Session 07-12 a Regular Meeting of the Homer City Council was called to order on May 29, 2007 at 7:00 p.m. by Mayor James C. Hornaday at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska, and opened with the Pledge of Allegiance.

PRESENT: COUNCILMEMBERS: NOVAK, ROBERTS, SHADLE, STARK, WYTHE

ABSENT: HEIMBUCH (excused)

STAFF: CITY MANAGER WREDE

CITY CLERK JOHNSON

Councilmember Heimbuch has requested excusal.

Department Heads may be called upon from time to time to participate via teleconference.

Council met as a Committee of the Whole from 4:00 p.m. to 5:47 p.m. Agenda items: Resolution 07-25, Amending the City Property Management Policy and Procedures Manual, Satellite Telephone for Councilmembers, Affordable Living in Homer – Live Aboard Boats and Regular Meeting Agenda items.

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:

Pending Business - Resolution 07-62(S) Additions to Coordinated Transportation Plan.

PUBLIC COMMENTS UPON MATTERS ALREADY ON THE AGENDA

Public may comment on any matter on the agenda except Visitor Steve Howell’s report and Ordinance 07-19, Amending Homer City Code Section 18.07.060 Program Administration; Public Arts Committee Appointments.

There were no public comments.

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 May 14, 2007 Regular Meeting. City Clerk. Recommend approval.

B. Ordinance 07-22, Of the City Council of Homer, Alaska Amending the FY 2007 Operating Budget by Appropriating $53,000.00 for a Microwave Repeater, Authorizing a Sole Source Procurement Contract with Procomm Alaska, and Authorizing the City Manager to Execute the Appropriate Documents. City Manager. Recommend Introduction and First Reading and conduct Public Hearing and Second Reading on June 11, 2007.

Mayor Hornaday called for a motion for the adoption of the recommendations of the Consent Agenda as read.

WYTHE/ROBERTS – SO MOVED.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VISITORS

A. Steve Howell, CIRCAC 10 minutes.

Visitor Steve Howell was not present at this time of the meeting.

ANNOUNCEMENTS/PRESENTATIONS/BOROUGH REPORT/COMMISSION REPORTS

A. Memorandum 07-93 from Councilmember Stark, Re: State Chamber of Commerce Trip Report.

PUBLIC HEARING(S)

A. Ordinance 07-19, Of the City Council of Homer, Alaska Amending Homer City Code Section 18.07.060 Program Administration; Public Arts Committee to Appoint Public Arts Committee Members for Two Year Terms, Staggering Terms. City Manager. First Reading May 14, 2007, conduct Public Hearing and Second Reading on May 29, 2007.

There was no public testimony.

Mayor Hornaday called for a motion for the adoption of Ordinance 07-19 by reading of title only for second and final reading.

WYTHE/ROBERTS – SO MOVED.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

ORDINANCE(S)

None scheduled.

CITY MANAGER’S REPORT

A. City Manager’s Report

1. Port and Harbor Lease Notes: Lease negotiations have started with Hughes Pellets Alaska for Lot 12 near the Deep Water Dock. This negotiation is a little more complex because it also includes possible negotiation regarding a berthing agreement at the dock. At the time this was written, it was too early to get a lease before the Council for consideration at the May 29 meeting but we are hoping to be ready by June 11. The City is still talking to AMHS about a lease on Lot 48 for its proposed new warehouse. The City has offered short term leases to Snug Harbor and to Ocean Beauty for operations on the Old Porpoise Room Lot. Harbor Leasing LLC has also been offered a short-term lease while negotiations on a long term lease proceed.
2. KESA Meeting: The City and representatives from KESA and the Borough met on May 17 to discuss the future of the relationship between the City and KESA. The meeting was very productive and we discussed some of the outstanding issues identified by both parties. The issues addressed included maintenance of KESA and City of Homer Fire and Emergency vehicles, providing for Rural Fire Fighter, engineers positions, and ETT positions within KESA to encourage volunteer recruitment, other incentives to encourage volunteers, and a permanent funding formula for the contract. These issues and the City’s responses will be discussed with the KESA Board and the consultant selected to conduct the KESA Feasibility / Strategic Plan. Future, follow-up meetings are anticipated. The contract expires on December 31 of this year. Please let me know if the Council wants to be briefed more fully on this.
3. Coast Guard Dolphin: In the last Manager’s Report, I provided you with a copy of a proposal to add a mooring dolphin near the Pioneer Dock to assist the Hickory. This proposal has been controversial in the past. Steve Dean has arranged for a public meeting to discuss this project that will be held on May 23. This meeting is sponsored by the Port and Harbor Commission and will be attended by representatives of the Coast Guard and the Corps of Engineers. Steve specifically invited the Captains of the AMHS ships and the SW Pilots as requested by the Council. Although it was reported by a Council member at the last meeting that the Coast Guard may have dropped this proposal in the face of strong state opposition, it is our understanding that the Coast Guard is still moving ahead and plans to send representatives to the meeting.
4. Shoulder Seasons: As you know, the shoulder seasons are expanding in Homer and more and more folks are coming here to recreate and conduct other activities in the spring and fall. Campers are asking us to open the campgrounds, the dump stations, and the restrooms earlier and earlier each year. Some events are being scheduled and promoted in the shoulder seasons by local organizations. The Shorebird Festival in early May continues to grow. A girls softball tournament was scheduled two weeks earlier than usual this year. Hundreds of school aged children visited in May on an educational field trip. The City received multiple complaints about the bathrooms and the dump stations not being open. There were two problems for us. The first is that the City has not historically opened campgrounds and bathrooms until the end of May. So, we do not have the budget or the summer staff on board to open things much earlier. The second problem was that winter’s cold weather hung on for a long time this year. The bathrooms and the dump station were frozen and there was not much Public Works could do. As the shoulder seasons expand in Homer, this is an issue the City will have to address, perhaps during the next budget cycle.
5. Alaska Marine Highway / Proposed Warehouse: The discussions here are on-going. I recently wrote a letter to AHHS proposing some new options but re-emphasizing that the City really values having the ferry system here and we do not want to make things difficult for them to operate. We recently received correspondence from a staff person within AMHS indicating that AMHS has reverted back to its original proposed location for the warehouse which is between the ferry terminal and the Coast Guard approach. This location presents new problems because it would mean that a sewer line and the fish waste outfall line would have to be relocated. It may also disrupt Coast Guard parking. Steve is trying to set up a meeting this week with the Coast Guard, AMHS, and the City to discuss these issues and seek a solution that works for all. This week I will be talking to the new Deputy Commissioner for AMHS to see if I can convince him that Lot 48 (behind the City Port Maintenance Shop) is the best location for the warehouse.
6. University Acquisition of City Hall: The Director of the University Lands office visited last week as a follow-up to the Regents visit. At the time, there was only $1,000,000 in the capital budget for the University to acquire City Hall. So we talked about different types of purchase agreements that would allow the University to acquire City Hall for that amount and other considerations. The Legislature subsequently approved $2.5 million. So, we are now probably talking about a straight purchase at fair market value. If so, the next steps are likely to have a new appraisal performed and to enter into a purchase agreement. Please let me know if you would like to discuss this whole process in detail.
7. Intersection of Sterling Highway and Main St: The Council will recall that the City and the State have developed a CIP project called the Homer Intersections Improvement Project. The City recently inquired about the status of that project and the DOT/PF Regional office told us that they did not have the funding at this time to work on the entire project. DOT/PF stated that they would have to work on this one intersection at a time and that its focus initially would be on the Pioneer / Heath and Lake Street intersections. The City understands the logic for this but intends to push for immediate attention to the intersection of Main St. and the Sterling Highway. The Homer Police Department believes that this is the most dangerous intersection in town and generates the most accidents and near misses.
8. Capital Budget: By now, I expect that most Council members have heard the news about the capital budget approved by the Legislature, thanks to the dedication and hard work by Representative Seaton and Senator Stevens. Assuming that none of this is vetoed by the governor, “the City” was funded for $2.5 Million for University acquisition of City Hall, $1.3 Million water treatment Plant, $133,000 for the Research Reserve, $65,000 for completion of the Spit Trail, $50,000 for the Senior Access Trail, $89,000 for the Olsen Mt. rope tow, $30,000 for the horse park, and $25,000 for the Pratt Museum Fuel Tank. In addition, $10,000,000 was placed into the Harbor Facilities Grant Fund. Homer has several identified projects eligible for funding under that program.
9. Fire Safety House Donated to Homer: The Denali Safety Council recently donated their fire safety house to HVFD. The fire safety House is used for fire safety educational programs. This is great news and will go a long way toward promoting fire safety in Homer. A Memo from Chief Painter is attached which describes the facility in more detail.
10. East Boat Harbor: A scoping meeting for the project feasibility study was held on May 16. The meeting was attended by staff members from the agencies that would be involved in issuing permits for the project. USFWS, ADF&G, DNR, Corps of Engineers, Borough Coastal Management, State Harbor Engineer, and the City were all represented. Missing but invited included NOAA and NMFS. The purpose of the meeting was to identify issues that should be addressed and studies that should be conducted before permits are issued. Potential studies discussed included circulation patterns, fish and wildlife baseline information, dredge disposal sites, alternative conceptual designs. Preliminary and basic baseline studies will begin this year. The first public scoping meetings will occur this fall.
11. Water Treatment Plant: We have offered a preliminary Purchase Agreement to the owner of the land upon which the new water treatment plant will be located. This offer will be preliminary and one of the contingencies will be Council approval of the acquisition and proposed financing. We have received verbal agreement to enter the property to conduct soils tests. Negotiations over this land are proceeding slower than we would like but we are making progress. One new development is that we are actively talking to the property owner about a trade for land of equal value.
12. Revenue Sharing and PERS. The legislature was not able to agree upon a long- term solution to these problems but it did pass a revenue sharing program for this year ($331,221 for Homer) and it capped the City’s PERS contribution rate at 22 percent. The Council budgeted for a contribution of 26 per cent. This is very good news for the City and for taxpayers.
13. Pedestrian Safety Campaign: When crosswalks were placed on Pioneer Ave. and the Sterling Highway several years ago, there was a lot of discussion about how to educate both drivers and pedestrians about pedestrian safety and how to properly use crosswalks. The City Manager’s office and the Police Department adopted a strategy that included a public education program first, and increased enforcement second. Now that the summer season is here and there are more interactions between pedestrians and drivers, we have attempted to make a greater effort at increasing awareness of pedestrian safety. Attached are an OP-ED Piece and a Press Release from Chief Robl. The Chief also did a 30 second radio spot last week. We intend to continue with the public education and awareness program and to gradually increase enforcement.
14. Lane Striping: Some of you may have noticed that the lines depicting the bike lanes and crosswalks are fading. Have no fear. The new City Striper will be here within a month or so. In the meantime, Carey plans to ask DOT/PF for some help.

The Fire Safety House will be dedicated to the Homer Volunteer Fire Department on May 30^th at 1:00 p.m. at the Roanoke Coast Guard Building. Discussion on land acquisition for the Water Treatment Plant.

B. Question of the Week

Mayor Hornaday called for a motion to suspend the rules to hear Steve Howell, CIRCAC, as visitor.

WYTHE/ROBERTS – SO MOVED.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

VISITORS

A. Steve Howell, CIRCAC 10 minutes.

Steve Howell of Cook Inlet Regional Citizens Advisory Council presented Council with the 2006 Annual Report. He outlined projects including the Navigational Risk Assessment for Cook Inlet, Geographic Response Information Network, offshore Potential Places of Refuge and an Environmental Monitoring Program. Mr. Howell expressed his appreciation of seeing everyone in Homer and added he will be leaving CIRCAC next month to accept a new position.

COMMITTEE REPORT

A. Comprehensive Plan Community Advisory Committee

(June 28, 2007 6-8 p.m.)

B. Global Warming Task Force

(May 30 and 31, June 1, 2007)

C. Public Arts Committee

(June 21, 2007 at 11 a.m.)

D. Transportation Advisory Committee

(June 19, 2007 at 5:30 p.m.)

PENDING BUSINESS

A. Resolution 07-62(S), Of the City Council of Homer, Alaska In Support of the Homer Area Coordinated Transportation Plan Developed by the Homer Coordinated Transportation Task Force. City Manager. Recommend adoption.

Memorandum 07-86 through City Manager as backup.

NOVAK/WYTHE – MOVED FOR THE ADOPTION OF RESOLUTION 07-62(S) BY READING OF TITLE ONLY.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

B. Memorandum 07-95, From City Clerk, Re: Recommendation of Candidates for the Kenai Peninsula Borough Planning Commission. Recommend approval.

Memorandum 07-94 through City Manager as backup.

WYTHE/NOVAK – MOVED FOR THE APPROVAL OF THE RECOMMENDATION OF MEMORANDUM 07-95.

There was no discussion.

VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.

Motion carried.

NEW BUSINESS

A. Ordinance 07-21, Of the City Council Setting the Property Tax Rate (Mill Rate) for Homer, Alaska for Fiscal Year 2007 at 4.00 Mills. Stark/Shadle. Recommend Introduction and First Reading and conduct Public Hearing and Second Reading on June 11, 2007.

STARK/SHADLE MOVED FOR THE INTRODUCTION OF ORDINANCE 07-21 BY READING OF TITLE.

Councilmember Stark cited the increased revenues from property assessments, revenue sharing, a savings of $391,000 for the PERS rate, and additional tax income from the Borough of $256,000 as reasons for the property tax rate reduction.

Councilmember Wythe commented the decisions of the Legislature have yet to be approved by the Governor and will not be by the time the ordinance passes. Nothing has been approved as a sustainable replacement of revenue; only a one year fix on PERS and community profit sharing. Until passed into law it is not a replacement for income from property tax revenues. The .98 mill rate increase in Borough property tax for the hospital addition does not reduce any expenses the City incurs. Heating costs and vehicle operation costs continue to increase with unfunded responsibilities for reserve funds. Reserve funds are to be increased by $5M, and $28M is to be funded for depreciation reserves. It is the responsibility of the elected body to ensure a secure financial future for the community. If property tax value is maintained at a set rate, allowing increases of property values to drive the increase of revenue will result in a sustainable, self-indexing income. Although property values have increased substantially over the last few years, they followed years of zero or less than five percent increases. Council made resolution last fall something would be done about the City’s financial situation and address employee’s rates. There is no point of a property tax reduction when there is the prospect of having to increase property taxes to meet the budget. The budget has been balanced by being negligent business owners, without providing the best service to the community when thinking in those terms. Reserves need to be built in the event of a catastrophic incident.

Councilmember Shadle stated it is negligent when we don’t give property owners a break. Over the last two years property tax assessments have gone up 29% and there has been nothing done to help people who are forced to sell as they can’t pay their property tax. We owe it to the people. He will always try to reduce property tax, as when it comes to government spending, government will spend whatever you give them. If you give them a lot they will spend a lot. If you give them enough, they will spend enough. If the ordinance passes introduction, the public will be allowed to comment.

Councilmember Novak related 1/2 mill is $50 per $100,000 of assessed value, and not too much money. The City gets by from making trade-offs and not funding what they should. Now there is another opportunity to get by. Resolution 06-100 provides for contributions to depreciation and reserve accounts and is a top fiscal priority. There is now opportunity to put some money into depreciation funding. Resolution 06-101 addresses the need for 6 months of operating expenses or $3M ($600,000 per year for 5 years) in the Reserve Fund. Money from the PERS saving and revenue sharing could be placed in the Reserve Fund and just about make the $600,000 annual goal. It is a financially responsible thing for a corporation to do to remain solvent. The property tax rate at 4.5 mills needs to be held consistent, neither going up or down.

Councilmember Roberts commented on the $391,000 anticipated savings from PERS, noting Council passed as resolution to place it in a PERS fund already. It is not the intention to spend the money, but rather put it in the reserve and depreciation funds. We are mandated to build the reserve funds, as extra money may be needed for a rainy day. Homer could be needy of it someday.

Councilmember Stark noted at a consistent 4.5 mills people can’t count on their tax bills, as the assessed value has gone up 29% in the last two years. This year the City had a surplus of $1M due to increases of assessed property value. The PERS rate has been set for the next 25 years at 22%. The Governor’s budget on December 15^th had $48M for revenue sharing. That is the amount Legislature approved and the Governor stated in her press conference May 15^th she urged Legislature to approve the $48M for revenue sharing. She supported the reduction in the PERS cost. The Borough estimates the City will gain an additional $256,000 in sales tax from charter boat customers. Effective January, the Borough is increasing sales tax 1% January, the mill rate will be increased .98 mill borough-wide. Council is not only Board of Directors on a municipal corporation, but a municipal government and it is the responsibility to see to the financial affairs of the citizens of Homer. Shoving money in boxes here and there will result in a rich municipal corporation residing in a very poor community.

Councilmember Wythe refuted the PERS allocation was made for the 2008 budget, not 25 years, and revenue sharing is a one-year allocation. There are still serious reservations about putting the PERS allocation in place as they haven’t figured out how to deal with increasing costs. It is short-sighted to make a plan based on the 22% figure. The amounts required in our depreciation and reserve funds came from federal accounting standards for government. It is the Council’s responsibility to follow the laws of the City.

Councilmember Novak remarked that just as property taxes have gone up, so have assessed values. A seller will get much more for a home today. The City has no control over property tax assessed values and no control over the hospital mill rate. People want certain things and their expectations are that the City operates responsibly.

Councilmember Shadle noted there was a balanced budget last year based on a dollar amount. With increased revenues from property tax the number is larger than we thought. If the City retains the surplus, we are saying we can do better things with peoples’ money than they can.

When reserve fund monies are used to buy equipment or a new roof, the funds decrease. The budget has been balanced by making tradeoffs and not funding things that are mandated. Sooner or later it catches up; equipment falls apart and then the City has to go to the bank to get money.

VOTE: YES. SHADLE, STARK

VOTE: NO. ROBERTS, WYTHE, NOVAK

Motion failed.

RESOLUTIONS

None.

COMMENTS OF THE AUDIENCE

Councilmember Shadle introduced and welcomed Sherman “Red” Smith from Cooper Landing. Mr. Smith is a World War II veteran, a Raider completing three tours and is a poet. His poetry may be accessed at poetry.com (Red Smith).

Sherman “Red” Smith presented a letter to Council referring to the State Constitution and failure to enforce a segment of it that is vital to the future of the state. He sees discussion still revolves around how much money there is and how to spend it. Mr. Smith came to Alaska in 1948 and settled in Cooper Landing providing everyone with one of the most beautiful places to stop along the highway. He said nothing is changing. In the fight for Statehood there was uncertainty of the future. Revenues come from development, not just out of the air. He has a lot of fond memories of Homer, having worked here on the small boat harbor. Most of the things he did were against opposition. There is still a lot of opportunity. He suggested building a state Denali Park on the south side of the mountain with the population nationwide supporting it. Supporting the current administration will get things of value started.

Kevin Hogan, city resident, commented both sides are right on the tax debate. He has been following the lease policy since 1994 and noted a few things that are being talked about as fact that are not. Council has always had the right to restrict use on city properties but has never done so. On lease policy documents the changes proposed in Resolution 07-25 have already been incorporated, in violation of City Code per HCC 1.04.065. There is a cry to remove politics from the process, yet he has never heard anyone testify or favor that option. It is always concentration of power in the bureaucracy; with a represented democracy elected officials need to be involved. He is uncomfortable with many things, including receipt of an ultimatum to sign a short term lease or be thrown out of town. The short term lease includes putting his buildings on the property and giving them to the City in six months. It is not a good business decision for him. Council should question what they are being told and stay involved. Homer needs economic development and business, with a lease process made simpler. There is a power struggle between Administration and City Council.

Pam Horazdovsky, owner of Elder Options of Alaska and member of Homer Transportation Coordinated Task Force, addressed the Council. Ten percent of the population is 65 and older; baby boomers make up 32% of the Alaska population, a larger share than any other state. One in five Americans age 65 and above does not drive. She thanked Council for their support on Resolution 07-62(S).

COMMENTS OF THE CITY ATTORNEY

City Attorney Tans was not present.

COMMENTS OF THE CITY CLERK

City Clerk Johnson had no comments.

COMMENTS OF THE CITY MANAGER

City Manager Wrede had no comments.

COMMENTS OF THE MAYOR

Mayor Hornaday commented on the various observances of Memorial Day and the importance of remembering those veterans and service people who keep us free. He complimented Councilmember Roberts on a nice commencement address at his granddaughter’s graduation at Homer High School. His four children graduated, now the grandchildren are coming up. There are three teams going to State; the baseball, softball and soccer team. He wished them the best. The Governor may still veto the capital budgets. Mayor Hornaday commended Council, staff and folks in the community for their good work in securing funding. Homer came out fairly well:

* $2.5M for purchase of City Hall

* $1.3M Water Treatment Plant upgrade

* $133,000 Kachemak Bay Reserve exhibit

* $65,000 Homer Spit Trail completion

* $50,000 Senior Access Trail

* $89,000 Kachemak Ski Facility

* $30,000 Equestrian Association

* 25,000 Pratt Museum fuel tank

Additionally there were a number of things in Anchor Point and around. The City is qualified to apply for a $10M harbor project. Homer will receive $330,000 in revenue sharing and $391,000 in the PERS re-figuration from 26% to 22%. Without a full time lobbyist it is incumbent on the City Council to keep advised. He thanked Councilmember Shadle for the work he did in Washington, D.C.

COMMENTS OF THE CITY COUNCIL

Councilmember Novak said Homer is a growing and busy place. After listening to Red Smith talking about development it almost sounded like Governor Hickel. He appreciates the comments. The town is a growing and positive place and we will all do our part.

Councilmembers Shadle, Stark and Roberts had no comments.

Councilmember Wythe thanked Mr. Smith for his service to our country.

ADJOURNMENT

There being no further business to come before the Council, Mayor Hornaday adjourned the meeting at 8:11 p.m. The next Regular Meeting is scheduled for Monday, June 11, 2007 at 7 p.m. and the next Committee of the Whole is scheduled for Monday, June 11, 2007 at 4 p.m. All meetings are 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: ______________________