Session 02-05, a Regular Meeting of the Homer City Council was called to order at 7:31 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 4:14 to 5:22 p.m. and discussed the regular meeting agenda, the survey question development the City's project list.

PRESENT: COUNCILMEMBERS: CUE, FENSKE, LADD, MARQUARDT, YOURKOWSKI.

ABSENT: COUNCILMEMBERS: KRANICH (Excused)

STAFF: CITY MANAGER DRATHMAN

DEPUTY CITY CLERK BENSON

FINANCE DIRECTOR BAUGH

CITY PLANNER TUCKER

PUBLIC WORKS DIRECTOR MEYER

FIRE CHIEF PAINTER

HARBORMASTER DEAN

POLICE OFFICER SHEALY

AGENDA APPROVAL

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

APPROVED BY CONSENSUS. Add Resolution 02-20 Agenda to Item #14, Resolutions, Item A

Add Marquardt Juneau Trip Report Under Item #7, Item F.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

There were none.

RECONSIDERATION

There were 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 regular meeting unapproved minutes of February 25, 2002. Recommend approval.

B. Ordinance 02-08, Of the City Council of Homer, Alaska Amending Homer City Code Section 1.05.010 City Boundaries Designated. City Manager. Recommend adoption for first reading and introduction and Public Hearing on March 26th if Council approves the meeting date change, Second Reading on April 8th.

C. Ordinance 02-09, Of the City Council of Homer, Accepting and Appropriating a Grant of $20,000.00 from the State of Alaska Department of Fish and Game for the Fish Waste Grinding and Disposal System and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Recommend adoption for first reading and public hearing and second reading for March 25/26, 2002.

Memorandum from Port/Harbor Director as backup.

D. Resolution 02-17, Of the City Council of Homer, Alaska Recognizing the Contributions of the Volunteers of the Homer Volunteer Fire Department in 2001. City Manager. Recommend adoption.

E. Resolution 02-18, Of the City Council of Homer, Alaska Requesting that the Alaska Board of Fish Review Their Decision to Reduce the South Central Alaska Resident Harvest Limit for King Salmon. Yourkowski. Recommend adoption.

F. Memorandum 02-12, from City Clerk, Re: Second Regular Meeting of March to be held on Tuesday March 26th instead of Monday, March 25th, Seward's Day. Recommend approval.

G. Memorandum 02-15, from City Manager, Re: Permission to Construct Barge Facilities. Recommend approval.

FENSKE/LADD - MOTION FOR ADOPTION OR APPROVAL OF THE RECOMMENDATIONS OF THE CONSENT AGENDA AS READ.

VOTE: YES: FENSKE, LADD, YOURKOWSKI, MARQUARDT, CUE

Motion carried.

VISITORS

ANNOUNCEMENTS/ PRESENTATIONS/ BOROUGH REPORT/ COMMISSION REPORTS

Representative Drew Scalzi reported on the State's fiscal budget and answered questions from the council. He thanked the Council for their support on Resolution 02-20. Representative Scalzi provided a one-page handout to the council and the public explaining the proposal to balance the budget and augment the CBR (Constitutional Budget Reserve). The following taxes will assist in balancing the budget; a) a 4% flat income tax has been adopted which should raise about $180 million, b) 10 a drink, an alcohol tax increase, would generate about $30 million and c) a cruise ship passenger tax at $30 a head will generate about $30 million. In addition the POMV (Percent of Market Value) calculation on the Permanent Fund and Earnings Reserve starting at a 7% calculation and going to a 6% in FY 05, then back to 5% after that will be tapped. Monies from the permanent fund would be divided 50/50; 50% to the General Fund and 50% for the dividend checks. Over a period of time the dividend check will go from what it currently is and level out at about $1000 to $1100 according to Department of Revenue calculations. This plan would save the PFD (Permanent Fund Divident) for future generations and implement an income and other taxes to supplement the deficit in the CBR, which has been used to fill the budget gap over the last 6 or 8 years. He concluded by saying that if we don't augment the CBR in this way, first thing to go would be the permanent fund.

Representative Scalzi addressed Resolution 02-18 saying he was glad to see it and supports asking the Board of Fisheries to rescind action on the 5 king salmon per year limit. He advised that he has 7 bills relating to fisheries alone, in addition to others, two of which may not go anywhere. Representative Scalzi touched on the following legislation that he has:

• Two house bills that may not go anywhere - he talked about changing the designated seats on the Board of Fisheries and conflict of interest laws.
• HB 286 and HB 288, are related to fishery buy-backs and will give the fishermen new latitude in making changes in different areas of the state and help them survive during the low salmon prices. This will allow fishermen to buy-down their permits and consolidate their efforts.

• HB 287, deals with loan refinancing and strengthens the state's position on commercial fishing licenses. Right now the IRS (and others) call the license property and can attach them with liens. The State maintains they are not property, they are an occupational license. The only agencies that will be able to lien a commercial fisheries entry permit will be SEAFAB, the Alaska State Loan Program and the Child Support Division.
• HB208, pertains to Mariculture. $250,000 is now provided to Fish & Game to locate sites that are not in conflict and then they are put up for bid at auction. He advised that this has a lot of potential and gave an example.
• HB216 pertains to the emergency authority on fish and game management. It clarifies the departments position and the Board of Fish's decision. In the situation where there are mandatory 48 hour closures it gives the Dept of Fish & Game no opportunity to open that fishery should a run of reds or pinks (salmon) show up. This bill allows that under certain circumstances where there is a harvest that would go un-managed and unharvested, the Dept. of Fish and Game may make that authority.

Regarding local issues, Representative Scalzi felt that reconstruction of East End Road would weigh heavy on some of the businesses in that area. He voiced the importance of the City and State making sure that DOT (Dept of Transportation) uses the best application in the management of keeping the road open.

Regarding budget cuts, Representative Scalzi advised that the caucus has requested a 5% budget cut of the Department of Natural Resources, the Department of Environmental Conservation and the Department of Fish and Game. That's roughly a million dollars. In DNR, the million dollar cut will come out of Parks. In DEC, the million dollar cut will come out of restaurant inspections and in ADF&G, a million dollar cut will come out of subsistence which may change to habitat.

Representative Scalzi then stood for questions.

The council asked about a house bill regarding differential tax on properties. He advised that this bill passed out of Community & Regional Affairs and has not passed the house however he did not see a problem. The council voiced appreciation that there is no sales or property tax being considered. The council voiced concern that the fisheries bills might not be supporting the small boat fisheries and hoped that Homer's fleet is looked after. In regard to Mari-culture the council advised that local public input recently showed residents were not in support of on-bottom fisheries. Council voiced concern that DEC has been cut to the bone and hopes it isn't cut any further, so the timber industry can be tended properly.

Representative Scalzi assured council that the buy-back house bills are strictly for the small boat. The current buy back program requires buying everything that goes along with the operation. The new bill would allow buying back just the permits. He advised that by statute it's mandatory to have a buy-back program and that the industry pays for it. He addressed Mari-culture saying that it may not be applicable in this area, however it would be in other areas of the state. He added that he felt sales tax needed to be addressed and had a gross receipts bill out which was found with disfavor.

Council asked if the flat tax (the 4% income tax) was removed, would the permanent fund cover the debt? Representative Scalzi felt it would, clarifying that in that case it would substantially reduce the permanent fund check. He guesstimated that the checks could be approximately $500. Council asked leading questions saying that if the flax tax was removed and the checks reduced, then the permanent fund income would not be taxed. Representative Scalzi agreed.

Council voiced dissatisfaction on the present formulas for human services and education on allocation and distribution of those resources. Representative Scalzi advised that he is supportive of cost differentials and agreed that the current formula is not fair to the Kenai Peninsula Borough.

Representative Scalzi advised that a lot of people are saying that the income tax is important so that the out of state employees will have to contribute. He advised that this percentage is about 9-11%.

The presentation was concluded with appreciation expressed by the council to Representative Scalzi for allowing the legislature to vote their conscience on annexation.

A. Yourkowski Juneau Trip Report

B. Ladd Juneau Trip Report

C. Mayor Juneau Trip Report

D. Special Recognition of the Achievements of Fire Chief Bob Painter

Mayor Cushing presented Fire Chief Painter with a certificate from the National Fire Academy commending him for earning the esteemed title "Executive Fire Chief". Mayor Cushing read the contents of the certificate into the record. Fire Chief Painter was applauded. Fire Chief Painter gave a brief summary of the 4 year commitment to meet high standards and sustain the rigorous training required to earn that title.

E. Certificate of Achievement for Excellence in Financial Reporting.

Mayor Cushing presented Finance Director Baugh with a plaque presented to public employees who achieve the highest standard for government accounting and financial reporting. Mayor Cushing read the inscription on the plaque into the record. Mayor Cushing added that this plaque is one of many for the city and thanked Finance Director Baugh for the good work.

• Marquardt Juneau Trip Report (Added under Agenda Approval)

Mayor Cushing called for a recess at 8:22 p.m. and reconvened the meeting at 8:32 p.m.

PUBLIC HEARING(S)

A. Ordinance 02-06, Of the City Council of Homer, Alaska Accepting and Appropriating Amendment No. 01 to the Alaska Department of Community and Economic Development, Community Development Block Grant for the South Peninsula Women's Services Renovation/Addition Shelter Project in the Amount of $36,752.00 for the Installation of an Elevator/Lift and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Fiscal Note: Revenue and Expenditure Acct. 151-729, pass through grant additional $36,752.00 for a total grant of $106,752.00. (First Reading 02/25/02, Public Hearing 03/11/02, Second Reading directly after public testimony.)

NO ONE TESTIFIED.

YOURKOWSKI/CUE - MOVE FOR THE ADOPTION OF ORDINANCE 02-06 FOR SECOND AND FINAL READING BY READING OF TITLE ONLY

The maker of the motion felt that this is a great organization. He pointed out it is a needed service and something the City of Homer gladly does for the whole area. Public Works was congratulated on their financial frugality and quality of workmanship on this project.

VOTE: YES: CUE, FENSKE, LADD, YOURKOWSKI, MARQUARDT

Motion carried.

B. Ordinance 02-07(A), Of the City of Homer Amending Sections 21.36.030 & 21.42.010 of the Homer City Code to Modify the Zoning Process at the time of Annexation. City Manager. (First Reading 02/25/02, Public Hearing 03/11/02, Second Reading 03/26/02).

NO ONE TESTIFIED.

ORDINANCE(S)

CITY MANAGER'S REPORT

A. City Manager's Report

City Manager Drathman read the commendation memo from Harbor Master Steve Dean to Harbor Officer Matt Clarke regarding his actions in circumventing an almost certain fatality by rescuing a man out of the harbor who had been in the water for an extended period of time. City Manager Drathman thanked Pat Evarts for bringing attention to the need for a streetlight at a school bus stop. It's now been installed by Homer Electric Association. He also shared some of the training he attended on Friday at the Emergency Procedures meeting sponsored by the Kenai Peninsula Borough Emergency Services Director and the State Emergency Coordinator. He described some of the drills and scenarios they were given to deal with. They were introduced to a new concept called MACS (Multi Agency Coordinating) groups. City Manager Drathman apologized to the council for not including in this packet a status report of all that public works is doing; it will be included in the next packet. He added that it's a pretty impressive list. City Manager Drathman requested a special meeting of the city council be scheduled for Monday, March 18^th at 12 noon to hold an execute session to discuss offers of settlements on two lawsuits. He projected that it would last for about an hour. There was no objection to the special meeting.

B. Game permits

COMMITTEE REPORT

Councilmember Marquardt reported that the Parking Task Force met last Tuesday and were tasked by the Planning Director to come up with solutions for some of the parking problems around town. He felt they are making good progress; the members are enthusiastic about their rolls and good things will come of it. They received good public input that was helpful. He encouraged the public to participate and announced that the meetings are held every other Tuesday.

PENDING BUSINESS

A. Memorandum 02-10, from City Manager, Re: Sportsman Marine Supply, Inc. Consent to Assignment for Security Purposes. Postponed on 2/25/02 for City Manager clarification, Main motion for the approval of the recommendation is on the floor.

Councilmember Yourkowksi advised that his concerns were addressed by the City Manager and he supports this memorandum.

Recommendation: Authorize the City Manager to execute the appropriate documents.

Adopted by unanimous consent.

NEW BUSINESS

None.

RESOLUTIONS

• (Added under Agenda Approval) Resolution 02-20, A Resolution of the City Council of Homer, Alaska, Supporting a Long Range Fiscal Plan This Year That Ensures a Stable Future for All Alaskans By Promoting Affordable State and Local Tax Levels and Adequate State and Local Services. Fenske.

FENSKE/CUE - (Main motion)MOVE FOR THE ADOPTION OF RESOLUTION 02-20 BY READING OF TITLE.

Councilmember Fenske announced that AML (Alaska Municipal League) is the origin of this resolution and it speaks to the fact that the constitutional budget reserve is finite and depleting quickly. He felt we needed to encourage the legislature to come up with some recommendations specifically addressing long range planning this year. Councilmember Cue felt that it's time for the residents of Alaska to start giving back to the State and one way to do that is to support affordable state and local taxes. She added that while taxes are not popular, they are a method of providing necessary services to the people who live in this state citing public health and safety as two important services. Councilmember Ladd stated that we have to do something, the question is 'where do we do it' and 'where does the money come from'. He commented on the interpretations of 'affordable' and 'fair'. He did not support endorsing a blanket statement saying we support and promote affordable state and local tax levels. He questioned what type of tax is being promoted. He pointed out that over the past several years the state has not been able to have a balanced budget without funding from the CBR (Constitutional Budget Reserve). He felt that the state has to get out of this mode of operating and suggested demanding that the state have a truly balanced budget this year.

LADD/ - MOTION TO PROPOSE AN AMENDMENT THAT THE TITLE BE CHANGED AND THE FOURTH LINE BE STRUCK; IN THE FIFTH LINE THE 'AND' BE STRUCK AND INSERT 'ADOPTING A BALANCED BUDGET SUPPORTING' ADEQUATE STATE AND LOCAL SERVICES; TAKING OUT THE 'AFFORDABLE STATE AND LOCAL TAX LEVELS'.

Died for lack of a second.

LADD/MARQUARDT - (Primary amendment) MOTION TO AMEND AFTER NOW, THEREFORE BE IT RESOLVED TO STRIKE 'BY PROMOTING AFFORDABLE STATE AND LOCAL TAX LEVELS AND ADEQUATE' AND INSERT 'ADOPTING A BALANCED BUDGET SUPPORTING'.

The mayor stated that it will now read: ' NOW THEREFORE BE IT RESOLVED THAT THE HOMER CITY COUNCIL SUPPORTS A LONG RANGE FISCAL PLAN THIS YEAR THAT ENABLES A STABLE FUTURE FOR ALL ALASKANS BY ADOPTING A BALANCED BUDGET, SUPPORTING STATE AND LOCAL SERVICES.

There was concern voiced in not defining the type of tax. Without the word 'taxes' included, the intent of protecting state and local services and adopting a fiscal plan that avoids a fiscal crisis in 2004 remains the same. There was an understanding of the ambiguities in the language but that there would still have to be specifics, and that 'adopting a balanced budget' sounded like saying to just continue with the status quo. Revenue raising measures other than taxes and balancing the budget prior to raising revenues was discussed. It was pointed out that this resolution does not address other revenue sources and advocates taxes.

Consensus of the council to amend the amendment to read: MOTION TO AMEND WILL NOW BE, NOW THEREFORE BE IT RESOLVED THE HOMER CITY COUNCIL SUPPORT A LONG RANGE FISCAL PLAN THIS YEAR THAT ENSURES A STABLE FUTURE FOR ALL ALASKANS BY PROMOTING AFFORDABLE STATE AND LOCAL TAX LEVELS CONSIDERING ALL FORMS OF STATE REVENUE AND PROVIDING ADEQUATE STATE AND LOCAL SERVICES.

Primary amendment carried by unanimous consent.

LADD/MARQUARDT - (Secondary amendment) MOTION TO INSERT THE SAME LANGUAGE INTO THE TITLE.

Secondary amendment carried by unanimous consent.

The title will now read: A RESOLUTION OF THE CITY COUNCIL OF HOMER, ALASKA, SUPPORTING A LONG RANGE FISCAL PLAN THIS YEAR THAT ENSURES A STABLE FUTURE FOR ALL ALASKANS BY PROMOTING AFFORDABLE STATE AND LOCAL TAX LEVELS CONSIDERING ALL FORMS OF STATE REVENUE AND PROVIDING ADEQUATE STATE AND LOCAL SERVICES.

Main motion(twice amended) carried by unanimous consent.

COMMENTS OF THE AUDIENCE

No one commented.

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans was present by phone if needed.

COMMENTS OF THE CITY CLERK

Deputy Clerk Benson had no comment.

COMMENTS OF THE CITY MANAGER

City Manager Drathman thanked City Planner Zak Tucker for his long hours of work on a sense of direction for the City and for his attendance at the council meeting.

Mayor Cushing asked to SUSPEND THE RULES to allow School Board Vice President, Deb Germano to address the council. Approved by unanimous consent by the council.

Ms. Germano voiced support and thanked the council for passing Resolution 02-20. She expressed concern regarding 'what is adequate' and what is adequate funding in the State of Alaska. She hopes the state comes to a conclusion. She disagreed with Councilmember Ladd on his discussion regarding balancing the budget because that is arguable as well. She encouraged everyone in the state to pick up the AML resolution and move it on.

COMMENTS OF THE MAYOR

Mayor Cushing had no comment.

COMMENTS OF THE CITY COUNCIL

Councilmember Cue addressed Ordinance 02-08 which amends the city boundaries. She recognized the contentious response to the annexation process and added that she firmly believes that the City and the Council conducted the entire process according to the established standards set out by the State Constitution and the Local Boundary Commission. She recognized the need for healing within the community. She invited and encouraged new and current citizens to become involved in the community and the transition process. Councilmember Cue acknowledged Mayor Cushing's discussions on increasing representation of new citizens on committees and commissions and she again encouraged people to become involved. Councilmember Cue addressed the categorization of the initial 25 acres petitioned to be annexed as a "land grab". She felt this was unfair and failed to take into account the rate of growth in this community over the past 10 years and into the future over the next 10-20 years. She also understood that maybe the people who used this categorization had their own political agendas and did not understand what has taken place in council meetings, on the radio and in the newspapers over the past two year. She further felt the reasons why the 25 square mile area was proposed originally were also not understood. She felt that future councils and administrators will be dealing with some of the same issues that have been dealt with over the last two years. Her opinion was that the issues will not go away because of the 4 square mile annexation.

Councilmember Yourkowski thanked the council for passing Resolution 02-18, asking the Board of Fish to review it's King Salmon limit proposal. He added that it's questionable whether the Board of Fish has the authority to regulate an international mixed stock fishery and they're proposing quite a change for this community in the winter.

Councilmember Fenske appreciated Councilmember Yourkowski's comments. He gave an example to explain his comment that the fisheries is on a learning curve. He explained that initially pen-raised salmon were purported to not be able to survive in the wild and now they're showing up in streams worldwide. He felt there is a lot that needs to be addressed in these areas. He thanked council for moving Resolution 02-20 forward adding that it's a better document than was initially presented. He addressed Ordinance 02-07(A) encouraging everyone to read the whereas's which addresses everybody being on board on what's going to happen in the next year or so. He thanked the City Planner for his effort and knowledge and appreciated his learning curve which is increased by the fact that he's never lived here before.

Councilmember Ladd thanked the City Manager for Memorandum 02-15, for working cooperatively with a local business to further develop facilities on the spit. He felt this is a partnership in which both come out a winner. He thanked City Manager Drathman for working with Gates Construction and bringing this to the council. Regarding Resolution 02-20, Councilmember Ladd reiterated; that it is important that we have a balanced budget; that he does not support taking money from the savings account; that it's important that we fund other sources of revenue and that he does not support balancing the budget using taxes only. He addressed the debatable definitions of "adequate" "fair" and "affordable". He felt that "adequate" funding of education on the Kenai Peninsula is not adequate. He wasn't sure that the allocation and distribution of educational funding in the state is appropriate to begin with. He felt we should look at the formula's and look at issues in terms of revenue measures, that when we do we will be a better state in the end.

Mayor Cushing announced the start of a series of transition meetings on the annexation. The council will be available for public input on political issues and the staff will be taking input from the public on the technical issues. The meetings and times will be announced in the media.

ADJOURNMENT

There being no further business to come before the Council the meeting was adjourned at 9:22 p.m. The next regular meeting is scheduled for Tuesday, March 26, 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 March 26, 2002, in the Homer City Hall Council Chambers. There will be a Special Meeting next Monday, March 18^th, 2002, at noon.

_____________________________________

DEENA BENSON, DEPUTY CITY CLERK

Approved: ____________________________