other matters of the like that pertain to employee compensations.

Mayor Hornaday ruled pursuant to HCC.1.12.030, that he believes she does have a conflict, but not one of substantial nature, HCC.1.12.010, and emphasized that she may not participate in discussion on those matters.

There were no objections from the Council.

NOVAK/ROBERTS - MOVED TO ADOPT ORDINANCE 06-62 BY READING OF TITLE.

The following are proposed amendments number A.1. and so on, that the Council worked from in amending the budget.

A1. Wythe - Removal all additional employees except water and sewer. Reduction of $90,377.00

100.101.5103-5104 - $12,913.00

100.120.5103-5104 - 10,671.00

100.145.5101-5102 - 50,083.00

100.171.5101-5102 - 16,710.00

A2. Wythe - Increase water and sewer rates (4%) to provide for new water and sewer employees . Increase of $263,509.00 accounts 400 & 500 4616-4618

Water current rate proposed rate

customer charge 4.21 4.38

commodity charge per 1000 gal 5.01 5.21

Bulk rate per 1000 gal 15.30 15.91

Bulk rate per 1000 gal at pw 18.80 19.55

service charge 5/8" 17.65 18.36

service charge 3/4" 26.48 27.54

service charge 1" 44.13 45.90

service charge 1 1/2 " 88.25 91.78

service charge 2" 141.20 146.85

service charge 3" 308.79 321.14

service charge 4" 555.83 578.06

service charge 6" 1,238.17 1,287.70

excess use charge 5/8">20,000 gal 26.48 27.54

excess use charge 5/8">70,000 gal 44.13 45.90

excess use charge 3/4">70,000 gal 44.13 45.90

Sewer current rate proposed rate

customer charge 3.83 3.98

commodity charge per 1000 gal 8.77 9.12

service charge 5/8" 16.30 16.95

service charge 3/4" 24.46 25.44

service charge 1" 40.76 42.39

service charge 1 1/2 " 81.52 84.78

service charge 2" 130.43 135.65

service charge 3" 285.32 296.73

service charge 4" 513.58 534.12

service charge 6" 1,238.17 1,287.70

Kachemak City 52.99 55.11

Increase 4% - water = $160,274.00 and sewer = $103,235.00 Total: $263,509.00\

A3. Wythe - increase water and sewer rates 2% to cover costs of 1/2 of new employees. Accounts 400 and 500 - 4616-4618 $185,995.00

A4 Wythe - provide for full compensation review to develop a compensation plan that will help the City move toward plans to address shortfalls. Cost $15,000.00.

A5. Heimbuch - Increase COLA for all City employees from 2% to 3%. Total Cost $74,388.00. 100. 400, 500 and 600, 5101-5106 line items. General Fund is $50,823.00, Water and Sewer is $11,233.00 and Port and Harbor is $12,332.00.

A5-1Other -Increase COLA for all City employees from 2% to 4%. Total Cost $151,751.00. 100. 400, 500 and 600, 5101-5106 line items. General Fund is $103,678.00, Water and Sewer is $22,916.00 and Port and Harbor is $25,157.00.

A6 Heimbuch - decrease in projected sales tax revenue - General fund $149,635.00. HAWSP $38,542.00 HARP $38,542.00. Total $226,719.00

A7. Management - decrease in projected sales tax revenue General Fund $66,812.00, HAWSP $17,209.00, HARP $17,209.00 Total $101,230.00 Increase in projected property tax revenue General Fund $101,274.00.

A8. Management - all departments 100, 400, 500, 600 5101--5107 Total increase $128,800.00. COLA and Parity Recommendations - increase COLA to 3% $74,000.00. Merit/longevity step increases from two year increments to one year $37,000. On call Pay increase $17,800.00

A9. Roberts - General fund 100.175.5604 appropriate $1,000.00 for public education for parks day.

A10. Council - Resolution 06-96, Methamphetamine Abuse Education Campaign $2,500.00

100.100.5210.

A11. Wythe - from General Fund 100.?.5210 $22,000.00 from Port and Harbor 600.?.5210$66,000 total of $88,000.00 for East Boat Harbor Feasibility Study.

A12. Wythe - Water and Sewer - connection fees at outlined in PWD memo of December 4, 2006. Total revenue of $46,732.00. 200.?.4662 All property owners are required to pay monthly customer charge and general service charge to cover fixed costs of system even when service is temporarily turned off. and increase the turn on/turn off fee from $30 to $75.00.

A 13 Stark - $3,000 for Survey.

A 14 Novak - Decrease in projected sales tax revenue General Fund $104,866.00, HAWSP $27,011.00 and HARP $27,011.00. Total : $158,888.00.

Council action:

HEIMBUCH/ - MY AMENDMENT ON A-6 - IS TO ADOPT THE SALES TAX PROJECTION FOR 7%, IN LINE WITH WHAT REGINA (FINANCE DIRECTOR) HAS HANDED US TONIGHT, TO IT ALSO IN A -7 TO ADOPT THE PROJECTED INCREASE IN PROPERTY TAXES $101, 274.00 TO ADD BACK IN, IN A-1 THE EMPLOYEE DELETIONS.

Councilmember Heimbuch was advised by Councilmember Wythe that the employee deletions in A-1 have not been deleted from the budget.

Councilmember Wythe called a Point of Order, recognized by the Mayor, stating that it would be cleaner if Council took one item at a time. She stated that she believes the 7% tax is A-14.

Motion died for lack of a second.

HEIMBUCH/NOVAK - MY MOTION WOULD BE TO ADOPT A-14 (Decrease in projected sales tax revenue General Fund $104,866.00, HAWSP $27,011.00 and HARP $27,011.00. Total : $158,888.00.)

The intent of the motion is a compromise to the discussions about the sales tax projections. There was further discussion.

HEIMBUCH/ - MOVED TO ACCEPT THE PROPERTY TAX INCREASE AND THE FIGURE I GAVE/GOT TO ADOPT A-14 SATES TAX INCREASE AND TO WITHHOLD THE HIRING OF THE POSITIONS LISTED IN A-1 UNTIL THE FIRST OF APRIL PENDING A BUDGET PROJECTION INFORMATION SHOWING US ON TARGET.

Motion died for lack of a second.

There was one clarification on the previous motion. Mayor Hornaday confirmed that this is to amend the sales tax projection from the staff projection to 7%.

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

Motion carried.

HEIMBUCH/NOVAK - I WOULD ALSO MOVE TO ACCEPT THE RECOMMENDATIONS IN A7 FOR THE INCREASE IN PROJECTED PROPERTY TAXES REVENUES TO $101,000.00 AN INCREASE OF $101, 274.00.

There was no discussion.

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

Motion carried.

HEIMBUCH/ - IN A-1 I WANT TO RECOMMEND THE RETENTION OF ALL OF THE EMPLOYEES LISTED IN A-1 WITH THE CAVEAT THAT WE LEAVE IT AT THE MANAGER'S DISCRETION TO DO THOSE HIRES BY APRIL 1ST IF THE PROJECTIONS ARE BEING MET IN OUR SALES TAX AND PROPERTY TAX REVENUES.

Motion died for lack of a second.

WYTHE/NOVAK - I WOULD MOVED TO REVISE THE WATER AND SEWER RATE PROJECTIONS TO REFLECT A FOUR PERCENT RATE INCREASE AS ESTABLISHED IN ITEM NUMBER A-2.

The purpose of the increase would be that the water and sewer fund is an enterprise fund, established to run as a utility and should be self financing. This increase would cover the deficit projection as to the two additional water and sewer employees.

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

Motion carried.

HEIMBUCH/STARK - I MOVE AMENDMENT A-5 INCREASING THE COLA FROM 2% TO 3%.

Council stated the need to implement this COLA and expressed support of the employees.

VOTE: (primary amendment 4.) NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

HEIMBUCH/ROBERTS - I MOVED THE INCLUSION OF A-10 $2,500 FOR METHAMPHETAMINE EDUCATION.

There was no discussion.

VOTE: (primary amendment 5.) NON OBJECTION. UNANIMOUS CONSENT.

Motion carried unanimous.

NOVAK/HEIMBUCH - MOVED TO IMPLEMENT THE POLICY CHANGE ON THE/PER CAREY MEYER MEMORANDUM ON THE WATER AND SEWER FEE STRUCTURE, A-12.

Clarification: A12. is about only two of the recommendations in the memorandum - Water and Sewer - connection fees at outlined in PWD memo of December 4, 2006. Total revenue of $46,732.00. 200.?.4662 All property owners are required to pay monthly customer charge and general service charge to cover fixed costs of system even when service is temporarily turned off and increase the turn on/turn off fee from $30 to $75.00.

This is budget not policy.

VOTE: (primary amendment 6.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

ROBERTS/WYTHE - I MOVE TO INCLUDE ITEM A-9 IN THE BUDGET WHICH WOULD BE A THOUSAND DOLLARS FOR THE PUBLIC EDUCATION OF PARKS DAY.

This is a valid request by the Parks and Recreation Commission to help support them in the work that they are trying to do.

VOTE: (primary amendment 7.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

STARK/HEIMBUCH - I MOVE THAT A-13, $3,000.00 TO SURVEY 40 ACRES BE INCLUDED IN THE BUDGET.

This really is not additional expenditure and was approved a year ago and the administration is going to lapse these funds, so this is merely keeping it in the budget another year. The administration has been working on this project for about eight months and the survey is needed to finalize it.

VOTE: (primary amendment 8.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

HEIMBUCH/NOVAK - I MOVE FOR THE CONSIDERATION OF A-11 AND TO ADOPT THE RECOMMENDATIONS HERE $88,000.00 FOR THE EAST HARBOR FEASIBILITY STUDY WITH THE RECOMMENDATION IN THE BUDGET THAT THE CITY MANAGER IS TO BRING BACK, AS WE DISCUSSED EARLIER, THE RECOMMENDATIONS THAT MIGHT OCCUR DURING THE FIRST PART OF THIS SO THAT WE BACK OUT AFTER $40 SOME THOUSAND AND TO ALSO MAKE SURE THAT THE $66,000.00 DOES COME OUT OF THE ENTERPRISE FUND OF THE PORT AND HARBOR.

There was no discussion.

WYTHE/NOVAK - I WOULD LIKE TO AMEND A-11 AS IT IS STATED AND HAVE THE 25% INSTEAD OF COMING FROM THE GENERAL FUND HAVE IT COME FROM THE SPECIAL PROJECTS FUND SO THAT 25 WOULD COME FROM THE SPECIAL PROJECTS AND THEN THE REMAINING 75% WOULD COME FROM THE PORT AND HARBOR RESERVE FUNDS.

There was no discussion.

VOTE: (secondary amendment to primary amendment 9.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

There was no discussion.

Councilmember Heimbuch began making a motion "I Move the remaining in A-8, I Move for us to implement the remaining monies of that $128,000.00", the City Clerk interrupted and advised that the Council needed to take action on the primary amendment as amended.

VOTE: (primary amendment 9. as amended) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

HEIMBUCH/ - TO A-8, TO IMPLEMENT THE REMAINING MONIES AFTER OUR 3% COLA ADJUSTMENT, IN A-8, TO IMPLEMENT THE REST OF THE PARITY RECOMMENDATIONS.

Motion died for lack of a second.

ROBERTS/HEIMBUCH - I'D LIKE TO MOVE THAT THE ITEM IN A-8, THE ON CALL BUDGET BE INCREASED TO $17,800.00, AS PROPOSED BY THE MANAGER.

There was no discussion.

VOTE: (primary amendment 10.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

NOVAK/ROBERTS - MOVED TO AMEND THE PRATT MUSEUM BUDGET TO ADD $10,000.00.

It was noted that the Pratt Museum has not received a budget increase from the City for five years and that operation costs are increasing and over the amount the museum requested. This will help to offset some of the increased costs.

WYTHE/HEIMBUCH/SHADLE - I WOULD AMEND TO DEFER THAT AGAIN AS MR. HEIMBUCH HAS SAID UNTIL THE END OF THE FIRST QUARTER WHEN WE ARE ABLE TO PROVE UP OUR REVENUES.

There was no discussion.

VOTE: (secondary amendment to primary amendment 11.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

Pro and Con were expressed. The ability exists for adjustments to be made later in the year and that is the appropriate time to make this appropriation. Postponing the implementation sets a bench mark for looking at this. Concern was expressed that the Council will not have the information on revenues by April 1st. It would be better to wait until June.

VOTE: (primary amendment 11.) YES: NOVAK, HEIMBUCH, ROBERTS, WYTHE, SHADLE.

NO: STARK.

Motion carried

WYTHE - I WOULD LIKE TO AMEND THE BUDGET BY ADDING THE APPROPRIATION OF FUNDS FOR $2,500 TO COVER RESOLUTION 06-96 FOR THE METHAMPHETAMINE EDUCATION PROGRAM.

It was noted that the Council already took this action.

HEIMBUCH - JUST FOR THE SAKE OF GOING THROUGH THESE I WANT TO INTRODUCE A-4 $15,000 FOR COMPENSATION REVIEW.

Motion died for lack of a second.

NOVAK - I MOVE TO TAKE THE REMAINING BALANCE AND PLACE IT IN THE GENERAL FUND OPERATING BALANCE.

Motion died for lack of a second.

There was clarification that this automatically happens to the remaining balance.

STARK/ROBERTS - I MOVE TO INCREASE THE CITY MANAGER'S SALARY TO $96,000 A YEAR.

Wythe was not allowed to speak to this amendment per the Mayor and there were no objections from the Council. He asked if the Council wanted to overrule him and they did not.

Councilmember Novak stated that the 3% COLA applies to everybody and at this point it also includes the City Manager.

NOVAK/HEIMBUCH - SO I WOULD MAKE A NOTE THAT TO AMEND DOUG'S AMENDMENT TO STATE THAT THE 3% COLA WILL APPLY TO THE CITY MANAGER SINCE WE FORGOT IT DIDN'T.

Comments: This went back and forth at the worksession and Council was told that the City Manager was included in the COLA and then that was disputed. If this amendment is to amend the motion to give a 3% raise then that's a legitimate motion.

Finance Director Harville, at the request of the Mayor, stated that the City Manager's Contract does not cover the COLA, but that she, not realizing that, had included a COLA increase to the City Manager in the calculations of the proposed amendment.

The maker of the secondary motion clarified that the amendment now gives the City Manager a 3% COLA.

For clarification, this is in addition to the primary amendment.

VOTE: (secondary amendment to primary amendment 12.) YES: NON OBJECTION. UNANIMOUS CONSENT.

There was no discussion.

VOTE: (primary amendment 12. as amended) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

HEIMBUCH - I WOULD MOVE TO DELAY THE IMPLEMENTATION OF THE NEW HIRES TILL APRIL 1ST PENDING A TRACK RECORD AND DOCUMENTATION OF THE INCREASES THAT WE PROJECTED IN SALES TAX.

Motion died for lack of a second.

ROBERTS/WYTHE - I WOULD MOVE TO INCLUDE $10,000.00 MORE IN THE BUDGET TO BE CONSIDERED APRIL 1ST FOR THE HOMER FOUNDATION FOR OUR NON PROFITS.

VOTE: (primary amendment 13.) YES: NOVAK, HEIMBUCH, ROBERTS, WYTHE.

NO: SHADLE, STARK.

Motion carried

Councilmember Heimbuch called a point of order asking that the Clerk be recognized.

The City Clerk requested that the Council move to amend the fee schedule to include those fees in their amendments.

WYTHE/STARK - SO MOVED TO IMPLEMENT ALL OF THE FEE SCHEDULE CHANGES INTO THE CITY FEE SCHEDULE.

There was no discussion.

VOTE: (primary amendment 14.) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried

There was no further discussion, other than some simple clarifications on the amendments that the Council has made.

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

Motion carried.

Mayor Hornaday called for a recess at 8:07 p.m., reconvening the meeting at 8:13 p.m.

Mayor Hornaday thanked Finance Director Harville, City Manager Wrede and all of the other people who worked real hard, and for all of the citizens who participated for assisting in getting the budget passed.

B. Ordinance 06-63, Of the City Council of Homer, Alaska Amending Homer City Code Marine Commercial District Sections 21.52.020 Permitted uses and structures, 21.52.030 Conditional uses and structures, and 21.52.040 Dimensional requirements. Planning Commission. (First Reading and Introduction November 27, 2006, Public Hearing and Second Reading December 11, 2006.)

Followed Item C. Mayor Hornaday inadvertently read Item C. before Item B. and Council had no objection to switching the two.

Steve Rykaczewski, lives in the City of Homer, thanked the Mayor and Council for their service to the community, adding that he is not sure what motivates one to do that, but it is appreciated. He stated that he operates an Oyster Farm, Early Tide Sea Farms in Bear Cove. This Ordinance seems like, largely, an house keeping issue, that it accomplishes several purposes by amending the City Code. It will allow the Kachemak Shellfish Mariculture Association (KSMA) to proceed with plans to construct a multi use shell fish processing building: To house office space for the Association and for the Shellfish Growers Coop. Provide retail sales for the shell fish product. Implement shore based processing for the shell fish delivered from the farms around the Bay. The ultimate hope is to have additional rental spaces for retail. Conveniently located near the harbor parking. KSMA has got a baker's dozen of farmer's members. Most of the farms employ people seasonally and the association currently has one full time employee. Having a shore based facility will allow for sorting, grading, packing and for live storage of the product to keep it fresh for delivery more than one day a week. All of this is essential to move shell fish farming into a year round enterprise in Homer and Kachemak Bay, with, hopefully, full time year round employees. It will make shell fish farming a viable family business and, hopefully, keep all in a fresh supply of oysters and mussels. He thanked the Mayor and Council and wished them Happy Holidays.

Frank Griswold, City resident, stated that right now processing facilities are allowed in Marine Industrial and that he does not think these really belong in Marine Commercial. This Ordinance accommodates zoning violators and it rewards them for violating the zoning laws on the Spit. It illegally restricts business competition by outlawing itinerant merchants. A playing field is not leveled by keeping one team from showing up. It endangers lives by allowing residential uses in a Tsunami Zone. How will the restrictions against mobile home vendors be enforced when the prohibitions against B & Bs have not been enforced nor the set back requirements enforced for over twenty years. He stated that he does not think the Spit Zoning should be amended on a piece meal basis. The Marine Commercial and Marine Industrial Districts should be dealt with at the same time or leave both alone. The proposed amendments do not steamline the City Code as claimed by the Planning Department. Streamlining the City Code is not a legitimate zoning objective. If this is passed, the Code will have to be read and consulted just as before. It's also not a legitimate objective to take care of one's buddies or abate zoning violations by legalizing them. Any Ordinance dealing with itinerant merchants should be heard in the summer months when they are here to defend themselves. He thanked the Mayor and Council.

Cheryl Rykaczewski, lives in Homer, asked for Council's support of Ordinance 06-63. She advised the Mayor and Council that she is an Oyster Farmer and member of the KSMA, a non profit organization supporting the Kachemak Shellfish Growers Cooperative in Kachemak Bay, some fourteen farms. For years this industry has been hampered by the lack of a central sorting and shipping facility for their product. At long last the KSMA has secured funding to build an oyster processing facility on the Homer Spit on land owned by the association in the Marine Commercial District. The facility will be receiving oysters from various farms through out the bay, rinsing and sorting them and then selling the product for retail or packing for shipment. There will be minimal fish waste generated in this process. She relayed that the KSMA feels that this facility will attract tourists and locals. As well as oyster processing capabilities, the facility will include an educational display about oyster farming, an oyster bar restaurant, and rental retail shops for tourist related businesses. Homer residents will be employed and it will provide a service to the community. As such it is well suited for the intended land uses for the Homer Spit. She thanked the Mayor and Council for their consideration and time, adding that she appreciates the work they do for Homer.

Debbie Seims, resident of the Homer community and a business owner in Homer, greeted the Mayor and Council by wishing them Happy Holidays and expressed her appreciation to the Mayor and Council. She advised that she is a member of the Kachemak Shellfish Growers Cooperative, an oyster grower, and is a mom and wife and lives here all year round. After sixteen years they are a pioneer of this industry. The Coop, finally, has, after a long time in coming, a facility on the Homer Spit and that they are very pleased to have it. This project will provide year round job opportunity. It is environmentally compatible and all need clean water, including oysters. Homer is a destination point and people from all over the country and the world come here. It is educational and tourist friendly, because of the Homer Spit. It's a fresh quality product that will be supplied year round. It is also a Future Farmers of America opportunity. These opportunities for the community will happen with this Ordinance. The community will have a positive effect, bringing uniformity to the undeveloped properties on the Homer Spit and a growing playing field for economic development. She thanked the Mayor and Council for the time and that if they have any questions and want more information that any of the farmers would be happy to talk to any of them any time.

Ray Kranich went over the concerns about the itinerant merchant, that the itinerant merchant is not a child setting up a table to sell key chains made over the winter. There is a lengthy definition for the itinerant merchant, that this is one who engages in temporary business. A temporary business or enterprise is one that is carried out for less than sixty days. He commented on the rigorous process for obtaining an itinerant merchant permit, some about the permit fees and commented on the location for itinerant merchants and the prohibitions thereof. He noted that a mobile food vendor permit has additional requirements.

There were some comments back and forth between Council, Mr. Kranich and the City Manager. This was tending to be deliberative therefore this discourse was discontinued.

NOVAK/WYTHE - MOVED TO ADOPT ORDINANCE 06-63 BY READING OF TITLE ONLY.

There was no discussion.

HEIMBUCH/ROBERTS - I MOVE THE FOLLOWING AMENDMENT, ON PAGE 194 OF THE PACKET LINE 49, STARTS WITH THE WORDS AMENDED BY, AND I WOULD LIKE TO DELETE THE FOLLOWING WORDS: "REPEALING SUBSECTIONS (H) THROUGH (J) IN ENTIRETY" SO LINE 49 WOULD READ: "AMENDED BY REENACTING SUBSECTION (H) TO READ AS FOLLOWS", EXCEPT THAT H. WILL BE CHANGED TO J. AS IT CURRENTLY EXISTS IN THE CODE, TO REESTABLISH, THEN, LETTER H. THERE THAT IS CROSSED OUT "H. MOBILE FOOD SERVICES" AND LETTER "I. ITINERANT MERCHANTS" AND TO STRIKE LINES 23 AND 24 IN THE WHEREAS CLAUSE.("WHEREAS, Mobile food services and itinerant merchants directly compete with established businesses, which operate on a seasonal basis on the Homer Spit; and")

As existed prior to amendment.

Section 1. Homer City Code Section 21.52.020, Permitted uses and structures is hereby amended by repealing subsections (h) through (j) in entirety, reenacting subsection (h) to read as follows and that subsections (a) through (g) remain in effect as are currently codified:

h. Mobile food services;

i. Itinerant merchants;

j.h. Recreational vehicle parks, provided they shall conform to the standards in HCC 21.61.090.

All other portions of Section 21.52.030 are not affected by this amendment, reenacting subsection (h) to read as follows and that subsections (a) through (g) remain in effect as are currently codified:

This amendment reestablishes the rights of mobile food services and itinerant merchants to be a permitted use and structure as exists currently in the Code. There are not too many places in this area wherein there could be a mobile food service or itinerant merchant, any way.

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

Motion carried.

NOVAK/ - I'D LIKE TO AMEND THE PORTION REGARDING MOBILE FOOD SERVICES AND ITINERANT MERCHANTS AND I WOULD LIKE TO PLACE A STATEMENT IN THERE THAT ONCE THE PERMITTING PROCESS IS COMPLETED I'D LIKE TO SAY THAT THEY WOULD GO THROUGH THE CITY MANAGER WITH THE PERMIT PROCESS TO DETERMINE WHERE THEY WOULD BE LOCATED, ASSUME IT WOULD BE THAT.

Motion died for lack of a second.

WYTHE/NOVAK - I WOULD LIKE TO MOVE TO INSERT THE STATEMENT THERE THAT MOBILE FOOD SERVICE AND ITINERANT MERCHANTS WOULD BE PERMITTED IN ACCORDANCE WITH THE PERMITTING REGULATIONS AND A DESIGNATED AREA WILL BE ESTABLISHED WITH A SET FEE AND THOSE AREAS WILL BE PROVIDED ON AN BID FOR AT LEASE ON AN ANNUAL BASIS.

It was noted that it has been proposed to have a designated area on the Spit. The intent of the amendment is that there be one designated spot, period and no provision for private property use, on the Spit, on City land. There is a process for using City land. This would satisfy City Attorney concerns, because it would not be precluding these businesses solely on basis of trying to protect existing business and limit competition. The amendment says, "on an annual basis", but the permit is for sixty days. Objection to including private land in the designated areas, in that it is not a good idea to do this on private land. Moot point if not a substantial problem there.

City Manager advised that, on occasion, there have been some problems and relayed a situation where there was a businessman that had a mobile vendor on his property and that it did create parking problems, some traffic problems and that it violated a provision in the Code that says a vendor cannot be set up if in close proximity to an existing business providing the same service. Therefore, the City had that vendor move to another location. The City had the ability, even on private property, if there is a parking problem being caused to try to deal with that. He confirmed that the City does have the tools, now, to deal with problems and that it is more an enforcement problem than one of needing new legislation.

Discussion ensued. The point is that the City needs to have control. In terms of private land the City could be doing a better job, there could be better coordination between the Police Department, Planning Department and, perhaps, the City Manager's Office. Pedestrian safety is also an issue on the Spit.

VOTE: (primary amendment 2.) YES: WYTHE, NOVAK.

NO: SHADLE, STARK, HEIMBUCH, ROBERTS.

Motion failed.

There was no further discussion.

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

Motion carried.

C. Ordinance 06-64, Of the City Council of Homer, Alaska Accepting and Appropriating a Grant from the AHSO in the Amount of $15,319.00 for Homer Police Department Enhanced Accident Investigation and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. (First Reading and Introduction November 27, 2006, Public Hearing and Second Reading December 11, 2006.)

This was read after the Budget Ordinance. Council had no objections to going ahead with this Ordinance and then going to Item B. Ordinance 06.63.

There was no public testimony.

WYTHE/NOVAK -SO MOVED FOR THE ADOPTION OF ORDINANCE 06-64 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY.

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

D. Ordinance 06-65, Of the City Council of Homer, Alaska Approving a Settlement Agreement between the City of Homer and Gates Construction Inc. Regarding 2004 Property Taxes and Appropriating $5,639.67 for that Purpose. City Manager. (First Reading and Introduction November 27, 2006, Public Hearing and Second Reading December 11, 2006.)

There was no public testimony.

NOVAK/WYTHE - MOVED TO ADOPT ORDINANCE 06-65 BY READING OF TITLE

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

E. Ordinance 06-66, Of the Homer City Council Appropriating and Accepting the Alaska Department of Home Land Security and Emergency Management Grant in the Amount of $16,400.00 for Homer's Emergency Operations Plan and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. (First Reading and Introduction November 27, 2006, Public Hearing and Second Reading December 11, 2006.)

There was no public testimony.

WYTHE/NOVAK - SO MOVED FOR THE ADOPTION OF ORDINANCE 06-66 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY.

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

F. Ordinance 06-67, Of the City Council of Homer, Alaska Approving a Settlement Agreement in Fuller vs. Homer, Case Number 3HO-02-78 CI, Amending the FY 2006 Operating Budget to Appropriate Settlement Funds in the Amount of $15,750.00 and Authorizing the City Manager's Execution of the Appropriate Documents. (First Reading and Introduction November 27, 2006, Public Hearing and Second Reading December 11, 2006.)

Frank Griswold, City resident, testified in favor of putting the annexation issue to bed, this is probably a smart move and that he understands that the $15,750.00 is primarily to cover the other side's attorney fees as the prevailing party. He inquired what hourly rate that attorney charged.

WYTHE/NO- SO MOVED FOR THE ADOPTION OF ORDINANCE 06-67 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY.

It was noted, in response to a Councilmember, that the case number is correct. It was further noted that this is only peripherally related to the annexation.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Mayor Hornaday called for a recess at 8:50 p.m. at the request of Councilmember Wythe, reconvening the meeting at 8:55 p.m.

ORDINANCE(S)

A. Ordinance 06-53, Of the Homer City Council Amending Homer City Code by Creating a New Title 15, "Special Service Districts", Creating the Ocean Drive Loop Special Service District, a Differential Property Tax Zone to Levy Property Taxes to Fund Special Services Provided in the District, and a Citizen Advisory Council. Bluff Erosion Control, Special Services District, Property Tax to Pay for Maintenance. City Manager (First Reading September 25, 2006, Public Hearing and Second Reading October 9, 2006, Second Reading Postponed to November 27, 2006 Main motion is on the floor as postponed, further postponed on November 27, 2006 to December 11, 2006.

A.1. Ordinance 06-53(S), Of the Homer City Council Amending Homer City Code by Creating a New Title 15, "Special Service Districts," Creating the Ocean Drive Loop Special Service District and a Differential Property Tax Zone to Levy Property Taxes to Fund Special Services Provided in the District, and Authorizing Grant Awards to Eligible Entities to Operate the Seawall for the Benefit of the District. City Attorney, City Manager. Requested by Council.

MAIN MOTION IS ON THE FLOOR AS POSTPONED: WYTHE/MCLAY - SO MOVED, FOR THE ADOPTION OF ORDINANCE 06-53 FOR SECOND AND FINAL READING.

There was no discussion.

HEIMBUCH/NOVAK - SO MOVED TO AMEND TO SUBSTITUTE ORDINANCE 06-53(S) FOR ORDINANCE 06-53.

City Manager responded that the reason for removing the Citizen Advisory Council was to stream line the process. The intent to still involve the property owners, who would be required to organize themselves, adopt a budget every year and a fiscal plan, which would be used to levy the mill rate.

Comments pro and con: It would be more efficient for the City to run it directly, as far as the expenditure, because the City is more used to doing these kinds of things. Appreciation expressed for the work done in drafting these ordinances. This is like Braer Rabbit and the tar baby. The City's continuing involvement in this project is an unwillingness to accept reality, to cut losses and go. These people have a vested interest in taking care of the seawall themselves. City continued involvement gives too much opportunity for people to involve the City in litigation. Concern regarding pitfalls. Not about to walk away from outstanding debts. This particular Ordinance deals with maintenance of the seawall and establishes a way to levy a tax or fee to maintain the wall for the people and it is their money and the City is just collecting and holding it. This is the function of a municipal corporation to get things done, to look out for the best interests of the citizens, in some reasonable manner, this Ordinance is absolutely the proper thing to do to organize a special assessment district and have the benefitting people pay for the maintenance of the facility that is on their land. This is a creature of state law.

City Manager responded regarding the assessment methodology, that special service areas are generally set up for property taxes, that there might be other ways to collect fees, but these would be voluntary. One of the advantages of property taxes is that there is some recourse if people don't pay. One of the beauties of property tax is the people who have the most to lose or gain by the seawall being there, are the ones that pay the most. The main advantage of a property tax is that it is enforceable and that there are tools already in the law to enforce it people don't pay their fair share. The service the City is providing is to ensure that everyone pays their fair share.

VOTE: (primary amendment - substitute ordinance) YES: SHADLE, STARK, NOVAK, ROBERTS, WYTHE.

NO: HEIMBUCH.

Motion carried.

There was no further discussion.

VOTE: (main amended motion) YES: STARK, NOVAK, ROBERTS, WYTHE, SHADLE.

NO: HEIMBUCH.

Motion carried.

B. Ordinance 06-58, Of the City Council of the City of Homer, Alaska, Amending the Homer City Zoning Map to Rezone Portions of the Rural Residential (RR) to General Commercial One (GCI). City Manager. Planning. ( Introduction and First Reading October 9, 2006, Public Hearing October 23, 2006, schedule Second Reading for November 27, 2006 postponed to December 11, 2006.)

Memorandum 06-206, through City Manager from City Planner.

MAIN MOTION IS ION THE FLOOR AS POSTPONED: HEIMBUCH/NOVAK - MOVED TO ADOPT.

Council comments: The City Planner was thanked for her additional information and that many of the questions have been answered. Did the adjacent property owners know that the rezone includes all of the uses of a GCI? Best to leave this as is.

The City Planner responded that the notices were sent, meeting notices sent, it is unknown what the adjacent property owners knew or did not know. She advised that not all permits require neighboring property owner notice. Another primary structure would require a Conditional Use Permit and would require noticing the neighboring property owners.

VOTE: YES: WYTHE, SHADLE, NOVAK, ROBERTS.

NO: STARK, HEIMBUCH.

Motion carried.

CITY MANAGER'S REPORT

A. City Manager's Report (UPDATES/FOLLOW-UP: Goals for the upcoming year, a list of major priorities to accomplish in 2007. In addition to the standing goal of improving the day to day functions and operations of the City Government. First priority is always to provide the best services to the residents of Homer. The day to day operations of the City consume 99% of our time and resources, expect that will continue in 2007. Is the Council is in agreement. This list is in no particular order and is not prioritized. It is not an exhaustive list but hits the highlights.

Old Library Building

� Complete Appraisal

� Discuss options such as leasing and other uses

� Execute sale

Fish Dock Road Redevelopment

� Amend and issue RFP for four lots

� Amend Lese Policies

� Improve City Property Management Function

City Hall / Town Center

� Complete Report / Refurbishment of Old School Building

� Site Selection

� Financing Plan

� Design and Architectural Work

Deep Water Dock

� Resolve issues related to Federal Appropriation and Project Management

� Issue Notice to proceed on economic feasibility study, design and engineering work.

Heath Street Extension

� Keep pressure on DOT/PF to design and fund intersection improvements.

� Resolve ROW and financing issues

� Get to design phase

Revision and Amendment of HARP Rules

� Assist Parks Commission and Transportation Advisory Committee on developing new criteria for recommendation to Council on funding for new trails and roads.

� Submit those recommendations to Council early next year

Energy Efficiency

� Take steps to improve energy efficiency, reduce energy consumption in City buildings and fleet.

Comprehensive Plan

� Start work this year and provide all of the staff support necessary to provide for an inclusive process and community ownership of the plan.

Seawall

� Resolve all outstanding issues and finally put this matter to rest.

Water and Sewer

� Continue with work on building a new water treatment plant and improving the I&I situation to extend the life of the Sewer treatment Plant.

� Continue with construction of Kachemak Drive Phase I and other proposed LIDs

Title 21 Rewrite

� Completed and submitted to Council in 07.

Spit Trail

� Continue to Work with DOT/PF and others to complete financing plan

KESA

� Negotiate new contract(s) and bring to Council for approval.

Kachemak City

� Negotiate Inter-Governmental Agreement and bring to Council for Approval

� Negotiate new sewer agreement

CIP List

� Provide the necessary resources and support to secure funding for the priority CIP projects.

December Employee Anniversaries: Mark Robl HPD 22 years, Will Hutt HPD 12 years, Jim Nelson PWD 8 years, John Berelc PWD 7 years, Bryan Hawkins PH 7 years and Paul Meyer HPD 6 years; and Peter Coots Library 1 year.

B. Bid Report (City Wide Surplus Sale: Sealed bids are due by 10 a.m. on Thursday, December 28, 2006 in the City Clerk's Office. Includes heavy equipment approved for surplus by City Council.

C. Games Report (Share the Spirit, 2007 Alaska Gaming Permit Application Filed and Received December 4, 2006. American Legion Auxiliary Unit #16, Inc. Alaska Gaming Permit Application Filed and Received December 4, 2006.)

D. Question of the Week

City Manager noted that he used the report to outline, in a sense, what he is thinking about for the next year and that this is really only the surface, and that he was thinking that he probably got some of the primary ones. In the next meeting or two the Council will be getting similar things from Public Works and maybe from some of the other departments on what their goals are for the next year. He asked for feed back and for Council to pass on to him some things that they think he should be focused on.

Council comments: Request that the allocation of HARP fund issue come before the Council for recommendation and input to go to the Commissions as opposed to waiting for the Commissions to come forward with their planning things. This will provide the Commissions with a concept of what the Council is thinking so that the Commissions are not 180 degrees away from that. This was requested to be an agenda item on the Committee of the Whole agenda for January 8, 2007. Comprehensive Plan is supposed to be done about November 2007. The effective date of the HARP ballot propositions were discussed:

Clerk Note: Certified via Resolution 06-145(S), October 9, 2006.

"Shall the City of Homer, Alaska continue to provide a funding source for street reconstruction improvements and related utilities in accordance with the City of Homer Accelerated Roads Program (HARP) by continuing after December 31, 2007 to levy a three fourth percent (3/4%) sales tax to fund HARP for up to twenty additional years?" YES 914 NO 368

"If Proposition 3 is approved by the voters, shall the City also be authorized to use the revenue from the three fourths percent (3/4 %) dedicated sales tax for the construction of new local streets?"

YES 742 NO 536

"If Proposition 3 is approved by the voters, shall the City also be authorized to use the revenue from the three fourths percent (3/4%) dedicated sales tax for the construction of new local non-motorized trails?" YES 781 NO 507