Session 00-13, a Regular Meeting of the Homer City Council was called to order at 7:30 p.m. by Mayor Cushing at the Homer City Hall Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska, and opened with the Pledge of Allegiance.

A Worksession was held from 6:42 p.m. to 7:30 p.m. with the City Auditor, John M. Bost, Partner, Mikunda, Cottrell & Company.

PRESENT: COUNCILMEMBERS: WELLES, FENSKE, MARQUARDT, YOURKOWSKI, CUE

STAFF: CITY MANAGER DRATHMAN

CITY CLERK MARY CALHOUN

DEPUTY CITY CLERK BENSON

FINANCE DIRECTOR BAUGH

ACCOUNTING SUPERVISOR MACK

PORT DIRECTOR/HARBORMASTER ABBOTT

PUBLIC WORKS DIRECTOR MEYER

EXCUSED: KRANICH (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 City Council with the following changes.

Additions: Consent Agenda: Memorandum 00-40 Commission Appointments, Resolution 00-68 accepting a grant for the new dock, Resolution 00-69 Public Safety 2000 Special Services Contract.

Note: Minutes on Page 1 should read Session 00-11.

Visitors: Requested by Councilmember Marquardt. Pamela Brodie, Task Force Representative for Alternatives for Annexation.

Information: for Ordinance 00-13 a map, City Manager's Report a Letter from ADEC, Re: Legislative Appropriation/Grant Form for $72,000 for One Million Gallon Storage Reservoir Study and Preliminary Design. And a copy of Resolution 98-63 regarding the Old Intermediate School.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Laura Barton commented on the records destruction and voiced concern that no records are being destroyed that would be of interest later on for doing research on City mandated funds and etcetera. She thanked the Council for their consideration of this concern.

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 12, 2000. Recommend approval.

B. Resolution 00-61, Of the City Council of Homer, Alaska Awarding the Bid for 2000 Public Works Gravel Supply, GRVL-00, to Pit Run Plus of Ninilchik, Alaska in the amount of $8.75/CY for 2"Minus and $8.25/CY for Sand and Authorizing the City Manager to Execute the Appropriate Documents. Public Works. City Clerk. Fiscal Note: 2" Minus Gravel Acct: 100.5202.172, budgeted amount is $8,750 and Winter Sand Acct: 100.5202.174, budgeted amount is $9,840. Recommend adoption.

Memorandum from Public Works as backup.

C. Resolution 00-62, Of the City Council of Homer, Alaska Amending the Records Retention Schedule for the City of Homer Regarding Canceled Checks. Finance. City Clerk. Recommend adoption.

Memorandum from Finance as backup.

D. Resolution 00-66, Of the City Council of Homer, Alaska, Setting an Interim Zone Connection Fee of $2,500 for Extraterritorial Water and Sewer Service Connections and any other "spaghetti lines". Public Works. Finance. Council Requested. Recommend adoption.

E. Resolution 00-67, Of the City Council of Homer, Alaska Authorizing the City Manager to Purchase the Dredge Spoils Dewatering Maintenance, Trucking and Spreading from the Firm of Nehalem River Dredging Inc., of Nehalem, Oregon in the amount of $12,500.00. Port/Harbor. City Manager. City Clerk. Fiscal Note: Dredging, Acct: 400.5245.601, budged amount is $25,000. Recommend adoption.

Memorandum from Port/Harbor as backup.

F. Memorandum 00-38, from City Manager, Re: Kozak Extraterritorial Sewer Connection. Fiscal Note: Sewer Extension/Line Zone Connection $2,500 and Sewer Permit $200.Recommend approval.

G. Memorandum 00-39, from Finance Director, Re: Aurora Northern Lease Agreement. Fiscal Note: Lease rate $19,867.32 per year revenue. Recommend approval.

H. ADDED UNDER AGENDA APPROVAL: Memorandum 00-40, from Mayor, Re: Appointment of Mary Lentfer and Robert Rosenfeld to the Parks and Recreation Commission and Melvyn Strydom to the Port/Harbor Commission. Recommend approval.

I. ADDED UNDER AGENDA APPROVAL: Resolution 00-68, Of the City Council of Homer, Alaska Accepting the U.S. Department of Commerce, Economic Development Administration Financial Assistance Award in the amount of $1,300,000 for the Pilings for the Pioneer Dock and Authorizing the City Manager to Execute the Appropriate Documents. Finance. City Clerk. Fiscal Note: $1,300,000 to Dock project. Recommend adoption.

J. ADDED UNDER AGENDA APPROVAL: Resolution 00-69, Of the City Council of the City of Homer, Alaska Authorizing the City Manager to Execute the 2000 Special Services Contract by and between the City of Homer and the Alaska Department of Public Safety, Alaska State Troopers. City Manager. Finance. City Clerk. Fiscal Note: $72,500 Revenue to Acct: 100.4505.030 as budgeted. Recommend adoption.

Memorandum from Chief of Police as backup.

FENSKE/WELLES - MOVED FOR THE APPROVAL OF THE RECOMMENDATIONS OF THE CONSENT AGENDA.

FENSKE/ - REQUESTED THAT ITEMS D. AND F. BE PLACED UNDER NEW BUSINESS AS ITEM B. TO BE DISCUSSED SIMULTANEOUSLY WITH A SEPARATE VOTE ON EACH.

Councilmember Yourkowski thanked Mary Lentfer, Robert Rosenfeld and Melvyn Strydom for their willingness to serve on Commissions. He pointed out that Commissioners are needed for the Planning Commission and encouraged the public to contact the Mayor if interested in serving on a Commission.

VOTE:(Items A - C and E, and F - J.) YES: FENSKE, WELLES, YOURKOWSKI, MARQUARDT, CUE.

Motion carried.

VISITORS

A. Report from City Auditor: John M. Bost, Partner, Mikunda, Cottrell & Company. Letter to Management provided to the Mayor and Council.

Mr. Bost noted that the 1998 Audit still showed the downward trend of the City's financial state; however, 1999 was a much better year and 2000 looks even better. Essentially every fund did better in 1999 with the exception of the water fund. The 1999 budget projected a loss of $684,621, the actual was $312,360, making a difference of $372,261. The projected budget loss for 2000 is zero. Mr. Bost advised that in the Management letter there is a recommendation to combine the water and sewer funds to eliminate the need for separated accountings on projects and estimates on proposed projects. Combining the two funds, as most cities do, allows the City to add the water and sewer engineering, construction and related costs together. He commented on amortization of contributed capital and operating transfers. Also noted was the interest from the TORA $3.6 million that will be used on the Small Boat Harbor TORA project.

B. ADDED UNDER AGENDA APPROVAL: Requested by Councilmember Marquardt. Pamela Brodie, Task Force Representative for Alternatives for Annexation. Letter attached.

Ms. Brodie advised that on June 14th the organization, Objective Annexation Review, sponsored a luncheon forum. The Chair of this forum was former State Senator and Kenai Peninsula Borough Mayor, Don Gilman. The luncheon included people who have been involved in the annexation controversy. The purpose was to increase cooperation, communication and was geared more toward problem solving. Out of this luncheon a group of people were appointed to a Task Force or Working Group. This group was tasked to continue work on looking at government services broadly and creatively in terms of different possible ways to distribute burdens more equitable and provide services that people most want. The members appointed at the luncheon were Chris Moss, Kurt Marquardt, Mary Griswold and Pam Brodie. More members may be added in time. This group is not an elected body, although two members are elected officials. (Chris Moss - KPB Assembly and Kurt Marquardt - Homer City Council.) She emphasized that this group is committed to working cooperatively with all parties and to try to improve the situation in terms of coming up with positive solutions and building trust to lead to happier relations in the community. Currently the group plans to start meeting this Thursday, and then every second and fourth Thursday at the Borough Conference Room at 7 p.m. and these meetings will be open to the public and everyone is welcomed. She relayed that they hope to be able to cooperatively work with all of the Council and City employees.

There was a brief question and answer period with the Council.

Mayor Cushing called for a recess at 8:34 p.m., reconvening the meeting at 8:49 p.m.

ANNOUNCEMENTS/ PRESENTATIONS/ BOROUGH REPORT/ COMMISSION REPORTS

A. Mayor's Proclamation - Youth Appreciation Week - July 15 - 21, 2000

PUBLIC HEARING(S)

A. Ordinance 00-13(S), Of the City Council of the City of Homer, Alaska, Authorizing the City Manager to Purchase Lot 12-A, Bunnell Subdivision No. 17, for the Amount of $38,000 and Designating this Parcel for Public Purpose. City Manager. (First Reading and Introduction 06/12/00, Public Hearing 06/26/00, Second and Final Reading 06/26/00 - Originally the final reading was scheduled to July 10th, due to quorum matters the final reading is rescheduled to June 26, 2000.) Additional Map.

Wendy Kroll, representing Cook Inlet Keeper, testified that in the interest of protecting water quality the Cook Inlet Keeper strongly suggests extending sewer and water hook ups to Homer's more densely developed areas. The City's purchase of Lot 12 A would facilitate this effort and would also provide additional benefit for the City of Homer as well. Lot 12A lies within the Woodard Creek Watershed, which is one of Homer's few remaining urban streams. Woodard Creek flows by the South Peninsula Hospital, Karen Hornaday Park, through a residential neighborhood, past the Pratt Museum, and into the business district before it ends near Bishop's Beach. This is the largest watershed running through Homer's core and is currently experiencing a wide range of urban impacts. This watershed holds the most promise for conservation through responsible development. Ms. Kroll pointed out that the community has an opportunity to improve the quality of life within this neighborhood by taking advantage of this natural resource. She noted the beauty of this lot, that it is wooded and undeveloped and that the creek runs right through the lot. She advised that the riparian zone is healthy on both sides of the creek. Ms. Kroll reported that the Cook Inlet Keeper wants to support the effort to get water and sewer to these community members and also to preserve the riparian zone and to promote the health of this watershed at this time.

ORDINANCE(S)

A. Ordinance 00-13(S), Of the City Council of the City of Homer, Alaska, Authorizing the City Manager to Purchase Lot 12-A, Bunnell Subdivision No. 17, for the Amount of $38,000 and Designating this Parcel for Public Purpose. City Manager. (First Reading and Introduction 06/12/00, Public Hearing 06/26/00, Second and Final Reading 06/26/00 - Originally the final reading was scheduled to July 10th, due to quorum matters the final reading is rescheduled to June 26, 2000.) Additional Map.

FENSKE/WELLES - MOVE FOR THE ADOPTION OF ORDINANCE 00-13(S) BY READING OF TITLE.

Council agreed that it was necessary to preserve the special character of the Woodard Creek Watershed/drainage. Council further agreed to forward this matter to the Water and Sewer Standards Committee for comment on the development of easements and access across this drainage. There was suggestion that a member of the Cook Inlet Keeper attend a Water and Sewer Standards Committee meeting to discussion what they know about this particular watershed and how it impacts that drainage. There was brief discussion about carving the road right-of-way around the trees and preserving some of the more natural habitat in addition to the watershed.

City Manager Drathman advised the Council that there are no immediate plans for any development of this lot.

Mayor Cushing commented on the land the Museum purchased adjacent to this lot and that access is needed to the Borough sports field and additional access to the Museum. He stated that this is a great opportunity to look at a wide range of options for the comprehensive development of this area including the reason for buying this lot for the water, sewer and road.

VOTE: YES: CUE, FENSKE WELLES, YOURKOWKSI, MARQUARDT.

Motion carried.

CITY MANAGER' S REPORT

A. City Manager's Report. (Ice/Crane Time, DJ Stokes Commendation, Thank You to the SnoMads, Funding for Pioneer Dock, Legislative Appropriation/Grant Form for $72,000 for One Million Gallon Storage Reservoir Study and Preliminary Design and information on the Old Intermediate School.)

B. Bid Report, from City Clerk

C. Records Report from City Clerk

City Manager Drathman read, into the record, the Commendation of Harbor Officer DJ Stokes. He reported that he has signed the papers for the transfer of the Old Intermediate School from the Kenai Peninsula Borough to the City of Homer.

Councilmember Marquardt noted the Bypass Sewer project on the Bid Report. He asked if this was one of the project that was at the top of the CIP List and inquired about the construction schedule.

Mayor Cushing voiced his belief, without having the CIP document in front of him, that the Bypass Sewer project had been on the list.

Public Works Director Meyer briefly commented on the Bypass Sewer Project construction schedule and gave a very basic scope of work. This is the final extension from the Bypass to the Treatment Plant and follows the access road to the RV dump station. The line is being replaced in its present location.

City Manager Drathman noted the funds that have been received on the Pioneer Dock and the letter from Senator Stevens regarding the $5.8 million in the Transportation Appropriation Bill.

Mayor Cushing pointed out that the City spent money on lobbying efforts that have paid off.

City Manager Drathman reported that Hazel Avenue will be paved before the weekend. He noted the clean up work that HTI has done on the Hazel Avenue/Poopdeck Street project.

Mayor Cushing commented on the Fish and Wildlife ceremony this weekend and that Senator Stevens will be in Homer July 4th.

COMMITTEE REPORT

PENDING BUSINESS

NEW BUSINESS

A. Memorandum 00-37, from Councilmember Fenske, Re: Cancelling the Regular Meetings for the month of July and conducting a special meeting for July 31st with the Regular Agenda Items.

Recommendation: Approve the cancellation of the regular meetings of July 10 and 24, 2000 and schedule a special meeting for July 31st to contain all of the regular agenda items for the month of July.

FENSKE/CUE - MOVED FOR APPROVAL OF THE RECOMMENDATIONS OF MEMORANDUM 00-37.

Council schedules were discussed as was the need to conduct Worksessions on Annexation during the month of July.

VOTE: YES: YOURKOWSKI, MARQUARDT, CUE, FENSKE, WELLES.

Motion carried.

B. Consent Agenda Item D. Resolution 00-66, Of the City Council of Homer, Alaska, Setting an Interim Zone Connection Fee of $2,500 for Extraterritorial Water and Sewer Service Connections and any other "spaghetti lines". Public Works. Finance. Council Requested. Recommend adoption. With

Consent Agenda Item F. Memorandum 00-38, from City Manager, Re: Kozak Extraterritorial Sewer Connection. Fiscal Note: Sewer Extension/Line Zone Connection $2,500 and Sewer Permit $200.Recommend approval.

Council expressed the need to understand the formula for the connection fee, the need for a more thorough examination, the need for more information and the need for some feed back from the public. There was objection to considering another extraterritorial service before work on the fees and policy. It was noted that the line to the Kozak connection goes past other lots, making it difficult for the City to not grant these other lots access to this same 4" line.

FENSKE/CUE - MOVED TO POSTPONE MEMORANDUM 00-38 AND RESOLUTION 00-66, UNTIL THE WATER AND SEWER STANDARDS COMMITTEE HAVE A CHANCE TO MAKE A RECOMMENDATION.

Council discussed the moratorium on extraterritorial and spaghetti line connections, meaning no approval of these types of connections inside and outside of the City limits until a policy is set.

Mayor Cushing called for a recess at 9:41 p.m. during Council deliberations, reconvening the meeting at 9:51 p.m.

COUNCIL CONSENSUS TO ADD TO THE MOTION: TO THE FIRST REGULAR COUNCIL MEETING IN AUGUST (AUGUST 14TH), INCLUDE PLACING A MORATORIUM ON EXTRATERRITORIAL SPAGHETTI LINES UNTIL THE COMMITTEE COMES BACK WITH A RECOMMENDATION.

No date was set for the Water and Sewer Standards Committee meeting at this time.

VOTE: YES: WELLES, YOURKOWSKI, MARQUARDT, CUE, FENSKE.

Motion carried.

RESOLUTIONS

A. Resolution 00-63, Of the City Council of the City of Homer, Alaska Accepting the 1999 Comprehensive Annual Financial Report and Acknowledging the Management Letter Submitted by the City's Independent Auditor, Mikunda, Cottrell, & Co. Finance. City Clerk. Report provided to the Mayor and Council under Worksession.

WELLES/MARQUARDT - MOVE TO ADOPT RESOLUTION 00-63 BY READING OF TITLE.

Mikunda Cottrell, & Co. was thanked for their work on the City's 1999 Audit.

VOTE: YES: FENSKE, WELLES, YOURKOWSKI, MARQUARDT, CUE.

Motion carried.

B. Resolution 00-64, Of the City Council of the City of Homer Finding the Need to Create the Jenny Way Road Reconstruction Improvements/Assessment District and Setting a Date for Public Hearing, August 14, 2000. City Clerk.

Fiscal Note: Property Owner Share $44,700. Estimate on this project has not been updated by Public Works.

FENSKE/WELLES - MOVED ADOPTION OF RESOLUTION 00-64 BY READING OF TITLE.

It was pointed out that the property owners on this road, Jenny Way, have been asking for an upgrade for a while.

VOTE: YES: CUE, FENSKE, WELLES, YOURKOWSKI, MARQUARDT.

COMMENTS OF THE AUDIENCE.

Laura Barton began reading a letter for someone else regarding City Manager Drathman and was interrupted by Mayor Cushing who called for a recess at 10:04 p.m. to review HCC 1.24.040(n) Decorum at Meetings. He reconvened the meeting at 10:08 p.m. Mayor Cushing read HCC 1.24.040(n) into the record. He barred the reading of this letter by Laura Barton citing for reason HCC 1.24.040(n).

Ms. Barton thanked the Mayor for not shooting the messenger. She asked the Council to withdraw the annexation petition, that there is a lot to work on and voiced appreciation for their time.

Cris Ridout commented on the Crossman Ridge Responsive Brief and that he does not feel that those residents on Crossman Ridge are taking a stance in support of or in opposition of annexation. He clarified that they have some concerns and the primary intent of their document is to identify and correct some of the significant errors and misleading information implied by the City's current annexation petition. He stated that the Crossman Ridge residents believe that accurate information is essential for the Local Boundary Commission to make a viable recommendation, conditions and decisions relating to annexation, and also to assist the Council in their reply brief. He noted that the petition looks good on paper, but when applied to the actualities and realities of the annexation territory it falls short of being a credible document. He voiced an assumption that the Council will be working to make this document more credible. The current annexation petition has created some mistrust and discontent toward the City by residents of the City and the Homer area. People need to work together to identify the real issues and concerns of the City and community. People need to work together to find and implement real solutions. The Task Force, as recommended by Mr. Don Gilman, has some place to start and hopefully the City government and Homer area community will support the Task Force in helping to resolve the challenges that face the City. There is a hope that positioning and posturing will be dropped and these energies redirected to developing viable solutions that are workable, agreeable, and beneficial for all affected parties. He commented that although he might not agree with the City Council's approach and method with the annexation petition he still believes that the City Council's intentions for the City and community are good and appreciates the time Councilmembers have dedicated to the City and the community. He recalled the work that Luke Welles, Sam Matthews and some others did on the Port/Harbor rates to help make decisions in that regard as well as other projects the Council has worked on and if the community took at good look at these projects they would really appreciate what the Council has done. He noted that a lot of people, because of the annexation, have missed some of the summer, summer solstice has come and gone, but there is light at the end of the tunnel, the days will be getting longer in less than six months.

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans is on standby if he should be needed, pursuant to Contract.

Councilmember Fenske commented on the response from the Attorney regarding Mr. McCubbins and Mr. Cundiff's administrative notice. Mr. Fenske stated that his interpretation of the Attorney's letter was that he, also, did not understand what Mr. McCubbins and Mr. Cundiff were asking. If they could rephrase the question, perhaps then it could be answered.

COMMENTS OF THE CITY CLERK

City Clerk Calhoun had no comment.

COMMENTS OF THE CITY MANAGER

City Manager Drathman further commended DJ Stokes for her remarkable performance in the City work force. He thanked Laura Barton for trying to share some interesting information, being sure that the author is someone that has made major contributions to the City.

COMMENTS OF THE MAYOR

Mayor Cushing commented on the good weekend coming up. He voiced his pride of the Council for having the guts to continue dealing with public input, noting that the majority of the citizens provide really good input, are very well meaning, intelligent, decent people and willing to discuss the future of the area. He encouraged the Council to not be tainted by the few that give off the wall input and those who attack Council personally. He noted that the public has the privilege of speaking in a democratic process. He exhorted the Council to continue working in the interest of the City, noting the countless hours of time spent on these processes, from the mundane to the very important items, to the ones that have begged and asked to be addressed in different manners. The annexation issue has begged to be addressed for the last numerous years. It has now got to the point where people are informed about City finances and what one has to understand and pay attention to in order to address these issues. The financial situation will not go away. The state has made it clear for the City to address this problem while Homer is a good healthy City.

COMMENTS OF THE CITY COUNCIL

Councilmember Cue noted the mention of the fiscal health of the City. She publicly acknowledged the City Manager and all the department heads and employees who have worked very, very hard to show fiscal restraint and to manage this City very well. She asked that the Manager relay to the employees in all the departments acknowledgment of their efforts. She voiced disagreement with the public comments over the past several weeks that she has read and heard about the turn over in department heads and in staff being detrimental to City management. She voiced her concerns regarding the Woodard Creek watershed and acknowledged the Cook Inlet Keeper's ability to educate the community about this particular issue. She noted that the Mayor had mentioned that the Jenny Way Road project may impact the Woodard Creek Watershed. She asked for input from the Cook Inlet Keeper or other concerned citizens regarding this watershed at the August 14th public hearing.

Mayor Cushing interjected that when he thanks the Council for their endurance he, of course, means this to be applicable to the administration for dealing at the same level. He voiced appreciation for the many administrative overtime exempt employees and others that put in countless unrecoverable hours for the City. He recognized the amount of demand on staff regarding the annexation issue. He commented on having the privilege of observing department head's and many employee's work patterns, habits and over time hours. He reiterated his thanks to the City Administration at all levels for the amount of effort and uncompensated hours. In some cases there are some totally unjustifiable things that get stated and just like elected officials the employees have to accept it and just endure it as people's rights in democracy to say these things.

Councilmembers Yourkowski and Welles had no comment.

Councilmember Fenske stated that it seems he has made the next month and a half much more busy for some citizens of the community than what he would like to have done as far as answering these questions with the Water and Sewer Standards Committee. He thanked these individuals in advance for the time they are going to be putting in during the only summer there will be in the year 2000. He voiced his appreciation of the efforts of many in the community that are actively getting involved in this process and helping Council work it out. This job is way too big for one person and way too big for five, six or seven and it takes the whole community to put forth the effort.

Councilmember Marquardt thanked the Mayor for the kind words regarding Council's efforts. He advised that there will be a Road Standards Committee meeting this Thursday at 7 p.m. with a full agenda that anyone can get a copy of from the Clerk's Office.

ADJOURNMENT

There being no further business to come before the Council the meeting was adjourned at 10:26 p.m. The next regular meeting is scheduled for August 14, 2000 at 7:30 p.m. If the Council agrees to cancel the July 10 and July 24 Regular Meetings there would be a July 31st Special Meeting with the Regular Meeting Agenda Items. Road Standards Committee Meeting June 29th at 7 p.m.

_______________________________________

MARY L. CALHOUN, CMC, CITY CLERK