Session 02-12, a Regular Meeting of the Homer City Council was called to order at 7:36 p.m. by Mayor Jack Cushing at the Homer City Hall Council Chambers located at 491 E Pioneer Avenue, Homer, Alaska, and opened with the Pledge of Allegiance.

The Council's Committee of the Whole met from 4:05 p.m. to 5:06 p.m., the regular meeting agenda items and the development of City wide survey questions were the items of discussion.

PRESENT: COUNCILMEMBERS: CUE, FENSKE, KRANICH, YOURKOWSKI

STAFF: CITY MANAGER DRATHMAN

CITY CLERK CALHOUN

FINANCE DIRECTOR BAUGH

CHIEF OF POLICE ROBL

PUBLIC WORKS DIRECTOR MEYER ACCOUNTING SUPERVISOR VAUGHN

ABSENT: COUNCILMEMBER: MARQUARDT, LADD (excused)

AGENDA APPROVAL

(Addition of items to or removing items from the agenda will be by unanimous consent of the Council. HCC 1.24.040.)

The agenda was approved by consensus of the Council with the following changes: Substitute Resolution 02-38(S) with backup memorandum from Public Works, Correct account number on Resolution 02-40 is 100.4503.030, Correct date on last line of the minutes, page 17 is June 24. Audit Documents, delete Ordinance 02-29 and Marquardt Resolution 02-43.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

There were no public comments.

RECONSIDERATION

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 regular meeting unapproved minutes of June 10, 2002. (correction page 17, change date from June 10, last line, to June 24, 2002). Recommend approval.

B. Ordinance 02-27, Of the City of Homer Amending Homer City Code Chapter 13.04, Concerning Definitions for Standard Construction Practices, Amending Section 13.08.010 Concerning the Applicability of Chapter 13.08, and Repealing in Entirety Sections 13.40.010 through 13.40.320 and Reenacting a New Section 13.40.010 Concerning Standard Construction Specifications. City Manager. Recommend introduction, Public Hearing and Second Reading on Tuesday, July 9, 2002.

C. Ordinance 02-28, Of the City Council of Homer, Alaska Amending Section Three of Ordinance 02-21(S), Regarding Zone Two Mill Rate. City Manager. Fiscal Note: Cost to the City is $324.09. Recommend Introduction and Public Hearing and Second Reading on July 9, 2002.

Memorandum from City Manager as backup.

Pull from the agenda under agenda approval. D. Ordinance 02-29, Of the City Council of Homer, Alaska, Accepting and Appropriating a State of Alaska Department of Health and Social Services Division of Public Health Grant for Tobacco Enforcement Program in the Amount of $5,500.00, and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Recommend Introduction and Public Hearing and Second Reading on July 9, 2002.

Not submitted pull with Ordinance 02-29. Memorandum from Chief of Police as backup to be submitted by meeting time with substitute Ordinance.

E. Resolution 02-37, Of the Homer City Council Amending the Mill Levy for Calendar Year 2002 for Zone 2, Set by Resolution 02-36(S) from 3.625 to 3.62. City Manager. Fiscal Note: Cost to the City is $324.09. Recommend adoption.

Memorandum from City Manager as backup.

Substitute submitted under agenda approval. F. Resolution 02-38(S), Of the City Council of Homer, Alaska Awarding the Contract for the Forest Glen and Harrington Heights Subdivisions’ Water and Sewer Improvements to the firm of Herndon Construction, LLC, of Seward, Alaska in the Amount of $589,699.48 for Forest Glen and $690,300.52 for Harrington Heights for a Total of $1,280,000.00 and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Fiscal Note: Project Acct: 215.817 and 215.819, HAWSP, Loan money and Property Owner Assessments. Recommend adoption.

Substitute submitted under agenda approval. Memorandum from Public Works as backup to be submitted by meeting time with substitute Resolution.

G. Resolution 02-39, Of the City Council of Homer, Alaska, Authorizing the Participation of the Elected Officials of the City of Homer, Alaska, in Addition to its Participating Employees and Officials, in the PERS of Alaska and the Payment of Retirement Premiums, Pursuant to AS 39.35 et seq. and Authorizing the City Manager to Execute the Appropriate Documents, Including Taking the Necessary Steps to Enroll the Elected Officials. City Manager. Recommend adoption.

H. Resolution 02-40, Of the City Council of Homer, Alaska Approving and Accepting the Renewal of the Jail Service Contract with the State of Alaska in the amount of $334,003.04 and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Fiscal Note: Revenue budgeted in Acct. 100.4503.030, corrected on Resolution. Recommend adoption.

I. Resolution 02-41, Of the City Council of Homer, Alaska, Approving and Accepting the Renewal of the Agreement for Joint Use of Equipment and Facilities for the Community Schools Program in the Amount of $5,000.00 and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Fiscal Note: Budgeted in Account 100.5812.350. Recommend adoption.

J. Memorandum 02-32, from City Clerk, Re: Request to Reschedule July 8th Committee of the Whole and Regular Meeting to Tuesday, July 9th. Recommend approval

CUE/KRANICH - MOVED FOR THE ADOPTION AND/OR APPROVAL OF THE RECOMMENDATIONS OF THE CONSENT AGENDA AS READ.

VOTE: (excluding Ordinance 02-29) YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VISITORS

A. Auditor Presentation and Report. John Bost, Mikunda, Cottrell and Company.

John Bost, Mikunda Cottrell the City’s Auditor, stated that 2001 is the best year the City of Homer has had since they have been the City’s Auditor, four years. He cited fiscal history and reviewed the Management Letter and suggestions with the Council.

Ø Overall, equity increased by 1.9 million, in 2000 it was 1.5 million, in 99 a little over 900,000. In 1998 overall there was a $63,000 loss.

Ø Port/Fund increased equity by 1.1 million as compared to $331,000 in 2000.

Ø General Fund lost equity of $221,000 compared to a $426,000 profit in the 2000. $527,000 was budgeted as a loss. Therefore, was $306,000 better than projected.

Ø CIP funds increased equity by $456,000, a $100,000 increase over 2000.

Ø Water fund increased equity by $235,000, much the same as 2000.

Ø Sewer fund increased equity by $549,000 as compared to $682,000 in 2000.

Ø Risk Management lost $184,000 as compared to a loss of $164,000 in 2000.

Ø $60,000 were transferred out of the non expendable trust fund for the Library.

The advance monies on the Small Boat Harbor Project and grant advances have allowed the Port to generate some healthy investment income. All the enterprise funds are funding depreciation after all operating costs. The comments in the management letter are related to software issues. He noted that the City is considering different software that should address these issues. He pointed out that the auditor recommendation on the capital project fund grant activity is to place those non capital items, that are operating type grants, in the general fund or in a special revenue fund. There are a lot of

grants being accounted for in the capital project fund grant that, technically, should not be. He noted that the main

concern is to ensure that the grants do not lapse. The fixed asset matter is probably one of change over and should be addressed with GASB 34, wherein all general fixed assets are depreciated. The capital project accounting is an in house issue and the detail should be maintained.

There was a very brief question and answer period. Mr. Bost expressed his opinion that combining the sewer and water enterprise funds is a good idea, no accountability is lost and is more efficient. He elucidated the accounting basics. He emphasized that the internal controls, cash disbursements and receipts were all tested and came out good.

Finance Director Baugh noted that as of January 1st Finance began combining the water and sewer funds as were combined in the 2002 Budget.

Mayor Cushing commended the management staff for the good review by the auditor.

ANNOUNCEMENTS/PRESENTATIONS/ BOROUGH REPORT/COMMISSION REPORTS

Mayor Cushing reported on the UAA sponsored, Writer’s Workshop. Every night there are open readings and receptions providing an opportunity to meet the various writers as well as hear some of the readings. There are a lot of new and familiar faces in town. Mayor Cushing stated that he, acting on the Council’s behalf, and the UAA Chancellor welcomed the Writers’ group to town. He advised the Council that he and the Chancellor had an opportunity to discuss the presence of the university in Homer, one of Council’s high priorities.

He informed the Council and the public, interjecting that this is one of his fun things to do, regarding the Coastal Impact Assistance Grant awards to the Southern Peninsula Area and that $3.1 million was available statewide for coastal endeavors. He stated that this was supposed to be deliberated upon and voted by the Coastal Policy Council, of which he is a member and represents the Lower Cook Inlet. He noted the following awards:

Ø City of Homer has been granted $75,000 for the implementation of the Beach Policy measures adopted by Homer City Council.

Ø Kenai Peninsula Borough awarded a mapping grant for the Southern Peninsula from Anchor Point to Kachemak Bay. Mapping coastal issues, such as bluff erosion.

Ø NERR awarded two grants, one that Carl Schoch will administer and one that Carmen Field will administer.

Ø Center for Coastal Studies education program in conjunction with the Pratt Museum.

Ø Caribou Hills, Cabin Hoppers, for pioneering new ways of protecting the vegetation from four wheelers and for hardening different areas of the muskeg. In conjunction with soil conservation service and some of the other governmental agencies in the area.

Ø Cook Inlet Keeper for water quality laboratory.

Ø Department of Fish and Game out of Anchorage received an allocation to do some further studies on the impact of off road vehicles in the Deep Creek area.

There may be further monies available so the sub committee is going to do a further ranking of the next twenty projects.

Councilmember Yourkowski announced a Town Square Committee meeting this Thursday, June 27 at 7 p.m. He also announced that he has resigned his seat on the Council effective with the certification of the election. He clarified, at the Mayor’s request, that he is in no way relinquishing his right to “run again”.

PUBLIC HEARING(S)

A. Ordinance 02-26, Appropriating $20,000 from the General Fund Fleet Reserve for the Purchase of One Used Vehicle for the Police Department. City Manager. Fiscal Note: $20,000 from the General Fund to Acct. 152.5902.382 (First Reading 06/10/02, Public Hearing 06/24/02, and Second Reading directly after public testimony.)

There was no public testimony.

CUE/KRANICH - MOVED FOR THE ADOPTION OF ORDINANCE 02-26 AS IT HAS BEEN READ FOR SECOND AND FINAL READING.

There was no discussion.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

B. Hillside Acres Sewer Improvement/Assessment District.

Greg Martin stated that he and his wife are the property owners of Lot 11A Hillside Acres Subdivision. He told the Council that it is real easy for someone to change their mind, that up until about two weeks ago he and his wife were in favor of the sewer improvements. He pointed out that when the sewer and water LID came around they signed at a 25/75 split, figuring this was a good deal and were very upset when it changed. He voiced his opinion that since this was accepted by the City it should have stayed that way or should have gotten kicked back and brought back to the property owners. He stated that now it seems that the Planning Commission, in their infinite wisdom, has decided to go against the wishes of the neighborhood and allow a trailer park to come in, even though nearly all of “us” said, “We don’t want it”. He offered that it seems like, maybe, having no sewer in there is going to make it so that it is not such a likeable place for those people to develop a trailer park. He relayed that at the last meeting “they” said that it was going to be a conditional use that “they” had to have DEC approved water and sewer. Therefore, right now, “we” don’t want it because “we” don’t want a trailer park. He voiced his understanding that “it” is going to get more expensive if “we” need it later. He stated that his sewer has passed DEC before and that he is sure that he and his wife can make sure that it is maintained to pass DEC approval.

ORDINANCE(S)

CITY MANAGER'S REPORT

A. City Manager's Report (Ice/Crane usage and delivery record, Asset Forfeitures, Campground

Fee Collections.)

B. Bid report.

City Manager Drathman thanked the campground collection crews for their work, adding that collections are up about 50% over last year, at least through May 2nd. He reported that Fire Chief Painter has advised that the Homer Volunteer Fire Department and City of Homer will be hosting the 2003 Alaska Association of Fire and Arson Investigators’ Arson Conference, April 22 through 26, 2003. He read the Fire Chief’s Memo regarding the conference into the record. He informed the Council that English Bay Corporation has made an offer to purchase up to (10,000) ten thousand cubic yards of dredge spoils for $3.00 per cubic yard.

In response to Council inquiry the Manager advised that the dredge spoils for the Ocean Drive Loop Bluff Erosion Control Project will start being used in mid August. In September there will be additional dredge spoils from the COE dredging project. In the Twenty Year Dredge Spoils Plan the dredge spoils will be trucked for free by the COE to identified parking areas/parking lot improvements on the Spit and other identified projects. He relayed the plan regarding the new dredge spoils dewatering location and process.

COMMITTEE REPORT

A. Road Standards Committee

B. Town Square Working Group

C. Beach Policy Implementation Group

D. Parking Task Force

Councilmember Fenske reported that the AML Summer Legislative Committee meetings are scheduled for July 28th in Bethel.

PENDING BUSINESS

NEW BUSINESS

RESOLUTIONS

A. Resolution 02-42, Of the City Council of the City of Homer, Alaska, Accepting the 2001

Comprehensive Annual Financial Report with Audit and Financial Statements and Acknowledging

the Management Letter submitted by the City’s Independent Auditor, Mikunda, Cottrell, & Co. City

Manager.

FENSKE/KRANICH - MOVED FOR THE ADOPTION OF RESOLUTION 02-42 BY READING OF TITLE.

Councilmember Fenske stated that it is pretty satisfying sitting on this side of the table to have the finances of the City reported in such favorable terms and conditions. He reiterated the Mayor’s comments acknowledging that the staff and management are doing a pretty good job of managing the funds for the City.

Councilmember Kranich commented that while the management letter was three or four pages long the items listed were not huge errors or omissions in procedures, these were fairly minor things and some are software changes. He voiced his confidence that the City’s accounting system is working quite well and that he is sure that these smaller problems will be taken care of and will work even better.

VOTE: YES: NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

B. Resolution 02-43, Animal Shelter Project. Marquardt.

Deleted from the agenda under Agenda approval.

COMMENTS OF THE AUDIENCE

Greg Martin, noting that he and his wife are property owners of Lot 11A of Hillside Acres Subdivision, commented that what he would like to bother the Council about is something that is going on in the Planning Commission right now. He stated that he is not sure that everyone is aware of it and voiced his belief that some of the Council have been contacted. He relayed that it seems one of the lot owners put in a request for a conditional use permit for more than one structure on a lot containing a principle use. He advised that a notice was sent to all the property owners within three hundred feet, that he believes there were six property owners signing against it and about three letters written against the permit. He stated that it just so happens that the permit application was actually changed by the next meeting after being postponed for clarification and during that time period it changed from a conditional use permit for more than one structure on a lot containing a principle use to a trailer park. He emphasized that clearly the neighborhood is not in favor of a trailer park, not even in favor of two structures on principle use. He voiced his understanding that this is a conditional use, a conditional use is not outright guaranteed just as what the zoning is for and zoning

clearly states, in the Homer City Code, what is an outright permitted use and a conditional use is not. He also voiced an understanding that they do not have covenants and that he was told that once a subdivision has been developed and people have moved in that it is nearly impossible to get covenants. He told the Council that there must be some way that “our” view of what the neighborhood should be, can be brought forward without covenants. Just because a person is asking

for a conditional use that is permitted some places in the City, just as right behind this building, which is a good place for a trailer park, but not in “our” neighborhood. Mr. Martin asserted that a trailer park is not in harmony with the neighborhood as it states on the paper work that was submitted. He encouraged the Council to ask the neighborhood if a trailer park is in harmony, they live there, and there is no one else who can say what is in harmony with their neighborhood. He voiced his hope that there is something else that can be done to stop this, adding that he filed an appeal and apparently reconsideration was issued so there will be another opportunity to comment. He urged the Council to take a look at this and see if the neighborhood has any standing. He voiced his hope that those involved and making the decision will take their opinions with some weight. Mr. Martin told the Council that he has nothing against the people, that he does not even know them, has nothing against the fact that they want to have their family living by them, but that this would set a precedence in the neighborhood. He stated that once this is allowed there is no standing to tell the next person that they can’t do it. He commented that clearly there is no property assessor, that he knows, that will not state that a trailer park will decrease property value in his neighborhood as was stated in the application. He thanked the Council for their time.

City Manager Drathman explained the appeal process and why the Council does not get involved at the Planning Commission level.

Mr. Martin voiced his assurance that the Council cares, adding that many of them have served for several years.

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans was not present.

COMMENTS OF THE CITY CLERK

City Clerk Calhoun had no comments.

COMMENTS OF THE CITY MANAGER

City Manager Drathman updated the Council regarding the July 2nd festivities planned for the New Pioneer Dock dedication ceremony between 2 and 4 p.m. He reported that the invitation flyer, put together by Anne Marie Holen and Rachel Livingston in his office, is on the homepage at http://www.ci.homer.ak.us. He advised that Senators Stevens and Murkowski, Governor Knowles and the Commandant of the Seventeenth Coast Guard District will be in attendance. There may be an open house on the Coast Guard Cutter SPAR, which is home ported out of Kodiak and is the sister ship of the Hickory, the vessel that will be replacing the Sedge. He stated that the Council would be able to see how the new vessel will fit the dock. The Ferry will be coming and going on that same day and will be in at about 5 p.m. He wished the public to attend. He commended the staff for

putting this ceremony together, adding that they did a marvelous job. He commented that the staff has already been in the process of addressing the issues, which are minor, mentioned in the Auditor’s Management Letter. Regarding the grant funds, he reminded the Council that a few years ago there were no accounts for the grants. Most of the issues are related to the Finance Software, which is very expensive.

COMMENTS OF THE MAYOR

Mayor Cushing had no comments.

COMMENTS OF THE CITY COUNCIL

Councilmember Cue commented about the Coastal Impact Assistance funds that have been awarded to the Southern Peninsula and thanked the Public Works Director, City Manager and the Mayor.

ADJOURNMENT

There being no further business to come before the Council the meeting was adjourned at 8:37 p.m. The next regular meeting is scheduled for Tuesday, July 9, 2002 at 7:30 p.m. in the Homer City Hall Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska. The Council's Committee of the Whole is scheduled to meet at 4 p.m. on Tuesday, July 9, 2002, in the Homer City Hall Council Chambers.

_____________________________________

MARY L. CALHOUN, CMC, CITY CLERK

Approved: ______________________