PORT AND HARBOR ADVISORY COMMISSION UNAPPROVED

REGULAR MEETING

OCTOBER 22, 2008

Session 08-10 A Regular Meeting of the Port and Harbor Advisory Commission was called to order at 6:05 pm on October 22, 2008 by Vice Chair Cathy Ulmer at the City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.

PRESENT: COMMISSIONERS VELSKO, ULMER, HARTLEY, MARTIN, HOGAN

ABSENT: COMMISSIONERS KILCHER AND CARROLL (EXCUSED)

STAFF: DEPUTY HARBORMASTER MATT CLARKE

DEPUTY CITY CLERK KRAUSE

APPROVAL OF THE AGENDA

VELSKO/HARTLEY – MOVED TO APPROVE THE AGENDA.

There was no discussion.

The agenda was approved by consensus of the Commission.

PUBLIC COMMENT REGARDING ITEMS ON THE AGENDA (3 Minute Time Limit)

None.

RECONSIDERATION

None.

APPROVAL OF MINUTES

A. Regular Meeting Minutes of September 24, 2008

VELSKO/HARTLEY – MOVED TO APPROVE THE MINUTES AS WRITTEN.

There was no discussion.

The minutes were approved by consensus of the Commission.

VISITORS

None.

STAFF & COUNCIL REPORT/COMMITTEE REPORTS/BOROUGH REPORTS

(Chair set time limit not to exceed 5 minutes)

A. Port & Harbor Director’s Staff Report – October 2008

Deputy Harbormaster Clarke reported that all the lease offers have been issued at this time. They have issued new leases and started the stall swaps and will revisit the stall swap list after responses have been received from the initial offers.

Port & Harbor Director Hawkins is in Portland attending the Pacific Coast Harbormaster’s Conference in Seattle, Washington.

He reported that he attended the meeting with the Seward Harbormaster and they do not have billing control like Homer has and they are looking at a city owned and operated crane and transient mooring. The Seward Harbormaster Carrie Anderson was hired last November.

Deputy Harbormaster Clarke reviewed the users of winter power; the spill response drill held in September; he responded to questions from the Commissioners regarding the number of employee hours involved in an exercise of this magnitude at approximately 10-12 hours; he explained what is involved in the preparation to hold such a drill. He confirmed that moorage is charged to the larger vessels. Fishing vessels that are in the Harbor to attend the exercise add to the revenue.

Commissioner Velsko commented that the City should not bear the cost alone.

Deputy Harbormaster Clarke expressed opinion that this drill was very relevant for their area. The drill is scheduled in the shoulder seasons when they do have the manpower needed to prepare for the drill.

He commented on the Public Scoping Meeting held on October 15, 2008. This has been a long-term project lasting 18 months. He summarized the presentation given by the Army Corps of Engineers contained studies of the proposed footprint and the effect on marine life, salmon runs, relocation of the US Coast Guard into a secured facility; and how rising construction costs would affect the feasibility of this expansion. The analysis received from the consultant hired was that the economic impact on the area currently was $95 million dollars annually. This encompassed direct and indirect dollars that pass through to businesses with harbor activities. It is believed that this encompasses 1250 employment opportunities. An additional 20-30 acre facility is estimated to increase the regional impact to $115 million dollars annually.

Vice Chair Ulmer requested the information to be included in the November packet.

There was no further discussion.

B. Lease Committee Report

Commissioner Velsko reported that there was a meeting on October 9, 2008 and they discussed Lot 9A Kenai River Seafoods which is currently non-responsive to the request to enter into negotiations. The Lease Committee has requested that City Manager Wrede send a certified letter requesting Kenai River Seafoods to respond in 30 days and if no response is received in that time period for the Lease to be released for RFP again.

The Committee has made progress and agreed to quarterly meetings starting in January. They have on the agenda dissecting the Lease Policy to create a simpler, user-friendly lease packet. The city staff will review and have a list prepared on what leases will be coming up for renewal for 2009. Minutes will be distributed; the City Council did not accept the Lease Committee or the Port and Harbor Advisory Commission recommendations and extended a 50-year lease to the Alaska Marine Highway. Commissioner Velsko questioned the advertising for the Lease Committee meeting date, but opined that going to regularly scheduled meetings will provide ample time for advertising. Commissioner Ulmer requested information on the number of members for the Lease Committee. Commissioner Hogan listed the current membership of the committee.

Discussion evolved regarding negotiated, amended leases; performance clauses; lease options; how changes can be made to existing leases; if legal advice is available for dealing with these leases for the Uplands; what should be done if a leaseholder has not fulfilled the lease requirements; revenue amounts the City receives from the Harbor Enterprises lease; that the hours of availability for the fuel float should be a set requirement; if the Commission will get a say in this renewal; when or if this lease has requested renewal.

MARTIN/VELSKO – MOVED TO REQUEST STAFF TO INCLUDE THE LEASE RENEWAL DOCUMENT FOR HARBOR ENTERPRISES/PETRO MARINE SERVICES IN THE NOVEMBER PACKET AND HAVE INFORMATION REGARDING THE STATUS OF THIS LEASE.

There was further discussion regarding the hours of operation during the summer and adding a requirement that they are open; safety issues with boaters; transporting fuel in portable containers.

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

Motion carried.

PUBLIC HEARING (3 minute time limit)

None.

PENDING BUSINESS

A. Sales Tax Funding Memorandum – Draft Resolution

a. Draft Resolution 08-XX

b. Memorandum dated September 8, 2008 to City Manager Re: Recommending Port & Harbor Enterprise Fund is elevated to the Same Level as the Water Sewer Fund.

c. Minutes from August 27, 2008 indicating discussion and decisions.

d. H.A.W.S.P. Policy Manual

e. Resolution 99-53 Authorizing the Homer Accelerated Water and Sewer Program

Memorandum 99-149 to City Council and Mayor from City Clerk Calhoun

Re: Homer Accelerated Water and Sewer Program

HOGAN/VELSKO – MOVED TO DISCUSS SALES TAX DRAFT RESOLUTION.

There was no discussion.

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Commissioner Martin requested clarification on how the Water & Sewer Fund differs from the Port & Harbor Fund. Commissioner Velsko and Hogan explained that the Water & Sewer gets to keep the sales tax generated from the water & sewer bills and the Harbor does not receive any of those similar funds from the revenue it generates.

VELSKO/HOGAN MOVED TO RECOMMEND TO DELETE THE LAST TWO WORDS IN THE LAST LINE OF THE PARAGRAPH STARTING WITH “NOW THEREFORE”.

Discussion ensued regarding the possibility of adding in reference to individual sales within the resolution; how the city could designate those amounts since it has to be paid through the Borough. Discussion continued regarding the projected revenue for the port is estimated about $3 million dollars. It was agreed to start with the easy stuff then develop into the harder stuff.

VOTE. YES. ULMER. VELSKO. HARTLEY, HOGAN, MARTIN.

Motion carried.

A brief discussion ensued regarding the time period for submitting this to City Council for approval and who would be in town to attend that meeting. Commissioner Martin or Ulmer will have to attend as Commissioner Hogan and Velsko will be out of town for the Holiday.

NEW BUSINESS

A. Water Usage and Budget

Vice Chair Ulmer requested a motion to discuss.

HOGAN/VELSKO – MOVED TO DISCUSS.

There was no discussion.

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Commissioner Hogan commented that this should actually be two agenda items and he would like to address the water usage for the Harbor first then the 2009 Budget.

Commissioner Martin requested clarification on what the accounting system used. Deputy Harbormaster stated this was the first time he has seen these records so he agreed that Finance is possibly using a double entry method. Further discussion on the figures representing the higher usage in the summer, a high figure for the month of September when that is not a peak use month; the credit balance shown for sewer on Fish Dock; what the billing cycle was; the effect of the price increase and credit; using fresh water to wash down the docks which is flushing money away; should install seawater pump; whether a business would want sea water or fresh water.

Commissioner Hartley recommended re-budgeting the Fish Dock. Commissioner Hogan recommended a salt-water wash down for the dock.

HOGAN/HARTLEY - REQUEST STAFF TO EXPLORE THE POSSIBILITY OF INSTALLING A SALT WATER WASH DOWN AND BRING INFORMATION TO THE NEXT MEETING.

There was a brief discussion on drilling a well down through the spit or using harbor water. It was agreed that harbor water should not be used. The Commissioners further discussed partnering with private enterprise to accomplish a project like this and agreed that using saltwater it would be preferred to add a chlorine injection station. They further agreed that the biggest use of fresh water was use of the high- pressure hose on the docks and asphalt.

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

Motion carried.

Commissioner Hogan stated he asked for the budget to be on the agenda because every year the administration works on the budget and then it is reported that the Commission signed off on it and as far as he can recall the budget has never been reviewed by the Port & Harbor Advisory Commission.

Discussion developed regarding the G/F Admin Services amount shown on page 26C of the Budget. Deputy Harbormaster Clarke stated that the Commissioners must take into consideration that this budget does not reflect all the revenue that was brought in by the spike in activity at the deep-water dock such as the sulfur shipments. Commission Martin commented that as long as the revenue stream flows to the City the coffers will never show that profit; or show the Port is a viable business. Deputy Harbormaster Clarke responded that you also need to look at the retained earnings. That is the figure that is used as a benchmark to determine the solvency of a entity. He proceeded to give an example that it would be used in applying for matching grants, or bond issues. Retained earnings are real dollars and should be in an account. Commissioner Velsko said the interest on those funds should go to the enterprise fund. Questions were asked regarding where retained earnings would show on the budget. Was the interest in a separate account or funneled into the general fund? It was agreed that Director of Finance Harville would be the best person to explain how everything works. The Commissioners would like to have the Finance Director attend the meeting in January to explain the budget processes.

Commissioner Velsko wanted to know where the grant monies received for the restrooms is in regard to the budget. His questions and interest in creating the Port & Harbor Enterprise Fund was due to statements made on KBBI that the water & sewer fund was in better shape than the Port & Harbor.

After additional discussion the Commissioners agreed it was too late to do anything for the 2009 budget and they needed to be educated. The Commission discussed having a special meeting but decided to add it as an agenda item for December and until fully discussed and explained. They agreed to then have a mid year budget review next June.

There was no further discussion.

B. Meeting Schedule for 2009

HOGAN/VELSKO – MOVED TO DISCUSS.

There was no discussion.

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

Motion carried.

The Commissioners first addressed the meeting date for November since it was apparent many of the Commissioners would be out of town. There may not be a quorum for the November meeting but they did not want to cancel it.

HOGAN/VELSKO – MOVED TO RECOMMEND THE PORT & HARBOR ADVISORY COMMISSION MEETINGS FOR NOVEMBER AND DECEMBER 2009 BE MOVED TO THE THIRD WEDNESDAY OF EACH MONTH.

There was a brief discussion regarding changing the day and times of the meetings to better accommodate and have a quorum each month. It was determined that they could change days and times as needed or required and to keep it as scheduled. The meetings dates will be November 18, 2009 and December 16, 2009. It was noted that the meeting may be held in the Conference Room upstairs due to a conflict with the Planning Commission.

VOTE. YES. NON-OBJECTION. UNANIMOUS CONSENT.

Motion carried.

There was no further discussion.

INFORMATIONAL MATERIALS

A. Harbormaster’s Monthly Statistical Report for September 2008

B. Weekly Crane and Ice Report

C. Pioneer Dock

D. Pioneer Dock Ferry Landings

E. Deep Water Dock

Deputy Harbormaster solicited questions and commented that there was an increase in moorage and boat tows. This seems indicative of growth even in the recent economic downturn.

There was no further discussion.

COMMENTS OF THE AUDIENCE

There were no comments.

COMMENTS OF THE CITY STAFF

Deputy City Clerk Krause had no comments.

Deputy Harbormaster Clarke gave a brief explanation on the website and the weather station that relays real-time results. This weather station is city owned and the website is more organized and informational than most municipal websites. There are forms you can download too.

COMMENTS OF THE COUNCILMEMBER (If one is appointed)

None.

COMMENTS OF THE CHAIR

Vice Chair Ulmer commented that the Port & Harbor website is just awesome and likes the weather information. She feels it is very impressive.

COMMENTS OF THE COMMISSION

Commissioner Hogan thanked Deputy Harbormaster and the Harbormaster for the work and time they put in and praised the staff; he gave a brief summary of the agenda items the Economic Development Advisory Commission (EDC) was reviewing. He thanked Commissioner Velsko for his Lease Committee report and recommended that they include a Transportation report since the Port is all about transportation. He explained that there are many different aspects such as the road and ferry link. The EDC has been speaking on the value of the Ferry and south bay transportation link. The Lease Policy is being reviewed also by the EDC. He was very pleased to see the enthusiasm from the Commission on reviewing the budget and keeping it as an agenda item.

Commissioner Martin commented that he was particularly interested in the leases and bringing them into the modern world where people are held to their lease. He thanked Kevin and the EDC for reviewing these leases.

Commissioner Hartley would like to continue exploration of the moorage agreements particularly with the larger vessels to get more business in the shoulder seasons.

Commissioner Velsko thanked staff for putting up with them once more.

ADJOURN

There being no further business before the Port and Harbor Advisory Commission Vice Chair Ulmer adjourned the meeting at 7:55 p.m. The next meeting is scheduled for 6:00 p.m. on November 26, 2008 at City Hall, Cowles Council Chambers, 491 E. Pioneer Avenue, Homer, Alaska.

Renee Krause, Deputy City Clerk I

Approved: