Session 08-04 a Regular Meeting of the Homer City Council was called to order at 7:00 p.m. on February 11, 2008 by Mayor Pro Tempore Dennis Novak 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: CHESLEY, HEIMBUCH, NOVAK, ROBERTS, WYTHE

ABSENT: SHADLE (excused)

STAFF: CITY MANAGER WREDE

CITY CLERK JOHNSON

FINANCE DIRECTOR HARVILLE

CITY PLANNER MCKIBBEN

PUBLIC WORKS DIRECTOR MEYER

Mayor Hornaday and Councilmember Shadle have requested excusal.

Council met as a Committee of the Whole from 4:02 p.m. to 5:10 p.m. Agenda items were Water/Sewer Rates and Regular Meeting Agenda items.

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.)

NOVAK/WYTHE – MOVED TO AMEND THE AGENDA AND MOVE RESOLUTION 08-20 TO 9A UNDER ORDINANCES.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Agenda approved by consensus of the City Council with the following changes:

Consent Agenda - Resolution 08-16 – Email from Councilmember Chesley; Resolutions - Resolution 08-20 – Council Opinion on Town Center Development and Memorandum 08-22 from City Manager, Re: Financing/City Hall Town Square Project; Resolution 08-21 - Memorandum from Finance Director, Re: Credit for Small Business Owners, Written public comment; Ordinance(s) – Ordinance 08-02(S) - Council Opinion on Town Center Development and Memorandum 08-22 from City Manager, Re: Financing/City Hall Town Square Project.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Frank Vondersaar, city resident, supports Town Square/City Hall and asked for the passage of Ordinance 08-02(S). It is a good idea and the time has come.

Celeste Novak, Homer resident and campaign coordinator for the Town Square project, supports Ordinance 08-02(S). It is an opportunity to plan growth, sustainable and useable, with an eye for future needs. The election is for only building of the new city hall; other buildings are just on the Capital Improvement Project list. The Town Square idea has always included City Hall, rather than just a green space area. CIRI will be paying a percentage of costs of roads, sewer and water. The University of Alaska must have the deal happen as they have the funds; the time is now, as the money has a sunset. Waiting will only escalate costs at a minimum of 10% per year. It is a bond issue rather than a tax issue. She urged the public to attend the Public Workshop on February 21^st from 7:30 to 9:30 p.m.

Angie Newby, city resident and committee member of the Town Square/City Hall, urges a yes vote on Ordinance 08-02(S). The project has been studied for a long time. May 1998 was the first community meeting sponsored by the Land Trust and June of 1998 was the first contact with CIRI. Now is the opportunity to implement our dreams. For years we have begged the Regents of the University of Alaska to fund the local campus. They saw the need and rewarded it with funding for expansion. They are a cash buyer. The university would like to renovate and move into City Hall by fall 2009. Dream #1 University consolidation and expansion. Dream #2 the City can spearhead the Town Square plan with a new civic anchor in the square. Dream #3 it will solidify the business core.

Steve Gibson, Homer resident, supports the Town Square project. Although he may have a slight conflict of interest as his son works temporary for the project, he supports it for bigger reasons. Costs are increasing dramatically and it is an opportunity to make a confirmed nucleus for Homer. He asked that it be done in a most energy efficient way. As to water rates, he hopes there will be a new proposal. He owns property on Main Street and used 200 gallons and was billed for $200. It is inappropriate. He questioned why people evaluating the rates believe commercial consumers have been getting a free ride?

Councilmember Heimbuch asked if Mr. Gibson reviewed Model #3. Mr. Gibson asked for the most equitable rates per usage.

Dean Ravin, city business owner, commented Model #4 is a step in the right direction, an improvement in the 2008 rate schedule. He asked for an additional category for small commercial users using less than 1,000 gallons. He thanked Council for their work on water/sewer rates.

Tammi Huston, city resident, manages homes and multi-family complexes. The new water rate plan was not well thought out, as the City would not intentionally have discriminated against some residents. It is unfair to charge extraordinary rates for apartment dwellers; families are already having a hard time paying for heat. She asked that condos, townhouses, and apartments be excluded as commercial businesses.

Kevin Hogan, city resident, commented on the minutes of the last meeting, stating he thought the City was not acting in good faith, instead of the Lease Committee. As to water rates, the interim rates are a good solution. He suggested Council look at forming a rate policy task force to allow citizens to have review and input. The enterprise fund has the largest number of stakeholders of any entity within the City. He endorsed the Town Square bond issue on the ballot to allow the public a voice. The project is an $11.8 M project, excluding land purchase.

Claire Waxman, small business owner in Homer, wants to do her fair share, but the water rates are not a fair share. If the City provides water we should not be paying a premium for conservation. She does everything possible to conserve and should not be paying as much as the ten people living in her duplex. Residents should not be discriminated on what type of residence they live in. Her bill has now increased to $225.00. Ms. Waxman supports the Town Square.

Marlene Cordone, owns commercial property, and her bill doubled in one month. She hopes Council rectifies the mistake. Commercial and residential should pay the same amounts.

Leonard Wells, business owner and city resident, commented on Council’s discussion of water rates at the Committee of the Whole. They are looking at the mis-action done in November and December. As to Town Center, it is a tax issue, as bonds are paid back with taxes. It is a short time to put the issue to the voters, many voters won’t be around.

Tom Boss, business owner and new Homer resident, has been getting sticker shock since he became a resident of Homer. He asked how the model of water rates was created as the people would have to understand there would be a room full of people when the rates doubled. There is no spirit of conservation with the rates. He was looking at cost saving fixtures, although there is not a lot of reason to do so as he can use twice as much water for $15 more per month. Rates cannot be fair if they are anything but the gallons used. For the new Town Square, building it from wood should be a thought since steel prices are high. There are a lot of resources close by.

Kim Burrows, Homer resident, lives in a multi-family apartment complex. The water rate increase is extreme and the property owner will have to pass it onto the residents. Do you want people to move to Anchor Point?

Ken Castner, city resident, stated Sam Matthews and himself wrote the old water rate model, prior to City Manager Wrede coming to town. It was a fair and simple rate model. A grand feature was predicated on the size of the meter, those with a higher demand paid more; the usage feature was equitable. The Spit people had a slight subsidy. The only way the old model could fall apart was to bring policy issues into the equation. He suggested Council revisit the elements of the old rate model and see why it fell apart. He believes the budget was not applied into the rate model correctly.

Darren McVeigh, has a seasonable business on the Spit. He closed September 15^th and received a water/sewer bill for $193.50 for one month. He wouldn’t mind paying for the water used, but does mind paying when he is closed.

Carol Swartz, Campus Director of University of Alaska Kenai Peninsula Borough Campus, thanked Council and Homer voters for bringing the college to the edge of fulfilling plans going on before 1985. Folks way back then set it in motion, making it clear UA would have a growing presence. They made it clear the university would be in town as it was an economic development engine. Higher education has a role in cultural and economic development. The university went forth and multiplied funds, receiving an allocation from the last Legislative session to purchase City Hall.

Roger Brown, city resident, represents the Church of Christ. Their average water bill is $30 to $60 per month; average usage 300 gallons per month. The water bill this month is $300. There is no logic. He doesn’t mind paying for what they use, but the price is outlandish for 300 to 400 gallons.

Frank Griswold, city resident, stated there should be criteria for excusing a councilmember from attending a council meeting. Two unexcused or greater than six absences total should result in permanent excusal. Caroline Storm appears to have good credentials for serving on the Planning Commission. He hopes it is not a political tactic to ensure the permitting of the construction of the new City Hall. Contrary viewpoints are healthy; it is unfortunate ex-commissioner Valerie Connor was rejected when she was willing to continue her service. Ballot language on Ordinances 08-02 and 08-02(S) is misleading as they violate the single subject rule. There should be three separate initiatives referring to the City Hall, Plaza and Capital Improvements with specific allocations of funds to each. The voters should be told how it will be paid for; what matters is how well voters understand the ballot language.

Steve Zimmerman, city resident and business owner, believes you should pay for what you use per water rates. Four-plexes should be charged for four residences or four commercials. Everyone is complaining the price of fuel, living and taxes has all gone up. What is going to happen if things go down and we can’t pay for what’s going on? Good information was presented tonight; there is still some stuff happening behind closed doors. He is interested in where the money is coming from. The price of things going up is good for the City, as the City makes more in taxes.

Bill Tener, Spit business owner, spoke on water rates. He has a business open to the public, but refers people to city facilities for restroom use. He uses 300 to 500 gallons per month. Water rates should be money spent for water used.

Lynda Reed, Picture Alaska Art Gallery owner, stated it is not wise to complicate water rates and pick and chose who can afford the increase. More water used should produce a higher per gallon charge. Several people said their water bill doubled, but hers tripled from $66 to $220.96. It is an unfair burden during the January heat bills. She questioned why Homer water rates have to be so much more than comparable towns?

Mel Bass, city resident, had a usage of 900 to 1,000 gallons of water and his bill increased from $60 to $220 per month. It is a little outrageous.

Bill Marley, Homer resident, has a hangar at the airport that is a declared business, although he has no revenue or employees. He used 400 gallons of water last month and received a $217 bill, 50 cents per gallon. He would like to avoid the distinction between residential and commercial and make equality the word of the day. Soldotna, Seward, Kenai, and Anchorage rates do not make distinctions for commercial users. They make distinctions in pipe size. Customer service charges must be reasonable, people who live here all year support the infrastructure. Those that leave and return for the summer harvest don’t pay the rates to support the infrastructure.

Trace Carlos, Homer resident and small business owner, commented on the excused member, stating he could be here by teleconference and conserve on transportation costs. As a family member, costs are sky-rocketing, costs have tripled in the last seven years with heating fuel and gas. With the economical engine running this place, in 20 years from now his kids have no hope.

Margarida Kondak, Homer resident, said her bill last month was $92 and this month was $220 for less usage. She urged Council to work on usage to equal out rates, encouraging conservation and making it more fair. Apartments, condominiums and rental homes should not be counted as commercial usage.

Karin Marks, city resident and business owner, commented on the water rates. She questioned if the meter size is an indicator of water usage? How is the water usage by the City handled? She favors the Town Square and proposed City Hall as it shows opportunity for growth, businesses and jobs.

RECONSIDERATION

None.

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 January 28, 2008 Regular Meeting. City Clerk. Recommend approval.

B. Resolution 08-15, Of the City Council of Homer, Alaska Noting Public Works Acceptance of the South Douglas Place Road Reconstruction and Paving Improvement Project, Accepting this Project for City Maintenance and Forwarding the Assessment District to the Final Assessment Roll and Payment Process and Setting a Public Hearing Date of March 10, 2008. Public Works/City Clerk. Recommend adoption.

C. Resolution 08-16, Of the City Council of Homer, Alaska, Expressing Support of House Bill No. 288, “An Act Relating to Net Energy Metering for Retail Electricity Suppliers and Customers”. Chesley. Recommend adoption.

Placed under Resolutions.

D. Resolution 08-19, Of the City Council Amending the City of Homer Procurement Policy and Procedures Manual, Travel Authorization and Expenditure Report Forms Regarding the Personal Auto Use Mileage Rate from $0.485 to $0.505. City Clerk. Recommend adoption.

Placed under Resolutions.

E. Resolution 08-23, Of the City Council Amending the City of Homer Procurement Policy and Procedures Manual, Business Travel Procedures, Travel Expense Report and Travel Report Narrative Per Diem Allowance for Meals and Incidentals from $53.00 Daily to $58.00 Daily. City Clerk. Recommend adoption.

Placed under Resolutions.

F. Memorandum 08-17, from Mayor, Re: Appointment of Caroline Storm to the Advisory Planning Commission, Appointment of Stephen Scarpitta to the Economic Development Advisory Commission, and Reappointments of Kevin Hogan and Catherine Ulmer to the Port and Harbor Advisory Commission. Recommend confirmation.

The consent agenda as amended was approved by consensus of the Council.

VISITORS

A. Kachemak Kids Early Learning Center, 10 minutes.

Caroline Storm presented information about Kachemak Kids Early Learning Center, a safe nurturing preschool and child care program that follows the Reggio Emilia program.

Mayor Pro Tempore Novak called for a recess at 8:04 p.m. and resumed the meeting at 8:12 p.m.

ANNOUNCEMENTS/PRESENTATIONS/BOROUGH REPORT/COMMISSION REPORTS

A. Report of Trip to AML, Juneau, Alaska, January 23 – 26, 2008, Mayor Hornaday

PUBLIC HEARING(S)

A. Ordinance 08-03, Of the City Council Accepting and Appropriating an ADOT Reimbursement of up to $6,605.00 for Commercial Vehicle Enforcement Inspections and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Introduction January 28, 2008, Public Hearing and Second Reading February 11, 2008.

Memorandum 08-07 from Police Chief as backup.

There was no public testimony.

WYTHE/ROBERTS – MOVED FOR THE ADOPTION OF ORDINANCE 08-03.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

B. Ordinance 08-05, of the City Council of Homer, Alaska Amending Chapter 21.32 by Adding a New Section Entitled Chapter 21.32.09X, “Business, Open Air.” City Manager/Planning. Introduction January 28, 2008, Public Hearing and Second Reading February 11, 2008.

Memorandum 08-09, from City Planner as backup.

Frank Griswold, city resident, supports Farmers Market, but not this ordinance. It is poorly crafted as the terms within the definition require further definition. There are undesirable uses in GC1, some conflicting Farmers Market use. Farmers Market is well defined in the City Code. He suggested substituting Farmers Market for open air business and remand to the Planning Commission for their recommendations.

WYTHE/ROBERTS – MOVED TO ADOPT ORDINANCE 08-05.

Councilmember Heimbuch expressed the need to review the ordinance more closely.

HEIMBUCH/CHESLEY - MOVED TO POSTPONE UNTIL FEBRUARY 25, 2008.

There was no discussion.

VOTE: YES. ROBERTS, WYTHE, CHESLEY, NOVAK, HEIMBUCH

Motion carried.

C. Ordinance 08-06, Of the City Council of the City of Homer, Alaska, Amending the Homer City Zoning Map To Rezone Portions of the Conservation Zoning District (CONS) to Rural Residential (RR). City Manager/Planning. Introduction January 28, 2008, Public Hearing and Second Reading February 11, 2008.

Memorandum 08-10, from City Planner as backup.

There was no public comment.

WYTHE/ROBERTS – MOVED FOR THE ADOPTION OF ORDINANCE 08-06.

Councilmember Roberts expressed her approval of the zoning area change, noting there were no objections from affected residents.

VOTE: YES. HEIMBUCH, ROBERTS, WYTHE, CHESLEY, NOVAK

Motion carried.

D. Ordinance 08-07, Of the City Council Amending the FY 2008 Budget by Authorizing the Transfer of $15,000.00 from City Hall Recycling Fund to the Sustainability Fund. Heimbuch. Introduction January 28, 2008, Public Hearing and Second Reading February 11, 2008.

Leonard Wells, city resident, questioned the difference between the recycling and sustainability funds?

Placing recycling funds in the sustainability fund will broaden the scope of sustainability measures.

WYTHE/ROBERTS – MOVED FOR THE ADOPTION OF ORDINANCE 08-07.

There was no discussion.

VOTE: YES. NOVAK, HEIMBUCH, ROBERTS, WYTHE, CHESLEY

Motion carried.

ORDINANCE(S)

A. Resolution 08-20, Of the City Council of Homer, Alaska, Establishing a Project Budget in the Amount of $11,799,000 for Constructing and Equipping the Proposed New City Hall and Town Square. City Manager. Recommend adoption.

Memorandum 08-20, from Public Works Director as backup.

WYTHE/ROBERTS - MOVED FOR THE ADOPTION OF RESOLUTION 08-20.

City Manager Wrede explained the new budget for the project is $11.8M, as provided by the design team. Costs per sq. ft. are down to $340 and some items not included in the original amount are now added. Reference is made to expenditures in Memorandum 08-20 from Public Works Director Carey Meyer. The LEED (Leadership in Energy and Environmental Design) certification and solar panels will cost more; there will be savings in the long run. This is a preliminary budget, rather than a contract amount, and may change. The preliminary budget was prepared so Council can have an intelligent conversation with the community. More numbers will be produced at the 35% and 65% design, although the design team is confident the amount will be in this neighborhood.

Mayor Pro Tempore Novak explained the City owns the land City Hall will be built on; the land for Town Square will be traded with CIRI. Construction costs are as follows:

Construction – City Hall Building $ 6,800,000

Construction – City Hall Sitework $ 1,200,000

Construction – Town Square $ 1,000,000

Pre-Construction Services $ 980,000

Subtotal Construction $ 9,980,000

Management of Construction

City Personnel $ 110,000

Technical Inspection $ 345,000

LEED Certification $ 40,000

1% for Art $ 70,000

Renewable Energy (Solar Thermal Panel) $ 60,000

Furnishings/Equipment $ 450,000

Administration/Platting $ 45,000

Contingency (7% of Construction) $ 699,000

Subtotal Non-Construction $ 1,819,000

Total Project $ 11,799,000

VOTE: YES. CHESLEY, NOVAK, HEIMBUCH, ROBERTS, WYTHE

Motion carried.

A. Ordinance 08-02, Of the City Council of Homer, Alaska Authorizing the City to Issue General Obligation Bonds in the Principal Amount of Not to Exceed $6,000,000 to Finance Part of the Cost of the Planning, Design, Construction and Equipping of a New City Hall and Town Square (Plaza) and Related Capital Improvements; and to Submit the Question of the Issuance of Such Bonds to the Qualified Voters of the City at the March 25, 2008 Special Election. City Manager. Introduction January 14, 2008, Public Hearing January 28, 2008 and Second Reading on February 11, 2008.

Ordinance 08-02(S), Of the City Council of Homer, Alaska Authorizing the City to Issue General Obligation Bonds in the Principal Amount of Not to Exceed $8,000,000 to Finance Part of the Cost of the Planning, Design, Construction and Equipping of a New City Hall and Town Square (Plaza) and Related Capital Improvements; and to Submit the Question of the Issuance of Such Bonds to the Qualified Voters of the City at the March 25, 2008 Special Election. City Manager. Follows schedule of Ordinance 08-02.

Motion on the floor from the Regular Meeting of January 14, 2008 for the adoption of Ordinance 08-02 for introduction and first reading by reading of title only.

WYTHE/ROBERTS – MOVED TO SUBSTITUTE ORDINANCE 08-02(S).

Councilmember Chesley questioned City Manager Wrede on public comments that we were violating the separate subjects rule. City Manager Wrede explained the ordinance was written by bond counsel and he is more than comfortable it does not violate those principles.

VOTE: YES. CHESLEY, NOVAK, HEIMBUCH, ROBERTS, WYTHE

Mayor Pro Tempore Novak called for a motion for the adoption of Ordinance 08-02(S) by reading of title only.

WYTHE/ROBERTS – SO MOVED.

There was no discussion.

VOTE: YES. WYTHE, CHESLEY, NOVAK, HEIMBUCH, ROBERTS

Motion carried.

CITY MANAGER’S REPORT

A. City Manager’s Report

1. Alaska Energy Authority Application: The HEA General Manager and Board have expressed support for the City’s application to AEA regarding feasibility studies on the idea of using the City water lines to generate electricity. A copy of the HEA Board application is attached for your information. Carey and Anne Marie are working on the application now with review and assistance from HEA staff.
2. City Hall / Town Square: Bond Payments: At the last meeting we discussed the implications of making bond payments for the City Hall / Town Square project without raising taxes or impacting existing services. We emphasized that it was important to have a public discussion about this and to demonstrate to the public that it was possible and that the City had the resources and fiscal discipline to pull it off. I hope to spend the bulk of the time allotted to the Manager’s Report discussing this issue. A written report will be provided with some recommendations for action at the next meeting.
3. Purchase Agreement / University of Alaska: The City and the University of Alaska have been working on a draft purchase agreement for City Hall that would meet the needs of both parties. We are scheduled to discuss the negotiations in executive session at this meeting so that you can be briefed on the status of negotiations and associated legal and financial issues. After receiving input from the Council, I hope to have a final document ready for public review at the next meeting.
4. ISO Report: We received a copy of the new ISO Report last week and were very disappointed. In short, the City’s rating has been reduced from a 3 to a 5/8B. (still a good rating for a small, rural community with a volunteer fire department, but not where we want to be). At the time this was written, Chief Painter and I were discussing how to respond. The Chief feels that the new rating is incorrect and that the evaluator made some mistakes and missed some important information. We have the option of appealing and are actively considering that approach. We can also develop a plan to improve services and rectify some identified deficiencies within the next year. This could preserve our current rating but will have some budget implications. Please let us know if you would like to talk about this issue at the meeting. We will be ready with a recommendation course of action at that time.
5. CIRI Discussions RE: Town Center: I had what I thought was a very productive meeting with CIRI officials last week regarding potential Town Center transactions. As you know, we have been talking to CIRI on a regular basis about broad planning issues for Town Center for some time now. Now that the City has identified the location for a new City Hall, Town Square, and roads to access both, the focus of this meeting was on how the City would acquire the land for the square and how the parties would apportion the cost of building the road. We are scheduled to discuss the status of these negotiations in executive session at this meeting. These are currently confidential negotiations with an array of legal and financial considerations. After hearing your discussion and advice, I hope to be able to bring a conceptual transaction plan to the Council at the next meeting so that the Public will have a chance to examine and discuss the proposed agreement.
6. Climate Action Plan / Homer Foundation: Attached is a letter from Joy Steward of the Homer Foundation regarding donations the Foundation is holding for implementation of the Climate Action Plan. Please note that at the end of the letter, Joy states that it is her understanding that the money does not have to be used for an employee (could be a consultant). I will speak with Joy before meeting time to get further clarification.
7. AMHS Warehouse: It looks like we are back on track and progress is being made. AMHS recently sent us a letter describing how much land will be needed for a warehouse, staging area, and long term parking on Lot 48 (across form the terminal). DOT/PF is currently working on the necessary permits and the EA and we hope to amend the land use agreement shortly. Recall that I inform you several months ago that I had offered land for the warehouse rent free as part of an arrangement to keep the warehouse from being built right next to the terminal. I hope the Council is still on board with that. You should have a lease agreement and/or an amended land use agreement before you shortly.
8. Lease Committee Update: The newly configured Lease Committee is up and running with the exception of a member from the Economic Development Committee. We hope to have that member appointed soon. After consulting with Gordon, we have set this committee up like any other committee. The lease Committee is no longer an Administration Committee; formed by the administration and made up entirely of administration members. The Committee make-up has changed and the new membership makes it an official committee of the Council. That changes things. The meetings of the committee are now public. Meetings are announced in advance, an agenda is published, the meeting is recorded, and meeting notes are taken. The public has an opportunity to address the Committee. At the last meeting, the Committee spent a fair amount of time talking about what types of topics can be discussed in public and what cannot. Gordon provided us some guidance on that. In short, it was generally agreed that deliberations over the details of proposals, scoring them, rating them against other proposals, etc. should be done in executive session. The reason for that is to protect private and sensitive financial, business, and personal information that will appear in applications. The Committee also has an obligation to protect the financial interests of the City and scoring and rating applications in public is not conducive to doing that. The members should be allowed to deliberate in private and speak freely without pressure from the public. All decisions should be made by motion in public and all other business, such discussion of the lease policies and things like that should be public as well.
9. Ordinance 07-50 Update: This is the ordinance regarding the proposed water line extension on Kachemak Drive. Carey and Jo have scheduled a neighborhood meeting to discuss the project on February 14. This after the proposed date for second reading. In addition, a new petition for water and sewer LIDs along the same stretch of Kachemak Drive has been submitted. This also needs further analysis. For all of those reasons, I would suggest postponing second reading at least until Feb. 28.
10. City Hall / Town Square “TO DO LIST”: Your next two meetings, February 11 and Feb 12, are shaping up to be a critical ones. Some major decisions will need to be make at that time. This is intended to give you a heads-up about what we are working on in preparation for these meetings.
• Establish an Approved Project Budget: It is important for the Council to establish and approve a project budget for a variety of reasons. We have consistently told the Council that we will be able to provide much more precise and accurate cost and budget numbers at 35%. That is true and 35% plans are scheduled to be delivered on March 10. However, we have asked the design team to spend time more now on cost estimating because we need good numbers before March 10. The primary reasons for that are to make sure the Bond Proposition has the right amount on it and also to make sure we are giving the public the best numbers possible at this time. So, the team has been taking a fresh look at costs. We plan to have a series of meetings on this topic late this week. The cost of materials continues to rise steadily, the building has grown by about 1,200 feet, we have discovered that original estimates were for the building and square only and did not include all of the design costs, including the additional costs for alternative energy alternatives, and all of the efficiency measures and alternative energy measures we are discussing will cost more up front, in order to save later. The City’s project management costs, furniture for the building, and infrastructure costs were also not included in a total budget. So, needless to say, we are examining all options and sharpening pencils. We will continue to work on this and plan to bring you a project budget resolution for adoption at the next meeting. We would also suggest postponing second reading of the bond ordinance until February 11 as well. This will give you time to discuss the budget and see what impact that might have upon the amount you want to borrow.
• Budget Projections: Council members have made it pretty clear that they want to do this project without raising taxes or affecting existing services. If we say we are going to do this, we need to assure the public that it is possible. Doing this will require some policy calls and tough budget decisions in the future because as you know, if we spend money on bond payments out of the general fund budget, that money will not be available for other things. Regina and I are working on some FY 2009 budget and revenue projections for your consideration so that you will have a better understanding about what funds might be available for this purpose. This information and a resolution stating the Council’s intent will be on the agenda for your consideration Feb. 11.Remember that the Council also has other funds available that it could tap for bond payments such as the General Fund Reserve or the Special Projects Fund. So, there are options. But, it may be important for the Council to make some sort of official statement that bond payments are a top priority, over everything else, and that the Council intends to make payments out of the existing budget or existing reserves, without raising taxes or affecting existing services.
• Business Transactions with CIRI: I plan to meet with CIRI multiple times over the next few weeks in order to put together a proposal involving infrastructure development and land transactions. This is much easier now that we are close to a preliminary plat and decisions on building and square locations. We hope to have a conceptual transaction / proposal ready for CIRI Board and City Council review in late February. If both bodies like the direction we are going, we will take the necessary steps to obtain final approval in March (April for the CIRI Board).
• Preliminary Plat: We plan to discuss with you a concept preliminary plat at the February 11 meeting. The idea is to get conceptual approval of the locations for City Hall, the square, and the access roads. It would be good to formally get Council approval of those items on the record.
• City / University Purchase Agreement: We will be bringing you a draft purchase agreement for discussion at the second meeting in February. An executive session to talk about the status of the negotiations is schedule for Feb. 11.
11. City Hall / Town Center schedule questions: The contractors are scheduled to present the City with completed 35% plans on or about March 10. However, the Special Bond Election is now scheduled for March 25. This could mean that there are approximately two weeks in which the design team might be sitting around unable to work on this project; more if the Council is not able to certify the election until sometime in April. This is wasted time that we cannot afford if we want to stay on schedule. So, we are considering asking the Council, assuming that it likes the 35% plans, if it would approve a contract to move to 65% plans on March 10 with a provision in the contract that work can be stopped if the bond prop. fails. This would allow the design team to keep working. A completed design will be necessary anyway if the Council ultimately decides to finance this project another way.

An appeal will be filed to the ISO Report the Fire Department received. Objections to the methods used to assess the dispatch center, fire department, response capacity and water delivery system will be made. A rating of 4 is desired; a 3 rating will require expenditures. A fire station on Skyline Drive will have a huge impact. When replacement is made for Engine 4, the older engine may be kept as a backup. There is review of the existing water treatment facility to produce an easier way to fill the tankers. Incentives for recruiting and retaining volunteers is needed to build up the numbers.

Memorandum 08-22 outlines where the money will come from for the Town Square City Hall project. The City is in good financial shape as the General Fund is healthy, with fiscal policies implemented to set aside for depreciation and PERS. Budget surpluses have been run the last couple of years, with lines held on expenses and conservative revenue projections. The level of debt is low for a community of this size, with most debt associated with enterprise or special revenue funds. The General Fund has library debt and a few pieces of equipment debt. Revenue projections for 2009 and 2010 are conservative. It would be difficult to fit a $540,000 bond payment into 2009 without impacting existing services. It is not recommended to cut back on contributions to depreciation and fleet reserves. At the end of next year $4M is projected in General Fund reserves and $700,000 in the Special Projects Fund, both unallocated. In 2008 there will be a budget surplus of $1.1M. If we chose to sell $8M bonds, we will first try to fit the bond payment in to the 2009 budget. If it is difficult or impossible there are assets to make bond payments before we ever consider raising property taxes. The General Fund is in good shape to ensure Council can make bond payments without raising taxes of impacting existing services. Recommendations can be brought back at the next Council meeting.

Mayor Pro Tempore Novak stated Alaska Municipal Bond Bank is a method used by many cities. Funds for renewable energy solar panels and LEED costs were discussed. Sources for energy incentives are being explored.

B. Bid Report

C. Games Report

D. Question of the Week

E. Records Inventory Report

F. Report of Records Destruction

COMMITTEE REPORT

A. City Hall - Town Square Review Committee

(February 21, 2008 4:30 – 5:30 p.m. and Public Workshop 5:30 – 7:30 p.m.)

The Council Report on Town Square as prepared by Councilmember Wythe was discussed. Questions and concerns posed by the public are answered in the document. By consensus Council agreed to provide the report to the media.

B. Comprehensive Plan Community Advisory Committee

C. Lease Committee

(February 19, 2008 3:00 p.m.)

D. Permanent Fund Committee

(April 10, 2008 6:00 p.m.)

E. Public Arts Committee

(February 21, 2008, Worksession 10:00 a.m. and Regular Meeting 11:00 a.m.)

F. Transportation Advisory Committee

(February 19, 2008, Regular Meeting 5:30 p.m.)

PENDING BUSINESS

None.

NEW BUSINESS

A. Bid Opening - Request for Proposals

· Lot 1: 141 West Pioneer Ave - Old Homer Public Library building with 3,441 sq. ft. and approximately 17,000 sq. ft. of land feet of land. Appraised Value & Minimum bid is $462,500.

· Lot 2: Plat No. 88-43, containing 1.312 acres (approximately 59,000 Square feet) of vacant land with 215 feet of frontage on Main Street. Appraised Value & Minimum bid is $225,000.

One bid was received for Lot 1: Jim and Laurie Heston, bid amount $462,500 with contingency that the City bears the complete financial burden of any soil remediation or any other environmental clean up that may be required following an environmental inspection of the property.

Resolution 08-17, Of the City Council of Homer, Alaska, Declaring that the Highest, Responsible Bidder for Lot 1, Old Library Property is ___________ and that the Highest, Responsible Bidder for Lot 2, Old Library Property is _____________, and Authorizing the City Manager to Execute the Appropriate Documents to Finalize the Sale. City Manager. Recommend adoption.

Mayor Pro Tempore Novak called for a motion for the adoption of Resolution 08-17 by reading of title.

WYTHE/CHESLEY - SO MOVED.

City Manager Wrede advised the City is aware of an old fuel tank Public Works abandoned in the mid 1990’s. Although the City is not aware of any spill or contamination, but if there were, the City would be responsible anyway. There is no objection to the contingency.

WYTHE/HEIMBUCH - MOVED FOR THE AMENDMENT OF RESOLUTION 08-17 BY INSERTING LAURIE AND JIM HESTON IN THE TITLE FOR LOT 1 AND STRIKE “AND THAT THE HIGHEST, RESPONSIBLE BIDDER FOR LOT 2, OLD LIBRARY PROPERTY IS.”

There was no discussion.

VOTE: YES. ROBERTS, WYTHE, CHESLEY, NOVAK, HEIMBUCH

Motion carried.

WYTHE/ROBERTS - MOVED TO AMEND THE FOURTH WHEREAS BY STRIKING “AND THE MINIMUM BID FOR LOT 2 IS $225.000.”

Mayor Pro Tempore Novak asked for a friendly amendment to remove Lot 2 from the title and the fourth whereas. The friendly amendment was not accepted as the points are contained in both motions to amend.

VOTE: YES. HEIMBUCH, ROBERTS, WYTHE, CHESLEY, NOVAK

Motion carried.

WYTHE/ROBERTS – MOVED TO AMEND UNDER THE NOW THEREFORE BE IT RESOLVED: ON LOT 1 ENTER LAURIE AND JIM HESTON AND ON BID ENTER $462,500 AND ALSO STRIKE THE LINE THAT IS PROVIDED FOR LOT 2 BID.

There was no discussion.

VOTE: YES. NOVAK, HEIMBUCH, ROBERTS, WYTHE, CHESLEY

Motion carried.

Mayor Pro Tempore Novak noted the one bid placed is a minimum bid. He asked if that is the best value that can be obtained from the property.

Councilmember Chesley commented the City acted in good faith and needs to accept the bid. The bidding process was public, transparent, and available to all. The Heston’s came forward and it would be in the best interest of all to proceed and accept the bid. Councilmember Wythe received an accounting of the monthly expenses for maintaining and keeping the old library building. It costs the City $3,000 per month to hold the property; it does not take long to add up to an amount more than we could get on a further bid.

VOTE: (main motion as amended) YES. CHESLEY, NOVAK, HEIMBUCH, ROBERTS, WYTHE

Motion carried.

B. Memorandum 08-19, 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. (Negotiations between the City and the University of Alaska regarding a Purchase Agreement for City Hall and Negotiations between the City and Cook Inlet Region Inc. regarding Negotiations over a Proposed Financial Transaction regarding the Town Square Land and Construction of Town Center Infrastructure.)

Mayor Pro Tempore Novak called for a motion for the approval of Memorandum 08-19.

WYTHE/CHESLEY – SO MOVED.

There was no discussion.

VOTE: YES. CHESLEY, NOVAK, HEIMBUCH, ROBERTS, WYTHE

Motion carried.

Council adjourned to Executive Session at 9:14 p.m. and reconvened at 9:54 p.m.

Mayor Pro Tempore Novak stated Council discussed financial arrangements with regards to the University purchasing City Hall and negotiations between the City and CIRI regarding development of the Town Square.

C. Memorandum 08-18, from City Manager, Re: Conceptual Approval, City Hall, Town Square, Road Locations. Recommend approval.

Memorandum 08-21, from Public Works as backup.

Mayor Pro Tempore Novak called for a motion for the approval of the recommendations of Memorandum 08-18.

WYTHE/ROBERTS – SO MOVED.

There was no discussion.

VOTE: YES. ROBERTS, WYTHE, CHESLEY, NOVAK, HEIMBUCH

Motion carried.

RESOLUTIONS

Resolution 08-20, Of the City Council of Homer, Alaska, Establishing a Project Budget in the Amount of $11,799,000 for Constructing and Equipping the Proposed New City Hall and Town Square.

Under agenda approval Resolution 08-20 was moved to Ordinances, Item A.

A. Resolution 08-21, Of the City Council of the City of Homer, Alaska Amending the City of Homer 2008 Fee Schedule for Commercial Water and Sewer Rates. Novak. Recommend adoption.

Mayor Pro Tempore Novak called for a motion for the adoption of Resolution 08-21 by reading of title only.

WYTHE/ROBERTS - SO MOVED.

NOVAK/WYTHE - MOVED TO AMEND THE NOW THEREFORE BE IT RESOLVED BY INSERTING “2008” VARIABLE RATE MODEL AND VARIABLE RATE MODEL “#3”.

Discussion ensued on INCORPORATING Model #3 as an attachment to the resolution.

Councilmember Wythe offered a friendly amendment to include “as attached”, in reference to Model #3. The amendment was accepted by Mayor Pro Tempore Novak.

Asked what criteria is used for condominiums, Finance Director Harville responded there are some incorrect classifications. The Finance Department is available to clear up concerns. Discussion ensued as to the date being included on the accepted Model #3 as an identifier.

City Clerk Johnson suggested including “Attachment #1” on the resolution to ensure the Model #3 attachment would stay with the resolution.

Councilmember Wythe offered a friendly amendment to include Attachment #1 in parenthesis. The amendment was accepted by Mayor Pro Tempore Novak.

VOTE: YES. HEIMBUCH, ROBERTS, WYTHE, CHESLEY, NOVAK

Motion carried.

VOTE:

NOVAK/CHESLEY – MOVED TO AMEND THE BE IT FURTHER RESOLVED TO ADD “THAT THE COUNCIL WILL GIVE SMALL BUSINESS OWNERS A CREDIT EQUAL TO THE DIFFERENCE IN CUSTOMER CHARGES FROM THE 2008 ADOPTED VARIABLE RATE MODEL AND THE 2008 VARIABLE RATE MODEL #3 AS ATTACHED (ATTACHMENT #1); THEN BELOW THAT ADD DIAGRAHM: THE CREDIT IS COMPUTED AS FOLLOWS:

Commercial Users </= 2,000 gallons: $205 - $72 = $133 x 92 = $12,236

Commercial Users </= 5,000 gallons: $205 - $145 = $60 x 88 = $5,280”

The amendment will replace the current be it further resolved.

VOTE: YES. NOVAK, HEIMBUCH, ROBERTS, WYTHE, CHESLEY

Motion carried.

Councilmember Roberts noted Model #3 does emphasis conservation of water; higher users of water will be charged more, lower users will be charged less.

Mayor Pro Tempore Novak noted Model #3 is on target, although there may be other points to consider in the future.

VOTE: (main motion as amended) YES. CHESLEY, NOVAK, HEIMBUCH, ROBERTS, WYTHE

Motion carried.

A credit will be issued to customer’s accounts for those that have overpaid.

B. Resolution 08-22, Of the City Council of Homer, Alaska, Approving a Memorandum of Agreement Between the City of Homer and the Kachemak Nordic Ski Club regarding Operation and Maintenance of Recreational Ski Trails on City Owned Land in the Diamond Creek Watershed (Baycrest Ski Trails). City Manager. Recommend adoption.

Mayor Pro Tempore Novak called for a motion for the adoption of Resolution 08-22 by reading of title only.

WYTHE/ROBERTS – SO MOVED.

Council voiced full support of the Memorandum of Agreement.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

C. Resolution 08-16, Of the City Council of Homer, Alaska, Expressing Support of House Bill No. 288, “An Act Relating to Net Energy Metering for Retail Electricity Suppliers and Customers”. Chesley. Recommend adoption.

Councilmember Wythe declared a potential conflict of interest as she is employed by Homer Electric Association.

Mayor Pro Tempore Novak ruled Councilmember Wythe did have a conflict of interest and excused her from participation.

Councilmember Wythe exited the Council Chambers.

Mayor Pro Tempore Novak called for a motion for the adoption of Resolution 08-16 by reading of title.

CHESLEY/ROBERTS – SO MOVED.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

E. Resolution 08-19, Of the City Council Amending the City of Homer Procurement Policy and Procedures Manual, Travel Authorization and Expenditure Report Forms Regarding the Personal Auto Use Mileage Rate from $0.485 to $0.505. City Clerk. Recommend adoption.

Mayor Pro Tempore Novak called for a motion for the adoption of Resolution 08-19 by reading of title.

WYTHE/ROBERTS - SO MOVED.

WYTHE/ROBERTS - MOVED TO AMEND TO CHANGE THE TITLE TO ELIMINATE THE “FROM 0.485 TO 0.505”.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

WYTHE/ROBERTS – MOVED TO AMEND THE SECOND WHEREAS: THIS RATE IS REVIEWED AND AMENDED ON A PERIODIC BASIS AND USE THEREOF MUST STILL MEET THE CRITERIA IN THE BUSINESS TRAVEL PROCEDURES.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

WYTHE/ROBERTS – MOVED TO AMEND UNDER THE NOW THEREFORE BE IT RESOLVED: STRIKE “IS HEREBY AMENDED FROM $0.485 TO $0.505”, REPLACE WITH: “SHALL BE SET AT THE RATE ESTABLISHED BY THE IRS AS REVIEWED AND AMENDED ON A PERIODIC BASIS”.

The purpose of the amendment is that the IRS reviews the rate each year. It authorizes staff to use the IRS rate, preventing the need to come back with resolutions each time the rate is amended.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VOTE: (main motion as amended) YES. WYTHE, CHESLEY, NOVAK, HEIMBUCH, ROBERTS

Motion carried.

F. Resolution 08-23, Of the City Council Amending the City of Homer Procurement Policy and Procedures Manual, Business Travel Procedures, Travel Expense Report and Travel Report Narrative Per Diem Allowance for Meals and Incidentals from $53.00 Daily to $58.00 Daily. City Clerk. Recommend adoption.

Mayor Pro Tempore Novak called for a motion for the adoption of Resolution 08-23 by reading of title.

WYTHE/ROBERTS – SO MOVED.

WYTHE/ROBERTS - MOVED TO AMEND THE TITLE BY STRIKING “FROM $53.00 DAILY TO $58.00 DAILY”.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

WYTHE/ROBERTS – MOVED TO AMEND THE SECOND WHEREAS TO DELETE “INCREASE FROM $53.00 DAILY TO $58.00 DAILY” AND REPLACE WITH “THIS IS AN ALLOWANCE THAT IS REVIEWED AND AMENDED ON A PERIODIC BASIS BY THE IRS”.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

WYTHE/ROBERTS - MOVED TO STRIKE THE THIRD WHEREAS.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

WYTHE/ROBERTS – MOVED TO AMEND THE NOW THEREFORE BE IT RESOLVED TO STRIKE EVERYTHING AFTER “INCIDENTALS” AND REPLACE WITH “SHALL BE SET AT THE RATE ESTABLISHED BY THE IRS AS REVIEWED AND AMENDED ON A PERIODIC BASIS”.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VOTE: (main motion as amended) YES. ROBERTS, WYTHE, CHESLEY, NOVAK, HEIMBUCH

Motion carried.

COMMENTS OF THE AUDIENCE

Leonard Wells, city resident, questioned the per diem rates and whether IRS based their rates where travel occurs? He asked if voters for the March 25^th election will receive an explanation that the $8M for bonds will not be the entire cost of the project and they may be asked later to spend more for Town Center? He questioned if the financial condition of the City is in such good shape, why hasn’t Council cut tax rates in levies in the past? He asked if other Council members would have input at putting the statement in the newspaper? He commented to increase the ISO rating Council could consider de-annexing some properties making them much closer to services.

Stan Anderson, Homer resident, supports a resolution from City Council calling for impeachment hearings in Congress. An inquiry is needed to restore public faith and ensure the government will follow its own laws. The officials took an oath and pledged support of the Constitution, yet powers have been abused by Cheney and Bush. Mr. Anderson referenced Bill Moyers Journal or Cheney’s Law as reading material. He looks for Council to defend the Constitution, as Congressman Don Young will not.

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans was not present.

COMMENTS OF THE CITY CLERK

City Clerk Johnson thanked Council for a lot of work done.

COMMENTS OF THE CITY MANAGER

City Manager Wrede thanked Council for their nice work.

COMMENTS OF THE MAYOR

Mayor Pro Tempore Novak is happy Council addressed issues of commercial water/sewer rates. Although it may not be a perfect model, it is a great improvement with a lot of continuity. Once customers have reviewed the model and seen their bills hopefully we will get supportive response from customers in the future.

COMMENTS OF THE CITY COUNCIL

Councilmember Wythe is excited about the sale of the library building and the pending pay down of the new library loan; it is a unique opportunity and could not come at a better time financially. She thanked everyone that came out today regarding water rates. One question that resounded through the rate discussion was, “why is our water rate so high?” Homer has an expensive system for water and sewer, a decision that was made many years ago when we upgraded to our sewer system. There are few users on the water system, creating an individual rate burden that is high. To compare rates with Kenai, Soldotna, Seward and Anchorage is an inaccurate comparison. Density of population and neighborhoods cost less to provide water to than spreading out the service to one-acre lots. The best thing that can happen in Homer is what people least like, to develop density, infilling, downtown structures, more people using the existing structure, as opposed to building more. Until more people are on the existing structure there is not a viable way to bring rates down. Councilmember Wythe is excited to be moving along with Town Center. City Manager Wrede spoke on the financial condition of the City. There are pockets of money available for use on the project or other projects of a similar nature. It doesn’t mean our financial condition can be ignored. We need to remain cautious in maintaining reserve, and funding for depreciation. If there is a mill rate established at an appropriate level, the growth of the community and relative property value increases will support your community for a long time without having to raise or lower property taxes. Some years there will be more revenue to fund depreciation and reserves, other years when construction or infrastructure is needed there is a pot of money to draw on. Many areas in the City need remodel or reconstruction replacement. The items go on the CIP (Capital Improvement Plan) list on a continuing basis, and are seldom removed unless completed. Over a number of years there are a variety of buildings on the CIP. It is Council’s goal before the end of the year to view the CIP and criteria for placing projects on it. As to Leonard’s question about making personal statements, the Council is not bound by not supporting certain activities. We are bound to not use the City’s money to support a position, but as individuals can make comments we feel are a benefit to projects that are of great interest to us. We cannot use our title as councilperson. That is the reason Mrs. Wythe brought the requested statement to the Council to get support. She would never go out with a personal opinion without coming to the Council as a whole, nor would anyone seated at the table.

Councilmember Chesley thanked Council for adopting Resolution 08-16 and asked the Clerk to forward to Representative Seaton’s office as soon as possible. He asked if Mayor Pro Tempore Novak could sign the resolution in Mayor Hornaday’s absence.

Councilmember Heimbuch agreed with Councilmember Wythe all night long, which is pretty unusual in itself until she started talking about her philosophy of property tax. He does not have the energy to discuss it, as after 3 ½ hours of the way he feels it is best captured in the words of the old song, “Don’t it Make You Want to Go Home”.

Councilmember Roberts read in the City newsletter there were several new volunteers at the Fire Department. She welcomed them and thanked them for volunteering, stating it was an important community thing. She said although the people that testified tonight may not know it, the Finance Department needs a thank you for all the work they did on the water model. They worked really hard to make the model easy to understand. The Lease Committee minutes were in the packet for the first time. She supports the Lease Committee for being more transparent and public. It is frustrating to some people in the community and she thanked them for getting organized in that way.

There being no further business to come before the Council the meeting was adjourned at 10:36 p.m. by Mayor Pro Tempore Dennis Novak. The next Regular Meeting is scheduled for Monday, February 25, 2008 at 7 p.m. and the next Committee of the Whole is scheduled for Monday, February 25, 2008 at 4 p.m. A Joint Worksession with Advisory Bodies is scheduled for Monday, February 25, 2008 at 5:30 p.m. All meetings scheduled to be held in the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

______________________________

JO JOHNSON, CMC, CITY CLERK

Approved: _____________________