CITY OF HOMER

HOMER, ALASKA

City Manager

ORDINANCE 06-65

AN ORDINANCE OF THE CITY COUNCIL OF HOMER, ALASKA APPROVING A SETTLEMENT AGREEMENT BETWEEN THE CITY OF HOMER AND GATES CONSTRUCTION INC. REGARDING 2004 PROPERTY TAXES AND APPROPRIATING $5,639.67 FOR THAT PURPOSE.

WHEREAS, Gates Construction Inc. ceased business operations on the Homer Spit effective June 30, 2004, and

WHEREAS, The City permitted Gates to terminate it’s ground lease early and at mid-year, and

WHEREAS, Since the leases were terminated, the City, the Borough, and Gates have been involved in a dispute over whether Gates should have been required to pay property taxes for the second half of 2004, and

WHEREAS, The Borough Tax Code provides that the entity who owns or leases property in January of a given year is responsible for property taxes for the entire year, and

WHEREAS, Gates paid property taxes in the amount of $11,279,34 for the second half of 2004 in order to avoid being in default, but did so under protest, and

WHEREAS, The City and Gates disagree over the meaning and intent of the language in the lease with respect to the tax obligation in the event that a lease is terminated at mid-year, and

WHEREAS, Both the City and Gates wish to settle this dispute by splitting the amount of taxes due for the second half of 2004.

NOW THEREFORE THE CITY OF HOMER ORDAINS:

Section 1: The City Council hereby approves a settlement of the property tax dispute with Gates Construction, Inc. in which the City and Gates split the amount of taxes due for the second half of 2004. This means that the City will pay Gates the amount of $5,639.67 as a refund of a portion of the property taxes previously paid under protest by Gates. The City Manager is authorized to negotiate and execute all documents necessary to implement this settlement.

Page Two

Ordinance 06-65

City of Homer

Section 2: The City Council hereby amends the FY 2006 Operating Budget by appropriating $5, 639.67 from the General Fund Reserves Account Number 100.000.1000 for the purpose of settling this dispute.

Section 3: This ordinance is to approve settlement of a dispute and a related budget amendment only. It is not of a permanent nature and is a non-code ordinance.

PASSED AND ENACTED by the Homer City Council this ____ day of _____, 2006.

CITY OF HOMER

JAMES C. HORNADAY, MAYOR

ATTEST:

MARY L. CALHOUN, CMC, CITY CLERK

Introduction:

Public Hearing:

Second Reading:

Effective Date:

Ayes:

Noes:

Abstain:

Absent:

Reviewed as to form and content:

Walt Wrede, City Manager Gordon Tans, City Attorney

Date: Date:

Fiscal Note: $5,639.67