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HomeMy WebLinkAbout2005-12-07 Council PacketKenai City Council Meeting Packet December 7, 2005 AGENDA KENAI CITY COUNCIL- REGULAR MEETING DECEMBER 7, 2005 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http'//www, ci.kenai.ak.us ITEM A: CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval 4. Consent Agenda *All items listed with an asterisk (*) are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. ITEM B: , ITEM C: ,,, SCHEDULED PUBLIC COMMENTS (3 minutes) Tim Dillon, Arctic Winter Games -- Funding Issues. UNSCHEDULED PUBLIC COMMENTS (3 minutes) ITEM D: REPORTS OF KPB ASSEMBLY~ LEGISLATORS AND COUNC!LS ITEM E: PUBLIC HEARINGS . Ordinance No. 2133-2005 -- Increasing Estimated Revenues and Appropriations by $36,370 in the Airport Land Fund for Repairs at the Flight Service Station. e Ordinance No. 2134-2005 -- Increasing Estimated Revenues and Appropriations by $1,000 in the General Fund for a State Library Grant. 0 R~solution No. 2005-51 -- Setting the Public Hearing Date on the Proposed McCollum and Aliak Drives Paving District. Resolution No. 2005-52 -- Adopting the City of Kenai Capital Improvements Plan Priority List Fiscal Year 2006 - 2011 as the Official Six-Year Capital Improvements Plan for the City of Kenai. Se Resolution No. 2005-53 -- Awarding Non-Exclusive On-Airport Car Rental Concessions to Corporate Sales & Leasing, Inc., d/b/a Budget Rent A Car of Kenai; Alaska Rent A Car Inc., d/b/a Avis; The Hertz Corporation; and, Alaska Dial A Car Inc., d/b/a Payless for the Period January 1, 2006 Through December 31, 2010. , , ITEM F: ITEM G: , ITEM H: . . e . . . ITEM I: lo 2. 3. 4. 5. 6. 7. Resolution No. 2005-54-- Approving the Sale of Lots One (1), Two (2) and Three {3), Block One {1), Evergreen Subdivision, Klm Addition. *Liquor License Renewal-- Kenai Golf Course Caf6, Inc., d/b/a Kenai Golf Course Ca/fi. MINUTES *Regular City Council Meeting of November 16, 2005. *Council Work Session of November 28, 2005. *Council Work Session of November 12, 2005. OLD BUSINESS Approval-- Lease Application/Tract B-l, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and. Associates, Inc. on Behalf of Wal-Mart Stores, Inc. {Clerk's Note: A motion to approve the lease application was postponed from the November 16, 2005 council meeting to December 7, 2005.) NEW BUSINESS Bills to be Ratified Approval of Purchase Orders Exceeding $15,000 *Ordinance No. 2135-2005 -- Increasing Estimated Revenues and Appropriations by $6,100 in the General Fund for a Donation to the Peninsula Art Guild for Building Repairs. *Ordinance No. 2136-2005 -- Authoriz~g the Sale of Four (4) Parcels of Land to The Conservation Fund for Fair Market Value and Placing Certain Conditions on the Sale. Discussion -- Schedule Work Session/City Manager Search Discussion -- October 2006 Council Meeting Schedule COMMISSION/COMMITTEE REPORTS Council on Aging Airport Commission Harbor Commission Library Commission Parks & Recreation Commission Planning & Zoning Commission Miscellaneous Commissions and Committees a. Beautification Committee b, Alaska Municipal League Report Arctic Winter Games Stranded Gas Committee ITEM J: REPORT OF THE MAYOR ITEM K: ADMINISTRATION REPORTS 1. City Manager 2. Attorney 3. City Clerk ITEM L: DISCUSSION 1. Citizens (five minutes) 2. Council EXECUTIVE SESSION -- Personnel Issues ITEM M: ADJOURNMENT DECEMBER 7~ 2005 REGULAR COUNCIL MEETING ADD TO: K-l, City Manager Report-- 12/6/05 Arctic Web Publications Letter regarding updating of city web page. REi~UESTED BY: CITY MANAGER No changes. CONSENT AGENDA MAYOR'S REPORT LUZLU ~~o~~>.~oo W ~ wZW ©© ~~ZW Z 0 ~WZW W ~.- ~wZUJ Wal-Mart Is Good for the Economy BY JOHN SEI~EN$ To some, Wal-Mart is a "corporate criminal.TM Loni Hancock, a Cali£ornia legislator, asserts that Wal-Mart's fortune "has been built on hmnan ndsery."2 A variety of critics have accused the company of engaging in questionable and exploitive practices on its way to becoming the largest business in the ~vorld.-~ (Its $250 billion in annual sales means that Wal-Mart has more revenues than leg- endary giants like Exxon, General Motors, and !BM.) To get this big, Wal-Mart allegedly exploits. its own employees by paying' ' "poverty wages" and forcing them to work unpaid overtime. It also alleged- ly "squeezes" vendors, forcing them to lay off American workers and ship their jobs to foreign "sweatshops." On top of this supposed economic rapacity is the charge that Wal-Mart disregards the concerns of small com- munities.~ While such charges fuel the passions of competitors who are los- ing customers to Wal-Mart, unions that have been unsuccessful in organ- izing the company's employees, and ideologues who despise the free market, they are with- .out merit. The nature of competition is to produce winners and losers. Those who lose can be expected to bemoan their fate. The remedy is to improve one's own. competitive offering. The strategy and tactics of the leading com- petitor can be observed, analyzed, and, if' warranted, inzi- tared. Countermeasures can be devised. Since competition in the fi'ee market is continuous, today's los- ers can be tomorrow's winners. Instead of ibmenting political opposition to Wal-Mart, its rivals should be improving ~heir o~vn game. Unions in America have been granted ample privi- leges in their quest to enlist members. Under regulations established by the National Labor 1Kelations Board, they can convert businesses to "union shops." A union shop means the union speaks and bargains Ideologues who rant against.Wal-Mart. do not understand ..~ economics. In a market economy, success goes to those businesses that best on behalf of all workers~even those ~vho don't belong. Non-members. may even .be compelled, to.. pay fees to . . the union ibr unwanted bargaining "services." The rules governing elec- tions to determine whether a union will be instituted are slanted in favor of the unionk case. If Wal-Mart employees decline to form unions they are certainly within their rights to do so. and most efficiently serve consumer needs. Ideologues who rant against Wal- Mart do not understand economics. In a market economy, success goes to. those businesses that best' and most effi- ciently serve consumer needs. Business- es must induce customers to hand over money in exchange for the merchandise. Customers are completely fi'ee to ignore the offerings of any business. Every business, Wal-Mart included, must ~vin its cus- tomers' patronage anew each day. We all know that consumers like bargains. Getting something for less money is considered savvy shopping. Wal-.Mart has opted to ensure that its prices are as low John Semme~s (jsemmer~s(~cox.,,et) is an economist at the Laissez Faire h~.stitu, te in Arizona, THE FREEMAN' Ideas on Liberty 8 Wal-Mart Is Good for the Economy as can be. This Focus has enabled the company to prom- ise "always low prices, ' ," aiwa). $. Low prices benefit both the consumers and the over- all economy, besides being a winning strate=o7 for Wal- Mart. Every dollar a consumer saves on a purchase enables him or her to buy other items. More o£ con- sumers' needs and wants can be Fulfilled when prices are lower than when prices are higher. Because a consumer's dollars go £urther at lower prices, more merchandise can be manu£actured and sold. All the businesses making and selling these other products and services are helped. The sheer size o£Wal-Mart attests to the success o£ its strateg7 and the benefits to the economy. Growing into the largest business on. the planet indi, cares that it is accurately interpreting consumer needs and efficiently serving them.. This is exacdy what we want businesses to do. This is what the free market encourages them to do. It is estimated that Wal-Mart's impact on prices accounted for 12 percent of the econonw's pro- ductivity gains in the 1990s..s This also helped reduce the 'effect of the' Federal 'Reserve's inflation of'the money suppl}: But what about the methods \Val-Mart uses to achieve its goal of'low prices? What about J. ts exploita- tion o£1abor? The flee market requires that transactions be carried out voluntarily between, the parties. No one is forced to work £or Wal-Mart. The wages it pays must be adequate to secure the services of'. its employees. Would Wa.l-Mart's en~ployees like to be paid more? Sure, everyone wants higher pa3: If'its empl. oyees could get higher pay elsewhere, Wa].-M. art would lose its best workers to the businesses paying those higher wages. The same goes for the alleged uncompensated over- time. V4al-Mart can't Force its employees to work over- time without compensation. Employees are not chained to their stations. They are flee to leave and take other jobs if' .the pay or working conditions at Wal-Mart are less than satisfactory. Neither can Wal-Mart "squeeze" vendors, compelling them to accept deals that they would pr.efer to refuse. Of From an economic perspective, when all the claims are dispassionately evaluated it looks like Wal-Mart promotes prosperity. course, sellers ~vould like to get as high a price for their wares as they can. Likewise, buyers would like to get as low a price as they can. Both have to settle on a price that is mutually agreeable. Wal-Mart has a reputation for keeping its word and paying promptly. C, This enables its suppliers to plan their production and provides a reliable cash flow to help fund operations. If some of Wal-Mart's suppliers choose to manufac- ture their products overseas, that is because doing so lowers their costs. Sure, the costs may be lower because the wages demanded by foreign workers in places like Bangladesh are low and the work- places may be" " sweatshops compared to conditions in U.S. factories. But this is hardly the cruel exploitation that Wal-Mart's critics describe. The rele- vant comparison is not to the working conditions Alnericans have become accustomed to after two centuries of industrial progress and wealth beyond the wildest dreams of inhabitants of the less-developed countries. The relevant c.ompari- sOn is to. the alternatives available in these less-develoPed economies. - . Com.panies that employ people in factories in less- developed economies must offer a compensation pack- age su~cient to lure them fi:om alternative occupations. So as bad as these "sweatshop" wages and working con- di. tions may appear to Americans who have a. fabulous array of lucrative employment opportunities, they are obviously superior to the alternatives that inhabitants of~ less-devd, oped economies are ofi~red. If the "sweatshop" jobs weren't superior, people wouldn't take them. 'Wal-Mart and Small Communities The claim that Wal-,M, art "disregards the concerns of small communities is also cOntradicted by the evi- dence. If Wal-Mart's stores were not in tune with the concerns of shoppers in small communities, the stores wouldn't make a profit and would eventually shut down. IfWal-Mart's stores were not J.n tune with the concerns ' of job seekers in those communSties, the stores wouldn't be able to staff their operations. The concerns that Wal- Mart rightly disregards are those of local businesses that OCTOBER 2005 IJohn Semmens ~ would prefer not to have to deal with new competition. The absence of' rigorous competition leads to high prices in many small communities. While this may be good for the profit margins of' established businesses, it is not necessarily a condition to be preferred over the ben- efits for the majority of' the inhabitants, o£ the commu- nity that result fi'om robust competition. ~Val-.Mart runs the largest corporate cash-giving Foundation in America. In 2004 Wal-Mart donated over $170 million. More than 90 percent o£ these donations went to charities in the communities served by XX/~al- Mart stores.? From an economic perspective, when all the claims are dis.passionately evaluated it looks like Wal-Mart pro- motes prosperity. The company is helping consumers get more for their money. It is providing jobs for willing employees. It is stimulating its suppliers to achieve greater economies in manu£acturing. It is encouraging tt*ade with less-developed economies~ helping the inhabitants of' Third World nations to improve their standards o£ living.-Far fi'om "diSregm-ding the cOnCerns of 7 small. Communities," Wal-Mart offers an appealing. place to shOp and ~vork. .. XX~al-Mart is doing ail these good things and making ' a profit of' around $9 billion a year. This is a profit mar- gin of'less than 4 percent. That's mighty efficient. To call Wal-Mart a "corporate criminal" is slander. ~X/~al-Mart is a model o£ how successful capitalism is supposed to work. It is a company that should be emulated, not reviled. ~ I. Liza Featherstone, "Down and Out in Discount ArnericaT' Tt~e ~N~:~tion, January 3, 2005, p. 1. 4. 2. Charles Bm;ress,"Vv~al_Ma~-t Foes Detail Costs to C, ommunity," Sa~t~ Francisco Ct~rcmicle, February 17, 2004, www. sf2ate.com/cgi_bin/ a~' ticle, tgi ?ill e= / chronicle/archive/2004 /02/17/B AGLL5224G1. DTL. 3. Charles Fishman,"The XX~al-Mart you Don't Knox,x~" Fast Com.~ .pan).,, December 2003. 4. Ann XX/-oolner, "Let Me Count the Ways People Don't Love WaI-Mart," Bloomberg.com, February 13, 2004, http://quote. bloomberg, com/apps/news?pid= 1000(J039&sid=aJqMefuSApSY& refbr=columnist_woolner. 5. Fishman. 6. Ibid. 7. "Total 2004 GMng Exceeds $170 Million," March, 1.1, 2005, .ww~v. walm,qrt£o u n da tion. o rg. · . . How Wal-Mart Responded to Katrina Wal-Mart dispatched more than 2,500 trailer-loads of water and emergency supplies to its facilities in the affected areas. Diapers, toothbrushes, and other personal products were given to assist evacuees arriving in large numbers at numer- ous Red Cross shelters. Wal-Mart also helped evacuees with emergency prescription needs, allowed for two weeks of free .check-cashing in stores in the disaster area, created an "emergency contact" service in stores and online, accepted vouch- ers from various relief agencies, and set up a gift-registry that allowed customers to purchase specific items for victims. By the end of the first week in September, Wal-Mart had donated the use of several vacant facilities to relief agencies and $17 million in cash to emergency relief efforts, and collected an additional $4 million in contributions from customers throughout the United States. Wal-Mart also donated computers to Red Cross shelters, beds to the Houston. Astrodome, and two trailers of water and basic goods to the New Orleans police department. In hard-hit areas of Mississippi, the com- pany sent truckloads of water, ice, and food for distribution to residents. Hurricane Katrina damaged 89 Wal-Mart facilities in' the south; nine sustained major damage. Ten days after the storm 15 stores and clubs remained closed. Ini- tially, more than 34,000 Wal-Mart employees were displaced. Wal-Mart moved quickly to contact employees to make sure they were safe and implemented a policy that allowed any displaced associate to "report for work at any U.S. Wal-Mart store." Employees whose homes were flooded or destroyed are eligible for up to $1,000 from a special disaster-relief fund. By early September nearly $4 million had been distributed to.more than 6,000 employees. ~Beth Hoffman THE FREEMAN'-Ideas on Liberty 10 Suggested by: Administration CITY OF KENAI ORDINANCE NO. 2133-2005 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA INCREASING ESTIMATED REVEN~S AND APPROPRIATIONS BY $36,370 IN THE AIRPORT LAND SYSTEM SPECIAL REVENUE FUND FOR REPAIRS AT THE FLIGHT SERVICE STATION. WHEREAS, the Federal Aviation Administration has authorized $36,370 to the City of Kenai for repairs and renovations at the Kenai Flight Service Station; and, WHEREAS, the City is willing to perform the needed repairs including crack sealing the parking lot, kitchen renovation, installation of doors, and exterior electrical receptacles. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that estimated revenues and appropriations be increased as follows: Airport Land System Special Revenue Fund. Estimated Revenues' Federal Grants $36,370 Appropriations' Airport Land - Repair and Maintenance $36,370 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this Seventh day of December 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk Approved by Finance: (11 / 10/2005) hi Introduced: November 16,2005 Adopted: December 7, 2005 Effective: December 7, 2005 CITY OF KENAI 210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611-7794 TELEPHONE 907-283-7535 FAX 907-283-3014 ~ M E M ORAN DUM To: Through' From: Date' Re: Charles M. Kopp, Acting City Manager Jack LaShot, Public Works Manage~-.~~- Robert C. Springer, Building Official ~ December 1, 2005 Automated Flight Service Station The ordinance that is up for Council approval on December 7, 2005 appropriating $36,369 is for upgrades and maintenance to the Flight Service Station building and parking lot. Jon Preston the Air Traffic Manager at the Kenai AFSS contacted me last winter requesting these upgrades. He indicated the FAA had money available in their budget for this work and requested a letter with a breakdown of costs. (See attached letter) It is my understanding that after the City has completed these upgrades the FAA will reimburse us for those costs. However, the actual costs will be higher due to the time difference between when quotes were received and when approval was provided. The added cost will be approximately $6,000 to $7,000 more. The interior work is almost $5,000 more, the electrical work is almost $2,000 more, but the parking lot work quote is good till June of 2006. I have emailed Jon Preston requesting additional money to cover the increased costs but have not received a response at this time. April 14, 2005 CITY OF KENAI 210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611-7794 TELEPHONE 907-283-7535 FAX 907-283-3014 ~ Jon Preston Air Traffic Manager Kenai AFSS 470 North Willow St. Kenai, AK 99611 Subject: Repairs and Upgrades to Kenai AFSS Building Dear Mr. Preston: Please find enclosed copies of price estimates/proposals for repairs and upgrade projects to the Kenai AFSS building. The following are the descriptions of these estimates/proposals: Crack seal and repair parking lot - Replace damaged exterior electrical pedestals- Install six new circuits for exterior electrical receptacles - Replace cabinets, countertops, appliances, flooring in kitchen - Install two pocket doom - Total - $11,778 $ 1,495 $ 5,876 $ 9,980 $ 7,240 $36,369 It should be noted that the replacement of items in the kitchen do not require upgrading to accessible standards. It would be beneficial to repair and maintain this building with the above projects. At this time the City of Kenai does not have funding available for these projects, however if the FAA were able to fund these projects the City of Kenai could act as the general contractor to oversee their completion. If there any questions, my phone number is 283-7535 ext. 233. · Robert C. Springer Building Official, City of Kenai Cc: Jack LaShot, City of Kenai Public Works Manager Rebecca Cronkhite, City of Kenai Airport Manager Suggested by: CITY OF KENAI ORDINANCE NO. 2134-2005 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA INCREASING ESTIMATED REVENUES AND APPROPRIATIONS BY $1,000 IN THE GENERAL FUND FOR A STATE LIBRARY GRANT. WHEREAS, the State of Alaska has awarded the Kenai Community Library a grant for continuing education; and, WHEREAS, the Institute of Museum and Library Services funds the state grant; and, WHEREAS, the grant will be used to attend the Public Library Association Annual Conference. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that estimated revenues and appropriations be increased as follows: General Fund Estimated Revenues: Library- State Grant $1,000 Appropriations: Library- Transportation $1,000 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this Seventh day of December 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk Approved by Finance: (11/10/2005) hl Introduced: Adopted: Effective: November 16, 2005 December 7, 2005 December 7, 2005 Suggested by: City CITY OF KENAI RESOLUTION NO. 2005-51 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, SETTING THE PUBLIC HEARING DATE ON THE PROPOSED MC COLLUM AND ALIAK DRIVES PAVING DISTRICT. WHEREAS, the City of Kenai has received a petition to form a special assessment district in the above-mentioned paving project; and, WHEREAS, the Council must set a date of public hearing on the proposed assessment district. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that the date of the public hearing on the proposed McCollum and Aliak Drives Paving Special Assessment District be set for February 1, 2006. , 'PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this seventh day of December, 2005. PAT PORTER, MAYOR ATTEST: Carol L. Freas, City Clerk clf Suggested by: Administration CITY OF K~NAI RESOLUTION NO. :2005-5:2 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, ADOPTING THE CITY OF KENAI CAPITAL IMPROVEMENTS PLAN PRIORITY LIST FISCAL YEAR 2006 - 2011 AS THE OFFICIAL SIX-YEAR CAPITAL IMPROVEMENTS PLAN FOR THE CITY OF KENAI. WHEREAS, the Capital Improvements Plan (CIP) is a long-term guide for capital expenditures; and, WHEREAS, the City intends to use the CIP as a guide for capital expenditures; and, WHEREAS, the City of Kenai CIP process has involved consideration of existing plans, programmatic needs, and public input; and, WHEREAS, the CIP process has also involved a public nomination and comment process; and, WHEREAS, the CIP compliments the legislative priorities, City Budget, and Comprehensive Plan; and, WHEREAS, the Kenai City Council held a public hearing on the Capital Improvements Program adoption on December 7, 2005. NOW, THEREFORE, BE IT RESOLVED THAT THE COUNCIL OF THE CITY OF KENAI, ALASKA adopt the attached City of Kenai Capital Improvements Plan Priority List Fiscal Year 2006 - 2011 as the official Six-Year Capital Improvements Plan for the City of Kenai. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this seventh day of December, 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk .,,.= o o Suggested by: CITY OF KENAI RESOLUTION NO. 2005-53 Administi ~uu~ A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AWARDING NON-EXCLUSIVE ON-AIRPORT CAR RENTAL CONCESSIONS TO CORPORATE SALES & LEASING, INC. D/B/A BUDGET RENT A CAR OF KENAI; ALASKA RENT A CAR INC., D/B/A AVIS; THE HERTZ CORPORATION; AND, ALASKA DIAL A CAR INC., D/B/A PAYLESS FOR THE PERIOD JANUARY 1, 2006 THROUGH DECEMBER 31, 2010. WHEREAS, four responsive bids were received on November 30, 2005 for the contract year January 1, 2006 through December 31, 2010; and, WHEREAS, the bid amounts received were as follows: Bidder Per Year Corporate Sales & Leasing Alaska Rent A Car The Hertz Corporation Alaska Dial A Car, Inc. $37,200.00 $3 ,2oo.oo $20,000.00 $12,000.00 WHEREAS, the Council of the City of Kenai has determined that awards to these bidders will be in the best interest of the City. NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA that the Non-Exclusive On-Airport Car Rental Concessions be awarded to the above bidders for the Kenai Municipal Airport for the period January 1, 2006 through December 31, 2010. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this seventh day of December, 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk Approved by Finance: ~ nal Municipal Airport Memo To: Charles M. Kopp, Acting City Manager From- Rebecca Cronkhite - Airport Manager ~~. Date: Subject: December 1, 2005 Award of Non-Exclusive Rental Car Concessions The bid opening for rental car concessions was held at the Kenai Airport on November 30, 2005. There were four bidders, all of which submitted complete bid packages and the required documentation for insurance and licensing. There are four spaces available for lease, therefore we recommend car rental concession contacts be awarded to all four companies and have prepared the attached resolution for Council consideration. The bid amounts determine which company selects space first. All companies pay the same space rent and 10% concession fee. The bid amount guarantees the company will pay that amount in concessions fees regardless of gross revenue. All the companies are currently doing business at the airport and their accounts are in good standing. We have an excellent working rolationship with all of them and look forward to having them in the airport for the next five years. www. ci.kenai.ak, us. Suggested by: CITY OF KENAI RE~OLUTION NO. 2005-54 City A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, APPROVING THE SALE OF LOTS ONE (1), TWO (2)AND THREE (3), BLOCK ONE (1), EVERGREEN SUBDIVISION, KlM ADDITION. WHEREAS, a written request has been received from Todd Harsha to purchase three lots in Evergreen Subdivision, Kim Addition for $25,000.00 (cash); and, WHEREAS, Ordinance No. 1548-93 determined the property is not required for a public purpose and can be sold; and, WHEREAS, these lots were included in a competitive bid sale in April of 1994, with the minimum bid being the fair market value of $11,000 (cash); and, WHEREAS, no valid bids were received; and, WHEREAS, there have been no other offers to purchase these parcels at the fair market value; and, WHEREAS, KMC 22.05.040(e) states the following: If no offers are submitted meeting the minimum acceptable offer (or appraised valuation), the City Manager may negotiate for sale of said tract or tracts of land with a modification of proposed terms or for less than the appraised valuation provided that no such negotiated sale for less than appraised value shall be binding upon the City unless the terms and price therein are approved by resolution of the City Council. NOW, THEREFOr, BE IT RESOLED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that the Council approves the sale of Lots One (1), Two (2) and Three (3), Block One (1), Evergreen Subdivision, Kim Addition. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this seventh day of December, 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk Approved by Finance: ~ (12/1/05) kh KENAI. ALASKA 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone' (907) 283-7535 / Fax: (907) 283-3014 www. ci.kenai.ak.us MemoranClum Date: From.' December 1, 2005 Charles M. Kopp, Acting City Manager Kim Howard, Assistant to the City Manager ~ Todd Harsha Proposal to Purchase- Lots 1, 2 & 3, Block 1, Evergreen Subdivision, Kim Addition Attached is a proposal to purchase Lots 1, 2 & 3, Block 1, Evergreen Subdivision, Kim Addition submitted by Todd Harsha. Mr. Harsha has offered $25,000 cash for all three lots ($8,333.33/lot). The lots were offered for sale by competitive bid on April 1994 for the appraised value of $11,000 cash. There were no bidders. There have been "For Sale" signs on the lots. Borough assessed values for each of these lots is currently $11,200. KMC 22.05.040(e) states the following: If no offers are submitted meeting the minimum acceptable offer (or appraised valuation), the City Manager may negotiate for sale of said tract or tracts of land with a modification of proposed terms or for less than the appraised valuation provided that no such negotiated sale for less than appraised value shall be binding upon the City unless the terms and price therein are approved by resolution of the City Council. There are 15 lots in the subdivision. Council has approved discounted sales for nine lots, as follows: · September 2005 - $9,500 each for two lots May 2005 - $9,500 (terms) June 2002- $9,500 · September 2000- $9,500 · June 1997 - $9,500 each for four lots I receive inquiries about the properties, however, there have been no other written offers made. Let me know how you would like me to proceed. Cc: Todd Harsha Attachments /kb December 1, 2005 City of Kenai ' Attn: Chuck Kopp, Acting City Manager 210 Fidalgo Avenue Kenai, AK 99611 Re: Evergreen Subdivision Lots Dear Mr. Kopp' I wish to purchase Lots 1, 2 & 3, Block 1, Evergreen Subdivision, K/m Addition from the City of Kenai. My intent is to build a home for myself On Lot 1 and then build houses to sell on Lots 2 and 3. Electric and gas utilities only extend to Lot 4. I have contacted Homer Electric Association and Enstar Natural Gas about the cost for extending the utilities to Lot 1. Homer Electric Association gave me an approximate quote of $6,500 and Enstar quoted $2,000. Considering the cost of the extensions, my offer is $25,000 for the three lots. This will be a cash sale. Enclosed is a $3,000 good faith deposit. Todd Harsha P.O. Box 2407 48001 Woken Ct. Kenai, AK 99611 335-3352 Evergreen Subdivision Kim Addition Subject Parcels (2) Spu._~r M._ote/ . 1714 THIRD AVE WESBET CT 1~03 Legend Lots for Sale Subject Parcels KENAI PENINSULA BOROL 144 N. BINKLEY · SOLDOTNA, ALASKA · 99669-7599 BUSINESS EMAIL:(907) 714-2160 FAX (907) 714-2388 assem blyclerk@ boro ug h. kenai.ak=us ' RECF,'; "y'q .... I November 17, 2005 Ms. Dawn Holland-Williams Records & Licensing Supervisor Alcoholic Beverage Control Board 5848 E. Tudor Rd. Anchorage, AK 99507-1286 SHERRY BIGGS, CMC BOROUGH CLERK Re: Application for Renewal of Liquor License Dear Ms. Holland-Williams: Please be advised that the Kenai Peninsula Borough has no objection to the approval of the application(s) for renewal of the liquor license(s) for the following establishment(s), located in the City of Kenai, Alaska: Restaurant/Eating Place Kenai Golf Course Caf6, Inc., DBA Kenai Golf Course Caf6 - #3146 The Kenai. Peninsula Borough Finance Department has reviewed its files and has raised no objection based on unpaid or delinquent taxes. Sincerely, Sherry Biggs,~OIC Borough Clerk cc.' applicant City of Kenai KPB Finance Department File S:\WPWIN~DATALa, BC Board~bc-lettcrs~*,.ENEWALS~Renewal in City. wpd Page 1 of 2 Carol Freas From: Reeda Jaramillo [reedajaramillo@dps.state.ak.us] Sent: Wednesday, November 02, 2005 11:10 AM To: Carol Freas Cc: Sue Ellen Essert Subject: 2006-2007 Renewal Notification - Kenai Dear Local Governing Body: We have received the following application(s) for renewal of liquor license(s) within your jurisdiction. You are being notified as required by AS 04.11.520. Additional information concerning filing a "protest" by a local governing body under AS 04.11.480 is included below. 2006-2007 Type: Restaurant/Eating Place License: Kenai Golf Course Cafe #3146 Location: 1.420 Lawson Dr. Owner: Kenai Golf Course Cafe inc. Agent: C.R. Baldwin Phone: 907-283-7167 Mailing Address: PO Box 289 Kenai AK 99611 We have received application (see attached notice) for a liquor license(s) within your jurisdiction. This is the notice as required under AS 04.11.520. Additional information concerning filing a "protest" by a local governing body under AS 04.11.480 is included in this letter. A local governing body as defined under AS 04.21.080(11) may protest the approval of an application(s) pursuant to AS 04.11.480 by furnishing the board and the applicant with a clear and concise written statement of reasons in support of a protest within 60 days of receipt of this notice. If a protest is filed, the board will not approve the application unless it finds that the protest is "arbitrary, capricious and unreasonable". Instead, in accordance with AS 04.11.510(b), the board will notify the applicant that the application is denied for reasons stated in the protest. The applicant is entitled to an informal conference with either the director or the board and, if not satisfied by the informal conference, is entitled to a formal hearing in accordance with AS 44.62.330-44.62-630. IF THE APPLICANT REQUESTS A HEARING, THE LOCAL GOVERNING BODY MUST ASSIST IN OR UNDERTAKE THE DEFENSE OF ITS PROTEST. Under AS 04.11.420(a), the board may not issue a license or permit for premises in a municipality where a zoning regulation or ordinance prohibits the sale or consumption of alcoholic beverages, unless a variance of the regulation or ordinance has been approved. Under AS 04.11.420(b) municipalities must inform the board of zoning regulations or ordinances which prohibit the sale or consumption of alcoholic beverages. If a municipal zoning regulation or ordinance prohibits the sale or consumption of alcoholic beverages at the proposed premises and no variance of the regulation or ordinance has been approved, please notify us and provide a certified copy of the regulation or ordinance if you have not previously done so. Protest under AS 04.11.480 and the prohibition of sale or consumption of alcoholic beverages as required by zoning regulation or ordinance under AS 04.11.420(a) are two separate and distinct subjects. Please bear that in mind in responding to this notice. AS 04.21.010(d), if applicable, requires the municipality to provide written notice to the appropriate community council(s). If you wish to protest the application referenced above, please do so in the prescribed manner and within the prescribed time. Please show proof of service upon the applicant. For additional information please refer to 15 AAC 104.145, Local Governing Body Protest. Note: Applications applied for under AS 04.11.400(g), 15 AAC 104.335(a)(3), AS 04.11.090(e), 11/3/2005 AGENDA KENAI CITY COUNCIL- REG~~ MEETING NOVEMBER 15, 2005 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://www.ci.kenai, ak.us ITEM A: CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval 4. Consent Agenda *All items listed with an asterisk (*) are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. ITEM B: SCHEDULED PUBLIC COMMENTS (10 minutes) le Ken Duff~ Ex. Director~ Frontier Community Services -- Frontier Community Services Building Project. , Rhonda Ogelsby/Kenai Kennel Club -- Section 36/Request for Space -- Dog Park/Section 36. . Comments/Wal-Mart (3 minutes/speaker) ITEM C: ,,, UNSCHEDULED PUBLIC COMMENTS (3 minutes) ITEM D: REPORTS OF KPB ASSEMBLY~ LEGISLATORS AND COUNCILS ITEM E: PUBLIC HEARINGS , Ordinance No. 2131-2005 -- Increasing Estimated Revenues and Appropriations by $1,300 in the General Fund for the Staying Connected Grant. e Ordinance No. 2132-2005 -- Increasing Estimated Revenues and Appropriations by $5,000 in the General Fund for a Donation Made by Tesoro Petroleum Co. to be Used for the Town Clock. , Resolution No. 2005-48 -- Directing the Continuation of the Project Entitled "Set Net Drive (From VIP Drive to Watergate Way)" and Designating What Improvements Are to be Included in This Project. (Clerk's Note: A motion for approval of Resolution No. 2005-48 is on the table.} , o ITEM F: o ITEM G: . e ITEM H: . . , , , . Resolution No. 2005-49 -- Opposing Integration of the Halibut Charter Fishery into the Existing Commercial IFQ System. Resolution No. 2005-50 -- Opposing the Proposed Mixing Zone Revisions to the Alaska Water Quality Standards. MINUTES *Regular City Council Meeting of November 2, 2005. OLD BUSINESS Discussion -- Proposed Sale of Wetlands/The Conservation Fund. (Clerk's Note: A motion to sell Parcels 4, 5, and 6 is on the table.) Approval -- Appointment of Mini-Grant Steering Committee NEW BUSINESS Bills to be Ratified Approval of Purchase Orders Exceeding $15,000 *Ordinance No. 2133-2005 -- Increasing Estimated Revenues and Appropriations by $36,370 in the Airport Land Fund for Repairs at the Flight Service Station. *Ordinance No. 2134-2005 -- Increasing Estimated Revenues and Appropriations by $1,000 in the General Fund for a State Library Grant. Approval-- Assignment/Security Assignment of Lease and Amendment to Lease -- Lot 2, Block 1, Gusty Subdivision/Thomas Wagoner to Ma & Pa Alaskan Treasures, Inc. Approval-- Vacation of the South 33-Foot Right-of-Way Easement Adjacent to Government Lot 94 and Vacate the North 33-Foot Right-of- Way Easement Adjacent to Government Lot 105, Reserving a 30-Foot Easement, 15 Feet Both Sides of the Property Line Between Government Lots 94 and 105 for Utilities. Original Patent No. 53348, Recorded in Book 31, Page 236 Kenai Recording District; Within Section 34, Township 6 North, Range 11 West, Seward Meridian, Alaska, the City of Kenai and the Kenai Peninsula Borough. KPB File No. 2005-256; Petitioners: Edmund C. and Iris B. Enders of Anchorage and John J. Williams of Kenai, Alaska; Location, City of Kenai. Approval-- Lease Application/Tract B-l, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. , Discussion -- Peninsula Art Guild/Request for Funding ITEM I: COMMISSION/COMMITTEE REPORTS . 2. 3. 4. 5. 6. 7. Council on Aging Airport Commission Harbor Commission Library Commission Parks & Recreation Commission Planning & Zoning Commission Miscellaneous Commissions and Committees a. Beautification Committee b. Alaska Municipal League Report c. Arctic Winter Games d. Stranded Gas Committee ITEM J: REPORT OF THE MAYOR ITEM K: ADMINISTRATION REPORTS 1. City Manager 2. Attorney 3. City Clerk ITEM L: DISCUSSION 1. Citizens (five minutes) 2. Council EXECUTIVE SESSION-- None Scheduled. ITEM M: ,ADJOURNMENT KENAI CITY COUNCIL- REGULAR MEETING NOVEMBER 15, 2005 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://www, ci.kenai, ak.u s MAYOR PAT PORTER, PRF.~IDING MINUTES ITEM A: CALL TO ORDER Mayor Porter called the meeting to order at approximately 7:00 p.m. in the Council Chambers in the Kenai City Hall Building. A-I. PLEDGE OF ALLEGIANCE Mayor Porter led those assembled in the Pledge of Allegiance. A-2. ROLL CALL Roll was taken by the City Clerk. Present were: I J oe Moore Rick Ross . Pat Porter, Mayor Linda Swarner Robert Molloy Cliff Massie Mike Boyle A quorum was present. Also Present: Les Krusen, Student Representative A-a. AGENDA APPROVAL Mayor Porter requested the following changes to the agenda: ADD AS: SUPPLEMENTAL INFORMATION FOR: SUPPLEMENTAL INFORMATION FOR: B-l, Persons Scheduled to be Heard-- Senator Tom Wagoner. Item E-3, Resolution No. 2005-48-- KK memorandum related to Set Net Drive LID. Item E-3, Resolution No. 2005-48 --d. Whannel letter noting a subsequent decision not to support the formation of the assessment district. REMOVE: Item E-4, Resolution No. 2005-49 MOVE: Item H-7, Lease Application/Lounsbury/k Associates for Wal-Mart Stores, Inc. -- Hear KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 2 Immediately following Item B-3 (public comments) ADD AS: Item H-9, Scheduling of Board of Adjustment Hearing -- Appeal submitted related to the Lease Application/Lounsbury & Associates for WE-Mart Stores, Inc. -- Hear immediately following H-7. ADD TO: K- 1, City. Manager's Report -- Draft City of Kenai Capital Improvements Plan 2006-2011 MOTION: Council Member Ross MOVED to approve the agenda with the list of changes, except to move H-7 and H-9 before H-3. Council Member Boyle SECONDED the motion. VOTE: *Student Representative Krusen: Yes 1 Moore Yes I oss Yes .Porter Yes . Molloy Yes Yes i Massie lYes Boyle Yes MOTION PASSED UNANIMOUSLY. MOTION: Council Member Moore MOVED to approve the agenda as amended and requested UNANIMOUS CONSENT. Council Member Swarner SECONDED the motion. There were no objections. SO ORDERED. A-4. CONSENT AGENDA MOTION: Council Member Moore MOVED for approval of the consent agenda and requested UNANIMOUS CONSENT. Council Member Swarner SECONDED the motion. There were no objections. SO ORDERED. ITEM B: SCHEDULED PUBLIC COMMENTS B-1. Senator Tom Wagoner -- Wagoner reported Agrium's Blue Sky coal gasification and power plant plan for putting their plant back on at full capacity. He KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 3 noted, the plan, if successful, would relieve the pressure for producing gas in Cook Inlet, however he did not believe it would alleviate the fear of running out of gas. Wagoner added, the spur line from the North Slope to Palmer would still be needed. Ken Duff, Ex. Director, Frontier Community Services -- Frontier Community Services Buildin§ Project. Referred to a previous visit in which he discussed the possibility of developing administrative and professional offices on city donated land in the same area as the proposed assisted living facility. At that time, council requested architectural drawings and additional information be prepared and presented to council. Duff distributed architectural renderings of their planned facility and noted, their .concept included an exercise trail to be placed between the Frontier Community Services (FCS) facility and the assisted living facility to tie them together. A brief discussion followed in which it was noted the city code allows land to be donated to 501(3)(c) organizations and FCS fell into that category; FCS would have to do the same as was indicated to the Senior Connection in that the encumbrances on the property would have to be brought current. Council Member Molloy stated his concern of donating that large a piece of property; what design considerations had been given to traffic issues that would occur and who would pay for the costs to resolve the issues; there would be no sales or property tax revenues from the property ff it were donated; and, suggested a lease or sale be considered instead. It was noted the city had donated property in the past to Habitat for Humanities, for the Juvenile Detention Facility, etc. It was also noted, the council had already passed a resolution in support of donating the property and the design concerns would be addressed during the permitting and planning stages. Concurrence of council was for FCS to work with city administration on the project, knowing direction to proceed would not mean a commitment, but bringing back a plan for council to review and consider. Rhonda Ogelsby/Kenai Kennel Club -- Section 36/Request for Space -- Dog Park/Section 36. Ogelsby referred to information included in the council packet, noting the Kenai Kennel Club hoped to build a dog park adjacent to the Section 36 property, starting out with a fenced and grassed area for holding agility trails and large dog trials; during the trials, there are generally 750 dogs, 100 recreational vehicles, and several hundred people in attendance; and, they also hoped to develop a walking trail and skijoring trail in the furore. Ogelsby added, the Club would maintain the area and collect waste, however the rules of the park would be for the dog owners to clean up after their pets. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 4 It was reported the Parks & Recreation Commission recommended approval for the concept after reviewing the layout, design, fencing, and whether or not the dog park would be the best use for the property and, though residents of the Evergreen Street area were not individually invited to attend the Commission meeting when the dog park was discussed, residents of the area were in attendance at the meetings when the issue was discussed but made no comments. Reference was made to the two issues needing to be considered, i.e. moving the Fire Wise site and rezoning the property from Rural Residential to Recreation. Ogelsby noted, the area they were interested in using would be north of the Fire Wise site, however they would like to use the Fire Wise site for parking. Administration was requested to work with the Parks & Recreation Commission, Kenai Kennel Club and the borough to resolve the issues. Approval-- Lease Application/Tract 13-1, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. Mayor Porter explained the issue would be opened for public comment, however comments would be kept to three minutes; since the city had received an appeal of the Planning & Zoning Commission's actions on the lease application, council would not answering any questions; if there were questions of the public, they should direct those questions to administration after the meeting; and, after the Board of Adjustment hearing, the lease application could come back to council for consideration and, there would not be public comments taken at that time. Porter offered a statement in reference to comments represented on a website related to her knowledge and disposition of the lease application. MOTION: Council Member Moore MOVED for approval of the lease application of Tract B-1, Baron Park No. 10 Tract C, Baron Park No. 5; and, Lot 1, baron Park No. 5 by Lounsbury and Associates, Inc. on behalf of Wal-Mart Stores, Inc. Council Member Ross SECONDED the motion. The floor was opened for public comment. Tom Adams, Lounsbury and Associates -- Reported his position as a civil engineer working for Lounsbury and Associates and that Lounsbury a.nd Associates is the Wal- Mart Stores representative for Alaska. Adams reported he was in attendance to listen to comments and concerns and begin the process through the lease application KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 5 approval. It was also noted, they were not currently in a position to address ingress/egress concerns made at the Planning & Zoning Commission hearing; no field studies had yet been made; studies, etc. would not proceed within a lease agreement; and, when a landscape/site plan is produced, it would be reviewed in a public meeting. Nancy Speedy, 1602 Pine Circle, Kenai -- Spoke in support of the development of a Wal-Mart Store -- good for the city's economic base and for her and her family's future. Kelly Gifford, 312 Rogers Road, Kenai -- Spoke in support of the development and requested council to do what would be needed to make the city a little richer and bring business to Kenai. Heather Rash, 48840. Knudsen Street, Kalifornsky Beach Road -- Spoke in opposition of the development noting more shops and retail businesses were needed in Kens_i, but not Wal-Mart because grocery stores were already available; Wal-Mart quality is low; employees are not treated well; and there are other options available. Rash left a movie for council to watch and urged them to consider all the factors in making their decision. Jason Carroll, 407 Eadies Way, Kenai -- Stated his support of the develop noting, he is the manager of First National Bank, and he talked with business people regarding the proposed develop; the businesses approved his speaking for them. Carroll noted it was false to say that small businesses are against the Wal-Mart development as only very few he spoke to did not support the development. Bekkie Jackson, 1528 Toyon Way, Kenai -- Submitted a letter signed by 25 people with whom she worked stating their strong support of the development and urged council to approve the lease application. Joel Caldwell, 48405 Bernice Avenue, Soldotna -- Stated his support of the development, noting he was grateful Home Depot opened a store in Kenai and was looking forward to spending money in Kenai and not traveling to Anchorage to go to a Wal-Mart store. Roy Wells, 410 Lawton Drive, Kenai -- Spoke in support of the development on behalf of the Kenai Chamber of Commerce and comments included: the residents he spoke with were mostly in support; free enterprise is a right; concerns of lack of retail shopping in Kenai; people need compelling reasons to come to Kenai and additional shops will bring clientele to Kenai; now would be the time to have a say in the aesthetics of the development; now would be the time for local businesses to make a game plan; better to have the development in the city than outside; and, tax revenue from sales would help the city. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 6 Tom Wagoner, 4040 Primrose Place, Kenai -- Stated his support of the development, noting more competition is better for business; other businesses in Kenai do not provide benefits to employees; and, remembering concerns with PERS and lack of municipal assistance, the council should do what is best for the city, i.e. providing more revenue to the city. Scott Romain, 425 Rogers Road, Kenai -- Stated his support of the develOpment and noted he is a local realtor; other realtors he spoke with were in support of the development; because Wal-Mart has stated they plan to build somewhere on the Peninsula, he believed it should be in Kenai; Wal-Mart would provide jobs for all ages; and, he congratulated Lounsbury and Associates for choosing Kenai. Chad Botirius, 47785 Michelle Avenue (Kalifornsky Beach Road), Soldotna -- Spoke in opposition to the development, noting he believed the property would be better used for Frontier Community Services and he believed Wal-Mart would bring low wages, no health care, no careers and, questioned what economic benefit the development would bring to Kenai. Ernie Lucas, 1520 Windward Way, Inlet Woods, Kenai-- Stated his stron§ support for the Wal-Mart development. Mary Morgan, 602C Peninsula Avenue, Kenai -- Stated she was not totally for the development or totally against it and submitted a newspaper article discussing Wal- Mart. Laura Sievert, 3329 Beaver Loop Road, Kenai -- Stated her strong support of bringing more shopping to Kenai, though was concerned how the facility would fit into the Kenai Economic Development Strategy; the development would be so large, it would transform the community; stated concerns of traffic, landscaping, and the size strangling small businesses and maybe force them out of business. She urged council to consider carefully the pros and cons and to keep the public informed. Peter McKay, 55441 Chinook Road, Kenai -- Stated his opposition to the development and reported some statistical information. Margaret Mentinll, 50375 Onslow, Kenai-- Stated her opposition to the Wal-Mart development, however if it was to come to the area, she wanted it to be in Kenai; noted concerns of water/sewer, electrical and traffic problems; also concerned with the possibility of chemicals stored outside of the building leaking into the river. Jim Fassler, 36814 Cheechako News Drive, Kenai Peninsula Borough -- Stated his opposition to the project due to the treatment of the employees and unkempt stores; KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 7 has no problem in coming to Kenai to shop; and, urged council to look for other retailers instead of Wal-Mart. Joe Ray Skrha, 2455 Watergate Way~ Kenai -- Stated his opposition to the Wal-Mart development and submitted a petition. He also stated his concerns with treatment of those who manufacture garments, etc. that are sold in Wal-Mart stores. Janice Nightingale, 49845 Otter Court, Nikiski -- Stated her opposition to the development, noting concern for local businesses and how Wal-Mart employees will be able to support their families due to wages offered. Glenda Feeken, 10672 Kenai Spur Highway, # 109, Kenai -- Spoke in support of the development, notin§ she spoke to all her customers and all were very excited; Wal-Mart is a very bi§ corporate donor; havin§ Wal-Mart in Kcnai will attract other businesses. Debbie Mci/ay, 55441 Chinook Road, Kenai (Nikiskl) -- Spoke in opposition to the development, noting concerns related to detention areas near the fiver; fair market value; increase in traffic; snow removal and storage; and sub-lot leasing. Attorney Graves explained the FAA requirements for fair market value rate determination; referred to estimated sales tax revenues reported in Finance Director Semmens' memorandum; and, explained snow storage and landscaping would be considered later on as part of the process. Fred Braun, Ntkiski -- Spoke in su;: "'orr of the development and commented, Wal- Mart had been investigating the poss~aility of opening a store in Kenai for the last four years; felt it important to keep them in Kenai; if they had chosen another site, he believed more people would be complaining why they did not choose Kenai; and, though there are downsides to the development, there are more upsides. Trish Kopp, 1340 Chinook Drive, Kenai -- Spoke in support, noting Wal-Mart and Home Depot are two of the top businesses nationally; there are people not looking for career jobs; and, there will be employment for the young people in Kenai. Ozzie Osborne,- 14360 Kenai Spur Highway, Kenai -- Stated his support of the development, noting he did not believe low wages or work hours was a concern of the city. Duane Bannock, 7450 FHntlock, Anchorage -- Spoke in support of the develOpment and noted similar concerns were voiced when KMart decided to move into Kenai; KMart affected the city economically; the development will be important to the economic future of Kenai. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 8 Craig Fanning, Salvation Army, Kenai -- Stated support of the development and noted, he is not a Wal-Mart shopper, however represents people that desperately need them and need the ability to spend their money carefully and Wal-Mart will offer them that ability. Also, he has relatives who work for Wal-Mart and are very happy and believe them wonderful employers. Leon (~uesnel, 516 Hemlock Avenue, Kenai -- Spoke in support of the development, saying he looked forward to Wal-Mart in Kenai. Rick Baldwin, 3080 Kim-N-Ang Court, Kenai/Chair of KEDS Action Team -- Reported the Team met to consider whether the lease application should be addressed by their board and if so, how in relation to the Kenai Economic Development Strategy. The Team unanimously recommended the city should grant the application and believed Wal-Mart an opportunity for revitalizing the community. Steve Hillyer, 381 Senior Court, # 109, Kenai -- Spoke in support of the development, noting people would come to Kenai to shop at Wal-Mart and other businesses instead of going to Anchorage; believed the development would be an advantage; and, believed the 'anti' crowd a minority and those in support a tremendous majority. Ray Sagorski, 8480 Kenai Spur Highway, Kenai -- Urged council to use economics and logic in making its decision. Tim__ Navarre, 608 Ponderosa, Kenai-- Spoke in support of the development, noting he believed esthetics should be considered and the development would help the appeal of the community; suggested the city should consider helping small businesses to plan for the impact of the new store; stated he believed the city has a responsibility to be proactive instead of reactive; and, stated he believed the development would be better for the community and small businesses. Bill Osborn, 450 Rogers Road, Kenai-- Spoke in support of the development, saying he believed Kenai would be moving ahead on the Peninsula and Kenai would grow if new businesses come to town. Tom Adams, Lounsbury and Associates -- Adams stated they were at the meeting to hear comments as part of the process; they would address the design/landscaping comments after the lease application has been approved; the social issues would have to be answered by the community; and urged all to be educated on the process. Adams also explained, the lease application was the beginning of the process; if the city chooses to deny the application, the questions presented during comments would KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 9 not be reviewed; if the lease application would be approved, they would engage the assistance of a landscaping architect, traffic engineers, etc. and return with a fully developed plan. End of public comments. BREAK TAKEN: 9:14 P.M. BACK TO ORDER: 9:31 P.M. Council noted the need to set a Board of Adjustment hearing on the appeal of recommendations taken by the Planning & Zoning Commission related to the lease application. Council scheduled the Board of Adjustment hearing for December 6 at 6'00 p.m. in the Kenai City Council Chambers. Council Member Ross stated the lease application could be included on the December 7, 2005 council meeting agenda and could be postponed if no decision would be made on the appeal. MOTION: Council Member Ross MOVED to postpone the vote on the lease approval until December 7 and Council Member Swarner SECONDED the motion. VOTE: *Student Representative Krusen: Yes Moore lYes Swarner lYes Massie Ross Yes Molloy Yes Boyle Porter Yes Yes Yes MOTION PASSED UNANIMOUSLY. I'I-9. Scheduling of Board of Adjustment Hearing-- Appeal submitted related to thc Lease Application/Lounsbury & Associates for Wal-Mart Stores, Inc. See discussion in Item H-7 above. ITEM C: UNSCHEDULED PUBLIC COMMENTS (3 minutes) Holly Norwood- Stated she was a candidate for city manager and came to thank the council for review her materials. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 10 ITEM D: -- No reports. REPORTS OF KPB ASSEMBLY, LEGISLATORS AND COUNCIL~ ITEM E: PUBLIC HEARINGS E-X, Ordinance No. 2131-2005-- Increasing Estimated Revenues and Appropriations by $1,300 in the General Fund for the Staying Connected Grant. MOTION: Council Member Molloy MOVED to approve Ordinance No. 2131-2005 and Council Member Swamer SECONDED the motion. There were no public or council comments. VOTE: *Student Representative Krusen' Yes Moore Yes i Swarner Ross Yes Molloy Porter Yes Yes Massie Yes Yes Boyle Yes MOTION PASSED UNANIMOUSLY. E-2. Ordinance No. 2132-2005 -- Increasing Estimated Revenues and Appropriations by $5,000 in the General Fund for a Donation Made by Tesoro Petroleum Co. to be Used for the Town Clock. MOTION: Council Member Massie MOVED for approval of Ordinance No. 2132-2005 and Council Member Swarner SECONDED the motion. There were no public comments. Porter reported the base of the clock had been completed and the arrival of the clock works was expected in the next few days. VOTE: *Student Representative Krusen: Yes Moore lYes Swarner Ross Yes Molloy Yes I Massie Yes Boyle Yes Yes KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 11 Porter lYes MOTION PASSED UNANIMOUSLY. E-3. Resolution No. 2005-48 -- Directing the Continuation of the Project Entitled "Set Net Drive (From VIP Drive to Water§ate Way)" and Designating What Improvements Are to be Included in This Project. (Clerk's Note: A motion for approval of Resolution No. 2005-48 was placed on the table at the November 2, 2005 council meeting.) MOTION: Council Member Molloy MOVED to remove Resolution No. 2005-48 from the table and Council Member Massie SECONDED the motion. VOTE: *Student Representative Krusen' Yes Moore lYes Swarner Ross Yes Molloy Porter Yes Yes Yes IMassie lyes Boyle Yes MOTION PASSED UNANIMOUSLY. There were no public comments. Acting City Manager Kopp referred to the Komelis memorandum provided in the packet and a memorandum distributed at the beginning of the meeting. Reviewing the information, it was noted there were three undeveloped properties in the Set Net Drive proposed local improvement district; the code indicated, "no assessment could be levied in excess of 25% of the fair market value of property after giving effect to the benefit accruing from the work or action for which assessed"; because the code conflict with the policy of council for 50% of all local improvement district costs to be paid for by the owners, several options were offered to council: · City could pay the extra $18,223 from grant funds. · Council could approve a slight change in policy to allocate costs on square foot basis plus an extra charge for the $18,223 to other eight property owners. · City could decide not to do the project. · Council could change KMC to do away with the 25% limit. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 12 Kopp noted, he and the city attorney were developing an ordinance to address the 25% limit. Ross stated, because the city had paid for costs as a result of the cap in past improvement districts, he believed the same should be done for this district and council could address a code change in the future. Moore noted his agreement. MOTION: Council Member Ross MOVED, as a result of the 25% cap, the city pay from its funds the additional $18,233 for the project and Council Member Boyle SECONDED the motion. Ross clarified, the costs would be paid from the grant funds. VOTE: *Student Representative Krusen: Yes I Moore lYes Ross Yes Porter Yes Swarner Yes Massie Yes Molloy Yes Boyle Yes MOTION PASSED UNANIMOUSLY. Resolution No. 2005-49 -- Opposing Integration of the Halibut Charter Fishery into the Existing Commercial IFQ System. Removed from the agenda. Resolution No. 2005-50 -- Opposing the Proposed Mixing Zone Revisions to the Alaska Water Quality Standards. MOTI01~: Council Member Swamer MOVED for approval of Resolution No. 2005-50 and requested UI~ANIMOUS CONSENT. Council Member Boyle SECONDED the motion. There were no public or council comments. VOTE: There were no objections. SO ORDERED. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 13 ITEM F: MINUTES F-Xo Regular City Council Meeting of November 2, 2005. Approved by consent agenda. ITEM G: OLD BUSINESS Discussion -- Proposed Sale of Wetlands/The Conservation Fund. (Clerk's Note: A motion to sell Parcels 4, 5, and 6 was placed on the table at the November 2, 2005 council meeting.) MOTION: Council Member Molloy MOVED to remove the motion to sell Lots 4, 5, and 6 from the table and Council Member Swamer SECONDED the motion. Council Member Molloy stated his support of the motion to approve the sale and noted, he believed the properties were not suitable for development because of the wetlands and the sale would bring revenue to the city. Brad Meiklejohn, The Conservation Fund, Eagle River -- Responding to a question of his reaction to what the city was offering, Meiklejohn stated he was disappointed and offered as a compromise, the Fund's purchase of Parcels 1, 2, 4, 5, 6 and the exemption of the panhandle on Parcel 2. · He would be willing to consider the sale of a Conservation.Easement on the same lots. The proposed exchange of Parcel 7 by the Kenai City Boat dock was not completed and the Fund was waiting to see what action would be taken with the sale; there was a possibility the exchange (for the exit road property) would not go forward. · If purchased by the Fund, the property could be placed into the Kenai River Special Management Area (KRSMA) or the Kachemak Land Trust. Discussion followed in which comments included: Kopp stated he had not had any discussion with Meiklejohn indicating the exit road trade and the land sale were linked. Swarner stated she would not be interested in any of the parcels going to KRSMA, though she was willing to support a conservation easement for Parcels 1 and 2. Meiklejohn stated if there was no sale, the Fund would reconsider whether to go forward with the exchange (dock exit road). KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 14 VOTE ON SALE OF PARCELS 4, 5, AND 6' *Student Representative Krusen: No I Porter No Massie No Boyle Yes Moore Ross No Swarner Yes No Molloy No MOTION FAILED. Council Member Massie stated he believed it was originally a good deal and was under the impression any part of the sale would be acceptable by the Fund. With the comments made related to the exit road exchange and the sale being linked, he felt the council was being held hostage. MOTION: Council Member Massie MOVED to sell everything except the panhandle on Parcel #2, i.e. Parcels 1, 2, 4, 5, 6, excepting the Parcel #2 panhandle. Council Member Boyle SECONDED the motion.. Ross stated he had similar feelings as Massie and explained, he thought the trade was a deal upon which both sides had agreed; the proposed wetlands sale was a separate item; thought the trade was of mutual benefit to both groups; the linking of the two transactions disturbed him; and, he would not support the motion. Moore stated he agreed with Ross; he was concerned with the link and the Fund giving the properties to KRSMA; and, stated he would not support the motion. MOTION TO AMEND: Council Member Swamer MOVED to amend the M.assie motion in that the property would not go to the State of Alaska {to eventually be in the Special Management Area) and would be held under a land trust. Council member Molloy SECONDED the motion. City Attorney Graves stated he could investigate whether a deed restriction could be included. Meildejohn stated the Fund would find a deed restriction acceptable. VOTE ON AMENDMENT: *Student Representative Krusen: Yes Porter Yes Massie Yes Moore No ] Swamer Yes Ross No [ MolloyYes KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 15 Boyle MOTION PASSED. MOTION TO AMEND: Council Member Swarner MOVED to sell a conservation easement on Parcels 1 and 2. Council Member Molloy SECONDED the motion. Graves explained the city would maintain technical ownership of the property with a conservation easement, but the city would essentially contract with The Conservation Fund and not allow development on the land. It would be a dual responsibility of the city and the Fund to enforce the conservation easement. The property would basically remain "as is." Graves noted, with a sale, the city would not longer have the responsibility of managing the property. He noted, ff council wished to go forward with the conservation easement, the price would need to be decided because prices could be different between sales and conservation easements because the Fund would be receiving less than it would with a sale. The prices included in the packet were developed for sale of the properties. Meiklejohn added, the conservation easement would be drafted and then taken to an appraiser; the appraiser would determine the percentage of the fair market value the document would be representing; the more restrictive an easement is, the greater percentage of value is represented in the easement; the commitment of the Fund and the restrictions on their funding to purchase properties, mandates the properties remain in their natural state; and, the sale of a conservation easement on Parcels 1 and 2 would be acceptable to the Fund. Student Representative Krusen stated he believed the proper management of the wetlands was essential to the health of the Kenai River and stated his support for the conservation easement sale. Ross stated he was opposed to the sale of Parcels 1 and 2; the city passed a resolution accepting the trade related to the exit road and now the negotiations had changed; and, he would vote against the motion. Molloy stated he understood the benefit of the road to the harbor and thought earlier the sale of the wetlands could be a win-~ situation and. would give the city revenue for other projects. Moore stated he also felt the exit road land trade was a completed deal and with the comments made by Meiklejohn, the value of Parcels 1, 2, 4, 5, and 6 had been diminished. Moore stated he would not support the motion. VOTE ON AMENDMENT: KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 16 *Student Representative Krusen: Yes Iporter Massie Boyle Yes Moore No No Ross No No Swarner Yes Molloy Yes MOTION FAILED. MOTION TO AMEND: Council member Swamer MOVED to delete Parcel 2 from the purchase and Council Member Moore SECONDED the motion. Public Works Manager La Shot noted, in deciding on what to do with the parcels, council should remember future trades may be needed for airport expansion, etc. VOTE ON AMENDMENT: *Student Representative Krusen: Yes Porter Yes Massie No Boyle No Moore Ross Yes Swarner Yes Yes Mollo¥ Yes MOTION PASSED. Meiklejohn stated the Fund were interested in a large scale conservation project. Ross clarified, the main amended motion was to sell Parcels 1, 4, 5, 6 with a deed restriction (the parcels would be placed in a land trust). Meiklejohn was asked if the sale as stated would be acceptable to the Fund and he answered yes. Meildejohn was asked ff the trade of properties for development of the dock exit road would still go forward in reference to the motion as it had been amended and Meiklejohn stated yes. VOTE: *Student Representative Krusen: Yes Porter No .... Massie Yes BOyle Yes Moore No Swarner Yes Ross No Mollo¥ Yes MOTION PASSED. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 17 Approval -- Appointment of Mini-Grant Steering Committee MOTION: Council Member Molloy MOVED to approve the appointments of the Steering Committee as presented and Council Member Moore SECONDED the motion. VOTE: *Student Representative Krusen: Yes Ross Yes Molloy Yes Boyle Yes Porter Yes MOTION PASSED UNANIMOUSLY. ITEM H: NEW BUSINESS H-X. Bills to be Ratified MOTION: Council Member Moore MOVED to ratify the bills and requested UNANIMOUS CONSENT. Council Member Swamer SECONDED the motion. There were no objections. SO ORDERED. i-2. Approval of Purchase Orders Exceeding $15,000 MOTION: Council Member Swarner MOVED to approve the purchase orders exceeding $15,000 and requested UNANIMOUS CONSENT. Council Member Moore SECONDED the motion. There were no objections. ~O ORDERED. *Ordinance No. 2133-2005 -- Increasing Estimated Revenues and Appropriations by $36,370 in the Airport Land Fund for Repairs at the Flight Service Station. Introduced by consent agenda. *Ordinance No. 2134-2005 -- Increasing Estimated Revenues and Appropriations by $1,000 in the General Fund for a State Library Grant. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 18 Introduced by consent agenda. Approval -- Assignment/Security Assignment of Lease and Amendment to Lease -- Lot 2, Block 1, Gusty Subdivision/Thomas Wagoner to Ma & Pa Alaskan Treasures, Inc. MOTION: Council Member Moore MOVED to approve the Assignment/Security Assignment of Lease and Amendment to Lease -- Lot 2, Block 1, Gusty Subdivision/Thomas WagOner to Ma & Pa Alaskan Treasures, Inc., Item H-5. Council Member Swarner SECONDED the motion and requested UNANIMOUS CONSENT. There were no objections. SO ORDERED. I'I-6 o Approval -- Vacation of the South 33-Foot Right-of-Way Easement Adjacent to Government Lot 94 and Vacate the North 33-Foot Right-of- Way Easement Adjacent to Government Lot 105, Reserving a 30-Foot Easement, 15 Feet Both Sides of the Property Line Between Government Lots 94 and 105 for Utilities. Original Patent No. 53348, Recorded in Book 31, Page 236 Kenai Recording District; Within Section 34, Township 6 North, Range 11 West, Seward Meridian, Alaska, the City of Kenai and the Kenai Peninsula Borough. KPB File No. 2005-256; Petitioners: Edmund C. and Iris B. Enders of Anchorage and John J. Williams of Kenai, Alaska; Location, City of Kenai. Noting the information included in the packet, City Attorney Graves reported the Borough Code indicated council was not required to take any action, but if they objected to the vacation, they did have the right to veto. Council took no action. Approval -- Lease Application/Tract B-l, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. Heard after Item B-2. Discussion -- Peninsula Art Guild/Request for Funding Marcia Beauchamp/Peninsula Art Guild-- Referring to information included in the packet, Beauchamp explained the Guild had been awarded a $13,320 grant from the Rasmuson Foundation for repair of the roof at the Kenai Fine Arts Building. In addition, they wanted to take advantage of an opportunity to gain an additional $4,100 from a dollar-challenge grant toward their renovation project. Beauchamp requested the city to issue $2,000 which had been allocated to the FY 2003 budget and had not been spent and consider granting the Peninsula Art Guild an additional KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 19 $4,100 to take advantage of the dollar-challenge grant. She explained, the renovation project would include electrical upgrading, carpeting, painting, etc. Administration indicated funds were available in the Buildings fund to cover the $4,100; issuing the funds was not time sensitive; and, with council's direction, an ordinance would be prepared to appropriate the funds. Council consensus was to move forward w/th the preparation of the ordinance. ITEM I: COMMISSION/COMMITTEE REPORTS I-1. Council on Aging -- Council Member Boyle reported the summary of the November 3, 2005 meeting was included in the packet and briefed those present of upcoming events at the Center. 1-2. Airport Commission -- Council Member Swarner reminded those in attendance of the Airport Supplemental Plan work session scheduled for Friday, November 18 beginning at 1:00 p.m. I-3. Harbor Commission -- Council Member Massie reported a joint work session between the Harbor and Parks & Recreation Commissions had been suggested in order to discuss the dip net fishery. Council had no objections. I-4. Library Commission -- Council Member Molloy reported the meeting summary of the November 1 meeting was included in the packet. The application of Christine Cook for appointment to the Commission was reviewed. Council had no objections to Cook's appointment. I-5. Parks/h Recreation Commission -- Council Member Moore reported the meeting summary of the November 3 meeting was included in the packet. I-6. Planning & Zoning Commission -- Council Member Ross reported on actions taken at the November 9 meeting, including the Commission's recommendation for council to approve the lease application for the Wal-Mart development. I-7. Miscellaneous Commissions and Committees I-7a. Beautification Committee -- Council Member Swa~ner reported the meeting summary of the November 8 meeting was included in the packet. She also noted the meetings for December and January had been cancelled. I-Th. Alaska Municipal League Report -- Swarner gave a brief report of events that took place at the AML Conference. I-7c. Arctic Winter Games--- Parks & Recreation Director Frates reported the KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 20 cost of the bleachers had been approved by the AWG as well as the bleacher installation costs and security camera installation. l-7d. Stranded Gas Committee -- No report. ITEM J: REPORT OF THE MAYOR -- Mayor Porter reported she had spoke at the Veteran's Day program; reminded council of the work sessions on November 18 with Paul Gray at 12:30 and the Supplemental Plan beginning at 1'00 p.m. ITEM K: _ ADMINISTRATION REPORTS K-1. City Manager -- Acting City Manager Kopp reported the following- . Referring to the November 10, 2005 memorandum included in the packet from Finance Director Semmens and requesting council approval of a new health insurance program at the December 7 meeting, Kopp noted new information had been received related to health savings accounts. He reported the high deductible plan would be raised from $1,200 to $5,000 for employee costs; January would not be a good time for a major change in the program as the employees felt more time would be needed to assess the health savings accounts and to review the entire benefit package; and, because a plan could not be chosen by December, an adjustment to the plan could be made in July. · An appropriation of $500,000 was made to the Corps of Engineers budget for the bluff restoration project to fund the next phase of the project. * Administration is corresponding with the Russian Orthodox Church regarding the relocation of cabins. · A new foundation on which to place the Claraence Ladd cabin was estimated at $4,000 and relocating the cabin would exceed $10,000. · Mary Jo Joyner accepted the Library Director job offer and should be on the job by the end of January. · A revised Capital Improvement Program Plan was distributed to council and a work session date of November 28 for review with area' legislators was suggested. Council stated no objection to the work session date. · The Friendship Mission was now open (old Eadies building). · The Katmai Motel renovation was moving along and they hoped to be open by Christmas. · The results from the Wellhouse No. 4 pilot test study were not good -- the study group reported its willingness to try a new study. · Administration has applied for an extension to the arsenic removal deadline. It is very likely the extension will be granted. · Reference was made to a memorandum included in the packet related to a request from Council Member Molloy to link his personal webpage to the city's webpage. Molloy stated he had several policy discussions with Council Member Ross KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 21 and requested the issue be included as a discussion item on a future agenda. Moore requested the issue of upgrading the city's webpage be discussed at that time as well. Council had stated no objections to discussing the issue in ,January. · Spoke with a representative from Northern Dynasties related to the city's desire to be their hub in air freight and learned Kenai is at the top of their list. Attorney-- No report. K-3. City Clerk -- City Clerk Freas reported she had received a petition from Angler Drive residents to form a local improvement district. She added, the petition was being processed. ITEM L: DISCUSSION L-Xo Citizens-- None. L-2. Council -- Moore -- Asked who was representing the city on the Kenai River Special Management Area Board and was informed Public Works Manager Komelis had been assigned that responsibility. Swarner -- Referring to the Airport Manager Report regarding the airport restaurant, she noted the many closures and non-availability of the facility was not acceptable. Massie -- Stated he felt the council had been pressured with regard to the land sale to The Conservation Fund. He added, he felt the boat launch facility was very important to the city and was why he voted for the sale. Krusen -- Reported on reactions to the lease application for the Wal-Mart development-- most were supportive and believed the application should move forward. Ross -- No report. Molloy -- Reported he appreciated attending the Newly Elected Officials seminar at the AML Conference. Boyle -- Stated he appreciated so many community members attending the meeting and reminded all, "without dissent, there is no democracy." He urged council to review the movie submitted earl/er in the meeting. Porter -- Noted there is also a movie available entitled, "Why Wal-Mart Works." KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 22 EXECUTIVE SF~SION- None Scheduled ITEM M: ADJouRNMENT . There being no further business before the Council, the meeting adjourned at approximately 11:00 p.m. Minutes transcribed and prepared by: Carol L. Freas, City Clerk *The student may cast advisory votes on all matters except those subject to executive session discussion. Advisory votes shall be cast prior to the official council vote and stroll not affect the outcome of a vote. Adviso~ votes shall be recorded irt the minutes. Student representatives may not move or second items during a council meeting. KENAI. ALASKA TO: FROM: DATE: 210 Fidalflo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 / Fax: (907) 283-3014 www. ci.kenai.ak.us MEMORANDUM Mayor and Council Members Carol L. Freas, City C~ December 14, 2005 ~-~?;iOV~D gY C©UNC~ RE: NOVEMBER 16, 2005 COUNCIL MEETING MINUTES -- REQUEST FOR CORRECTION At the December 7, 2005 council meeting, the minutes of the November 16, 2005 council meeting were removed from the consent agenda at the request of Council Member Molloy who requested they be corrected at Item B-2, page 3, third paragraph, second sentence to read: "It was also noted the council had already passed a resolution which expressed intent to donate up to 30 acres of the property to the Senior Connection and the design concerns would be addressed during the permitting and planning stages." This would be a change from the following: It was noted the city had donated property in the past to Habitat for Humanities, for the Juvenile Detention Facility, etc. It was also noted, the council had already passed a resolution in support of donating the property and the design concerns would be addressed during the permitting and planning stages. As requested, attached is a copy of the verbatim of the B-2 discussion. The particular portion in question reads: Kopp' Yes Council, you'll remember about eight months ago we had a resolution before council which was approved stating council's intent to donate up to 30 acres of the 77-acre parcel. It was contingent upon the site plan being approved, that was actually followed through and developed for its proposed purpose. The good issues that Councilman Molloy raised will be addressed of course, in the permitting/planning process but Council did previously address this issue and provided a resolution of support for this project. , I believe the minutes as presented accurately reflect what was stated during the discussion. KENAI CITY COUNCIL MEETING MINUTES NOVEMBER 16, 2005 PARTIAL VERBATIM ITEM B-2' Ken Duff, Ex. Director, Frontier Community SerVices -- Frontier Community Services Buildin§ Project DUFF' My name is Ken Duff. I'm with Frontier Community Services and we are located at the Red Diamond Center on K-Beach Road and no, we're not a city resident yet. Okay, last May, I believe I was here and presented to the council a suggestion or a request that the City of Kenai give land to Frontier Community Services to build a campus for our administrative offices as well as 'our program offices and at that time, I had absolutely in the way of concepts or architectural drawings and you asked that I produce for those for you so that you had something really to base your decision on. So we, in the meantime, have contracted with Bill Kluge and have met with a number of potential funders around the state and that is what we are presenting to you this evening. I believe you have the concept paper and some of the original drawings in your packet and Bill just gave you some very nice colored presentations too. Are there specific questions then? PORTER: Does council have any questions of Mr. Duff. I'm sure he'd be happy to answer them or Mr. Kluge. I was very impressed with your presentation. Very impressed with your site plan and I personally am very excited that you're hoping to do business in the city. DUFF: We're very hopeful. PORTER: Council, any questions? Councilman Moore. MOORE: Thank you Madam Mayor. So what we're seeing, what we were handed from Mr. Kluge, was I think a day care building and an administrative building? DUFF: Yes. MOORE: Okay. And then, in the minutes from the meeting that I was given in June, our city manager reported that the property that you identified is also been identified by.the Senior Connection, a 77-acre piece of property. Are we still at the same piece of property that we're speaking of there? DUFF: Yes, I believe so. They... MOORE: Okay. KENAI CITY COUNCIL MEETING MINUTES NOVEMBER 16, 2005 PARTIAL VERBATIM, ITEM B-2 Page 2 of 5 DUFF: ...I believe Bill had on the footprint where the land 'was that the Senior Connection was looking at and where the plan was that... MOORE: discussion) ...cause I was looking for that and maybe I missed it. (inaudible Great, I didn't read it. PORTER: Mr. Kluge, did you want to make a comment about that so the audience can hear as well? MOORE: If I could just say, the reason for my concern is that I just wanted to make sure there was room on that piece of property. KLUGE: Yes, actually Councilman Moore, we have, we have allowed room on the property for what is proposed for the assisted living project. In fact, we checked with the city to find out what they had proposed to utilize on this site prior to our, our work. We also have created a trail system for the day care center and it'd be an exercise trail in the summer and a cross-country ski trail in the winter and we're actually proposing to provide access to that senior project to that trail system and it's noted on you're A-1 drawing and I don't know how it's oriented that you have there, but it's on the left hand side. PORTER: Any other questions from council? Councilman Molloy. MOLLOY: You're plan involves the city donating... PORTER: Mr. Molloy, could you pull that... MOLLOY: ...certainly... PORTER: that's okay... MOLLOY: ...sorry... PORTER: MOLLOY: ...I apologize. Your plan involves the city donating the 34 acres. Have you looked at a model for financing where you, where there might .be a lease or a sale by the city to the organization? KLUGE: I guess I should let Ken address that issue. PORTER: Okay... KENAI CITY COUNCIL MEETING MINUTES NOVEMBER 16, 2005 PARTIAL VERBATIM, ITEM B-2 Page 3 of 5 DUFF: At this time we have not. We have been at least, initially putting together numbers with the idea that the city would be donating the land to us which would help with the funders showing local contribution to the project. We're not locked in at this point with any submission for funding, so whatever the city might be interested in, then we would look how to proceed. MOLLOY: Thank you. PORTER: Just, just a reminder for council that we do have a code that allows us to make land donations to non-profit organizations which are 50 l(3)(c)'s and Frontier Community Services fits'in that category. Councilman Ross. ROSS: The adjoining property that Senior Connection is looking at had encumbrances and assessments against it that they've applied for a grant to clear up as part of a transaction with the city. Does this property also have encumbrances and taxes owed against it? PORTER: Let me refer to the city attorney for that. GRAVES' This is basically one parcel...I need to turn my mike on too.., this is basically one parcel. A 77-acre parcel that the Senior Connection wants a piece of and Frontier wants a piece of, so the encumbrances and taxes apply to the whole parcel. PORTER: Okay, Councilman Ross, I see where you're going with this. ROSS: In follow-up, is the proposal the same as it was for Senior Connection that encumbrances and taxes owed would be part of the transaction cost borne by the recipient? PORTER: Ah, Mr. Duff, have, have you addressed that issue with the city administration? DUFF: No Ma'am, this is the first time we were aware of it but we would be very interested in sharing... PORTER: Very willing to do that? DUFF: Yes, very definitely. PORTER: Good. Thank you. Any other comments from council? Well, seeing no more comments, I would, I would imagine that you...is council in concurrence with Mr. Duff that we should move forward with this project and allow him to work out details with the, with the city administration? Councilman Molloy. KENAI CITY COUNCIL MEETING MINUTES NOVEMBER 16, 2005 PARTIAL VERBATIM, ITEM B-2 Page 4 of 5 MOLLOY' I, I have some reservations based on the fact...I know that you brought out that we have the authority to you know, donate to a non-profit, but, and I know that Frontier Community Services has a very valuable service that they provide to the community, but I'm not aware of the city having, and I could be wrong, but I'm not aware of the city having done a donation of that magnitude in the past... PORTER: I... excuse me... MOLLOY' ...and, so I would be concerned about a couple things. One would be, you know, like a traffic-type issues and if there, and what kind of design considerations there might have to be for that and who would bear the cost of that also and in addition, you know, there would be, you know, no sales tax revenue or property tax revenue. So, so I would, I would like to, I would like to see also a plan where there might be a lease or, or sale that would provide some cash to the city. Thank you. PORTER: What is the pleasure of council? Councilwoman Swarner. SWARNER: Thank you Madam Mayor. Just a history lesson. We have donated land to Habitat for Humanity and some of that land was foreclosed on land, or land that was that were property taxes owed on and as I recall there was one piece of property on Wildwood Drive that is, that was donated because of that. And then there was, there was some land off of Colonial Drive as well. So, the city has had a history of donating land to non-profit organizations. PORTER: Councilman Molloy, not only has the city has a history of donating to non-profit organizations, they've also had a history of having purchased land out of the General Fund and paid it to the airport so that we could have the Senior Center located, the Juvenile Detention Center...so there have been big blocks of donated, basically donated land. But, I'd like to refer to the City Manager. He has a comment he'd like to make. KOPP: Yes Council, you'll remember about eight months ago we had a resolution before council which was approved stating council's intent to donate up to 30 acres of the 77-acre parcel. It was contingent upon the site 'plan being approved, that was actually followed through and developed for its proposed purpose. The good issues that Councilman Molloy raised will be addressed of course, in the permitting/planning process but Council did previously address this issue and provided a resolution of support for this project. MOLLOY: Thank you. KENAI CITY COUNCIL MEETING MINUTES NOVEMBER 16, 2005 PARTIAL VERBATIM, ITEM B-2 Page 5 of 5 PORTER: Thank you. Councilman Ross. ROSS: I take it that your direction to proceed is not a commitment of council, but a direction to proceed to bring back to us a plan for... PORTER: Correct...just, just as if we have done with the Assisted Living project. ROSS: Thank you. PORTER: Do I see four heads nodding? Okay. One, two, three, four, five, four. We, we have enough concurrence on council? Okay thank you. Would you please, thank you for coming and please work with the administration to make this project happen. DUFF: We will do that. Thank you very much for your time. PORTER: Thank you very much. END OF VERBATIM. Verbatim prepared by: Carol L. Freas, City Clerk AGENDA KENAI CITY COUNCIL- REGULAR MEETING NOVEMBER 16, 2005 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://www.ci.kenai, ak.u s ITEM A: CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval 4. Consent Agenda *All items listed with an asterisk (*) are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. ITEM B: SCHEDULED PUBLIC COMMENTS (10 minutes) o Ken Duff, Ex. Director, Frontier Community Services -- Frontier Community Services Building Project. . Rhonda Ogelsby/Kenai Kennel Club -- Section 36/Request for Space -- Dog Park/Section 36. , Comments/Wal-Mart (3 minutes/speaker) ITEM C: UNSCHEDULED PUBLIC COMMENTS (3 minutes) ITEM D: REPORTS OF KPB ASSEMBLY~ LEGISLATORS AND COUNCILS ITEM E: PUBLIC HEARINGS , Ordinance No. 2131-2005 -- Increasing Estimated Revenues and Appropriations by $1,300 in the General Fund for the Staying Connected Grant. . Ordinance No. 2132-2005 -- Increasing Estimated Revenues and Appropriations by $5,000 in the General Fund for a Donation Made by Tesoro Petroleum Co. to be Used for the Town Clock. , Resolution No. 2005-48-- Directing the Continuation of the Project Entitled "Set Net Drive {From VIP Drive to Watergate Way)" and Designating What Improvements Are to be Included in This Project. (Clerk's Note: A motion for approval of Resolution No. 2005-48 is on the table.) , Resolution No. 2005-49 -- Opposing Integration of the Halibut Charter Fishery into the Existing Commercial IFQ System. . Resolution No. 2005-50 -- Opposing the Proposed Mixing Zone Revisions to the Alaska Water Quality Standards. ITEM F: MINUTES . *Regular City Council Meeting of November 2, 2005. ITEM G: OLD BUSINESS , Discussion -- Proposed Sale of Wetlands/The Conservation Fund. , (Clerk's Note: A motion to sell Parcels 4, 5, and 6 is on the table.) Approval -- Appointment of Mini-Grant Steering Committee ITEM H: NEW BUSINESS 1. Bills to be Ratified , Approval of Purchase Orders Exceeding $15,000 e *Ordinance No. 2133-2005 -- Increasing Estimated Revenues and Appropriations by $36,370 in the Airport Land Fund for Repairs at the Flight Service Station. o *Ordinance No. 2134-2005 -- Increasing Estimated Revenues and Appropriations by $1,000 in the General Fund for a State Library Grant. , , Approval-- Assignment/Security Assignment of Lease and Amendment to Lease -- Lot 2, Block 1, Gusty Subdivision/Thomas Wagoner to Ma & Pa Alaskan Treasures, Inc. Approval-- Vacation of the South 33-Foot Right-of-Way Easement Adjacent to Government Lot 94 and Vacate the North 33-Foot Right-of- Way Easement Adjacent to Government Lot 105, Reserving a 30-Foot Easement, 15 Feet Both Sides of the Property Line Between Government Lots 94 and 105 for Utilities. Original Patent No. 53348, Recorded in Book 31, Page 236 Kenai Recording District; Within Section 34, Township 6 North, Range 11 West, Seward Meridian, Alaska, the City of Kenai and the Kenai Peninsula Borough. KPB File No. 2005-256; Petitioners: Edmund C. and Iris B. Enders of Anchorage and John J. Williams of Kenai, Alaska; Location, City of Kenai. e Approval -- Lease Application/Tract B-1, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. , ITEM I: Discussion -- Peninsula Art Guild/Request for Funding COMMISSION/COMMITTEE REPORTS , 2. 3. 4. 5. 6. 7. Council on Aging Airport Commission Harbor Commission Library Commission Parks & Recreation Commission Planning & Zoning Commission Miscellaneous Commissions and Committees a. Beautification Committee b. Alaska Municipal League Report c. Arctic Winter Games d. Stranded Gas Committee ITEM J: REPORT OF THE MAYOR ITEM K: ADMINISTRATION REPORTS 1. City Manager 2. Attorney 3. City Clerk ITEM L: DISCUSSION 1. Citizens (five minutes) 2. Council EXECUTIVE SESSION-- None Scheduled. ITEM M' ADJOURNMENT KENAI CITY COUNCIL- REGULAR MEETING NOVEMBER 16~ 200S 7:00 P.M. KENAI CITY COUNCIL CHAMBERS http://www, ci.kenai.ak.us MAYOR PAT PORTER, PRESIDING MINUTES ITEM A: CALL TO ORDER Mayor Porter called the meeting to order at approximately 7'00 p.m. in the Council Chambers in the Kenai City Hall Building. A-Xo PLEDGE OF ALLEGIANCE Mayor Porter led those assembled in the Pledge of Allegiance. A-2. ROLL CALL Roll was taken by the City Clerk. Present were' Joe Moore Linda Swarner Cliff Massie Rick Ross Pat Porter, Mayor Robert Mollo¥ Mike Boyle A quorum was present. Also Present: Les Krusen, Student Representative A-3o AGENDA APPROVAL Mayor Porter requested the following changes to the agenda: ADD AS: SUPPLEMENTAL INFORMATION FOR: SUPPLEMENTAL INFORMATION FOR: B-l, Persons Scheduled to be Heard-- Senator Tom Wagoner. Item E-3~ Resolution No. 2005-48 -- KK memorandum related to Set Net Drive LID. Item E-3, Resolution No. 2005-48 --J. Whannel letter noting a subsequent decision not to support the formation of the assessment district. REMOVE: Item E-4, Resolution No. 2005-49 MOVE: Item H-7, Lease Application/Lounsbury/h Associates for Wal-Mart Stores, Inc. -- Hear KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 2 Immediately following Item B-3 (public comments) ADD AS: Item H-9, Scheduling of Board of Adjustment Hearing-- Appeal submitted related to the Lease Application/Lounsbury & Associates for Wal-Mart Stores, Inc. -- Hear immediately following H-7. ADD TO' K-l, City Manager's Report -- Draft City of Kenai Capital Improvements Plan 2006-2011 MOTION- Council Member Ross MOVED to approve the agenda with the list of changes, except to move H-7 and H-9 before H-3. Council Member Boyle SECONDED the motion. VOTE: *Student Representative Krusen- Yes Moore Yes Ross Yes Porter Yes Swarner Yes Molloy Yes Massie Yes Boyle Yes MOTION PASSED UNANIMOUSLY. MOTION: Council Member Moore MOVED to approve the agenda as amended and requested UNANIMOUS CONSENT. Council Member Swarner SECONDED the motion. There were no objections. SO ORDERED. A-4. CONSENT AGENDA MOTION: Council Member Moore MOVED for approval of the consent agenda and requested UNANIMOUS CONSENT. Council Member Swarner SECONDED the motion. There were no objections. SO ORDERED. ITEM B: SCHEDULED PUBLIC COMMENTS B-1. Senator Tom Wagoner -- Wagoner reported Agrium's Blue Sky coal gasification and power plant plan for putting their plant back on at full capacity. He KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 3 noted, the plan, if successful, would relieve the pressure for producing gas in Cook Inlet, however he did not believe it would alleviate the fear of running out of gas. Wagoner added, the spur line from the North Slope to Palmer would still be needed. Ken Duff~ Ex. Director, Frontier Community Services -- Frontier Community Services Buildin§ Project. Referred to a previous visit in which he discussed the possibility of developing administrative and professional offices on city donated land in the same area as the proposed assisted living facility. At that time, council requested architectural drawings and additional information be prepared and presented to council. Duff distributed architectural renderings of their planned facility and noted, their concept included an exercise trail to be placed between the Frontier Community Services (FCS) facility and the assisted living facility to tie them together. A brief discussion followed in which it was noted the city code allows land to be donated to 501(3)(c) organizations and FCS fell into that category; FCS would have to do the same as was indicated to the Senior Connection in that the encumbrances on the property would have to be brought current. Council Member Molloy stated his concern of donating that large a piece of property; what design considerations had been given to traffic issues that would occur and who would pay for the costs to resolve the issues; there would be no sales or property tax revenues from the property if it were donated; and, suggested a lease or sale be considered instead. It was noted the city had donated property in the past to Habitat for Humanities, for the Juvenile Detention Facility, etc. It was also noted, the council had already passed a resolution in support of donating the property and the design concerns would be addressed during the permitting and planning stages. Concurrence of council was for FCS to work with city administration on the project, knowing direction to proceed would not mean a commitment, but bringing back a plan for council to review and consider. Rhonda Ogelsby/Kenai Kennel Club -- Section 36/Request for Space -- Dog Park/Section 36. Ogelsby referred to information included in the council packet, noting the Kenai Kennel Club hoped to build a dog park adjacent to the Section 36 property, starting out with a fenced and grassed area for holding agility trails and large dog trials; during the trials, there are generally 750 dogs, 100 recreational vehicles, and several hundred people in attendance; and, they also hoped to develop a walking trail and skijoring trail in the future. Ogelsby added, the Club would maintain the area and collect waste, however the rules of the park would be for the dog owners to clean up after their pets. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 4 It was reported the Parks & Recreation Commission recommended approval for the concept after reviewing the layout, design, fencing, and whether or not the dog park would be the best use for the property and, though residents of the Evergreen Street area were not individually invited to attend the Commission meeting when the dog park was discussed, residents of the area were in attendance at the meetings when the issue was discussed but made no comments. Reference was made to the two issues needing to be considered, i.e. moving the Fire Wise site and rezoning the property from Rural Residential to Recreation. Ogelsby noted, the area they were interested in using would be north of the Fire Wise site, however they would like to use the Fire Wise site for parking. Administration was requested to work with the Parks & Recreation Commission, Kenai Kennel Club and the borough to resolve the issues. H-7o Approval -- Lease Application/Tract B-l, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. Mayor Porter explained the issue would be opened for public comment, however comments would be kept to three minutes; since the city had received an appeal of the Planning & Zoning Commission's actions on the lease application, council would not answering any questions; if there were questions' of the public, they should direct those questions to administration after the meeting; and, after the Board of Adjustment hearing, the lease application could come back to council for consideration and, there would not be public comments taken at that time. Porter offered a statement in reference to comments represented on a website related to her knowledge and disposition of the lease application. MOTION: Council Member Moore MOVED for approval of the lease application of Tract B-1, Baron Park No. 10 Tract C, Baron Park No. 5; and, Lot 1, baron Park No. 5 by Lounsbury and Associates, Inc. on behalf of Wal-Mart Stores, Inc. Council Member Ross SECONDED the motion. The floor was opened for public comment. Tom Adams, Lounsbury and Associates -- Reported his position as a civil engineer working for Lounsbury and Associates and that Lounsbury and Associates is the Wal- Mart Stores representative for Alaska. Adams reported he was in attendance to listen to comments and concerns and begin the process through the lease application KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 5 approval. It was also noted, they were not currently in a position to address ingress/egress concerns made at the Planning & Zoning Commission hearing; no field studies had yet been made; studies, etc. would not proceed within a lease agreement; and, when a landscape/site plan is produced, it would be reviewed in a public meeting. Nancy Speedy, 1602 Pine Circle, Kenai -- Spoke in support of the development of a Wal-Mart Store -- good for the city's economic base and for her and her family's future. Kelly Gifford, 312 Rogers Road, Kenai -- Spoke in support of the development and requested council to do what would be needed to make the city a little richer and bring business to Kenai. Heather Rash, 48840 Knudsen Street, Kalifornsky Beach Road -- Spoke in opposition of the development noting more shops and retail businesses were needed in Kenai, but not Wal-Mart because grocery stores were already available; Wal-Mart quality is low; employees are not treated well; and there are other options available. Rash left a movie for council to watch and urged them to consider all the factors in making their decision. Jason Carroll, 407 Eadies Way, Kenai -- Stated his support of the develop noting, he is the manager of First National Bank, and he talked with business people regarding the proposed develop; the businesses approved his speaking for them. Carroll noted it was false to say that small businesses are against the Wal-Mart development as only very few he spoke to did not support the development. Bekkie Jackson, 1528 Toyon Way, Kenai -- Submitted a letter signed by 25 people with whom she worked stating their strong support of the development and urged council to approve the lease application. Joel Caldwell~ 48405 Bernice Avenue, Soldotna-- Stated his support of the development, notin§ he was ~rateful Home Depot opened a store in Kenai and was lookin§ forward to spendin§ money in Kenai and not travelin§ to Anchora§e to §o to a Wal-Mart store. Roy Wells, 410 Lawton Drive, Kenai -- Spoke in support of the development on behalf of the Kenai Chamber of Commerce and comments included: the residents he spoke with were mostly in support; free enterprise is a fight; concerns of lack of retail shopping in Kenai; people need compelling reasons to come to Kenai and additional shops will bring clientele to Kenai; now would be the time to have a say in the . aesthetics of the development; now would be the time for local businesses to make a game plan; better to have the development in the city than outside; and, tax revenue from sales would help the city. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 6 Tom Wagoner, 4040 Primrose Place, Kenai-- Stated his support of the development, noting more competition is better for business; other businesses in Kenai do not provide benefits to employees; and, remembering concerns with PERS and lack of municipal assistance, the council should do what is best for the city, i.e. providin~ more revenue to the city. Scott Romain, 425 Rogers Road, Kenai -- Stated his support of the development and noted he is a local realtor; other realtors he spoke with were in support of the development; because Wal-Mart has stated they plan to build somewhere on the Peninsula, he believed it should be in Kenai; Wal-Mart would provide jobs for all ages; and, he congratulated Lounsbury and Associates for choosing Kenai. Chad Botirius, 47785 Michelle Avenue {Kalifornsky Beach Road}, Soldotna -- Spoke in opposition to the development, noting he believed the property would be better used for Frontier Community Services and he believed Wal-Mart would brin§ low wa§es, no health care, no careers and, questioned what economic benefit the development would brin§ to Kenai. Ernie Lucas, 1520 Windward Way, Inlet Woods, Kenai -- Stated his strong support for the Wal-Mart development. Mary Morgan, 602C Peninsula Avenue, Kenai -- Stated she was not totally for the development or totally a§ainst it and submitted a newspaper article discussing Wal- Mart. Laura Sievert, 3329 Beaver Loop Road, Kenai -- Stated her strong support of bringing more shopping to Kenai, though was concerned how the facility would fit into the Kenai Economic Development Strategy; the development would be so large, it would transform the community; stated concerns of traffic, landscaping, and the size strangling small businesses and maybe force them out of business. She urged council to consider carefully the pros and cons and to keep the public informed. Peter McKay, 55441 Chinook Road, Kenai -- Stated his opposition to the development and reported some statistical information. Margaret Menting, 50375 Onslow, Kenai -- Stated her opposition to the Wal-Mart development, however if it was to come to the area, she wanted it to be in Kenai; noted concerns of water/sewer, electrical and traffic problems; also concerned with the possibility of chemicals stored outside of the building leaking into the river. Jim Fassler, 36814 Cheechako News Drive, Kenai Peninsula Borough -- Stated his opposition to the project due to the treatment of the employees and unkempt stores; KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 7 has no problem in coming to Kenai to shop; and, urged council to look for other retailers instead of Wal-Mart. Joe Ray Skrha~ 2455 Watergate Way, Kenai -- Stated his opposition to the Wal-Mart development and submitted a petition. He also stated his concerns with treatment of those who manufacture garments, etc. that are sold in Wal-Mart stores. Janice Nightingale, 49845 Otter Court, Nikiski -- Stated her opposition to the development, noting concern for local businesses and how Wal-Mart employees will be able to support their families due to wages offered. Glenda Feeken, 10672 Kenai Spur Highway, #109, Kenai-- Spoke in support of the development, noting she spoke to all her customers and all were very excited; Wal-Mart is a very big corporate donor; having Wal-Mart in Kenai will attract other businesses. Debbie McKay, 55441 Chinook Road, Kenai (Nikiski) -- Spoke in opposition to the development, noting concerns related to detention areas near the river; fair market value; increase in traffic; snow removal and storage; and sub-lot leasing. Attorney Graves explained the FAA requirements for fair market value rate determination; referred to estimated sales tax revenues reported in Finance Director Semmens' memorandum; and, explained snow storage and landscaping would be considered later on as part of the process. Fred Braun, Nikiski -- Spoke in support of the development and commented, Wal- Mart had been investigating the possibility of opening a store in Kenai for the last four years; felt it important to keep them in Kenai; if they had chosen another site, he believed more people would be complaining why they did not choose Kenai; and, though there are downsides to the development, there are more upsides. Trish Kopp, 1340 Chinook Drive, Kenai -- Spoke in support, noting Wal-Mart and Home Depot are two of the top businesses nationally; there are people not looking for career jobs; and, there will be employment for the young people in Kenai. Ozzie Osborne, 14360 Kenai Spur Highway, Kenai-- Stated his support of the development, noting he did not believe low wages or work hours was a concern of the city. Duane Bannock, 7450 Flintlock, Anchorage -- Spoke in support of the development and noted similar concerns were voiced when KMart decided to move into Kenai; KMart affected the city economically; the development will be important to the economic future of Kenai. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 8 Craig Fanning, Salvation Army, Kenai -- Stated support of the development and noted, he is not a Wal-Mart shopper, however represents people that desperately need them and need the ability to spend their money carefully and Wal-Mart will offer them that ability. Also, he has relatives who work for Wal-Mart and are very happy and believe them wonderful employers. Leon Quesnel, 516 Hemlock Avenue, Kenai-- Spoke in support of the development, saying he looked forward to Wal-Mart in Kenai. Rick Baldwin, 3080 Kim-N-Ang Court, Kenai/Chair of KEDS Action Team -- Reported the Team met to consider whether the lease application should be addressed by their board and if so, how in relation to the Kenai Economic Development Strategy. The Team unanimously recommended the city should grant the application and believed Wal-Mart an opportunity for revitalizing the community. Steve Hillyer, 381 Senior Court, #109, Kenai-- Spoke in support of the development, noting people would come to Kenai to shop at Wal-Mart and other businesses instead of going to Anchorage; believed the development would be an advantage; and, believed the 'anti' crowd a minority and those in support a tremendous majority. Ray Sagorski, 8480 Kenai Spur Highway, Kenai -- Urged council to use economics and logic in making its decision. Tim Navarre, 608 Ponderosa, Kenai-- Spoke in support of the development, noting he believed esthetics should be considered and the development would help the appeal of the community; suggested the city should consider helping small businesses to plan for the impact of the new store; stated he believed the city has a responsibility to be proactive instead of reactive; and, stated he believed the development would be better for the community and small businesses. Bill Osborn, 450 Rogers Road, Kenai-- Spoke in support of the development, saying he believed Kenai would be moving ahead on the Peninsula and Kenai would grow if new businesses come to town. Tom Adams, Lounsbury and Associates -- Adams stated they were at the meeting to hear comments as part of the process; they would address the design/landscaping comments after the lease application has been approved; the social issues would have to be answered by the community; and urged all to be educated on the process. Adams also explained, the lease application was the beginning of the process; if the city chooses to deny the application, the questions presented during comments would KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 9 not be reviewed; if the lease application would be approved, they would engage the assistance of a landscaping architect, traffic engineers, etc. and return with a fully developed plan. End of public comments. BREAK TAKEN: 9'14 P.M. BACK TO ORDER: 9:31 P.M. Council noted the need to set a Board of Adjustment hearing on the appeal of recommendations taken by the Planning & Zoning Commission related to the lease application. Council scheduled the Board of Adjustment hearing for December 6 at 6:00 p.m. in the Kenai City Council Chambers. Council Member Ross stated the lease application could be included on the December 7, 2005 council meeting agenda and could be postponed if no decision would be made on the appeal. MOTION: Council Member Ross MOVED to postpone the vote on the lease approval until December 7 and Council Member Swarner SECONDED the motion. VOTE: *Student Representative Krusen: Yes Moore Yes Swarner Yes Ross Porter Yes Molloy Yes Yes Massie Yes iBoyle Yes MOTION PASSED UNANIMOUSLY. H-9o Scheduling of Board of Adjustment Hearing-- Appeal submitted related to the Lease Application/Lounsbury & Associates for Wal-Mart Stores, Inc. See discussion in Item H-7 above. ITEM C: UNSCHEDULED PUBLIC COMMENTS (3 minutes) Holly Norwood- Stated she was a candidate for city manager and came to thank the council for review her materials. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 10 ITEM D: -- No reports. REPORTS OF KPB ASSEMBLY, LEGISLATORS AND COUNCILS ITEM E: PUBLIC HEARINGS i-1. Ordinance No. 2131-2005.-- Increasin§ Estimated Revenues and Appropriations by $1,300 in the General Fund for the Stayin§ Connected Grant. MOTION: Council Member Molloy MOVED to approve Ordinance No. 2131-2005 and Council Member Swarner SECONDED the motion. There were no public or council comments. VOTE: *Student Representative Krusen: Yes Moore Yes Ross Yes Porter Yes Swarner Yes Molloy Yes IMassie Boyle Yes Yes MOTION PASSED UNANIMOUSLY. E-2. Ordinance No. 2132-2005 -- Increasing Estimated Revenues and Appropriations by $5,000 in the General Fund for a Donation Made by Tesoro Petroleum Co. to be Used for the Town Clock. MOTION: Council Member Massie MOVED for approval of Ordinance No. 2132-2005 and Council Member Swarner SECONDED the motion. There were no public comments. Porter reported the base of the clock had been completed and the arrival of the clock works was expected in the next few days. VOTE: *Student Representative Krusen: Yes Moore Yes Swarner Yes Ross Yes Molloy Yes Massie Boyle Yes Yes KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 11 Porter [Yes MOTION PASSED UNANIMOUSLY. E-3o Resolution No. 2005-48-- Directing the Continuation of the Project Entitled "Set Net Drive (From VIP Drive to.Watergate Way)" and Designating What Improvements Are to be Included in This Project. (Clerk's Note: A motion for approval of Resotution No. 2005-48 was placed on the table at the November 2, 2005 council meeting.) MOTION: Council Member Molloy MOVED to remove Resolution No. 2005-48 from the table and Council Member Massie SECONDED the motion. VOTE: *Student Representative Krusen' Yes Moore Yes Swarner Yes Massie Yes Ross Yes Porter Yes Molloy Yes Boyle Yes MOTION PASSED UNANIMOUSLY. There were no public comments. Acting City Manager Kopp referred to the Komelis memorandum provided in the packet and a memorandum distributed at the beginning of the meeting. Reviewing the information, it was noted there were three undeveloped properties in the Set Net Drive proposed local improvement district; the code indicated, "no assessment could be levied in excess of 25% of the fair market value of property after giving effect to the benefit accruing from the work or action for which assessed"; because the code conflict with the policy of council for 50% of all local improvement district costs to be paid for by the owners, several options were offered to council: · City could pay the extra $18,223 from grant funds. · Council could approve a slight change in policy to allocate costs on square foot basis plus an extra charge for the $18,2'23 to other eight property owners. · City could decide not to do the project. · Council could change KMC to do away with the 25% limit. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 12 Kopp noted, he and the city attorney were developing an ordinance to address the 25 % limit. Ross stated, because the city had paid for costs as a result of the cap in past improvement districts, he believed the same should be done for this district and council could address a code change in the future. Moore noted his agreement. MOTION: Council Member Ross MOVED, as a result of the 25% cap, the city pay from its funds the additional $18,233 for the project and Council Member Boyle SECONDED the motion. Ross clarified, the costs would be paid from the grant funds. VOTE: *Student Representative Krusen' Yes Moore Yes Swarner Yes Ross Yes Yes Porter Yes Molloy Massie Boyle Yes Yes MOTION PASSED UNANIMOUSLY. E-4. Resolution No. 2005-49 -- Opposing Integration of the Halibut Charter Fishery into the Existing Commercial IFQ System. Removed from the agenda. E-5. Resolution No. 2005-50 -- Opposing the Proposed Mixing Zone Revisions to the Alaska Water Quality Standards. MOTION: Council Member Swarner MOVED for approval of Resolution No. 2005-50 and requested UNANIMOUS CONSENT. Council Member Boyle SECONDED the motion. There were no public or council comments. VOTE: There were no objections. SO ORDERED. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 13 ITEM F: MINUTES F-Xo Regular City Council Meeting of November 2, 2005. Approved by consent agenda. ITEM G: OLD BUSINESS G-Xo Discussion -- Proposed Sale of Wetlands/The Conservation Fund. (Clerk's Note: A motion to sell Parcels 4, 5, and 6 was placed on the table at the November 2, 2005 council meeting.) MOTION: Council Member Molloy MOVED to remove the motion to sell Lots 4, 5, and 6 from the table and Council Member Swarner SECONDED the motion. Council Member Molloy stated his support of the motion to approve the sale and noted, he believed the properties were not suitable for development because of the wetlands and the sale would bring revenue to the city. Brad Meiklejohn, The Conservation Fund, Eagle River -- Responding to a question of his reaction to what the city was offering, Meiklejohn stated he was disappointed and offered as a compromise, the Fund's purchase of Parcels 1, 2, 4, 5, 6 and the exemption of the panhandle on Parcel 2. · He would be willing to consider the sale of a Conservation Easement on the same lots. · The proposed exchange of Parcel 7 by the Kenai City Boat dock was not completed and the Fund was waiting to see what action would be taken with the sale; there was a possibility the exchange (for the exit road property) would not go forward. · If purchased by the Fund, the property could be placed into the Kenai River Special Management Area (KRSMA) or the Kachemak Land Trust. Discussion followed in which comments included: Kopp stated he had not had any discussion with Meiklejohn indicating the exit road trade and the land sale were linked. · Swamer stated she would not be interested in any of the parcels going to KRSMA, though she was willing to support a conservation easement for Parcels 1 and 2. · Meiklejohn stated if there was no sale, the Fund would reconsider whether to go forward with the exchange (dock exit road). KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 14 VOTE ON SALE OF PARCELS 4, 5, AND 6' *Student Representative Krusen: No Porter N o Moore N o Swam er Ye s Massie No Ross No No Boyle Yes Molloy MOTION FAILED. Council Member Massie stated he believed it was originally a good deal and was under the impression any part of the sale would be acceptable by the Fund. With the comments made related to the exit road exchange and the sale being linked, he felt the council was being held hostage. MOTION: Council Member Massie MOVED to sell everything except the panhandle on Parcel #2, i.e. Parcels 1, 2, 4, 5, 6, excepting the Parcel #2 panhandle. Council Member Boyle SECONDED the motion. Ross stated he had similar feelings as Massie and explained, he thought the trade was a deal upon which both sides had agreed; the proposed wetlands sale was a separate item; thought the trade was of mutual benefit to both groups; the linking of the two transactions disturbed him; and, he would not support the motion. Moore stated he agreed with Ross; he was concerned with the link and the Fund giving the properties to KRSMA; and, stated he would not support the motion. MOTION TO AMEND: Council Member Swarner MOVED to amend the Massie motion in that the property would not go to the State of Alaska {to eventually be in the Special Management Area) and would be held under a land trust. Council member Molloy SECONDED the motion. City Attorney Graves stated he could investigate whether a deed restriction could be included. Meiklejohn stated the Fund would find a deed restriction acceptable. VOTE ON AMENDMENT: *Student Representative Krusen: Yes Porter Yes Moore No Massie Yes Ross No Swarner Molloy Yes Yes KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 15 i Boyle lYes MOTION PASSED. MOTION TO AMEND: Council Member Swarner MOVED to sell a conservation easement on Parcels 1 and 2. Council Member Molloy SECONDED the motion. Graves explained the city would maintain technical ownership of the property with a conservation easement, but the city would essentially contract with The Conservation Fund and not allow development on the land. It would be a dual responsibility of the city and the Fund to enforce the conservation easement. The property would basically remain "as is." Graves noted, with a sale, the city would not longer have the responsibility of managing the property. He noted, if council wished to go forward with the conservation easement, the price would need to be decided because prices could be different between sales and conservation easements because the Fund would be receiving less than it would with a sale. The prices included in the packet were developed for sale of the properties. Meiklejohn added, the conservation easement would be drafted and then taken to an appraiser; the appraiser would determine the percentage of the fair market value the document would be representing; the more restrictive an easement is, the greater percentage of value is represented in the easement; the commitment of the Fund and the restrictions on their funding to purchase properties, mandates the properties remain in their natural state; and, the sale of a conservation easement on Parcels 1 and 2 would be acceptable to the Fund. Student Representative Krusen stated he believed the proper management of the wetlands was essential to the health of the Kenai River and stated his support for the conservation easement sale. Ross stated he was opposed,to the sale of Parcels 1 and 2; the city passed a resolution accepting the trade related to the exit road and now the negotiations had changed; and, he would vote against the motion. Molloy stated he understood the benefit of the road to the harbor and thought earlier. the sale of the wetlands could be a win-win situation and would give the city revenue for other projects. Moore stated he also felt the exit road land trade was a completed deal and with the comments made by Meiklejohn, the value of Parcels 1, 2, 4, 5, and 6 had been diminished. Moore stated he would not support the motion. VOTE ON AMENDMENT: KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 16 *Student Representative Krusen: Yes Porter Massie Boyle Yes No No Moore No Ross No ISwarner Molloy Yes Yes MOTION FAILED. MOTION TO AMEND: Council member Swarner MOVED to delete Parcel 2 from the purchase and Council Member Moore SECONDED the motion. Public Works Manager La Shot noted, in deciding on what to do with the parcels, council should remember future trades may be needed for airport expansion, etc. VOTE ON AMENDMENT: *Student Representative Krusen: Yes Porter Yes Moore Yes Massie No Ross Yes No Boyle Swarner Molloy Yes Yes MOTION PASSED. Meiklejohn stated the Fund were interested in a large scale conservation project. Ross clarified, the main amended motion was to sell Parcels 1, 4, 5, 6 with a deed restriction (the parcels would be placed in a land trust). Meiklejohn was asked if the sale as stated would be acceptable to the Fund and he answered yes. Meildejohn was asked if the trade of properties for development of the dock exit road would s~ill go forward in reference to the motion as it had been amended' and Meiklejohn stated yes. VOTE: *Student Representative Krusen' Yes Porter No Massie Yes Boyle Yes Moore Ross No Molloy Yes Yes MOTION PASSED. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 17 Approval-- Appointment of Mini-Grant Steering Committee MOTION: Council Member Molloy MOVED to approve the appointments of the Steering Committee as presented and Council Member Moore SECONDED the motion. VOTE: *Student Representative Krusen: Yes Moore Ross Porter Yes Yes Yes Swarner Yes Molloy Yes Massie Yes Boyle Yes MOTION PASSED UNANIMOUSLY. ITEM H: NEW BUSINESS H-lo Bills to be Ratified MOTION: Council Member Moore MOVED to ratify the bills and requested UNANIMOUS CONSENT. Council Member Swarner SECONDED the motion. There were no objections. SO ORDERED. Approval of Purchase Orders Exceeding $15,000 MOTION: Council Member Swarner MOVED to approve the purchase orders exceeding $15,000 and requested UNANIMOUS CONSENT. Council Member Moore SECONDED the motion. There were no objections. SO ORDERED. H-3o *Ordinance No. 2133-2005 -- Increasing Estimated Revenues and Appropriations by $36,370 in the Airport Land Fund for Repairs at the Flight Service Station. Introduced by consent agenda. *Ordinance No. 2134-2005 -- Increasing Estimated Revenues and Appropriations by $1,000 in the General Fund for a State Library Grant. KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 18 Introduced by consent agenda. Approval-- Assignment/Security Assignment of Lease and Amendment to Lease -- Lot 2, Block 1, Gusty Subdivision/Thomas Wagoner to Ma & Pa Alaskan Treasures, Inc. MOTION: Council Member Moore MOVED to approve the Assignment/Security Assignment of Lease and Amendment to Lease -- Lot 2, Block 1, Gusty Subdivision/Thomas Wagoner to Ma & Pa Alaskan Treasures, Inc., Item H-5. Council Member Swarner SECONDED the motion and requested UNANIMOUS CONSENT. There were no objections. SO ORDERED. Approval-- Vacation of the South 33-Foot Right-of-Way Easement Adjacent to Government Lot 94 and Vacate the North 33-Foot Right-of- Way Easement Adjacent to Government Lot 105, Reserving a 30-Foot Easement, 15 Feet Both Sides of the Property Line Between Government Lots 94 and 105 for Utilities. Original Patent No. 53348, Recorded in Book 31, Page 236 Kenai Recording District; Within Section 34, Township 6 North, Range 11 West, Seward Meridian, Alaska, the City of Kenai and the Kenai Peninsula Borough. KPB File No. 2005-256; Petitioners' Edmund C. and Iris B. Enders of Anchorage and John J. Williams of Kenai, Alaska; Location, City of Kenai. Noting the information included in the packet, City Attorney Graves reported the Borough Code indicated council was not required to take any action, but if they objected to the vacation, they did have the fight to veto. Council took no action. H-7o Approval -- Lease Application/Tract B-1, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. Heard after Item B-2. H-S. Discussion -- Peninsula Art Guild/Request for Funding Marcia Beauchamp/Peninsula Art Guild -- Referring to information included in the packet, Beauchamp explained the Guild had been awarded a $13,320 grant from the Rasmuson Foundation for repair of the roof at the Kenai Fine Arts Building. In addition, they wanted to take advantage of an opportunity to gain an additional $4,100 from a dollar-challenge grant toward their renovation project. Beauchamp requested the city to issue $2,000 which had been allocated to the FY 2003 budget and had not been spent and consider granting the Peninsula Art Guild an additional KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 19 $4,100 to take advantage of the dollar-challenge grant. She explained, the renovation project would include electrical upgrading, carpeting, painting, etc. Administration indicated funds were available in the Buildings fund to cover the $4,100; issuing the funds was not time sensitive; and, with council's direction, an ordinance would be prepared to appropriate the funds. Council consensus was to move forward with the preparation of the ordinance. ITEM I: COMMISSION! COMMITTEE REPORTS I-1. Council on Aging-- Council Member Boyle reported the summary of the November 3, 2005 meeting was included in the packet and briefed those present of upcoming events at the Center. I-2. Airport Commission -- Council Member Swarner reminded those in attendance of the Airport Supplemental Plan work session scheduled for Friday, November 18 beginning at 1'00 p.m. I-3. Harbor Commission -- Council Member Massie reported a joint work session between the Harbor and Parks & Recreation Commissions had been suggested in order to discuss the dip net fishery. Council had no objections. I-4. Library Commission -- Council Member Molloy reported the meeting summary of the November 1 meeting was included in the packet. The application of Christine Cook for appointment to the Commission was reviewed. Council had no objections to Cook's appointment. I-5. Parks/l~ Recreation Commission -- Council Member Moore reported the meeting summary of the November 3 meeting was included in the packet. I-6. Planning/h Zoning Commission -- Council Member Ross reported on actions taken at the November 9 meeting, including the Commission's recommendation for council to approve the lease application for the Wal-Mart development. I-7. Miscellaneous Commissions and Committees I-7a. Beautification Committee -- Council Member Swarner reported the meeting summary of the November 8 meeting was included in the packet. She also noted the meetings for December and January had been cancelled. I-7b. Alaska Municipal League Report -- Swarner gave a events that took place at the AML Conference. brief report of I-7c. Arctic Winter Games'-- Parks & Recreation Director Frates reported the KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 20 cost of the bleachers had been approved by the AWG as well as the bleacher installation costs and security camera installation. l-Td. Stranded Gas Committee -- No report. ITEM J: REPORT OF THE MAYOR-- Mayor Porter reported she had spoke at the Veteran's Day program; reminded council of the work sessions on November 18 with Paul Gray at 12'30 and the Supplemental Plan beginning at 1:00 p.m. ITEM K: ADMINISTRATION REPORTS K-1. City Manager-- Acting City Manager Kopp reported the following: · Referring to the November 10, 2005 memorandum included in the packet from Finance Director Semmens and requesting council approval of a new health insurance program at the December 7 meeting, Kopp noted new information had been received related to health savings accounts. He reported the high deductible plan would be raised from $1,200 to $5,000 for employee costs; January would not be a good time for a major change in the program as the employees felt more time would be needed to assess the health savings accounts and to review the entire benefit package; and, because a plan could not be chosen by December, an adjustment to the plan could be made in July. · An appropriation of $500,000 was made to the Corps of Engineers budget for the bluff restoration project to fund the next phase of the project. Administration is corresponding with the Russian Orthodox Church regarding the relocation of cabins. A new foundation on which to place the Claraence Ladd cabin was estimated at $4,000 and relocating the cabin would exceed $10,000. · Mary Jo Joyner accepted the Library Director job offer and should be on the job by the end of January. · A revised Capital Improvement Program Plan was distributed to council and a work session date of November 28 for review with area legislators was suggested. Council stated no objection to the work session date. · The Friendship Mission was now open (old Eadies building). The Katmai Motel renovation was moving along and they hoped to be open by Christmas. · The results from the Wellhouse No. 4 pilot test study were not good -- the study group reported its willingness to try a new study. Administration has applied for an extension to the arsenic removal deadline. It is very likely the extension will be granted. · Reference was made to a memorandum included in the packet related to a request from Council Member Molloy to link his personal webpage to the city's webpage. Molloy stated he had several policy discussions with Council Member Ross KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 21 and requested the issue be included as a discussion item on a future agenda. Moore requested the issue of upgrading the city's webpage be discussed at that time as well. Council had stated no objections to discussing the issue in January. · Spoke with a representative from Northern Dynasties related to the city's desire to be their hub in air freight and learned Kenai is at the top of their list. X-2o Attorney-- No report. K-3. City Clerk -- City Clerk Freas reported she had received a petition from Angler Drive residents to form a local improvement district. She added, the petition was being processed. ITEM L: DISCUSSION L-X. Citizens-- None. L-2. Council -- Moore -- Asked who was representing the city on the Kenai River Special Management Area Board and was informed Public Works Manager Kornelis had been assigned that responsibility. Swarner -- Referring to the Airport Manager Report regarding the airport restaurant, she noted the many closures and non-availability of the facility was not acceptable. Massie -- Stated he felt the council had been pressured with regard to the land sale to The Conservation Fund. He added, he felt the boat launch facility was very important to the city and was why he voted for the sale. Krusen -- Reported on reactions to the lease application for the Wal-Mart development -- most were supportive and believed the application should move forward. Ross-- No report. Molloy -- Reported he appreciated attending the Newly Elected Officials seminar at the AML Conference. Boyle -- Stated he appreciated so many community members attending the meeting and reminded all, "without dissent, there is no democracy." He urged council to review the movie submitted earlier in the meeting. Porter -- Noted there is also a movie available entitled, "Why Wal-Mart Works." KENAI CITY COUNCIL MEETING NOVEMBER 16, 2005 PAGE 22 EXECUTIVE SESSION- None Scheduled ITEM M: ADJOURNMENT There being no further business before the Council, the meeting adjourned at approximately 11'00 p.m. Minutes transcribed and prepared by: Carol L. Freas, City Clerk *The student may cast advisory votes on all matters except those subject to executive session discussion. Advisort~ votes shall be cast prior to the official council vote and shall not affect the outcome of a vote. Ad~isor~ votes shall be recorded ir[ the minutes. Student representatives may not mo~e or second items during a council meeting. KENAI CITY COUNCIL WORK SESSION CAPITAL IMPROVEMENT PROJECT LIST NOVEMBER 28, 2005 15:00 P.M., KENAI COUNCIL CHAMBERS MAYOR PAT PORTER, PRESIDING NOTES Council members present: Staff present: Others present: P. Porter, C. Massie, J. Moore, R. Ross, R. Molloy, M. Boyle, and L. Swarner C. Freas, C. Graves, C. Kopp, K. Kornelis, R. Craig, J. La Shot, L. McNair Senator Tom Wagoner and Representative Kurt Olson The work session opened at 6:00 p.m. with Acting City Manager Kopp reviewing the cover memorandum included in the packet of information previously distributed. Discussion followed and comments included' · The same methodology used by the Legislature last year (fonv~d~g lump sums to municipalities to use at their discretion) would probably not be used this year, i.e. if funds are available, it would be awarded to specific projects. The water well treatment project was moved down on the list dUe to a request for a three-year extension on the mandate to clean up the arsenic and because of new technologies being employed to remove the arsenic. · Not much hope should be given for the Alaska Legislature to award funding for the bank stabilization project as it is a multiple-year project and the Legislature can only fund over a two-year period. Federal funds should be sought. · Wagoner/Olson will see urge funding for an upgrade of Wildwood Drive because the road is used primarily for access to the prison. · The funds previously directed to the Ketchikan bridge project will probably be placed back into the STIP list, though they would not be available for erosion control or coastal trails. It is hoped funds may be awarded to complete the Kalifornsky Beach Road upgrade (a priority) and upgrade the Sterling/Skilak Lake Road. Completing the Unity Trail along Bridge Access Road would be funded as a beautification project and the project remains on the STIP list under that section. · Due to the dip net fishery, funding for improvements to Kenai Avenue with the inclusion of additional toilet facilities would be appreciated, as well as funding for the dock exit road project. · The City should provide the legislators with projects in the $100,000 to $150,000 range. The Governor is hoping to fund PERS/TERS and it is hoped action by the Legislature would take place early enough for budgeting purposes of the School District as well as municipalities. PERS/TERS will be a priority during the session. · Consensus of council was for administration to develop a Request for Proposals for a sponsor to complete the Section 36 sports complex. KENAI COUNCIL WORK SESSION NOVEMBER 28, 2005 PAGE 2 Consensus of council was for administration to put together information related to bonding for roads (including projections of debt service, payments, etc.) Consensus was for administration to review fund availability for $20,000 to purchase library expansion conceptual design for grant application information. It was felt a resolution supporting the city's matching up to $500,000 in grant funds was premature until after a conceptual design/cost estimates, etc. would be available. No changes were made to the list of projects or the project order. The work session adjourned at approximately 7:00 p.m. Work Session notes prepared by: Carol L. Freas, City Clerk KENAI CITY COUNCIL WORK SESSION NOVEMBER 12, 2005 9:00 A.M. KENAI CITY COUNCIL CHAMBERS MAYOR PAT PORTER~ PRESIDING NOTES Council Members Present: Council Members Absent: Staff Present: Pat Porter, Mike Boyle, Bob Molloy, Cliff Massie, Rick Ross and Linda Swarner Joe Moore City Clerk Carol Freas, City Attorney Cary Graves, and Acting City Manager Chuck Kopp Mayor Porter called the work session to order at 9'00 a.m. After reviewing the applicant resumes on their personal time and prior to the work session, the members determined they would each pass a list of their personal top five choices of the 18 applicants to Porter. Porter prepared a list and determined there were actually six applicants, i.e. John Alder, Rick Koch, Michael Miller, Dennis Packer Ron Singel, and David Thompson. Council reviewed each of the six applicants, noting what appealed to them from the information available. From that, council determined to continue in the process with reference checks on the following: Koch, Miller, Packer, Singel, and Thompson. Acting City Manager Kopp reported he would check references and secondary sources, then provide a detailed report to council, probably after the first council meeting in December. At that time, it was suggested council could narrow the applicants to two or three, bringing those chosen applicants to Kenai for interviews. Work Session with Legislators: Council briefly discussed a common date to meet with area legislators regarding the City's Capital Improvement List. It was learned most would be available on Monday, November 28, 2005. The work session ended at approximately 10'00 a.m. Notes prepared by: Carol L. Freas~ ~ity ~lerk 210 Fidalgo Avenue, Kenai, Alaska 99~'~ '~ - f f 94 Telephone' (907) 283-7535 / Fax: (907) 283-3014 www. ci.kenai.ak.us KENAI. ALASKA M emoranclum Date: To.' For: From: November 10, 2005 Charles M. Kopp, Acting City Manager November 16, 2005 Meeting Klm Howard, Assistant to the City Manager Lease Application, Lounsbury and Associates, Inc. on Behalf of W~-M~ Stores, Inc. - Tract B-1, Baron P~k No. 10; Tract C, Baron Park No. 5; and Lot 1, Baron Park No. 5 Lounsbury and Associates, Inc. (on behalf of Wal-Mart Stores, Inc.) has submitted a lease application for the above referenced properties. Lot 1, Baron Park No. 5 is the site of the "dust bowl" ball field. Tract C, Baron Park No. 5 is directly behind it. It has been used as a tent camping area. Neither lot has ever been dedicated for park usage by the City. Tract B-1, Baron Park No. 10 faces Marathon Road. The parcels are shown on the attached maps that were included with the lease application. The properties are Airport property. Ordinarily, the General Fund would have to pay the Airport for its use of Airport lands. However, under Federal Aviation Administration roles, the property may be used as a ball field and camping area until such time as the Airport has a need for the property, either in terms of physical development for the Airport or as a commercial use that would benefit the Airport. Any money from the lease or sale of the property will go into the Airport Land Trust Fund. Once the Airport has a revenue generating commercial use for the property, the City General Fund may no longer use it rent-free. If the City were to retain the property for General Fund (non-Airport) use, the General Fund would have to pay the Airport fund the fair-market value for use of the property. Wal-Mart Stores is proposing a 20-year base lease term with 14 (5-year) options to extend with an option to purchase. The purpose is to construct a 235,000 square foot Wal-Mart Supercenter store, including general merchandise, grocery, garden center, and 6-bay tire/lube/express. The development includes six outlot parcels and a gas station. The estimated construction cost is between $15,000,000 -$18,000,000. Memo to Charles M. Kopp November 10, 2005 Page 2 of 2 KMC 21.10.080 states the term shall depend upon the durability of the proposed use, the amount of investment in improvement proposed and made, and the nature of the improvement proposed with respect to durability and time required to amortize the proposed investment. The beginning date for the proposed construction is April 2006. The proposed completion date is October 2007. The Planning Department has confirmed the property is zoned Light Industrial, which is consistent with the 1987 Airport Master Plan. Retail sales is a principal permitted use in the Light Industrial zone. This property is not included in the Airport Reserve in the proposed Supplemental Planning Assessment. An appraisal performed by Derry & Associates states the highest and best use as "Commercial/industrial development in conformance with zoning re gu 1 ati o ns/requirem ents." As outlined in KMC 21.10.030 (b)(5), the intended use must comply with the zoning ordinance and comprehensive plan of the City. KMC 21.10.060 (a) states the Planning Commission "shall normally consider applications for specific lands on a first-come, first-served basis if the Commission finds that the application is complete and the use proposed in the application is the highest and best use and conforms to the Airport Master Plan and other goals set by the Commission or the City Council." At their meeting of November 9th, the Planning and Zoning Commission made those findings and unanimously found that the uses listed conform to the zoning ordinance, the Comprehensive Plan, and the Airport Master Plan. KMC 21.10.060 provides that after Planning and Zoning approval, the lease application shall go to the City Council for its consideration. Cc: Lounsbury and Associates, Inc. Rebecca Cronkhite, Airport Manager /kh' Attachment KENAI. ALASKA 210 Fidalgo Avenue Kenai, Alaska 99611-7794 m,,p,.,M Telephone' 907-283-7535/FAX: 907-283-3014 '~111' 1992 MEMo: TO: Planning & Zoning Commission THRU: FROM: DATE: Jack LaShot, Public Works Manager/City Engi r Nancy Carver, Planning & Zoning Assistant~ November 4, 2005 SUBJECT: Lease Application, Tract B-l, Baron Park No. 10; Tract C, Baron Park No. 5; and Lot 1, Baron Park No. 5- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. The City of Kenai has received a lease application for the above-referenced parcels. The Planning Commission must determine if the intended uses comply with the zoning ordinance and the Comprehensive Plan. The parcels am zoned IL- Light Industrial. The attached memo states the applicant proposes to construct a 235,000 square foot Wal-Mart Supercenter store, including general merchandise, grocery, garden center, and six-bay tim/lube/express. The development also includes six outlet parcels and a gas station. According to the Land Use Table, these uses am permitted in the Light Industrial Zone. The outlet parcels will be looked at individually to make sum their uses am permitted in the zone. The City of Kenai Comprehensive Plan proposed Land Use Plan list these pamels as Central Commercial. "The Central Commercial district supports retail, service, and office businesses that serve afl of Kenai and the larger region, it is the Kenai subregion's main commercial district. Retail, service, office and public uses predominate." Based on this information, it appears the proposed lease as stated complies with the City's zoning and Comprehensive Plan. :. ,. i-.-:i .,'~'i -.,.~{ '.:~ ., .... ~:.~.'- CITY OF KENAI 210 Fidalgo Avenue, Suite 200 Kenai, Alaska 99611-7794 (907) 283-7535 Ext. 223 LEASE APPLICATION Name of Applicant~ Lounsbury and Associates, Inc. Address.'_ 3161 E. Palmer-Wasilla Hwy, Suite 2, Wasilla, AK 99654 Business Name and Address: Wal-Mart Stores, Inc. 2001 SE 10t~ Street A0plicant's Telephone: (907) 357-9129 Bentonviile, AR 72716-0550 .Kenai Peninsula Borough Sales Tax No. (if applicable_).' State of Alaska_ Business License No. (if applicable).' 27027 (attached) Legal Description: Tract B-l, Baron Park No. 10 (per Plat #94-13) (attached) Tract C, Baron Park 05 (per Plat 086-165) (attached) Lot 1, Baron Park#5 (Per Plat//86-165) (attached) Purpose of Proposed Lesse: Construction of a new Wal-Mart Supercenter Term of Proposed Le~se: 20 Year Base Term with 14 (5-year) options to extend with an option to purchase. Description of Proposed Development (type, construction materials, size, etc.) Approximately 235,000 square foot .Wal-Mart Supercenter, including general merchandise, grocery, garden center, and 6-bay tire/lube/express. Development includes six (6) outlot parcels and a gas station. Time Schedule for Proposed Development ~I a/-,--/ay- * Beginning Date April.,~llO~2'¢,o ~ "-~ '"'"" · Completion Date (maximum of two years) October2,O0¢ 200'7 Estimated Value of lmprovemen~.: $15,000,00,0 - ~000,000 APPLICANT'S SIGNATU .R~"'~ _~b~>~ APPLICANT'S SIGNATURE: ., Date: {~( ,.q(O.~ ,, Date: CITY OF ICENAI LEASE APPLICATION CHECKLIST (All items must be completed before application can be accepted.) Attach a development plan drawn to scale. Drawings do not need to be prepared by an architect or engineer. Show the layout of the lot and the location of all proposed improvements. The drawings also need to show the following. 1. Existing buildings 2. Proposed buildings 3. Parking facilities (how many spaces and location) 4. Site improvements · Areas to be cleared and method of disposal · Proposed gravel or paved areas landscaping plan (retentiOn' of natural Vegetation and/Or propOsed planting areas) 5. Building set backs 6. Drainage plan and method of snow removal 7. Circulation plan (all entrances, exits and on-site access) 8. Location of sign(s)- sign permit required 9. Fencing- permit required if height is over 6' 10.Curb cuts (where applicable) 11. Building height 12. FAA Form 7460 Notice of Proposed Construction (For comtruction of buildings on airport land. This form is to be submitted to the FAA by the applicant. It can be downloaded fi'om the FAA website http://www, alaska, f_aa, gov/airp,o, tl~__~. The site has a menu for forms. -7460 --,,,/? . t o CITY OF KENAI LEASE APPLICATION- CONDITIONS OF ACCEPTANCE (To be completed by the City) Kenai Peninsula Borough Parcel No. o Zoning Llght Industr±al (IL) 043-361-06; 043-361-02; 043-361-01 Permits Required: · Conditional Use Permit - Outlet lots may requ±re Gu? depend±rig on use. · Landscape Review x ,, · Building Permit x · Sign Permit x Assessments None Insurance Limits Required $500,000 & Workers" Comp. Construction must begin by Within 2 years of date of the leased date. Completion date for major construction Within 2 years of date of the leased date. By: DateofApproval: {//~/0 ~' Planning Commission Approval /~hairman Ci,ty Council Approval By: City Clerk Date of Approval: THIS APPLICATION WILL BE MADE A PART OF THE LEASE " ~ .- .,3 I/ IJJ I- Z IJJ ~ . ~Z KENAI. ALASKA 210 Fidaigo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 / Fax: (907) 283-3014 www. ci.kenai.ak.us MEMORANDUM To: From: Date: Subject: Chuck Kopp, Acting City Manager Larry Semmens, Finance Director ,~ November 10, 2005 Potential Impact of Wal-Mart on Kenai Finances Although I have not done extensive analysis on the impact of Wal-Mart coming to Kenai, I can draw some conclusions based on what happened to sales tax in Kenai when Kmart came in 1993. The first full quarter of sales tax that included Kmart was 3~a quarter 1993, in which there was a $7 million increase in sales, or 23% more than the same quarter in the previous year. The 4th quarter was up 33% over the prior year. Fiscal year 1994, which included these two quarters, ended up 22% higher than the prior year. Kmart sales alone did not account for all of the increase; other businesses in Kenai, taken together, also had increased sales. The City of Kenai benefited handsomely from increased sales tax and Kenai led the peninsula cities in taxable sales until Fred Meyer opened in Soldotna. This is significant! If Wal-Mart is coming to the Peninsula, and it appears they are, I definitely want them to be in Kenai. When Fred Meyer opened in Soldotna, Kenai taxable sales fell 6%. If Wal-Mart locates outside ofKenai, I expect a si&,nificant drop in taxable sales in Kenai- far more than the 6% that occurred previously. I am expecting Wal-Mart to exceed Kmart in taxable sales, and I expect other businesses in Kenai to have increased sales due to increased traffic in Kenai. Therefore, I am Confident that the first full year of Wal-Mart operations will set the new high mark for taxable sales in Kenai and that sales tax revenues will be up substantially, perhaps as much as $1 million dollars. Note that it takes over $33 million in taxable sales to generate a million dollars in sales tax. This is significant economic activity. Taxable sales in FY 2005 were $140 million. Wal-Mart will also be paying almost $200,000 per year lease revenue to the Airport Fund; which, as everyone is aware, is in financial difficulty. The General Fund will also Chuck Kopp, Acting City Manager Re: Potential Impact of Wal-Mart on Kenai Finances 11/10/05 Page 2 of 2 benefit through property tax on this leasehold interest. I am not able to deten~ine the exact amount of this tax, but it should exceed $10,000 annually at our current mill rate of 4.5. There will also be real and personal property tax on the building and fixtures when they are built. Again, I do not know the exact values, but Wal-Mart is estimating $18 million for construction and there will be taxable personal property in the store. This should generate about $85,000 in annual property tax. Other buildings are very likely to be sited on the property. No values have been projected for these, but when they are built there will be additional property tax revenues. I believe it is a conservative estimate that property tax of over $100,000 annually will be generated by the Wal-Mart complex at our current tax rate. The construction phase will also generate positive economic activity in Kenai. To summarize the annual revenue picture: Airport: General Fund: $200,000 lease revenue $1,000,000 sales tax $ 100,000 property tax Some may ask whether Kenai needs the extra money. It is no secret that costs are escalating. Fuel, which affects many things, property and liability insurance, workers comp insurance, and health insurance are all up significantly and could easily continue to rise faster than the national inflation rate. The biggest increase in cost for the City will be our contribution to PERS. In FY 2003 the City paid $128,000 or 2.63% of payroll, to PERS. In FY 2005 it was $419,000 with a rate of 8.67%; and in 2007 the rate will be 18.67% and will cost about $933,000. I expect the State to cover about $275,000 of the FY 2007 amount. If rates continue to rise to the projected acmarially required amount of 30%, our PERS cost will exceed $1.5 million annually. Even if the rates level off at 20%, which is a realistic probability, it will cost Kenai $1.1 million annually, or the equivalent of 3 mills of property tax. This money will have to come from somewhere or draconian cuts to services will have to be made. The question is, where will the money to cover these cost increases come from? Do we expect the State of Alaska to share revenues in amounts sufficient to cover these increases? I do not. Will property values rise enough to generate sufficient property tax revenues without increasing the mill rate? I don't think so. Are the taxpayers of Kenai going to support a significant mill rate increase? Or would it be better to welcome Wal-Mart and seek to make Kenai the retail hub of the Peninsula? Imagine the possibilties! -) KENAI. ALASKA 210 Fidaiflo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 www.ci.kenai.ak.us MEMORANDUM TO: FROM,,5.. DATE: RE: Mayor Porter and Councilors Cary R. Graves, City Attorney December 1, 2005 Wal-Mart Lease Application Councilor Molloy requested an opinion regarding the site plan attached to the Wal-Mart lease application. KMC 21.10.030(b)(5) states that every lease application shall become a part of the lease. As is standard with other lease applications, the Wal-Mart lease application includes a site plan. Councilor Molloy wondered whether approval of the lease application would bind the City to accept the site plan as attached to the lease application. The lease application requires an estimate of when building construction will commence and be completed. While those deadlines may be extended (and have been on other leases), the intent is to avoid a situation where a person would lease property for investment purposes without intending to construct a building on the property. The intent of incorporating the lease application in the lease is in part to ensure that the development schedule is a requirement., of the lease and that the lease may be cancelled under KMC 21.15.020(c) for failure to substantially complete the developmem plan. ' The City's standard lease form includes a provision that the site plan must be approved by the City. If City Council approves the lease application, City Administration intends to include such a clause in any lease with Wal-Mart. During the public testimony on the Wal-Mart lease application, Tom Adams, a representative of Wal-Mart, stated he had no objection to the site plan coming to Council for review following approval of the lease application. The intent of the lease clause is that the City would not be bound to the site plan attached to the lease application if it approves the lease application. The lease language anticipates council and community input on the site plan following any approval of the lease application. I believe such lease language should be interpreted so as not to bind the City to the original site plan submitted with the application. Mayor Pat Porter Councilors December 1. 2005 Page 2 of 2 However, in order to ensure there is no misunderstanding as to that point, a provision of any motion to approve the lease application could include language that the City Council shall approve the site plan prior to construction and that the City is not bound by the site plan as attached to the lease application. Please let me know if you have any questions. CRG/sp Z (.,1 Z ::3 0,~ Z Z o n, 0 z Lu z 0 (J Z ::3 0 Z ~ 0 Li.I U.I Z I- (/3 Z 0 0 U.I Z uiI Z :::3 I-- z 0 Z u.I (/) Z 0 Z Suggested by: Admin,~u ~tuun CITY OF KENAI ORDINAl/CS NO. 2135-2005 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENM, ALASKA INCREASING ESTIMATED REVEN~S AND APPROPRIATIONS BY $6,100 IN THE GENERAL FUND FOR A DONATION TO THE PENINSULA ART GUILD FOR BUILDING REPAIRS. WHEREAS, the Peninsula Art Guild has identified repairs needed at the Kenai Fine Arts Center; and, WHEREAS, the Art Guild has been awarded a Rasmuson grant for part of the repairs; and, WHEREAS, it is in the best interest of the City to donate $6,100 to this project. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that estimated revenues and appropriations be increased as follows: General Fund Estimated Revenues: Appropriation of Fund Balance $6,100 Appropriations: Legislative- Miscellaneous $6,100 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 21 st day of December, 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk Approved by Finance: (11/22/2005) hl Introduced: December 7, 2005 Adopted: December 21, 2005 Effective: December 21, 2005 Suggested by: City Council CITY OF KENAI ORDINANCE NO. 2136-2005 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING THE SALE OF FOUR (4) PARCELS OF LAND TO THE CONSERVATION FUND FOR FAIR MARKET VALUE AND PLACING CERTAIN CONDITIONS ON THE SALE. WHEREAS, KMC 22.05.080 authorizes the City to sell land it owns to IRS 501(c)(3) corporations for consideration as agreed upon by the parties; and, WHEREAS, the Conservation Fund, an IRS 501(c)(3) corporation, has requested to purchase four (4) parcels of City property as shown on Attachment "A" of this ordinance; and, WHEREAS, the property is wetlands property adjoining the Kenai River that is not suitable for development and should be preserved as wetlands; and, WHEREAS, the consideration agreed to is as follows, which is fair market value as reported in the Restricted Use Appraisal Report produced by Julie Derry of Derry & Associates, Inc., and dated April 22, 2005: Parcel 1: $46,000 Parcel 4: $ 8,000 Parcel 5: $27,500 Parcel 6: $ 1,000; and, WHEREAS, the deed of conveyance will require the property be placed in a land trust for preservation; and, WHEREAS, the deed of conveyance will stipulate the property may not be conveyed to the State of Alaska; and, WHEREAS, these parcels are not needed for a public purpose. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that the parcels identified as parcels 1, 4, 5 and 6 on Attachment "A" may be sold to the Conservation Fund, an IRS 501{c)(3) corporation, as follows: Parcel 1, consisting of approximately 45.67 acres for $46,000; Parcel 4, consisting of approximately 14.63 acres for $8,000; Parcel 5, consisting of approximately 61.37 acres for $27,500; and Parcel 6, consisting of approximately 2.04 acres for $1,000. Furthermore, be it ordained that the deed of conveyance shall require the property to be held for preservation by a land trust and not be conveyed to the State of Alaska. Ordinance No. 2136-2005 Page 2 of 2 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 21~t day of December 2005. ATTEST: PAT PORTER, MAYOR Carol L. Freas, City Clerk Introduced: Adopted: Effective: December 7, 2005 December 21, 2005 January 21, 2005 Ordinance 2136-2005 Parcel 1 $46,000 45.67 Ac Parcel 4 $8,000 14.63 Ac Parcel 5 $27,500 61.37 Ac Attachment A December 2005 Council/Commission Meeting Calendar Nov 2005 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 4 11 5 12 Harbor Commission, 7p Jan 2006 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 18 25 Board of Adjustment Hearing, 6p 6 19 Friday Council on Aging, 7p~ Senior Center Parks & Recreation Commission, 7 CITY COUNCIL MEETING, 7p Airport Commission, 7p 8 2 9 13 14 15 16 26 HOLIDAY/CITY OFFICES CLOSED Beautification Committee -- CANCELLED 2O 27 PLANNING & ZONING COMMISSION, 7p 21 CITY COUNCIL MEETING, 7p 28 Planning & Zoning Meeting -. CANCELLED 22 29 23 30 Satz.'dq)~ 3 10 17 24 31 KENAI. ALASKA 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 / Fax: (907) 283-3014 www. ci.kenai.ak.us MEMORANDUM TO' FROM: DATE: RE: Mayor and Council Members Carol L. Freas, City/~/e,~.k~ ,~./ November 30, 2005// OCTOBER COUNCIL MEETING DATE In preparing the 2006 meeting calendar, I found the third Wednesday of October (and regular second council meeting day) falls on October 18, which is Alaska Day and a city holiday. Kenai Charter, Section 2-6 states: The Council shall hold at least two regular meetings every month at such times as it may prescribe by ordinance, resolution, or rules of the Council..." Kenai Municipal Code 1.10.040 states' The regular meeting of the Council of the City of Kenai, Alaska is declared to be at 7'00 p.m. on the first and third Wednesdays of every month unless circumstances warrant deviation of the regular meeting date when the Council, by majority vote, may change the date and give public notice of such change. At this time, the council chambers is available on Tuesday, October 17 and Thursday, October 19. A motion to reschedule the second meeting of October is necessary and will require a majority vote. KENAI PARKS/~ RECREATION COMMISSION DECEMBER 1, 2005 CITY HALL COUNCIL CHAMBERS 7:00 P.M. AGENDA ITEM 1' ITEM 2' ITEM 3' ITEM 4: ITEM 5' ITEM 6' ITEM 7: ITEM 8: ITEM 9: ITEM 10: ITEM 11: CALL TO ORDER & ROLL CALL AGENDA APPROVAL APPROVAL OF MEETING SUMMARY-- November 3, 2005 PERSONS SCHEDULED TO BE HEARD OLD BUSINESS NEW BUSINESS Discussion -- Bernie Huss Fitness Trail REPORTS Commission Chair Director City Council Liaison COMMISSION OUESTIONS & COMMENTS PERSONS PRESENT NOT SCHEDULED TO BE HEARD INFORMATION Council Action Agendas of November 2 and 16, 2005. Beautification Com_n~ttee Meeting Summary of November 8, 2005. Updated Membership List ADJOURNMENT KENAI PARKS/h RECREATION COMMISSION DECEMBER 1, 2005 CITY HALL COUNCIL CHAMBERS 7:00 P.M. CHAIR DALE SANDAHL, PRESIDING MEETING SUMMARY ITEM 1: ,,, CALL TO ORDER/h ROLL CALL Chair Sandahl called the meeting to order at approximately 7:05 p.m. confirmed as follows: Roll was Commissioners present: Commissioners absent' Others present: D. Sandahl, J. Carroll, T. Wortham, D. Hagen A. DeMello, J. Foglia Council Member J. Moore, Parks & Recreation Director B. Frates ITEM 2: AGENDA APPROVAL There were no changes to the agenda and it was approved as presented. ITEM 3: APPROVAL OF MEETING SUMMARY-- November 3, 2005 There were no changes to the November 3, 2005 meeting summary and it was approved as submitted. ITEM 4: , PERSONS SCHEDULED TO BE HEARD -- None ITEM 5: OLD BUSINESS-- None ITEM 6: NEW BUSINESS Discussion-- Bernie Huss Fitness Trail Parks & Recreation Director Frates outlined the Commission's philosophy with respect to park development and the Commission's desire to maintain what the City currently has. Although the notion of 'pocket parks" is not a bad idea, there are more pressing projects already on the table such as the Bernie Huss Trail. Frates stated the Kenai Lions Club wishes to assist with the selective clearing of more trees in the Bernie Huss Trail area beginning Saturday, December 3, 2005. Frates asked the Commission to be thinking about other types of uses for the area. He suggested a small 3-4 hole disc golf course might be appropriate. A brief discussion took place on other uses such as x- country skiing. Chair Sandahl reiterated the Commission's number one priority of taking care of the current infrastructure and pursuing grants for soccer fields and Section 36 development; Bernie Huss Trail is a park that needs working on; and likes the Lions Club involvement. The Commission recommended the Kenai Lions Club be allowed to proceed with assisting with the removal of additional trees in Bernie Huss Trail Park. ITEM 7: REPORTS Commission Chair- None 7-b. · · · ~¢¢~r fields Director- Frates reported on the following' Snowmachine Charity ride Hiring progress for the Parks & Grounds Assistant position Kenai Peninsula Soccer Club's interest in pursuing a grant for additional Work being done on a Kenai River Marathon slated for October 2006 7-c. City Council Liaison- Moore reported · The idea for a request for proposal for a corporate sponsor for the outdoor complex · Council's approval for Administration to work out details for the Kenai Kennel Club's use of the property in Section 36 · Town clock update · Council's action on the conservation properties off Bridge Access ITEM 8: , COMMISSION OUESTIONS/h COMMENTS -- None ITEM 9: PERSONS PRESENT NOT SCHEDULED TO BE H_EA_RD -- None ITEM 10' INFORMATION 10-a. 10-b. 10-¢. Council Action Agendas of November 2 and 16, 2005. Beautification Committee Meeting Summary of November 8, 2005. Updated Membership List ITEM 11: ADJOURNMENT The meeting adjourned at approximately 7'45 p.m. Meeting Summary prepared by: Kari Mohn, Administrative Assistant PARKS & RECREATION COMMISSION MEETING DECEMEBER 1, 2005 PAGE 2 Ted Stevens Alaska President Pro Tempore Washington, DC 20510 (202) 224-3004 (202) 224-2354 (Fax) The Honorable Pat Porter Mayor City of Kenai 210 Fidalgo Avenue Kenai, Alaska 99611-7750 November 17, 2005 3 Commerc.~, ~.,.,,~,,,.~, ,mu transportation Appropriations Governmental Affairs Rules and Administration Library of Congress ¥ b:-.:: ~"- Dear Pat: Thank you for your letter in regard to support for funding for the Cook Inlet Regional Citizens Advisory Council (CIRCAC). I am aware of the benefits CIRCAC provides to Alaska on oil spill response issues. However, it would be extremely difficult to submit any new appropriations requests this late in the Fiscal Year 2006 appropriations process. The Senate has already passed its version of each of the appropriations bills. I encourage you to resubmit your request early in the Fiscal year 2007 appropriations process, and I will see what I can do to help. With best wishes, STEVENS Anchorage Fairbanks Juneau Wasilla Kenai Ketchikan Bethel (907) 271-5915 (907) 456-0261 (907) 586-7400 (907) 376-7665 (907) 283-5808 (907) 225-6880 (907) 543-1638 Arctic Web Publications City of Kenai 210 Fidalgo Avenue Kenai, Alaska 99611 Attn' Chuck Kopp It has been five years since the City contracted with me to develop a website design for the City of Kenai. While the site continues to remain attractive and useful today, I feel it needs to be brought into the 21st century with a fresh, new design, something fitting for a community on the move and one that embraces the newest in website technology. With that idea in mind, I have created a DRAFT page I would like you to visit and review. I have attempted to come up with a newer, fresher more inviting look and a design that is not only "user-friendly" but visually appealing as well. I hope you will agree. At this time I have only uploaded the "front" page and one additional page for your review (which you will find by clicking on the link at the top of the page titled "A Message From Our Mayor") top left on the menu. You can view the pages by going to the following link: www. a rcticp u bi ication s. com/k enai The City of Kenai currently has an (estimated) 34 main pages within their website, with numerous additional sub- pages. To redesign the entire site (departmental pages), I am estimating a fee of approximately $3500.00 to $4000.00. I hope you will enjoy the DRAFT pages I have created, but please keep in mind that if the City is looking for something entirely different then I what I had in mind, I am most willing to work towards a design of your choosing. I look forward to hearing from you and please let me know if you have any questions. Best regards, Bobbi Manning 35220 west, B'r00:ki~.,i:iD'~ive w~iarc~tic p,Ubl,i:catio.ns~:com,;~· in fo@arct.icpUb l icatio n s INFORMATION ITEMS KENAI CITY COUNCIL MEETING DECEMBER 7, 2005 , 2006 Gaming Permit Applications -- a. Alaska/Hawaii Moose Association b. Pickle Hill Public Broadcasting , 11/29/05 Public Works Department, Project Status Report. . 11/22/05 Set Net Drive LID, updated preliminary assessment roll. o 12 / 02 / 05 Purchase orders between $2,500 and $15,000 for Council review. , "Emerging Planning Challenges in Retail," Joumat of the American Planning Association, Autumn 2005. , "Everyday Low Wages' The Hidden Price We All Pay for Wal-Mart," A report by the Democratic Staff of the Committee on Education and the Workforce U.S. House of Representatives, Representative George Miller (D-CA}, Senior Democrat, 2/16/04 , 11 / 18 / 05 K. Simon letter regarding Wal-Mart planned development. Department of Revenue Stat0 of AlaSka Tax Division, Gaming Group 2006 Gaming Permit Application Po Box 110420 AS 05.15.020 Juneau, AK 99811-0420 ' Telephone 907.465.2320 This fo~ is also available on the Intemet at ~.tax. a~te. ak.u~o~s, asp ORG~~TION INFORMATION ' Federal Empio~r Idenfifi~fion Numar (EIN) Pe~it Number Or~an~tion'~ ~am~ ALASKA?Hawaii Moose Mailing Address 909 Roger dr. ,Anchorage ] AK. 199506 TYPE OF ORGANIZATION. (Check one box. For definitions see AS 05.15.690 and 15 AAC 160.995.) !~haritable r--] Fraternal [-1 Civic or Service r'"] Labor r"'] Dog Mushers Association ~ Municipality ["']Educational r-]Non Profit Trade Association ,["] Fishing De~y Association [~Outboard Motor Association ORGANIZED AS r-lCorporation ~ Partnership 907 K6_q-7q 52 Fax Number 907 561 --3039 E-Mail Address ahma frank@msn, com r--]Police or Fire Department ~'] Political r'-~Religious r'"]Veterans r-lirA/Native Village [Association PERSONS IN CHARGE OF GAMES. Persons must be active members of the organization, or an employ~ of the municipality, and designated by the organization. Persons may not be licensed as an operator, vendor, or employee of a vendor. Frank I Marouis.~ Renal d Social Secudty Ndmber ]Daytime T&lephone Number SOCial Secudty Number .;'- 1907 563-7352 I Home Mailing Address 4909 Roast dr_ " IState IZip City I AK' I 9C°de Anchorage 9507 Has the pdmary member taken and passed the test? ,.,--[~-~Yes r--]No Permit number under which the test was taken: THESE QUESTIONS MUST BE ANSWERED. (See instructions.) Home Mailing Address IM.I. IAItemate Member's Last Name rDaytime Telephone Number 907 243- 61S~ I p.o_ Ro× 220512 Anchorage Has the alternate member taken and passed the test? Permit number under which the test was taken: ISta_te IZip Code Ak. 199502 [ ~ Yes ~;] No Has any member of management or any person who is responsible for gaming activities ever been convicted of a felony, extortion, or a violation of a law or ordinance of this state or another jurisdiction that is a crime involving theft or dishonesty or a violation of gambling laws? ~ Yes 'r~ No Does any member of management or any person who is responsible for gaming activities have a prohil~ited conflict of interest as'defined by 15 AAC 160.9547 We declare under penalty of unswom falsification, that we have examined this application, including any attachments, and that to the best of our knowledge and belief, it is true and complete. We understand that any false statement made on this application or any attachments is punishable by law. Irimry Member's Signature or Alternate , I pres~o~ Vice-preSident's SignatU/~(see inStructions.; IPrinted Name ,-. IDate Printed Name ~ .... Permit Fee: Check the appropriate box and enclose the correct amount. The perm!t fee is based on 2005 estimated gross receipts. Make Checks Payable to the State of Alaska~ Form 04-828 Application Front (Rev 09~05) Page 1 2006 Gaming Permit Application GAME TYPE. (Use for completing information below.) ~,* ~ Bingo r'-] Dog Musher's.Contes, r"-J Race Classic r'"'] Animal Classic (Chicken) Raffles ulI-Tabs . ontest of Skill _Canned Salmon Classic Deep FreeZe Classic F'-] Fish Derbies F"] Goose Classic [~ Ice Classic r"'] King Salmon Classic ~ Mercury Classic ACTIVITIES CONDUCTED BY ORGANIZATION J~] Rain Classic r'"'] Salmon Classic r'~ Snow Machine Classic r'-I Special Draw Raffle · E~] Animal Classic (Rat Race) D Calcutta Pool r'~ Crane Classic · See Check List Facility Nam.,,.~..~~_8 . . Physical Address Game Type(s) Is Facility [~]Owned r""JLeased . Donated r-]Owned J~Leased r--]Donated r=~Owned [~Leased ~ r--]Donated [~Owned [~Leased r..-~ Donated MANAGER OF GAMES. As defined in 15 AAC 160.995 and 15 AAC 160.365. (If you have requested self-directed permits for bingo or 3uli-tabs above, you must appoint a manager and complete the information below.) ACTIVITIES CONDUCTED BY VENDOR. (Puli-tabs are the only games a vendor can conduct.) Vendor registration and fee must be attached. Name of Vendor Physical Address . ACTIVITIES CONDUCTED BY OPERATOR ACTIVITIES CONDUCTED BY MULTIPLE-BENEFICIARY PERMITTEE DEDICATION OF NET PROCEEDS. The organization must use the net proceeds from gaming activities for political, educational, civic, public, charitable, patriotic or religious uses in Alaska. (See statutes and regulations for specific rules.) In the space provided, tell how your organization will use the net proceeds from gaming activities. (Be specific.) · S Form 04-826 (Rev 09/0"~i Back ' ' ' Department of Revenue State of Alaska Tax Division, Gaming Group 2006 Gaming Permit Application PO Box 110420 AS 05.15.020 Juneau, AK 99811-0420 Telephone 907.465.2320 This form is also available on the Intemet at www. tax. state, ak. us/forms, asp ORGANIZATION INFORMATION Employer Identification Number (EIN) Number -0100 '717 13 ama Date Sram lone Number ?- 33 / .~ ~ SS ~PE OF ORG~~TION. (Check one ~x. For definitions see AS 05.15.690 and 15 ~C 160.995.) '~~ ~Fmtemal ~ Police or Fire Depa.ment J ~Ci~c or Sewice ~ Labor I ~ ~ Mushers ~socJation ~ Municipali~ ~ Politi~l ~Religious ~~du~onal ~Non Profit Trade Association ~Veterans ~ Fishing Derby Association ~ Outboard Motor Association ~l~Native ViII--- PERSONS IN CN~GE OF G~ES. Pemons must be active mem~rs of the o~anization, or an employee of the municipally, and designated by the or~n~on. Pe~ns may not ~ li~nsed as an operator, vendor, or emplo~ of a vendor. Member's Last Name rote ama ~ Metal Name ~ud~ Numar Telephone Number , .. Numar Mailing Address / ",, ~ ~m,~ mem~r taken and passed the ~Yes ~No Has the alternate member taken and pass~ the test? ~Ye, ~No P~it numar under ~ich the test was taken: Permit number under which the test was taken: ~ ~ ' ~ESE QUES~ONS ~UST BE ANSWERED. (See instructions.) ~ Yes ~ No Has any member of management or any person who is responsible for gaming activities ever been ~nvicted of a felony, exto~ion, or a violation of a law or ordinance of this state or another jurisdiction that is a chine involving the~ or dishones~ or a violation of gambling laws? Yes No Does any member of management or any person who is responsible for gaming activities have a prohibited conflict of interest as de,ned by 15 ~C 160.9~? We decle~ under penalty of unswom falsi~cetion, that we have examined this application, including any attachments, and that to the ~est of our knowledge end belief, it is t~e and complete. We understand that any fa/se statement made on this application or any a~echments is punishable by law. President nature Printed Name ;tructions.) Name Date //- Date ~ correct am~ , The permit fee is based on 2005 estimated gross receipts. Make Checks Payable to the State of Alaska $0 - $20,000 = $20.00 $20,001. $100,000 = $50 [~ $100,001 or more = $100 Two copies of this application must be sent to all applicable municipalities and boroughs. See instructions for mandatory attachments. Form 04-826 Application Front (Rev 09/05) Page 1 2006 Gaming Permit Application GAME TYPE. (Use for completing information below.)  Bingo ~ Dog Musher's Conlesl --'--'----'-- ,J~ Raffles .,-...,. [~ Fish Derbies !-"I R.- ..... · . L..J a~n Classic ~ Calcutta Pool · ~' Puli-Tabs ~ Goose Class,c ~ Sa,mon Classic ~ Crane Classic [~ Contesl of Skill [~ Ice Classic [~ Snow Machine Classic [~ Canned Salmon Classic ~ King Salmon Classic J~ Special Draw Raffle. .7- · ACTIVI?IE$ CONDUCTED BY ORGANIZATION Ph, ss / E~Donated [~]Owned E~Leased E~/Donaled E~Owned [~/Leased E~Donated [~Owned E~Leased pMuilA~aAbGsEa~RoOveF, GYOAulVlmEuS;i ;;pdo~n~ln;dm~;nlaSger~aCn~ 6c~mg~e~en~hle5inf~orCm:~o0~al~eSl~w(ll)you have requested self-directed perm~or ACTIVITIES CONDUCTED BY VENDOR. (Pull-tab ACTIVITIES CONDUCTED BY OPERATOR ACTIVITIES CONDUCTED BY MULTIPLE-BENEFICiARY PERMITTEE DEDICATION OF NET PROCEEDS. The organization must use/he net proceeds from gaming activities for political, educational, civic, public. charitable, patriotic or religious uses in Alaska. (See statules and regulations for specific rules.) In the space provided, fell how your Form 04-826 (Rev 09/0 _ Department of Revenue Tax Division, Gaming Group PO Box 110420 State of Alaska 2006 Puli-Tab Vendor Registration AS 05.15.020 Juneau, Alaska 99811-0420 Telephone 907.465.2320 A registration is required for each vendor location. A permittee may not contract with more than five vendors at one time. This form is also available on the Intemet at www. tax.state.ak.us/forms.asp ORGANIZATION INFORMATION IFederal EIN IPermit NUmber -.. IMem berin, C?arg. /1 ~' 7, 2 , I I /°r t,64%, / uX, qn?- 3,(,o- 6 65'¢ · ,I VENDOR INFORMATION I Fed~,~l~i or Socia, Security Number' -o lO IV~or ~a~ !8eyera_~e Dispen~ License ~ Business License Number i%a K x/e un a Lee ~EIE QUES~ONS MUST BE ~WERED BY ~E VENDOR. (If Du ~n~r ~" Io any question, please submit 1~ ~mn's name, date of ~, ~iN ~ufi~ .~Nr, an~ ~si[on of ~s~sibili~.) ~Yes ~o Hal ~y mem~r of management or any ~n ~ is r,s~sibl, for gaming a¢~ti,s ,v,r b,,n ~nvi~ of a felon, ~~, or ~ ~ola~on ¢ I ~ ~ o~i,an~ of lhis s~l, or anot~r jufi~i~ion that is a ~me invol~ng ~Yel ~o Do ~ employ or ~ve a contract ~lh lh~ pdma~ or allemate m,mNr in c~rge, o~mr. board mem~r or mana~r of ~ming for ~ a~ ~nalion?  Yes ~~ Do ~u have a ~ntmct other than a vendor mnlracl ~th lh~ o~aniation list~ above.'? ~DOE CON,CT TO ~E~ PULL-TAB~ Pursuant to AS 05.15.188, the vendor listed above hereby agrees to sell puli-tabs as a vendor on behalf of the permittee listed above. The vendor further agrees that, as compensation for expenses incurred in selling pull-tabs on behalf of the permittee, ~' O % of the ideal net of each game may be retained by the vendor as compensation. Permittee must receive at least 70% of the ideal net from each game. AS 05.188(h). The vendor further agrees that an amount equal to the ideal net, less the compensation owed to the vendor, shall be paid by check by the vendor to the permittee upon delivery of a pull-tab sedes. AS 05.15.188(i). It is further agreed that the vendor will ensure pull-tab winners of $50 or more will complete the prize receipt forms; that the prize winner summary form will be completed for each pull-tab game and retained with those winning pull-tabs (AS 05.15.187(i)); and that these records of pull-tab winners will be given to the permittee to retain for the required two or three years. AS 05.15.187(f). .. It is further agreed that it is the vendor's responsibility to ensure gaming activity at this vendor location is conducted in accordance with all applicable state statutes and regulations. It Il further agreed that, if the vendor is no longer eligible to sell pull-tabs, then all unopened and opened pull-tab games shall be returned to the permittee within 10 days. If the permittee loses the privilege to conduct gaming activities, then all unopened and opened pull-tab games must be lreated in accordance with 15 AAC 160.490. We declare under penalty of unsworn falsification that we have examined this form, ~ncluding attachments, and that to the best of our know/edge attd belief it is true and complete. We understand that any false statement made on this document or attachments is punishable by law. Ix. - Registrati $50 Make checks payable to the State of Alaska. Printed Name Dale 11-7-o, Validation Number This Registration form must be attached to an application form when submitting to the State of Alaska. o4-854 (Rev O9/O5) Department of Revenue Tax Division. Gaming Group PO Box 110420 Juneau. Alaska 99811-0420 Telephone 907.465.2320 State of Alaska 2006 Puli-Tab Vendor Registration AS 05.15.020 A registration is required for each vendor location. A permittee may not contract with more than five vendors at one time. This form is also available on the Internet at www. tax.state.ak.us/forms.asp O.~A.~ZA~o. ,.~o.~^~,o. J'Fe~:I,,~{al/.[EIN ...... --"t Permit Number I'~ ,'-~ 1 DateStamn J IMem~r in .Charge ,~ , ' i ll,e ~-.tv . I I YEN~OR INFORMATION Federal EIN °rS°cial ~ecu~Number°q.~''O ~N~~ q Vendor Name IBusi~as Name peig~is[~e~icense  t~~iness License Number Telephone Number IPhysical L~tion Address IPackage Store License IFax'Number Icily '~~ ~ / /~ ~~ / / lPrOvide your Social Security Number. THESE QUES~ONS MUST BE'~SWERED BY ~E VENDOR. (If ~u answer "yes" to any ques~on, plea~.submit ~ ~mon's name. date of bi~. ~ ~d~ numar, and ~si~on of ms~nsibili~. ) ~Yes ~o Has any member of management or any ~mon w~ is insensible for gaming ac~ifies ever b~n convict~ of a felony, exto~on, or a vi~ation of a law ~ o~inance of this s~te or another jurisdiction that is a cdme involving ~e~ or dis~es~ or a violation of gambling la~? ~Yes~No Do ~ employ or ~ve a contract ~th Ihe pdma~ or alternate mem~r in c~rge, offi~r. ~a~ mem~r or manager of ~ming f~ a~ve ~n~tion? ~Yes ~ Do ~u ~ve a ~ntmct other than a vendor ~ntract with the organi~tion list~ a~ve? ~NDOR CONTACT TO SELL PULL-TABS Pumuant to AS 05.15.188, ~e vendor listed above hereby agrees to sell pull-~bs as a vendor on behalf of ~e pe~iffee listed above. ~e vendor ~er agrees ~at, as ~mpensa~on for expenses incu~ed in selling pull-=bs on behalf of ~e perigee, ~ ~ % of ~e ideal net of ea~ game may be re=ined by ~e vendor as ~mpensation. Pe~ittee must receive at least 70% of the ideal net from ea~ game. AS 05.188(h). The vendor ~er agrees ~at an amount equal to ~e ideal net, less ~e compensa~on owed to ~e vendor, shall be paid by check by ~e vendor to ~e pe~iffee upon delive~ of a pull-tab series. AS 05.15.188(i). It is ~er agreed ~at the vendor ~11 ensure pull.tab winners of $50 or more will complete the prize receipt fo~s: that ~e prize ~nner summa~ fo~ ~11 be complet~ for each pull-~b game and re~ined ~th those winning pull-~bs (AS 05.15.187(i)); and that ~ese reco~s of pull-~b ~nners ~11 be given to the pe~ittee to re=in for ~e required ~o or ~ree years. AS 05.15.187(f). It is ~er agreed ~at it is ~e vendo(s responsibili~ to ensure gaming activi~ at ~is vendor I~on is conducted in ac~rdance ~ all appli~ble s~te s=tutes and regula~ons. It Is ~er agre~ ~at, if ~e vendor is no longer eligible to sell pull-=bs, ~en all unopened and opened pull-~b games shall ~ returned to ~e ~iffee ~in 10 da~. If ~e pe~ittee loses ~e privilege to conduct gaming ac~es, ~en all unopened and opened pull-=b games must be ~ated in ac~rdance wi~ 15 ~C 160.490. We declare under penalty of unsworn falsification that we have examined this form, {ncluding attachments, and that to the best of our know/edge and belief it is true and complete. We understand that any false statement made on this document or attachments, is punishable by law. of Vendor Printed Name Reg Fee $50 Make checks payable to the State of Alaska. Printed Name Validation Number This Registration form must be attached to an application form when submitting to the State of Alaska. Form 04.854 (Rev 09/05) Project status Report A/NC/F/ City Contact Project Name A JL Airport Security Fencing A=Active NC=Non-Construction F=Future STIP=State Trans. Imp KK - Keith Kornelis JL - Jack La Shot RS - Robert Springer MK - Marilyn Kebschull Jet - Jan Taylor status Working on closeout. A JL Airport Security System Working on closeout. A MK Airport Supplemental Planning Assessment Implementation Plan to Airport Commission 12/8/05 for recommendation to Council. A JL Airport Taxiway "H" Access Parking Completion in Spring. A JL Airport Terminal Modifications Change order work. A JL Contaminated Soils- Shop Grant application for further funding. A KK Kenai Boat Launch Improvements Received $350,000 grant. Nelson & Associates are working on the design and bid specs. Received Corps Permit. A KK Kenai River Bluff Erosion Control Project The City received the draft technical report from the Corps. Hopefully, the City will get additional funds to help with the design and answer any questions from the study and agencies including obtaining the Corps Permit. A JL Kenai Soccer Fields Being engineered. KK Lawton Drive Water Main WH4 to Swires Nelson working on design. City is working with DEC and Corps on permit. A JL Multi-Purpose Facility Bleachers being installed. Tuesday, November 29, 2005 Page 1 of 3 A/NC/F/ A JL City Contact Project Name Parallel Taxiway Status Winter shutdown. A JL A JL Runway Extension Environmental Assessment Runway Safety Zone/Extension Proceeding with main list of projects. Scoping meeting held. Bid mid-winter. A JL Senior Kitchen Kitchen nearly complete. A KK WH 4 Reviewing new EPA guidelines. Working with DNR on land purchase issues. Evaluating the two pilot test programs on water treatment. West Coast Filters completed a 40-day pilot study in August/September and want to try one in December.. Filtronics, Severn Trent, Kinetico, Pureflow Filtration Systems, and Basin Water are also being considered as treatment companies. F KK Ames & Dunes Road Kenaitze Indian Tribe paving roads with curbs, gutters, and sidewalks. Project on hold due to financial problems. F KK Angler Drive LID City received petition for paving Angler Drive. F KK Boating Facility Exit Road Council has approved the land trade with The Conservation Fund for the land. Still need to find funds to construct exit road. F KK Culvert Repairs S. Spruce & Boat Launch Road Boat Launch Road culvert replacement USFWS Grant has been received and funds appropriated. USFWS has asked for design change which increases the project cost significantly. Project is underfunded, but USFWS says they will increase the grant funds. Still waiting on S. Spruce culvert repair grant. F JL Maintenance Shop Preliminary plans and specifications complete. Tuesday, November 29, 2005 Page 2 of 3 A/NC/F/ F KK City Contact Project Name McCollum LID Status The City Manager's report went to Council on 11/2/05. The preliminary assessment roll will go to Council 12/7/05 along with resolution setting public hearing. F KK S. Ames and Thompson Park, LID Property owners are tirculating petitions for LID F KK Set Net Drive LID There was a public hearing on 11/2/05 for Set Net Drive Special Assessment District. Council directed administration to continue. STIP KK DOT- Bridge Access Pathway Pathway along Bridge Access Road from K-Beach to Spur 3.3 miles... Project in environmental assessment. Design scheduled FFY08. Construction after FFY09. Tuesday, November 29, 2005 Page 3 of 3 . } 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 ~ Telephone: (907)283-7535, Ext. 236 ' FAX: (907)283-3014 'llll' ' 1992 // MEMORANDUM KENAI. ALASKA ..- TO: FROM: ',//'Charles M. Kopp, Acting City Manager Larry Semmens, Finance Director Carol Freas, City Clerk Keith Kornelis, Public Works Director DATE: November 22, 2005 SUBJECT: Set Net Drive LID- VIP Drive to Watergate Way Attached is the new Preliminary Assessment Roll (Pre-Bid) with the change City Council made. Resolution No. 2005-48 directed the continuation of this project. Just before this resolution passed, the Council made a motion for the City to pay the extra amount for the property owners where their share of the LID was over 25% of the KPB assessment. The actual assessment roll will be the actual costs after the project is complete and all costs are known. However, the City will pick up the extra costs for the property owners whose share is above 25% of the KPB assessment. I think this project is ready to begin, and I will be requesting engineering design proposals soon. Do we need to set up a capital project for this specific project? Maybe an ordinance appropriating funds for this project is needed. KK/jet ..... Set Net Drive - from VIP to Watergate /. ...... PRELIMINARY ASSESSMENT ROLL (Pm-Bid) ! I ! ! I ! I I Public Hearing 1112/05 Council said city pay extra amount over 25% KPB Ass. ....... Based on property owners paYing proportionally based on square footage*==~ Below costs are estimates - final cost will be based on the actual cost of the project. ProPerties to be assessed- See Property Owners Spread Sheet ID Property Square KPB 25% KPB 100% of 50% of Amount # OWNER Address ACRE Feet % of Total Ass. $ Ass. $ Est. $ Est. $ Owner Pay I Driskill 750 SF_.~ NET DR 0.92 40,075 0.079792 184,200 46,050 17,554 8,777 8,777 2 Johnson 740 SET NET DR 0.98 42,689 0.084996 137,100 34,275 18,699 9,350 9,350 3~Whanneil 2560 SEINE CT 1.06 46,174 0.091934 153,400 38,350 20,';~5 10,113 10,113 4 Durkee 620 SET NET DR 0.92 40,075 0.079792 220,500 55,125 17,554 8,777 8,777 ~ ~',hap~nan 610 SET NEi DR 1.06 46,174 0.091934 201,300 50,325 20,'2'25 10,113 10,113 ~ ~gham 2600 WATERGA~ h_. 1.02 44,431 0.088465 14,500 3,625 19,462 9,731 3,625 .nith 615 SET NET DR 0.92 40,075 0.079792 14,500 3,625 17,554 8,777 3,625 --.. 8 iHoogland 2705 SEINE ST 1.09 47,480 0.094536 116,200 29,050 20,798 10,399 10,399 9 Leighty 735 SET NET DR 1.37 59,677 0.118820 173,900 43,475 26,141 13,070 13,069 10 Bumh 745 SET NET DR 1.08 47,045 0.093669 200,200 50,050 20,607 10,304 10,304 11 Aase 755 SET NET DR 1.11 48,352 0.096271 14,500 3,625 21,180 10,590 3,625 , '~ O~AL 11.53 502,247 1.000000 220,000 110,000 91,777 Muni Match Grant (50%) 110,000 Administration 3,000 Muni Match extra cost over 25% KPB Ass.(8.3%) 18,2~3 Engineering 31,000 Property Owners (41.7%) 91,777 Construction 186,000 TOTAL 220,000 TOTAL 220, O00 . Prepared by Keith Kornelis 11/22/2005 Z 0 0 0 t.O O~ 03 0 0 0 CXl C'Xl OD Z 0 u,,,I u,.I I-- Z w LU 0 w n n n, :~ rs) a. n ~: :::::) n,' ~ ~ 0 o~ r~ :~ ~ w Z u_ w w ~ n _ w w r~ 0 0 n n n,' w ~ n n Z r,.) 03 0 0 k- n,' m 0 0 w LLI n,' n,' ~ r~ m w _~ w ~ tL iZ. ~ ..J nn nn rn Z Z <C Z ~' !.- (.'3 z :~ z cs) w 0 -' W -- w n,' r~ r~ n, 0 rw ~ 0 ~ Z rw -r 0 <~ u_ _j-- X rw 3:: <~ ~ 0 w w _ >. 0 (0 rn I-- W Z rT) Z W n ::> (.'3 0 -r ~ "'J uJ tv' -r' u.. m ~ ..~ - z ~ 0 ' n w ~ 0 ~ o3 0 n . Z LM Z 0 0 r~ w w I- 0 0 ~ rY (,.) ~ rn ~ r~ ~. '~ w w n,' n,' n,' 0 Z Z I.- w w -- <~ I- -- w ~ '!- -- (/> (..,'3 n o3 0 ~ Z -r 0 :~ <( -~ ,~ 0 ~ n C.'3 . 0 0 w Z <1: 0 ~ 0 u.I n~ z o ,,, , >- -r- ~ < ._1 '~ Z (/> n,' 0 w > w 0 0 w < "~ rY -- n,, 0 0 0 LU 0 'T' Associate Editors Edward J. Blakeley University of Sydney Marion G. Boarnet University of California, Irvine William J. Drummond Georgia Institute of Technology Reid Ewing University of Maryland, College Park Robert Fishman University of Michigan Charlie Hoch University of Illinois at Chicago Anastasia Loukaitou-Sider. is University of California, Los Angeles Dowell Myers Universit3, of Southern California Arthur C. Nelson, FAICP Virginia Polytechhic and State University Lynne B. Sagalyn University of Pen. nsylvania Lawrence Susskind, AICP Massachusetts Institute of Technology Editorial Advisory Board Rachdle Alterman Technion--Israd Institute of Technology Donne Audirac Florida State University Philip Berke University of North Carolina at Chapel Hill Eugenic L. Birch, FAICP University of Pennsylvania David S. Boyd, AI CP MSA Professional Services, Madison, Wisconsin Raymond J. Burby, FAICP University of North Carolina, Chapel Hill Roger W. Caves San Diego &ate University Richard Codd, AICP Port Authority of New York and New Jersey Femando Costa, AICP Planning Department, Fort Worth, Texas Peter Fisher University of Iowa Ann Forsyth University of Minnesota Lawrence Frank, AICP University of British Columbia Lance Freeman Columbia University Steven P. French, AICP Georgia Institute of Technology' George' C. Galster Wayne State University Jos~ G6mez-Ib:tfiez Harvard University Jill Grant Dalhousie University Rosalind Greenstein Lincoln Institute of Land Policy Susan Handy University of California, Davis Robert Hodder AARP, Washington, DC Lewis D. Hopkins, FAICP University of Illinois at Urbana-Champaign Deborah Howe, FAICP Portland State University Judith E. Innes University of California, Berkeley Sanjay Jeer, AICP Planning Consultant, Chicago, Illinois Lynne Judd Wisconsin Department of Transportation Gerrit-Jan Knaap University of Maryland, College Park Donald A. Krueckeberg, FAICP Rutgers University Michael Leaf University of British Columbia Henry Markus, AICP King County Department of Transportation, Seattle, Washington Anne Vernez Moudon University of Washington Connie P. Ozawa Portland State University G. William Page, AICP State University of New York, Buffalo Roll Pendall, AICP Comell University Zhong-Ren Peng University of Wisconsin-Milwaukee Gary Sands, AICP Wayne State University Brenda Case Scheer, AICP University of Utah Alex F. Schwartz New School University Qing Shen University of Maryland, College Park Christopher Silver, AI CP University of Illinois at Urbana-Champaign Daphne Spain University of Virginia Michael B. Teitz, AICP Public Policy Institute of California James A. Throgmorton University of Iowa Margery Austin Turner Urban Institute, Washington, DC Robert Upton Royal Town Planning Institute, London Willem van Vliet- University of Colorado Paul Waddell University of Washington, Seattle Richard W. Willson, AICP California State Polytechnic University, Pomona Cover image Cover: Jacob Lawrence, This Is Harlem, gouache on paper, 15~ x 22~V~6 inches, 1943. Credit: © 2005 The Estate of Gwendolyn Knight Lawrence / Artists Rights Society (ARS), New York Hirshorn Museum and Sculpture Garden, Smithsonian Institution, Gift of Joseph H. Hirshorn, 1966. Photograph by Lee Stalsworth. Having lived in Harlem during the 1930s and 1940s, Lawrence used everyday street scenes as subjects for his art. This painting reflects the vitality of this urban neighborhood with a wide variety of buildings for shops, housing, and institutions. This issue is devoted to an appraisal of the current condition of America's big cities and suburbs. The issue begins with Robert Fishman's Longer View. In it, he describes a "Fifth Migration" as "the beginning of a beneficent spiral in which thc feedback from [Lewis Mumford's] fourth migration (the broad opposition to sprawl and urban disint~ration) has finally led to an ever-broadening mobilization of the powers inherent in traditional urbanism." Volumn 7~, Number 4, Autumn 2oo5 Journal of the American Planning Association City and Regional Planning, Georgia Institute of Technology Editor David S. Sawicki, FAICP Managing Editor Amy Helling, AICP Copy Editor Peter Link Editorial Assistant Stephen Conschafter Department of Urban Affairs and Planning Virginia Polytechnic Institute and State University Review Editors Thomas W. Sanchez Robert E. Lang Review Managing Editor Karen Danielsen 353 Articles Longer View: The Fifth Migration Robert Fishman Smart Growth: Why We Discuss It More than We Do It Anthony Downs Comment: An Ambitious Movement and Its Prospects for Success Fernando Costa Keys to the New Metropolis: America's Big, Fast-growing Suburban Counties Robert E. Lang, EdwardJ. Blakely, and Meghan Gough The Effects of Revitalization on Public Housing Residents: A Case Study of the Atlanta Housing Authority Thomas D. Boston Comment: Public Housing Demolition and the Benefits to Low-income Families Edward G. Goetz Response Thomas D. Boston America's Central Cities as the Location for Work: Can Cities Compete with Their Suburbs? Edward W. Hill and]ohn Brennan Emerging Planning Challenges in Retail: The Case of Wal-Mart Marlon G. Boarnet, Randall Crane, Daniel Chatman, and Michael Manville 357 367 378 38x 393 407 4Io 4II 433 Departments Letters to the Editor · Forthcoming 452 472 Emerging Planning Challenges in Retail 433 The future growth of the world's largest company hinges on its "supercenter" format, a bold evolution that made it the nation's largest grocer in a few short years. While proposals for big-box retail have long involved politically sensitive tradeoffs for planners, supercenters bring these into sharp focus by concentrating substantial wage impacts on one group, grocery workers. With much at stake-- we estimate direct impacts of hundreds of millions of dollars on each side in the San Francisco region alone--these battles promise to be more intense and challeng- ing than in the past. Yet many regulatory strategies are weakly rationalized, poorly targeted, and legally untested. We clarify key policy questions and offer a case study as a model for understanding the extent and character of expected tradeoffs between winners and losers. In the end, our analysis supports planning strategies explicitly aimed at mitigating costs while leveraging benefits. This will require a thorough assessment of each proposed store's costs and benefits in order to pro- vide a clearer rationale for when super- centers should be approved, denied, or mitigated. Such an approach permits planners to do what they do best: inform, mediate, and resolve. Marion G. Boarnet is a professor in and chairs the Department of Planning, Policy, and Design and is a professor of economics at the University of Califor- nia, Irvine. Randall Crane is a professor of urban planning at UCLA. Daniel G. Chatman is an assistant professor at the Edward J. Bloustein School of Planning and Public Policy and research director of the Alan M. Voorhees Transportation Center at Rutgers University. Michael Manville is a PhD student in urban planning at UCLA. Journal of the American Planning Association, Vol. TX, No. 4, Autumn 2005. © American Planning Association, Chicago, IL. The Case of Wal-Mart Marion G. Boarnet, Randall Crane, Daniel G. Chatman, and Michael Manville Wal-Mart is locally and globally conspicuous. It is the nation's largest private employer (~.z million workers), seller of retail goods ($28o billion), and owner of corporate real estate (gn million square feet). Wal-Mart accounts for roughly an eighth of China's exports to the U.S., and if it were a. country, would be China's eighth largest trading partner (Forsythe, 2oo3). The firm's signature passion for cutting costs and its dominant share of retail sales in the United States have increased national productivity and reduced the rate of inflation, leading some to question how such fundamental economic indicators should be calculated (Feldstein, 2oo3; Hausman & Leibtag, 2oo4; McKinsey Global Institute, zoo~). Locally, Wal-Mart stores are often welcomed becaUse they provide low prices and product variety in areas that previously lacked both, while they are also op- posed for their potentially negative land use, traffic, and small business impacts. The rapid rollout of the "supercenter," a relatively new Wal-Mart store format that combines discount retail with a supermarket and whose floor area can exceed 4 acres, poses new challenges to local planning. When a nonunionized competi- tor enters the grocery business in a unionized market, the lo~cal planning agency faces tradeoffs between wage impacts and price savings for consumers. Debate over even one store can be highly contentious, and the permitting process is often the only forum for resolving such issues. As we show below, the grocery store part of the supercenter format can have substantial impacts on a regional economy. On the plus side, Wal-Mart grocery prices tend to be significantly lower on average than those of other stores. This is a clear benefit, particularly for areas such as some inner-city neighborhoods that grocery chains have abandoned.~ In addition, as Wal-Mart gains market share, it puts pressure on other grocery stores to lower their prices, thereby benefiting all grocery customers in the area. On the negative side, the big-box format may cause traffic and other problems commonly investigated during the local review process. Because these concerns have received significant planning attention already, our focus in this paper is instead on potential labor market issues. The grocery sector in much of the urban U.S. is unionized, and Wal-Mart workers are not. One consequence of Wal-Mart's expansion is that we expect wages and benefits paid to grocery workers to fall significantly as supercenters gain market share. ! 434 Journal of the American Planning Association, Autumn 2005, Vol. 7t, No. 4 Consider Inglewood, California, a moderate-income city of tt3,ooo near Los Angeles International Airport. When the Inglewood city council declined Wal-Mart's plan to open a supercenter there in zoo4, the company sponsored a ballot referendum not only to permit building the 2oo,ooo-square-foot store, but also to skip the usual trat~c and environmental reviews and public hearings. Wal-Mart poured over Sx million into the referendum campaign; a coalition of churches, community groups, and labor unions organized against it. Supporters (including Inglewood's mayor) argued that the supercenter would bring new jobs and lower prices. Opponents argued that the development would undermine local union jobs and existing retail. The measure was defeated in April zoo4, but similar conflicts will certainly arise. Shordy after the Ingle- wood controversy, the city of Rosemead, California, was roiled by a proposed Wal-Mart supercenter. Organized labor poured money and personnel into defeating Wal- Mart's supporters on the Rosemead city council (Felch, 2005). According to the secretary-treasurer of the Los Angeles County Federation of Labor, Wal-Mart's move to the cities "will become the battle royal for all of organized labor in the United States. It will be where labor makes its stand" (Broder, zoo4). This article begins by profiling supercenters, the most recent chapter in retail restructuring. We then review their potential effects on consumer prices and grocery workers' wages and benefits, and present a case study of the San Francisco Bay Area, demonstrating that hundreds of mil- lions of dollars may be at stake. Finally, we discuss plan- ning responses. Communities have so far either welcomed supercenters, banned them on economic or other grounds, or indirectly blocked them with size restrictions, yet the legal basis for using land use controls to address wage impacts appears both weakly rationalized and untested. In the con- clusion, we suggest that planners develop the information necessary to negotiate regulatory strategies, rather than rely on clumsy and legally vulnerable quantity restrictions. Understanding which potential impacts are most impor- tant to mitigate should help planners generate more nu- mc. ed responses. Background: The Rise of Supercenters in the United States Until the last century, most retail goods were sold through specialty stores. That changed between ~9oo and ~92o when merchants in and around Boston began com- bining several shops under one roof, anticipating the modern department store. Filene's, which originilly sold only women's wear and accessories, began to acquire more space, sell new products, and remove the partitions that once separated different wings bf its stores (Bluestone et al., x98o). Filene's also developed the "bargain basement," in which merchandise was offered at drastically reduced prices, industry observers initially expected this approach to fail, as department s~res at the time were luxurious and situated in expensive downtown locations, with large sales staffs (Cohen, zoo3; Fogelson, 2ooz). The bargain base- ment lacked amenities but allowed Filene's to broaden its customer base and build customer loyalty among the working classes. As it turned out, the bargain basement was the future, of retail. By ~977, discount retail was the largest sector of general merchandising, with thousands of stores and bil- lions in sales. The undisputed champion was Detroit-based Kmart, which had over x,2oo stores and continued to grow. Figure ~ shows that Wal-Mart's growth was initially slower and confined to the southern and rural heartland, where it built customer loyalty without competing directly with the then larger Kmart (Hornbeck, ~994). As luck would have it, the challenges of operating in rural areas stimulated the company to become an early innovator in supply and distribution systems. In the meantime, the grocery industry also transformed. Neighborhood markets gave way to fewer and larger stores, increasingly operated by national chains. Since ~99o the size of the average store increased from 3~,ooo to 44,ooo square feet (Dunkley et al., zoo4). The industry also con- solidated as larger chains absorbed smaller national and regional companies. Supercenters combine these two heretofore-distinct industries and formats. Over the last 5 years, they have been the fastest growing sector of retail (Barry, zoo3). The first Wal-Mart supercenter opened in ~988, and by 2ooz the company operated 7o% of the country's supercenters (Barry, zoo3; Graft, ~998; Wal-Mart, 2oo3, zoo4). Several replaced existing discount stores, and many of those were in Wal-Mart's oldest and most profitable locations (Barry, 2oo3). This meant Wal-Mart could enter the grocery sector in areas where it already had strong customer identification and loyalty. By early zoo3, Wal-Mart had supercenters in all but seven states. See Figure z for supercenter growth trends for Wal-Mart and its competitors. As a result, the firm recently became the nation's largest grocer (Weir, 2oo3). Nationally, Wal-Mart is ex- pected to open several hundred supercenters in each of the ' next few years, about half by converting existing retail discount stores (Barry, 2003; Wal-Mart, 2003). Yet this format is still disproportionately rural. In 2oo3, over 70% were located outside the largest zoo metropolitan statistical Boarnet et al.: Emerging Planning Challenges in Retail 435 1990 1995 Figure I. Wal-Mart stores in the U.S., x97o-I995. Source: Basker (2005). Reprinted by permission. areas (Tatge, zoo3). In the 26 markets with populations over 2 million, Wal-Mart's combined average grocery market share is less than 4% by one estimate (Tatge, 2oo3). But the company has begun to develop supercenters in metropoli- tan areas, and many grocery industry analysts view Wal- Mart as a formidable contender in those markets (Callahan & Zimmerman', 2003; Hayes, 2o03; "Wal-Mart Forces Paradigm Shift," 2oo3). Planning Issues The larger size of the supercenter poses familiar plan- ning problems of traffic congestion and circulation, aes- 436 Journal of the American Planning Association, Autumn zoos, Vol. 71, No. 4 ,~umber of supercenter IWal-Mart liiTarget KlKmart stores 1400 1200 1000 7 800 600 400 200 1991 1992 1993 1994 1995 1996 1997 Y'~ar 1998 1999 2000 2001 2002 Figure 2. Growth in supercenter stores by company, 1991-2002. Sources: Barry (2003, pp. 29-30), Target Corporation (2003), Wal-Mart (2003), Kmart (2003). Note: The second and third largest supercenter firms in the United States, as of 2003, were Meijer and Fred Meyer, with 160 and 133 supercenters, respectively. Those firms are not included here because they are regional firms, without the national presence of Kmart, Target, and Wal-Mart. thetics, and public finance. Interesting and important as these are, we do not address them in this article.* Rather, this article focuses on the narrower, and in many ways more contentious, issues of consumer prices and grocery worker compensation. Supercenters exacerbate problems caused by previous forms of big-box retail in two respects. First, because of Wal-Mart's substantial cost advantage, adding only a few new supercenters in a metropolitan area can significantly and rapidly bring down both prices and wages. Second, while earlier forms of big-box retail resulted in lower regional prices and wages, these tended to be spread rather thinly across the local population. Supercenters, by con- trast, concentrate wage reductions on grocery workers, a relatively well-paid, blue-collar occupation that is also ' more unionized than retail clerks in general. As a result, deeply divisive political disputes erupt over locating even single stores. This in turn puts substantially greater pres- sure on local authorities to use land use laws to regulate the labor practices of firms, both directly and indirectly. Consumer Prices Wal-Mart has achieved almost legendary status for its Iow-priced goods. The company aggressively maintains efficient distribution systems, lower labor costs, and firm- level economies that give it leverage with suppliers. Com- bined with managerial innovations and the big-box format, which leads to in-store scale economies, these advantages help Wal-Mart cut costs and pass savings on to consumers (Basket, zoo4; Feldstein, zoo3; Postrel, zooz). Labor pro- ductivity was 44% higher in Wal-Mart stores than in other general merchandise retail stores in ~987. In x999, Wal-Mart still maintained labor productivity 4~% greater than com- petitors (McKinsey Global Institute, zoo~). The company's price advantage extends to groceries, particularly in the large footprint format. Dunkley, Helling, and Sawicld (zoo4) summarized the evidence on scale economies in grocery sales, arguing that larger stores enjoy cost economies, have more room for high-margin items, and may be more attractive to some consumers. A zooz study by UBS Warburg found that the price of a market Boarnet et al.: Emerging Planning Challenges in Retail 437 basket of grocery items at Wal-Mart supercenters was be- tween ~7 and 29% lower than prices at major supermarket chains in the same urban area (Goldman & Cleeland, zoo3). Moreover, grocery chains competing in the same market will normally be forced to lower their prices in response. The aggregate savings to consumers of such price differences across a metropolitan area, as we see in the San Francisco study below, can easily amount to hundreds of millions of dollars. Labor Market Impacts Wal-Mar~'s price advantage in groceries stems in par~ from its employee compensation packages. Compared with supermarket pay and benefits in some of' the larger metropolitan areas, Wal-Mart's are low. Wal-Mart is not unionized, while in many places the percentage of' grocery workers belonging to unions is higher than the na6onal average. For example, in bo~h the Los Angeles and San Francisco consolidated metropolitan statistical areas, ap- proximately 6o% of'grocery workers are union members (Boarnet & Crane, ~999; Boarnet et al., zoo4). Belman and Voos (zoo4), using data kom the Current Population Survey, report that z~% of' ~he nation's grocery workers were unionized in ~99~. This is similar to highly unionized sect- ors such as bus service and urban transit (zS% of' employees unionized) and air transportation (~9% unionized), and twice the ~o.z% unionization rate in the overall economy. Research also shows that, on average, union members earn a wage premium compared with nonunion members, and the size of' ~he union wage premium increases with the level o£ unionization in an industry (Belman zoo4). Hence the entry of' a nonunion ¢ompe6~or such as Wal-Mart into a metropolitan area's grocery market should depress regional grocery industry wages, especially in met- ropolkan areas with unionized grocery sectors. According to both the grocery workers' union and :he major grocery chains, the five-month-long grocery strike in southern Cali£ornq~in zoo~ and zoo4 was prompted in part by expectations tha~ Wal-Mart would enter that mar- ket in the near future (Cl¢¢land & Goldman, zooj). $in¢¢ then, contract negotiations in other regions, such as the San Francisco Bay Area, have also been influenced by the prospect of'super¢¢nter entry (e.g., Girion, zoo~; Kasler, 2oo5). Planning Responses Some local governments welcome supercenters with tax subsidies or infrastructure assistance (e.g., Perkes, ~999; Sommer, ~995). In less accommodating jurisdictions, the methods for addressing Wal-Mart's anticipated negative economic impacts are largely of .two kinds: limiting or banning supercenters specifically or large retail stores more generally/and assessing and mitigating impacts as needed. Ordinances restricting or banning large retail stores have been debated or adopted in communities across the country (Rodino Associat~es, 2003). Ever since Wal-Mart announced its plans to build 4o supercenters in California, where there were previously none, battles over the siting and permitting of those stores have been intense and in- tensely political. A statewide ban was proposed in ~999 but vetoed by the governor in the face of a public backlash against such a crude regulatory approach, as well as state involvement in local planning issues (Ingrain, ~999). There- after, local ordinances passed in Oakland, Arroyo Grande, Contra Costa County, Martinez, and Oakdale (Clanton et al., 2oo4). These typically take the form of a ban on stores over ~oo,ooo square feet with more than ~o% of floor space devoted to nontaxable goods. (Food items are not taxed in California.) This effectively prohibits supercenters without any explicit language to that effect. Ostensibly, the purpose of such ordinances is to regu- late the form and use of development, typically seen as an exercise of the police power (Ellickson & Been, zooo). Though regulating the economic impacts of development (e.g., fiscal impacts and blight) has clearly motivated some supercenter land use regulation, wage and salary impacts no doubt play a role as well. It is unclear, however, whether land use ordinances can legitimately consider whether a proposed development's expected wage and salary impacts exceed its expected consumer benefits.4 While the con- sumer benefits of development have long been touted by developers, only relatively recently have wage impacts influenced land use control ordinances and permitting decisions. In California and other states, the dominant political players in decisions about supercenter land use ordinances are often labor unions and Wal-Mart (Clanton -et al., 2004; Felch, 2005; Wasserman, 2oo5). Indeed, Wal-Mart has actively challenged several California ordinances. Perhaps as a result, there is some evidence that more flexible regulatory strategies, aimed at impact assessment and mitigation, are emerging. Following an extended effort to craft a prohibition, the City of Los Angeles in 2oo4 instead adopted an ordinance that requires economic impact assessments for proposed retail stores larger than ~oo,ooo square feet with more than ~o% devoted to nontaxable merchandise (Garrison, 2oo4; City of Los Angeles, 2oo4). Moreover, it applies only to such stores in "economic assistance areas," specifically the City's five state enterprise zones, the federal empowerment zone, the federal renewal community zone, the 37 community redevelop- 438 Journal of the American Planning Association, Autumn 2005, Vol. 7~, No. 4 ment agency project areas, the earthquake project areas, and one-mile buffers around the borders of those areas. The rationale was to focus on impacts in economicall~y distressed or redeveloping locations. The impact report must consider, but is not limited to, the following criteria: ~. Whether a supermarket larger than 2o,ooo square feet has existed within the impact area (the default 3-mile area around the proposed location) in the preceding xo years. z. Whether prior efforts to establish a supermarket larger than 2o,ooo square feet within the impact area have been unsuccessful. 3- Whether the supercenter will result in the displace- ment of businesses in the impact area, and if so the nature of those businesses. 4. Whether the supercenter would require the demo- lition of housing, or other action that decreases the stock of low- or moderate-income housing in the impact area. 5. Whether the supercenter would result in the loss of green space, playground facilities, childcare facili- ties, or community centers. 6. Whether the supercenter would provide lower-cost -or higher-quality goods to residents in the impact 7. Whether the supercenter would displace jobs within the impact area, and if so an estimate of the number of jobs displaced and whether those jobs are tempo- rary or permanent. 8. Whether the supercenter would impose additional costs in the form of traffic, security, environmental, or other impacts. 9. Whether the supercenter would increase or decrease net sales tax or business tax revenues to the city. m. Whether the supercenter site has restrictions on the re-lease of the site if it were to be vacated. tx. Whether the supercenter would have adverse or positive economic impacts. x2. Whether any adverse economic impacts can be mitigated. Presumably, the economic analysis will be used both to inform permitting decisions regarding stores and to assess mitigations when adverse impacts are identified. The impact assessment ordinance has been little tested as of this writ- ing, so there is no history of specific mitigation strategies. A background report prepared by the city suggested that lo- cal hiring requirements and requirements that supercenters assist local retailers could be among possible mitigations (Rodino Associates, 2oo3). To indicate how significant their economic impacts might be in o.ne region, the next section of this article estimates the wage and price impacts of supercenters entering the San Francisco Bay Area market. An Example: The San Francisco Bay Area In zoo~, Wal-Mart had ~ dis¢oum centers (their tra- ditional, nongrocery big-box stores) in the San Francisco Bay Area/but no supercenters. Thc company has, how- ever, announced plans to open several in Cali£ornta (Ful- mcr & Vrana, zoo4). We apply alternative-scenario analy- sis to understand the consequences of' the lower prices for consumers and downward pressure on grocery employee compensation likely to result from adding supercenters to this market. Note this is not a full cost-benefit analysis of' regional economic impacts, as many other likely significant f'a¢;ors (c.g., traffic, local pre£ercnces, and the timing of' impacts) are ignored here.s We intend only to illustrate the issues and rough magnitudes of' possible price and wage impacts. The analysis proceeds in three steps. First, we estimate market share, or the share of the grocery market business we expect supercenters will have in this region by zoxo. Second, on the benefit side, we calculate the consumer savings from lower grocery prices. Finally, on the cost side, we forecast how industry wages will be affected, based on data on wage and benefit differentials in this occupation and region. Market Share Estimates Projecting supercenter market share is complicated by the fact that the format is new, but data from other cities show that Wal-Mart can increase its grocery market share substantially in only a few years. As an example, Wal-Mart operated eight supercenters in Dallas in ~997, comprising 4.8% of the grocery market. By zoo3, the company had z8 supercenters and an ~8.3% market share. In Houston, Wal- Mart had two supercenters and a x.o% market share in ~997, and by zoo3 had increased its presence to z5 supercenters and a ~6.7% share (Shelby Publishing, ~997, zoo3; Trade- Dimensions, zoo3). · The size of the Bay Area grocery market was $9.7 billion in sales in zoo3 (Shelby Publishing, zoo3; TradeDi- mensions, zoo3). Converting that into per-person grocery sales, and using California Department of Finance popula- tion projections for the study region, we obtain a projected grocery market of $~o.4 billion in 2oxo (in 2003 dollars). To Boarnet et al.: Emerging Planning Challenges in Retail 439 provide reasonable bounds on our estimates, we examine a range of outcomes based on three scenarios for Wal-Mart supercenter market share in the Bay Area in zo~o: · Scenario ~. Wal-Mart supercenters capture a 6% market share by zoxo. This could occur if Wal-Mart converted all x6 discount centers in the study region in 2oo3 into supercenters, assuming annual grocery revenues of $4o million per supercenter. · Scenario 2. Wal-Mart supercenters capture an ~8% market share by 2o~o. The ~8% market share is com- parable to the high end of Wal-Mart grocery market shares in metropolitan areas in 2oo3. · Scenario 3. Wal-Mart supercenters capture an inter- mediate market share of ~o% by 2oIo. These market shares are within the range of possibility, as shown in Table x. The per-store revenues assumed above are also within the range of experience in markets where Wal-Mart currently has a supercenter presence. Projected Consumer Savings Consumer benefits from the lower prices depend on three interrelated factors: the average prices of grocery items. at supercenters, their effect on prices at other supermarkets and grocery stores, and the share of the market that super- centers capture. Average Prices of Grocery Items. A 2002 study by UBS Warburg found that the price of' a market basket otc grocery items at Wal-Mart supercenters was between ~7 and 29% lower than prices at major supermarket chains in the same urban area (Goldman & Clccland, 2003). Thc UBS Warburg study found that, on average, Wal-Mart grocery prices were 20% lower than those of' major chains (Koretz, 2002). Callahan and Zimmerman (2003) asserted that average Wal-Mart prices were xo or x~% lower when entering new markets, and cited unspecified studies show- ing differences in individual items ranging between 8 and 27%. A report by McKinsey & Company, apparently using proprietary survey data, states that conventional grocery stores have prices "over $% [higher] across the board in some markets" in comparison t6 "value formats" (Frank et al., 2003). Thus, based on these sources, we assume price savings on an average market basket ranging from 8 to 2o% in the calculations below.? Effect on Prices in ~ther Stores. The UBS Warburg study is cited as finding an average reduction of I~% per- cent (Koretz, 2oo2; Lofton, 2003) in prices at other stores in the market after entry by Wal-Mart supercenters. There- fore we use ~3% as an upper bound when estimating price reductions at other stores. As a sensitivity test, we assume a lower bound of 5% for price reductions at other stores. Calculation of Grocery Savings. Using these assump- tions, we expect net reductions in consumer expenditures on groceries ranging between $~82 million and $1.I~ billion per year in the study area. Looking at the first row of Table 2, for example, a 6% supercenter market share combined with an 8% price advantage translates into a 5% price reduction by the major grocery chains. This would allow shoppers switching to Wal-Mart to save $49.9 million per year, and continuing customers of conventional supermar- kets to save $~3z.~ million, or a total of $~8z.~ million in savings from prices lowered by price competition. The highest estimate of customer savings in Table 2 is $I.~3 billion. These grocery savings have additional, indirect impacts on total regional consumption. Savings raise net incomes, which are then partly spent on more regional goods and services, which are in turn partly paid out as wages. Our estimates, by contrast, include only direct effects. Impacts on Wages and Employment In zoo~, there were 3.5 million full-time and part-time jobs (excluding proprietors) in the San Jose-San Francisco -Oakland Consolidated Metropolitan Statistical Area (CMSA). The average pay and benefits per job in zoo~ was about $~z,ooo, one of the highest averages among U.S. metropolitan areas. The grocery industry accounted for Table x. Wal-Mart grocery market shares in U.S. metropolitan areas, 2003. : Dallas Houston Kansas City Denver Phoenix Average Stores 28 25 Annual grocery revenue per store (millions) $38 $41 Market share 18.3% 16.7% 13 7 11 17 $37 $37 $48 $40 18.0% 6.8% 10. 1% 14.0% Note: Market shares are for Wal-Mart supercenters only; neighborhood markets in Dallas and Houston are excluded. Sources: Shelby Publishing (2003), TradeDimensions (2003). 44o Journal of the American Planning Association, Autumn zoos, Vol. 7~, No. 4 ~53,492 jobs in the study area and 58,778 jobs in the San 'Francisco CMSA in zoo~ (U.S. Census Bureau, zooz). About 60% of employment in the Bay Area study region grocery industry is unionized, and fairly reliable wage data are available for union members. We focus on the possible impacts in the unionized sector of the grocery industry because downward wage pressure will likely be strongest there. Bay Area Unionized Grocery Average Wage. The grocery industry in the Bay Area is a source of well paid entry-level jobs that provide comparatively attractive benefit packages. Based on detailed data on wages and employment in United Food and Commercial Workers' (UFCW) job categories in the Bay Area study region, we calculated that unionized grocers in the region pay an aver- age of $~5.3o per hour. This is the equivalent of a $3o,6oo annual salary assuming full-time employment for z,ooo hours in a year, or $z3,4o9 worldng the approximately 75% time (~,53o annual hours) that was the average in 2003 for unionized Bay Area grocery workers. The average grocery wage calculation is shown in the Appendix in Table A-x. As we discuss later, the benefits package available to grocery employees adds substantial value beyond the base wage. Wal-Mart Average Wage. As of 2003, the best infor- mation available to the authors regarding the wages and benefits Wal-Mart would likely offer to its supercenter employees was based on a report using payroll records for zoo~ that Wal-Mart turned over to plaintiffs in a sex discrimination class action lawsuit (Drogin, zoo3),s Hourly employees made up 96% of total Wal-Mart employees in zoo~, and 94% of employees with full-time status and at least 45 weeks of work. The wage averaged $9.z~ an hour in zoo~. (See Appendix Table A-z for the Wal-Mart wage calculations.) If wages at Wal-Mart have increased at the rate of inflation in the San Francisco urban area since then, the average wage for full-time workers with at least 45 weeks of work during {he year would be $9.60 in zoo3. Monetized Grocery Industry Benefits. Both the UFCW locals and Wal-Mart offer paid holidays, paid vacation, heath benefits,.gick leave, and a pension plan. We estimated the dollar values of the benefits pa&ages in order to compare them more explicitly. UFCW monetized benefit estimates are based on reporting of disaggregate employee data by the union pension funds. Table 3 shows summary information on benefits offered to UFCW mem- bers (grocery workers at the major Bay Area chains). Table 4 shows that the net benefits package is worth about $7-57 per hour, excluding premiums (overtime, holiday, and Sunday pay). Monetized Wal-Mm-t Benefits. We estimate that the monetized benefits Wal-Mart employees receive are sub- stantially less than those of unionized grocery store workers in the Bay Area. (For similar results, see Dube & Lantsberg, zoo4.) Wal-Mart's average employer's contribution to health and welfare plans for participating employees in zooo was $o.86 per hour (based on the most recent publicly available tax return information as of 2oo3). We calculated the aver- age hourly health and welfare benefit for Wal-Mart employ- ees in 2ooo ($o.8~ per hour) by dividing employer contri- butions by estimated hours worked by all employeesP We also calculated that Wal-Mart's pension plan is worth $o.z2 per hour averaged across all employees. (Detailed calcula- tions and data sources are shown in Appendix Table A-4.) Comparison of Grocery and Expected Wal-Mart Compensation. Table 4 compares the compensation at unionized Bay Area grocery chains and Wal-Mart, showing that, based on available data, average. Bay Area grocery Table z. Estimated consumer grocery expenditure savings, by market sector. Groceries in supercenters Initial price Market share difference Reduced expenditures ($million) Other grocery stores Price Market share reduction Reduced expenditures ($millton) 6% -8% (49.9) 64% -5% (332.1) 6% -20% (124.8) 64% -13% (863.6) 10% -8% (83.2) 61% -5% (318.0) 10% -20% (208.0) 6~% -13% (826.8) 18% -8% (149.8) 56% -5% (289.7) 18% -20% (374.4) 56% -13% (753.3) Source: Authors' calculations. Boarnet et al.: Emerging Planning Challenges in Retail Table 3. UFCW benefit package available to unionized grocery workers in the Bay Area, 2003. 44~ Paid holidays: Vacations: Premium pay: Sick leave: Health & welfare eligibility Medical insurance: Dental insurance: Retirement plan: Other: Nine per year Two weeks after 1 year, three weeks after 5 years, four weeks after 15 years, five weeks after 20 years 150% for overtime and Sundays, 200% for holidays Accrues at six hours per month, maximum 360 hours of unused sick leave. Annual cash buyout for unused hours up to $400 less $10 for each sick leave hour used. Those working a minimum of 64 or 72 hours per month, after the first two months (60 days) of service Three plans offered. Dependents covered under all plans. No premium; $200 deductible per person per disability. Most common plan (66% of workers): 100% of outpatient, birthing, extended care, inpatient;, $10 copay for office visits, 100% coverage of remainder for PPO. 80% of standard services covered Pension and 401K both made available to employees after probationary period of 375 hours of service. No employee premium required. Death benefit insurance averaging $33,877. Vision coverage with $5 or $10 copay for exam; lenses and frames covered. Sources: UFCW (2003), UFCW Northern California Health & Welfare Trust Fund (UFCW Trust Fund) (2003). wages are about 6o% higher than Wal-Mart wages. Con- verting the benefit packages into hourly wage equivalents, total compensation at unionized Bay Area grocery firms rises to about double that typical for Wal-Mart. Table 4 uses national averages for Wal-Mart, because available evidence suggests that Wal-Mart employee compensation packages do not vary much across regions of the country (e.g., Drogin, 2oo3).'° If Wal-Mart offered a location premium based on cost of living, this would narrow the gap in compensation shown in Table 4. Table 5 uses these estimates, previously described assumptions about market share, and the wage and benefit gap to calculate a net supercenter impact for the year We assume that if supercenters capture market share, this puts downward pressure on wages and benefits in the unionized grocery sector because evidence suggests that falling unionization rates will reduce the gap between union and nonunion pay. Belman and Voos (2oo4) found that the union share of grocery employment fell nationally by 22 percentage points between ~978/79 and I996. They asso- ciate that decline in union membership with a 26 percent- age point reduction in the grocery union wage premium. This evidence is from a time period that predates most supercenters and is a national average. We believe,, based on recent experience in the Los Angeles area, that Wal-Mart entry into unionized grocery markets can have a larger effect on grocery employee compensation than the average effect estimated in Belman and Voos (2oo4). The grocery union in the Los Angeles metropolitan area ratified a new contract following a five-month strike in 2oo4. While no Wal-Mart supercenters were operating in the Los Angeles market at that time, the new contract included wage concessions based in part on the expectation that Wal-Mart supercenters would enter this marker in the near future. The new contract introduced two wage tiers, one applying to workers hired before the contract was rati- fied and the other applying to workers hired after contract ratification. The gap between these wage tiers indicates the wage concessions in the contract, sihce the tier for workers hired before contract ratification reflects, for the most part, wage levels determined by earlier contract agreements. As an example, consider wages for food clerks, typi- cally the largest category of grocery employment. Food clerks hired before the contract was ratified earn $I4.67 per hour after 78 weeks of employment. A food clerk with the same experience hired after the 2oo4 contract was ratified earns Sxo per hour, or 47% less (Fully Recommended Comprehensive Settlement Agreement, 2oo4). To reiter- ate, this wage concession was made preemptively, before Wal-Mart supercenters entered the Los Angeles area mar- ket. Thus we assume that Wal-Mart's entry into the San Francisco Bay Area market will reduce union wages by more than the 26% national average estimated in Belman and Voos (2oo4). We assume that the compensation gap will be reduced by either 4o%, 6o%, or, if supercenters capture an x8% market share, by 8o%. Table 5 shows these 442 Journal of the American Planning Association, Autumn 2005, Vol. 7x, No. 4 ~Table 4. Wages and benefits, unionized grocers vs. Wal-Mart. Unionized Wal- grocers, Mart, study area U.S. Diff. Average hourly wage, all workers Benefits package (excl. premium pay) Health & welfare benefits per hour Pension benefits per 'hour Vacation, per-hour basis Sick leave, per-hour basis Premium pay, per-hour basis $15.30' $ 9.60b $5.70 7.57 1.87 4.57c 0.81a 1.35c 0.22f 0.92z 0.38h 0.73~ 0.40 0.77k 0.48~ 5.70 0.29 Total wages and benefits, per hour $23.64 $11.95 Benefits/premiums as % of total compensation 35% 20% $11.69 Sources: Authors' calculations and Boarnet et al. (2004). Notes: a. From Appendix Table A- 1. b. From Appendix Table A-2. c. Mean employer contribution to health and welfare calculated by authors using UFCW Employers Benefit Plans database (UFCW Trust Fund, 2003). d. From Appendix Table A-3. e. Mean employer contribution to pension fund and 401K calculated by authors using UFCW Trust Fund (2003). f. From Appendix Table A-4. g. Based on 6% of hourly wage, treating a full-time employee with more than 5 years of tenure as the average. Sources: UFCW Trust Fund (2003) for tenure estimate of 9.77 years; UFCW (2001) for vacation entitlement of 3 weeks. h. Based on 4% of hourly wage, treating a full-time employee with 3 to 4 yeats of tenure as the average (Drogin, 2003; entitled to two weeks of vacation, according to Wal-Mart Associate Benefits Handbook, 1998). i. Based on 6 hours times 12 months times base wage divided by average hours per year of 1,500. j. Asstuned to be paid in same proportion to base wage as UFCW workers. k. Assumes premium pay (overtime pay and additional pay for Sundays and holidays); constitutes an increment of 5% on the base wage. 1. Assumed to be paid in same proportion to base wage as UFCW worker~. assumptions, coupled with previously described scenarios in the Bay Area. We assume that supercenters will capture )proportionate shares of union and nonunion grocery work- /ers, leaving the existing split between union and nonunion grocery employment in the Bay Area unchanged. Calculating reduced wages and benefits then involves two steps. First, some jobs that would have been unionized shift to supercenters, where employees are compensated less. We assume that supercenters reduce employment in the region's unionized and nonunionized grocery sectors in proportion to the split of unionized and nonunionized grocery jobs in the Bay Area in ~.oo3, and multiply the jobs lost in the unionized sector by the wage gap. Second, the remaining unionized gr6cery jobs also pay less, due to the reduced wage gap. We multiplied the number of union members by ~,53o hours per year (the average hours worked by UFCW members, including part-time), then by the wage gap, and then by the percentage reduction in the wage gap due to downward pressure on wages. (Details for the calculations are shown in the Appendix.) Shown in the column furthest to the right in Table 5 is the sum of those two impacts: unionized jobs lost to supercenters and the reduction in compensation paid to union members work- ing for the other grocery chains. This is our estimate of the lost grocery sector wages and benefits. We do not include any losses due to reductions in the nonunion sector of the market, for which we had no data. Thus using these as- sumptions and data, we expect that lost wages and benefits' will total between $3oo and $576 million per year after supercenters penetrate this market. While we believe these estimates are reasonable, we want to clarify our assumptions. First, we assumed no change in the staffing patterns of stores. If Wal-Mart's higher productivity allows the use of fewer employees, reducing overall grocery sector employ- ment, the labor market impacts could be larger than those estimated in Table 5. Note, however, that a recent study (Basker, zoos) estimates that Wal-Mart expansion increases retail jobs within a county. Second, both the estimates of reduced consumer expenditures and reduced grocery em- ployee compensation assume no impact, either in terms of lower prices or lower employee compensation, on the 3z% of the study region's grocery sales served by nonunionized firms as of zoo3. Lack of data for the nonunionized sector required that we focus only on the impact of supercenters on prices and employee compensation among the tradi- tional, unionized chains. If competition results in lower prices or lower employee compensation among nonunion- ized firms, both consumer savings and employee compen- sation losses could be larger than what we estimate. Third, in parts of the country where the grocery sector is not heavily unionized, prevailing grocery employee compensa- tion might be closer to Wal-Mart's wage and benefit pack- age, and hence the labor market impacts might be smaller in those cases. Our estimates in Tables z and 5 apply most correctly to grocery markets with high average wage rates, usually urban areas. Boarnet et al.: Emerging Planning Challenges in Retail 443 Table 5- Estimated impact of wage and benefit changes, 2oio. Employment Reduction in wages at~d benefits ($2003, millions) Supereenter Wage gap Among union Due to workers market share, 2010 closure Union Nonunion workers leaving the union Total 0.06 40% 36,190 25,906 ($259) ?' ($ 41) ($300) 0.06 60% 36,190 25,906 (388) (41) (429) 0.10 40% 34,650 27,446 (248) (69) (317) 0.10 60% 34,650 27,446 (372) (69) (441) 0.18 40% 31,570 30,526 (226) (124) (350) 0.18 60% 31,570 30,526 (339) (124) (463) 0.18 80% 31,570 30,526 (452) (124) (576) Note: The Bay Area grocery market was $9.7 billion in 2003, and was assumed to grow m $10.4 billion by 2010. Similarly, the total of all grocery workers was assumed to increase to 62,096. There were 35,993 union members in 2003, representing approximately 62% of the grocery workers in the Bay Area. Grocery workers were assumed to average 1,530 hours of work per year based on the UFCW average. The wage gap, from Table 4, was estimated at $11.69 per hour. The CoSts and Benefits of Supercenters: Important Cautions for Planners The San Francisco Bay Area example suggests that the entry of Wal-Mart into the region's grocery market can bring large reductions in grocery employee compensation and, under most modeling assumptions, even larger con- sumer savings on groceries. We estimate consumer savings on groceries across this ~z-county area to be between $382 million and $~-~3 billion per year, while we predict wages and benefits in the grocery sector, and thus local earned income, to fall by between $3oo and $576 million per year. The impacts in particular cities could be disproportionate, based on, among other things, the incidence of grocery savings and grocery employee compensation in those communities. As noted earlier, this is not a complete cost-benefit study, as it omits all but grocery price and wage impacts. More importantly it does not include any external impacts, including traffic, land use issues, environmental concerns, fiscal impacts, or the aesthetics of urban designY While we believe labor market and price impacts will drive super- center debates, we want to emphasize that broader con- cerns should be included i3a any economic analyses of actual projects. The distribution of these benefits and costs is also fundamental to this debate. Price savings are spread thinly across all grocery customers, in ways that depend on their individual food shopping behaviors, while wage losses are concentrated entirely on grocery workers. The results in Table 2 imply average household consumer savings of $~32 per year using the most conservative estimates and $39x per year for the least conservative scenario. From Table 5, average grocery employee compensation losses would be $4,83~ per year under the most conservative scenario or $9,276 per year under the least conservative scenario.'~ Note that these averages are calculated over all part- and full-time workers projected for the region in 2o~o. Losses for individual full-time workers would be considerably higher under these assumptions, ranging from $7,ooo to over $x8,5oo per person per year, depending on supercenter market share. Planners traditionally have grappled with the distri- butional impacts of public policy concerns, and we suggest that they continue to do so in the case of supercenters. While a regional cost-benefit analysis might condude that benefits outweigh the costs, planners should focus not just on the economic efficiency of the outcome, but on distri- butional concerns, including labor market impacts and related questions such as health benefits among blue-collar workers. But how to do that, given that planning regula- tions are typically tied to. land use while the distributional concerns related to supercenters are largely economic? We discuss this in the closing section. Conclusion: Planning Options In addition to land use impacts, we have shown that supercenters can generate public and private costs and benefits in the form of substantial wage and price changes. Not only are these costs and benefits possibly quite large, 444 Journal of the American Planning Association, Autumn 2oo5, Vol. 7x, No. 4 wage losses in particular are concentrated on a single, highly visible occupation. Since distributional concerns are often raised as a public interest, and courts have generally given communities great latitude in determining the public interest when regulating land uses, municipal governments may wish to respond based on distributional concerns alone. Altshuler and G6mez-Ib~lfiez (~993) described how land use controls initially prohibited undesirable activities altogether, but later came to permit them in some instances but not others, and later still to mitigate the negative im- pacts of otherwise desirable activities. If the regulation of superstores evolves in similar fashion, planners would need first to credibly document the scale, scope, and distribution of impacts. If community costs exceeded benefits, the project could be rejected. Or, if benefits exceeded costs but their distribution was objectionable, the project could be rejected (and substantial benefits foregone) or approved with modifications to mitigate its costs. The last has the most appeal, as it captures the benefits while explicitly addressing objections. Economic impact reports, expand- ing on those required by the Los Angeles ordinance, could accomplish this much as environmental impact reports do for projects with significant environmental consequences. Such an approach has the advantage of being flexible. To provide some hypothetical, but reasonable, examples, analysis might provide a means for distinguishing between (~) a supercenter in the upper-income area of West Los Angeles that would intolerably erode local wages, (2) a supercenter that would provide food to low-income per- sons in an area underserved by traditional supermarkets like South Central Los Angeles (Ashman et 'al., ~:993; Tseng, I999), and (3) a supercenter that would pay the prevailing local grocery industry wage in a rural area. As with many planning issues, local context matters. Ideally, mitigating distributional impacts involves compensating the injured parties themselves. This may not be feasible in this case, since most labor market costs would be borne by future grocery workers, a group difficult, if not impossible, to target. However, second-best mitigation strategies could aim at a similar result. A locality could assess fees to fund programs targeted at grocery workers, such as job training or education programs for entry-level workers in the community. Alternatively, since the San Francisco Bay Area case suggested that benefits explain a large part of the pay differential, planners might focus on approaches that address health concerns. For example, the Maryland legislature recently passed "a bill requiring organizations with more than m,ooo employees to spend at least 8% of their payroll on health benefits--or put the money direcdy into the state's health program for the poor" (Wagner & Barboro, 2oo5, p. AoI). In cases where corn- pensating affected groups is not possible, communities might instead focus on mitigatigns that benefit the com- munity broadly. However, this approach would not remedy the distributional impacts, and thus might fail a rational nexus test. In practice, a suitabli: mitigation scheme would depend on both the place, and the time, and on community standards. ~" In sum, the San Francisco case study suggests that the most contested battles over supercenter proposals will likely involve labor market impacts, while experience indicates there will be pressure to apply land use remedies (since these are often the only local regulatory option). Commu- nities that realize this in advance may select the more straightforward option we advocate, namely, expanding local review to indude and address economic impacts directly. In addition to offering the promise of a middle ground, such an approach permits planners to do what they do best: inform, mediate, and resolve. Acknowledglnents This paper draws in part on a report prepared for the Bay Area Economic Forum, a nonprofit public-private partnership of business, government, university, labor and community leaders. We thank the reviewers of' that study, four anonymous referees of' this article, and the editors for their many helpful comments and suggestions. Notes x. See Campbell (2004) for a discussion of supermarket availability and food quality in inner-city neighborhoods. z. See Boarnet et al. (2oo4) for a literature review and discussion of land use and public finance issues. 3. Dunkley, Helling, and Sawicki (2oo4) discuss local regulations to limit the size of grocery stores (specifically) or retail stores (generally), and they cite several examples compiled in the on-line newsletter The Hometown Advantage (Institute for Local Self-Reliance, zoo3). We do not indude analysis of individual store permit applications in this typology because we are focusing here on overall regulatory approaches, rather than evaluation of individual permit applications. 4. Legal challenges to land use control ordinances are commonly either due process challenges or challenges claiming unconstitutional "takings" of private property. 5. The study area is a m-county area consisting of the San Jose-San Francisco-Oakland, CA, Consolidated Metropolitan Statistical Area (CMSA), with the addition of Monterey County to the south. The San Jose-San Francisco-Oakland, CA, CMSA 0une, zoo3 definition) consists of the Napa, CA, Metropolitan Statistical Area (MSA; Napa County); the San Francisco-Oakland-Fremont, CA, MSA (San Fran- cisco, Marin, San Mateo, Alameda, and Contra Costa Counties); the San Jose-Sunnyvale-Santa Clara, CA, MSA (Santa Clara and San Benito Counties); the Santa Cruz-Watsonville, CA, MSA (Santa Cruz County); the Santa Rosit-Petaluma, CA, MSA (Sonoma County); and the Vallejo-Fairfidd, CA, MSA (Solano County). 6. Our Bay Area Economic Forum report (Boarnet et al., 2oo4) also estimates a range of traffic and other community impacts not addressed in detail here. Boarnet et al.: Emerging Planning Challenges in Retail 445 7. The upper and lower bounds are averages reflecting price differentials across market areas and across baskets of goods. The zo% price differen- tial is based on the initial difference between supercenters and grocery stores in markets Wal-Mart supercenters entered recently. The 8% price differential is based on studies averaged across a range of markets, including markets where supercenters are more established, and thus reflects a long-run response. Therefore, the 2o% differential likely better reflects the price gap soon after supercenters enter a market, the situation our scenario for the Bay Area seeks to portray. 8. The data from the payroll information (Drogin, zoo3) is more detailed than other sources of Wal-Mart wage information. Yet news reports and anecdotal data, like the data from Drogin (2oo3) used in the analysis in this paper, generally suggest that Wal-Mart pays less than Sro per hour. Bob Ortega, a Wall Street Journal reporter who wrote a book about Wal-Mart in x998, estimated the company's starting wages at between $6 and $7 per hour (Ortega, I998, I999). In June zoo3, National Public Radio aired a multipart series on Wal-Mart, and devoted one segment to the company's labor practices that reported Wal-Mart wages as hovering between $6 and $7 per hour (National Public Radio, 2oo3a, b). A recent journalist's report stated that the average wage at Wal-Mart annually is less than Sro an hour before bonuses (Saporito, zoo3), and an article in Forbes placed the average Wal-Mart wage at $7.5o per hour, with the average annual salary of a full-time Wal-Mart employee being about $x8,ooo (Hessel, 2oo3). These reported estimates are generally lower than the estimated wages based on the Drogin (zoo3) data used in this paper. 9. This assumes that the t.2 million Wal-Mart employees active at year- end zoox averaged 75o hours that year. No data on average hours were available. For details of this calculation and data sources, see Appendix Table A-3. to. The estimated national average Wal-Mart wage is used for the Bay Area. Note that while the data in Drogin (zoo3) give some information on Wal-Mart wages in different regions, those data suggest that the national average Wal-Mart wage is a good estimate of Bay Area Wal- Mart wages. The region including northern California, Oregon, and rural Washington has an average wage equivalent to the national average, but that region includes both the urbanized Bay Area and rural areas to the north. The southern California administrative region is likely more dominated by urban areas, and in southern California, Wal-Mart wages are 97% of the nationwide average. Among the Wal-Mart administra- tive regions analyzed in Drogin (zoo3), the regions with the highest pay rates offered wages averaging 2o% higher than the national average. Because none of those regions were in California, the estimated national average wage is used as an estimate of Bay Area supercenter wages in this study. xt. As an example, our more comprehensive report for the Bay Area Economic Forum included rough estimates of the external costs of ad- ditional driving associated with shopping trips to supercenters. Estimates of the effects of that additional driving on air quality and traffic conges- tion suggest that, under some scenarios, those external costs could be large enough to cause net regional costs of supercenters to exceed con- sumer price savings benefits (Boal'net et al., zoo4, pp. 57-60. We do not report those results here in part because longer shopping trips to super- centers could be offset by smaller numbers of such trips. For an extended discussion, see Boarnet and Crane (:toot). However, there are few data that would allow estimating tradeoffs between the length and frequency of trips to supercenters compared to other grocery stores. tz. The estimates of average household grocery expenditure savings and average grocery employee compensation reductions are for the year zoxo, expressed in zoo3 dollars. The consumer expenditure savings are converted to a per-household basis using population projections for the study region in 2o~o from the California Department of Finance (2oox) and assuming that average household tize for the study region from the 2ooo census (2.8 persons) is the same in 2oto. Per-employee wage and benefit losses are obtained by dividing the estimated employee compen- sation losses by the number of grocery employees, 6z,o96. The scenarios for consumer savings range from assuming a 6% Wal-Mart market share, combined with an 8% initial..~rice differential and a 5% reduction in prices in competing stores (yields the lowest estimates of consumer sav- ings); to assuming an ~8% Wal-Mart market share, combined with an 2o% initial price differential and t3% reduction in prices in competing stores (yields the highest estimates of consumer savings). The scenarios for grocery employee compensation range from assuming a 6% Wal- Mart market share and dosing the wage gap by 4o% (yields the lowest losses in compensation), to assuming an I8% Wal-Mart market share and closing the wage gap by 8o% (yields the highest losses in compensation). References Altshuler, A. A., & G6mez-Ib;ifiez, J. A. (x993). Regulation for revenue: Thepolitical economy of land use exactions. Washington, DC: Brookings Institution. Ashman, L., de la Vega, J., Fisher, A., Hippler, R., & Romnin, W. (~993). 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Appendix: Calculations and Data Sources Estimated Consumer Expenditure Savings (Table 2) For each assumed Wal-Mart market share, the consumer price savings were applied to the Wal-Mart supercenter sector and the unionized grocery sector, as shown in equa- tions (~) and (2) below. Wal-Mart market share is assumed to come from the unionized and nonunionized grocery sector in proportion to the relative shares of unionized and nonunionized sales in the San Francisco Bay Area study region market as of 2oo3. In 2oo3, unionized stores ac- counted for 68% of all grocery sales in the study region, based on weighted averages for unionized shares in sub- areas of the study region, where the average shares were weighted by effective buying power in those study regions. (See Tables A-~ and A-3 of Boarnet et al., 2oo4.) SCConsSavings = MarketSize x WMPercent x WMPriceDiff (x) UnConsSavings = MarketSize x UnSalesPercent x (x - WMPercent) x UnPriceReduction (2) Where: SCConsSavings = consumer savings in the supercenter sector UnConsSavings = consumer savings in the unionized grocery sector MarketSize = $~o.4 billion (projected annual sales in study region in year WMPercent = 6%, Io%, ~% (assumed Wal-Mart market shares) WMPriceDiff = 8%, 2o% (assumed difference between Wal-Mart and unionized grocery prices) UnSalesPercent = 68% (fraction of 2oo3 study region grocery sales in unionized grocery stores in year 2oo3) UnPriceReduction = 5%, ~3%(assumed reduction in prices in unionized grocery sector) Estimated Wage and Benefit Impacts (Table 5) The wage and benefit impacts were calculated in two steps. (~) Union shrinkage We assume that Wal-Mart supercenter jobs draw from the unionized and nonunionized grocery sectors in proportion to the fractions of study region grocery employment in the unionized and honunionized grocery sectors as of 2003, and then apply the estimated employee compensation to jobs shifted from unionized grocers to su- percenters. In 2003, 62% of the study region's grocery jobs were unionized (see Tables 5 and A-I). (2) Reduced wages and ben~fits, union workerr. The effect of downward wage pressure on grocery union wages is calculated by applying the assumptions about the fraction of the wage gap closed. Equations (3) and (4) show the calculations for each step. EmpCompUnShrink = TotEmp x UnPercent x WMPercent x WageGap x Hours (3) EmpCompUnWorkers = Totemp x UnPercent x (I-WMPercent) x WageGap x GapClose x Hours (4) 448 Journal of the American Planning Association, Autumn 2005, Vol. 71, No. 4 ~CrC: EmpCompUnShrink = Employee compensation losses, union shrinkage (based on estimated shift of employment from unionized grocery sector to Wal-Mart supercenters) EmpCompUnWorkers = Employee compensation losses, union workers (based on es- timated downward wage pressure in unionized grocery sector) TotEmp = 62,096 (study area grocery employment) UnPercent = 6z% (percent of study area grocery employment that is unionized in year zoo3) WMPercent = 6%, ~o%, x8% (assumed Wal-Mart market shares) WageGap = $n.69 (wage differential between union and supercenter employee compensation, from Table 4) Hours = .z x,53o (UFCW reported average annual hours per employee) GapClose = 4o%, 6o%, 8o% (assumed fraction of wage gap closed in unionized grocery sector) Table A-x. Weighted average hourly grocery wage, ~z-county Bay Area study region, 2oo3. Average hours Average Occupation Workers per year wage Courtesy clerk 4,364 961 $ 8.40 Food clerk 17,394 1,655 $18.40 General merchandise clerk 9,963 1,490 $11.30 Meat cutter 2,076 1,736 $18.30 Meat clerk 645 1,611 $13.50 Meat wrapper 30 1,718 $13.90 Miscellaneous positions 1,521 1,474 $13.00 Total 35,993 1,529 $15.30 Weighted average wage $15.30 Note: The weighted average wage was calculated by summing total wages across occupational categories and dividing by the UFCW-estimated average hours per worker of 1,529. The UFCW-provided figure differs from the weighted average hours (1,521, not shown) because the UFCW estimate includes hourly estimates for workers not classifiable into occupational categories due to missing data. Using the 1,529 estimate yields the weighted average hourly wage of $15.30 shown in Table 4. If one uses weighted average hours of 1,521, thus excluding data for workers not classifiable into the occupational categories shown above, the weighted average hourly wage is $15.38. Sources: Employees by wage categorization reported by Union Auto- marion, based on union records of the UFCW, Locals 428 (Santa Clara, Santa Cruz, Monterey, and San Benito Counties and Menlo Park), 373R (Napa and Solano Counties), 1179 (Contra Costa), 101 and 648 (San Francisco, Matin, and San Marco), 839 (Monterey, Santa Cruz, and San Benito Counties), and 120 and 870 (Alameda County). Wage steps from the Master Food Agreement between the UFCW locals and major unionized supermarkets including Safeway, Albertson's, Ralph's, Nob Hill, and Raley's. Table A-z. Wal-Mart average hourly wage, zoot (estimate). Full Part thne time Year-end actives not accounted for Men's average wage' $9.55 $8.50 N/A Women's average wage* $9.26 $7.88 N/A Women as share of workers 0.706 0.658 N/A Average hourly wage, 2001 $9.35 $8.47 Total workers .463,526 90,486 341,797 Percentage of year-end actives 52% 10% 38% Percentage of universe for which wage distribution is known 84% l 6% Weighted Wal-Mart average hourly wage, 2001 $9.21 Weighted Wal-Mart wage inflated to Apdl, 2003~' $9.60 Sources: Drogin (2003); authors' calculations. Notes: " a. Average wage is calculated for active workers at year's end who had worked at Wal-Mart for at least 1 year (Drogin, 2003). b. Using the Consumer Price Index-Urban Wage Earners and Clerical Workers for San Frandsco-Oaldand-San Jose. Boarnet et al.: Emerging Planning Challenges in Retail Table A-3. Estimated Wal-Mart health and welfare benefits per hour. Number of employees and dependents covered in 2000a Number of employees in 2000 (year-end)b Percent of employees covered in 2003c Total contributions to Associates Health & Welfare Plan, 2000d Contributions from employers (Wal-Mart)¢ Contributions from participants (Wal-Mart employees)f 980,241 1,239,409 46% $1,338,300,320 $748,321,573 $589,978,747 Estimates: Covered employees (B x C) Covered dependents (A- F) Employer contribution per"covered employee (D / F) Employee contribution per covered employee (E / F) Avg. hours worked, covered employees (45 wks, 34 hrs/wk) Employer contribution per hour for covered employees (G / H) Employer contribution per employee (D / B) Employee contribution per employee (E / B) Avg. hours worked, all employees (equiv. to 30 wks, 25 hrs/wk) Employer contribution per hour averaged 570,128 410,113 $1,313 $1,035 1,530 $0.86 $6O4 $476 H 750 J over all employees (I / I) $0.81 Note: Data on average hours worked per year for Wal-Mart employees were not available. For comparability with the benefit calculations for Bay Area UFCW employees, we assumed that covered Wal-Mart employees work 1,530 hours per year, the same as the Bay Area UFCW average. Sources: a. IRS Form 5500 for Wal-Mart Associate Health and Welfare Plans, Part II (Basic Plan Information), Line 7d. b. IRS Form 5500 for Wal-Mart 401K Retirement Savings Plan, Schedule T (Qualified Pension Plan Coverage Information), 4c(1). c. UFCW estimate. d. IRS Form 5500, Schedule H, Part II (Income and Expense Statement), Line 3 e. IRS Form 5500, Schedule H, Part II (Income and Expense Statement), Line lA f. IRS Form 5500, Schedule H, Part II (Income and Expense Statement), Line 1B Table A-4. Estimated Wal-Mart retirement benefits per hour. 449 Number of employees and dependents covered in 2000~ Total employees~' Number of excludable employeesc Number of nonexdudable employeesd Number of benefiting nonexdudable employeese Total Wal-Mart contributions to 401K retirement savings plant Total employee contributions to 401K retirement savings plang Estimates: Avg. hours worked, covered employees (45 wks, 34 hrs/wk) Employer contribution per covered employee (C / B) Employer contribution per total employees (C / A) Avg. hours worked, all employees (30 wks, 25 hrs/wk) Employer contribution per hour averaged over all employees (D / E) 613,995 1,239,409 581,054 658,355 556,522 B $209,122,000 C $181,923,000 1,530 $376 $169 D 750 E $0.22 Note: Data on average hours worked per year for Wal-Mart employees were not available. For comparability with the benefit calculations for Bay Area UFCW employees, we assumed that covered Wal-Mart employees work 1,530 hours per year, the same as the Bay Area UFCW average. Sources: a. IRS Form 5500 for Wal-Mart 401K Retirement Savings Plan, Part II (Basic Plan Information), 2000, Line 7d b. Schedule T (Qualified Pension Plan Coverage Information), 4c(I) c. Schedule T, 4c(2) d. Schedule T, 4c(3) e. Schedule T, 4c(5) f. Schedule H, Part II (Income and Expense Statement), 2a(1)(A) g. Schedule H, Part II (Income and Expense Statement), 2a(1)(B) EVERYDAY LOW WAGES: THE HIDDEN PRICE WE ALL PAY FOR WAL-MART A REPORT BY THE DEMOCRATIC STAFF OF THE COMMITTEE ON EDUCATION AND THE WORKFORCE U.S. HOUSE OF REPRESENTATIVES REPRESENTATIVE GEORGE MILLER (D-CA), SENIOR DEMOCRAT FEBRUARY 16, 2004 Vv'ai-/viart"s Labor Recora Report by ReDresentative George Miller F.~.hrli,~r~ 1R 2004 Page 2 of 25 TABLE OF CONTENTS INTRODUCTION ......................................................................................................................... 3 WAL-MART'S LABOR PRACTICES ....................................................................................... 3 WORKERS' ORGANIZING RIGHTS .................................................................................. 3 LOW WAGES ...................................................................................... ~: ................................... 4 UNEQUAL PAY AND TREATMENT ................................................................................... 5 OFF-THE-CLOCK WORK ..................................................................................................... 5 CHILD LABOR AND WORK BREAKS VIOLATIONS .................................................... 6 UNAFFORDABLE OR UNAVAILABLE HEALTH CARE ......................... , ..................... 7 LOW WAGES MEAN HIGH COSTS TO TAXPAYERS ................................................... 8 ILLEGAL USE OF UNDOCUMENTED WORKERS ....................................................... 10 TRADING AWAY JOBS ........................................................................................................ 11 DISABILITY DISCRIMINA~ON ................................................................... · .................... 14 WORKER SAFETY ............................................................................................................... ! 4 WAL-MART'S RESPONSE ...................................................................................................... 15 CONGRESSIONAL RESPONSES ........................................................................................... 19 LABOR LAW REFORM AND THE RIGHT TO ORGANIZE ........................................ 19 PROPOSALS TO INC~ASE WAGES AND PROTECT OVERTIME ......................... 19 CHILD LABOR ....................................................................................................................... 20 SWEATSHOPS ........................................................................................................................ 20 AFFORDABLE AND MEANINGFUL HEALTH INSURANCE ...................................... 20 FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS ............................. 21 CONCLUSION ........................................................................................................................... 21 ENDNOTES ................................................................................................................................. 22 WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 3 of 25 INTRODUCTION The retail giant Wal-Mart has become the nation's largest private sector employer, with an estimated 1.2 million employees. ~ The company's annual revenues now amount to 2 percent of the U.S. Gross Domestic Product.2 Wal-Mart's success is attributed r~ its abili .ty to charge low prices in mega-stores offering everything from toys and furniture to groceries. While charging low prices obviously has some consumer benefits, mounting evidence from across the count~, indicates that these benefits come at a steep price for American workers, U.S. labor laws. and communit), living standards. Wal-Mart is undercutting labor standards at home and abroad, while those federal officials charged with protecting labor standards have been largely indifferent. Public outcw against Wal-Mart's labor practices has been answered by.. the company with a cosmetic response. Wal-Mart has attempted to offset its labor record with advertising campaigns utilizing employees (who are euphemistically called "associates") to attest to Wal-Mart's employment benefits arid support of local commumties. Nevertheless- whether the issue is basic organizing rights of workers, or wages, or health benefits, or worldng conditions, or trade policy. - Wal-Mart has come to represent the lowest common denominator in the treatm~t of working people. This report reviews Wal-Mart's labor practices across the country and around the world and provides an overview of how working Americans and their allies in Congress are seeking to address the gamut of issues raised by this new standard-bearer of American retail. ,W, A~MART'S LABOR PRAC*FICES WORKERS' ORGANIZING RIGHTS The umted States recognizes workers' fight to organize unions. Govemment employers generally ma.v not interfere with public sector employees' freedom of association. In the private sector, workers' fight to organize is protecte~ by the National Labor Relations Act.3 Internationally, this right is recognized as a core labor standard and a basic human right.4 Wal-Mart's record on the fight to organize recently achieved international notorietv. On ,, Januaxy 14, 2004, the International Confederation of Free Trade Unions (ICFTU), an organization representing 151 million workers in 233 affiliated umons around the world, issued a report on U.S. labor standards.~ Wal-Mart's rampant violations of workers' rights figured prominently. In the last few years, well over 100 unfair labor practice charges ha,~e been lodg~ against Wal-Mart throughout the count~, with 43 charges filed in 2002 alone. Since 1995, the U.S. government has been forced to issue at least 60 complaints against Wal-Mart at the National Labor Relations Board .~ Wal-Mart's labor law violations range fi'om illegally firing workers who attempt to organize a union to unlawful surveillance, threats, and intimidation of employees who dare to speak out. WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 4 of 25 With not a single Wal-Mart store in the Umted States represented by a union, the company takes a pro-active role in mamtaimng its umon-free status. Wal-Mart has issued "A Manager's Toolbox to Remaining Union Free." xvhich provides managers xvith lists of warning signs that workers might be organizing, including "frequent meetings at associates' homes" and "associates who are never seen together start talking or associating with each other.''7 The "Toolbox" gives managers a hofline to call so that company specialists cab respond rapidly and head off any attempt by employees to organize. When employees have managed to obtain a umon election and vote for a union, Wal- Mart has taken sweeping action in response. In 2000. when a small meatcutting department successfully organized a union at a Wal-Mart store in Texas. Wal-Mart responded a week later by announcing the phase-out of its meatcutting departments entirely. Because of deficient labor laxvs, it took the meatcutters in Texas three years to win their jobs back with an order that Wal- Mart bargain ~4th their umon.s Rather than comply, Wal-Mart is appealing this decision.9 Wal-Mart's aggressive anti-union activi ,ty, along with the nation's weak labor la~vs, have kept the largest private sector employer in the U.S. umon-free. Breaking the law that guarantees workers' right to organize has material consequences for both the workers and the company. According to data released by the Bureau of Labor Statistics in January 2004, union workers earn median weekly salaries of $760, compared to non-union workers' median weekly salaries of $599 - a difference of over 26 percent.~° In tha supermarket industw, the umon difference is even more pronounced, with union members making 30 percent mom than non-union workers. Union representation also correlates with higher benefits.~ For instance, 72 percent of umon workers have guaranteed pensions with del'reed benefits, while only 15 percent of non-union workers enjoy such retirement securiW.~ _On' the health care front, which will be explored in more detail later, 60 percent of tmion workers have medical care benefits on the job, compared to only 44 percent of non-union workers,tz For companies like Wal-Mart seeking to maintain low labor costs, these statistics obviously provide an incentive to remain union-free. Unfommately, U.S. labor laws fail to provide a sufficient disincentive against violating workers' fights. LOW WAGES By keeping unions at bay, Wal-Mart keeps its wages low- even by general indust~ standards. The average supermarket employee makes $10.35 per hour. ~4 Sales clerks at Wal- Mart, on the other hand, made only $8.23 per hour on average, or $13,861 per year. in 2001.~ Some estimate that average "associme" salaries range from $7.50 to $8.50 per hour. ~ With an average on-the-clock workweek of 32 hours, many workers take home less than $1,000 per month.~7 Even the higher esfimme of a $13,861 annual salary fell below the 2001 federal poverty line of $14,630 for a family offlttee.~ About one-third of Wal-Mart' s empioyees are part-time, restricting their access to benefits.~ These low wages, to say the least, complicate employees' ability to obtain essential benefits, such as health care coverage, ~vhich will be explored in a later section. The low pay stands in stark contrast to Wal-Mart's slogan, "Our people make the difference." Now-retired Senior Vice President Don Soderquist has explained: "'Our people WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 5 of 25 make the difference' is not a meaningless slogan- it's a reali .ty at Wal-Mart. We are a group of dedicated, hardworking, ordinary.' people who have teamed together to accomplish extraordinary things.''2° With 2002 company profits hitting $6.6 billion. Wal-Mart employees do indeed ' "accomplish extraordinars.' things.''2~ But at poverty, level wages, these workers are not sharing in the company's success. UNEQUAL PAY AND TREATMENT Title VH of the Civil Rights Act prohibits discrimination in emplovment based on emplo.vees' race, color, religion, sex. or national origin.22 Additionally, ~e Equal Pay Act. an amendment to the Fair Labor Standards Act, prohibits unequal pa~v for equal, work on the basis of sex.23 These basic labor and civil rights laws have become an issue at Wal-Mart. In 2001. six women sued Wal-Mart in Califomia claiming the company discriminated against women by systematically denying them promotions and paving them less than men. The lawsuit has expanded to potentially the largest class action in U.S. history. - on behalf of more than 1 million current and former female employees. While txvo-thirds of the company's hourly workers are female, women hold only one-third of managerial positions and constitute less than 15 percent of store managers.24 The suit also claims that women are pushed into "female" departments and are demoted if they. complain about unequal treatment. One plaintiff, a single mother of four, started at Wal-Mart in 1990 at a mere $3.85 an hour. Even xxith her persistent requests for training and promotions, it took her eight years to reach $7.32 an hour and seven years to reach management, while her male counterparts were given raises and promotions much more quickly. For thisj?ainfiff, annual pay increases were as little as 10 cents and never more than35 cents per hour.''° OFF-THE-CLOCK WORK While wages are low at Wal-Mart. too often employees are not paid at all. The Fair Labor Standards Act (FLSA), along v~ith state wage and hour laws. requires hourly employees to be paid for all time actually worked at no less than a minimum wage and at time-and-a-half for all hours worked over 40 in a week.26 These labor laws have posed a particular obstacle for Wal- Mart. As of December 2002, there were thirty-nine class-action lawsuits against the company in thirty states, claiming tens of millions of dollars in back pay for hundreds of thousands of Wal- Mart employees.27 In 2001, Wal-Mart forked over $50 million in unpaid wages to 69,000 workers in Colorado. These wages were paid only after the workers filed a class action li~wsuit. Wal-Mart had been working the employees off-the-clock. The company also paid $500.000 to 120 workers in Gallup, New Mexico, who filed a lawsuit over unpaid work.28 In a Texas class-action certified in 2002 on behalf of 200,000 former and current Wal- Mart employees, statisticians estimated that the company shortchanged its workers $150 million over four years -just based on the frequency of emplo.vees working through their daily 15 minute breaks.2~ WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 6 of 25 In Oregon. 400 employees in 27 stores sued the company for unpaid, off-the-clock overtime. In their suit, the workers explained that managers would delete hours from their time records and tell employees to clean the store after the3., clocked out. In December 2002, a jury. found in favor of the workers.3° One personnel manager claimed that. for six years, she was forced to delete hours from employee time sheets In the latest class-action, filed in November 2003. noting evidence of systematic violations of the wage-and-hour la,v, a judge certified a lawsmt for 65,000 Wal-Mart emplovees in Minnesota. Reacting to the certification, a Wal-Mart spokesperson told the Minneapolis ~'tar Tribune: "We have no mason to believe these isolated situations.., represent a widespread problem with off-the-clock work.''3~ Man.v observers blame the wage-and-hour problems at Wal-Mart on pressure placed on managers to keep labor costs down. In 2002, operating costs for Wal-Mart were just 16.6 percent of total sales, compared to a 20.7 percent average for the retail industry as a whole.3~ Wal-Mart reportedly awards bonuses to its employees based on earnings. With other operating and inventory costs set by higher level management, store managers must mm to wages to increase profits. While Wal-Mart expects those managers to increase sales each year, it expects the labor costs to be cut by two-tenths of a percentage point each year as well.~4 Reports from former Wal-Mart managers seem to corroborate this dynamic. Joyce Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart "threatened to write up managers if they didn't bring the payroll in low enough." Depositions in wage and hour lawsuits reveal that company headquarters leaned on management to keep their labor costs at 8 percent of sales or less, and managers in mm leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheets.3~ CHILD LABOR AND WORK BREAKS VIOLATIONS The Fair Labor Standards Act and state wage and hour laws also govem child labor and work breaks. These work time regulations have likewise posed a problem at Wal-Mart stores. In January. 2004, the New York Times reported on an mtemal Wal-Mart audit ~vhich found "extensive violations of child,labor laws and state regulations requiring time for breaks and meals.''~ One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times.~? According to the New York Times report: "Verett¢ Richardson, a former Wal-Mart cashier in Kansas City, Mo., said it was sometimes so hard to get a break that some cashiers urinated on themselves. Bella Blaubergs, a diabetic who worked at a Wal-Mart in Washington State, said she sometimes nearly fainted from low blood sugar because managers often would not give breaks.''~8 .... WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 7 of 25 A store man~er in Kentucky., told the New York Times that. after the audit was issued, he received no word from company executives to try. harder to cut down on violations: "There was no follow-up to that audit, there was nothing sent out I was aware of saying, 'We're bad. We screwed up. This is the remedy we're going to follow to correct the situation.---39 UNAFFORDABLE OR UNAVAILABLE HEALTH CARE In 2002. 43 million non-elderly Americans lacked health insurance coverage- an increase of almost 2.5 million from the previous year. Most Americans receive their health insurance coverage through their employers. At the same time, most of the uninsured are working Americans and their families, ~vith low to moderate incomes. Their emplovers. however, either do not offer health insurance at all or the health insurance offered is simply unaffordable.4° Among these uninsured working families are a significant number of Wal-Mart employees, man,v of whom instead secure their health care from publicly subsidized programs. Fewer than half- between 41 and 46 percent- of Wal-Mart's employees are insured by the company's health care plan, compared nationally to 66 percent of employees at large f'(rms like Wal-Mart who receive health benefits from their employer. 4~ In recent years, the company increased obstacles for its workers to access its health care plan. In 2002, Wal-Mart increased the waiting period for enrollment eligibili~, from 90 days to 6 months for full-time employees. Part-time employees must wait 2 years before they. may enroll in the plan, and they. may not purchase coverage for their spouses or children. The definition of part-time was changed from 28 hours or less per week to less than 34 hours per week. At the time. approximately one-third of Wal-Mart's workforce was part-time. By comparison. nationally, the average waiting period for health coverage for employees at large firms like Wal- Mart was 1.3 months.~ The Wal-Mart plan itself shifts much of the health care costs onto emplo.vees. In 1999, employees paid 36 percent of the costs. In 2001, the employee burden rose to 42 percent. Nationally, large-firm employees pay on average 16 percent of the premium for health insurance. Umonized grocery workers typically pay nothing.4s Studies show that much of the decline in emplo.ver-based health coverage is due to shifts of premium costs from employers to employees.4~ Moreover, Wal-Mart employees who utilize their health care confront high deductibles and co-payments. A single worker could end up spending around $6,400 om-of-pocket - about 45 percent of her annual full-time salary - before seeing a single benefit from the health plan.4~ According to an AFL-CIO report issued in October 2003, the employees' low wages and Wal-Mart's cost-shifting render health insurance tmaffordable, particularly for those employees with families. Even under the Wal-Mart plan with the highest deductible ($1,000) - and WaI-Mart's Labor Record Report by Representative Georcje Miller February 16, 2004 Page 8 of 25 therefore with the lowest employee premimn contribution - it would take an $8 per hour employee, working 34 hours per week, almost one-and-a-half months of pre-tax earnings to pay for one year of family coverage.46 Wal-Mart's spending on health care for its employees falls well below industry, and national employer-spending averages. A Harvard Business School case gtudy on Wal-Mart found that, in 2002, Wal-Mart spent an average of $3,500 per employee. By comparison, the average spending per employee in the wholesale/retailing sector was $4.800. For U.S. employers in general, the average was $5,600 per employee.47 In the end. because they. cannot afford the compan.v health plan, many Wal-Mart workers must mm to public assistance for health care or forego their health care needs altogether. Effectively, Wal-Mart forces taxpa.vers to subsidize what should be a company-funded health plan. According to a stud.v by the Institute for Labor and Emplo.vment at the Umversity of California-Berkeley, California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart in that state alone.4~ In fact. Wal-Mart personnel offices, lmowing employees cannot afford the company health plan,, actually encourage employees to apply for charitable and public assistance, according to a recent report by the PBS news program Now W~th Mo yers. 49 When a giant like Wal-Mart shifts health insurance costs to emplo.vees, its competitors invariably come under pressure to do the same. Currently engaged in the largest ongoing labor dispute in the nation, unionized grocery, workers in southem Califomia have refused to accept higher health care costs resulting from cost-shifting on health insurance premiums by their grocery, chain employers - cost-shifting, the grocers say, inspired by the threat of Wal-Mart competition. Beginmng on October 11, 2003, 70,000 grocery employees of Vons, Pavilions, Ralphs, and Albertsons have either been on strike or locked out. The compames want to dramatically increase workers' share of health costs, claiming that the change is necessary in order to compete with Wal-Mart's incursion in the southern California market. E. Richard Brown. the director of the Center for Health Policy at the Universi .ty of' Califomia. Los Angeles, told the Sacramento Bee that, if the grocery chains drastically reduc~ health benefits, the trends toward cost shifting and elimination of health coverage will accelerate. Following the grocers' lead, more employers would offer fewer benefits, would require their workers to pay more, and may even drop health benefits altogether.~° Whether the current pressure from Wal-Mart is real or imagined or merely a convenient excuse for the grocers' cost-cutting bargaining position, Wal-Mart has sparked a new race to the bottom among American retail employers. Undeniably, such a race threatens to unde~e the employer-based health insurance system LOW WAGES MEAN HIGH COSTS TO TAXPAYERS Because Wal-Mart wages are generally not living wages, the company uses taxpayers to subsidize its labor costs. While the California study showed how much taxpayers were subsidizing Wal-Mart on health care alone, the total costs to taxpayers for Wal-Mart's labor policies are much greater. . WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 9 of 25 The Democratic Staff of the Committee on Education and the Workforce estimates that one 200-person Wal-Mart store ma.v result in a cost to federal taxpayers of $420.750 per year- about $2.103 per employee. Specifically, the low wages result in the following additional public costs being passed along to taxpa.vers: $36.000 a year for free and reduced lunches for just 50 qualifying~'Wal-Mart families. · $42.000 a year for Section 8 housing assistance, assmmng 3 percent of the store employees qualify, for such assistance, at $6.700 per family. $125,000 a year for federal tax credits and deductions for low-income families, assuming 50 emplo~vees are heads of household with a child and 50 are married with two children. · $100,000 a year for the additional Title I expenses, assuming 50 Wal-Mart families qualify, with an average of 2 children. · $108.000 a year for the additional federal health care costs of moving into state children's health insurance programs (S-CHIP), assuming 30 emplo.vees with an average of two children qualify.. · $9.750 a year for the additional costs for low income energy, assistance. Among Wal-Mart emplo~vees, some single workers may. be able to make ends meet. Others may be forced to take on two or three jobs. Others ma.v have a spouse with a better job. And others simply cannot make ends meet. Became Wal-Mart fails to pay sufficient wages, U.S. taxpayers are forced to pick up the tab. In this sense, Wal-Mart's profits are not made only on the backs of its employees - but on the backs of every U.S. taxpayer. The ultimate costs are not limited to subsidies for underpaid Wal-Mart workers. When a Wal'Mart comes to town, the new competition has a tipple effect throughout the community. Other stores are forced out of business or forced to cut employees' wages and benefits in o;der to compete with Wal-Mart. The Los Angeles City Council commissioned a report in 2003 on the effects of allowing Wal-Mart Supercenters into their communities. The report, prepared by consulting firm Rodino and Associates, found that Supercenters drive down wages in the local retail industry, place a strain on public services, and damage small businesses. It recommended that the Ci.ty Council refuse to allow any Supercenters to be built in Los Angeles without a promise from Wal-Mart to increase wages and benefits for its emplo.vees.~l The findings of the Rodino report are almming. The labor impacts of a Wal-Mart Supercenter on low-income communities include: "Big box retailers and superstores may negatively impact the labor market in an area by the conversion of higher paying retail jobs to a fewer number of lower paying retail jobs. The difference in overall compensation (wages and benefits) may be as much as $8.00." * "Lack ofhealth care benefits of many big box and superstore employees can result in a greater public financial burden as workers utilize emergency rooms as a major ' ' component of their health care." · "A study conducted by the San Diego Taxpayers Association (SDCTA), a nonprofit, nonpartisan organization, found that an infirm of big-box stores into San Diego would WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 10 of 25 result in an annual decline in wages and benefits bet~veen $105 million and $221 million, and an increase of $9 miflion in public health costs. SDCTA also estimated that the region would lose pensions and retirement benefits valued between $89 million and $170 million per year and that even increased sales and property., tax revenues would not cover the extra costs of necessars.' public services." "[The threat of Wal-Mart's incursion into the southern Califomia;groceD' market] is already triggering a dynamic in which the grocery, stores are negotiating with workers for lowered compemation, in an attempt to re-level the 'playing field.'" "One study of superstores and their potential impact on grocery, industry, employees found that the entry, of such stores into the Southem California regional grocer>' business was expected to depress industry wages and benefits at an estimated range from a low of $500 million to a high of almost $1.4 billion annually, potentially affecting 250,000 grocery industry employees... [T]he full impact of lost w~es and benefits throughout Southern California could approach $2.8 billion per year.''~2 Repons such as these have provided supporting evidence to localities ~vhich seek to pass ordinances restricting "big box" or supercenter stores. Such ordinances were recently passed in Alameda and Contra Costa counties in Califomia. Wal-Mart, however, has moved to overturn those ordinances. In Contra Costa, Wal-Mart launched a petition drive to challenge that county's ordinance in a referendum in March 2004. In Alameda, the company has filed a lawsuit to void an ordinance passed by the Board of Supervisors in January 2004.~3 ' One of the most cited studies on Wal-Mart's impact on local commtmities was performed by economist Kenneth Stone at Iowa State University in 1993. Stone looked at the impact of Wal-Mart on small towns in Iowa. He found a 3 percent spike in total retail sales in communities immediately after a Wal-Mart opened. But the longer term effects of Wal-Mart ~vere disastrous for nearby independent businesses. Over the course of the next several years, retailers' sales of mens' and boys' apparel dropped 44 percent on average, hardware sales fell by 31 percent, and lawn and garden sales fell by 26 percent. Likewise, a Congressional Research Service report in 1994 explained that Wal-Mart uses a saturation strategy with store development. In other words, it builds stores in nearby connected markets in order to stifle any competition in the targeted area by the size of its presence.~4 · By all accounts, Wal-Mart's development strategy has been working. Currently, Wal- Mart operates around 3,000 total stores and close to 1,400 Supercenters. It is the largest grocer in the U.S., with a 19 percent market share, and the third-largest pharmacy., with a 16 percent market share. According to Retail Forward, a global management consulting and research firm, for every one Supercenter that will open, two supermarkets will close.~ Since 1992, the supermarket inCustry has experienced a net loss of 13,500 stores.~ Over the next five years, Wal-Mart pians to open 1,000 more Supercenters in the U.S.~? By 2007, Wal-Mart is expected to control 35 percent of food and drug sales in the U.S.~ ILLEGAL USE OF UNDOCUMENTED WORKERS WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 11 of 25 Among the lowest paid workers in the U.S. economy, are undocmnented immigrants. As was reported in the fall of 2003, these workers are not foreign to the floors of Wal-Mart stores. On October 23.2003, federal agents raided 61 Wal-Mart stores in 21 states. When they left, the agents had arrested 250 nightshift janitors who were undocmnented workers.~9 Following the arrests, a grand jury convened to consider charging;Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Mart executives have tried to lay, the blame squarely with the contractors, federal investigators point to wiretapped conversations showing that executives knew the workers were undocumented.~° - Additionally, some of the janitors have filed a class-action lawsuit against W/d-Mm alleging both racketeering and wage-and-hour violations. According to the janitors, Wal-Mart and its contractors failed to pay them overtime totaling, along with other damages, $200,000. One of the plaintiffs told the New York Times that he worked seven days per week for eight months, earning $325 for 60-hour weeks, and he never received overtime.6~ A legal question now being rinsed is whether these undocumented workers even have the fight to sue their employers.62 Not surprisingly, this recent raid was not the first time Wal-Mart was caught ming undocumented workers. In 1998 and 2001, federal agents arrested 102 undocumented workers at Wal-Marts around the country. . President Bush's newly proposed temporary foreign worker plan would legalize such undocumented workers without granting them an oppommity for citizenship, creating a new class of indentured servants and a safer source of Cheap labor for companies like Wal-Mart. · - v TRADING AWAY JOBS Since the recession began in March 2001, the United States has lost 2.4 million jobs. In every, recession, since the Great Depression, jobs were recovered within the first 31 months after the recession began - tmfil now. The latest recession began 34 months ago and officially ended in November 2001, but the jobs have not been recovered. For American worlfing families, by all accounts, the "jobless recovery" has been of little benefit to them. While GDP growth was strong or solid in the third and fourth quarters of 2003, real wages for workers remained stagnant and even declined.** .... ~ ~: '-"~ ": '~"~-, ~"~',:. ~..,~ ...~ .-:-_ _, :-..~, - . ..... ...:~-:.-?,. .... . .-'-.~: Indeed, of the jobs hat remain, the pay is low. The count~ has seen a dramatic shift from high-paying jobs to low-paying jobs. For instance, in New Hampshire, which still has not recovered the number ofjobs it lost in the recessio~ new jol~ pay 35 percent lower wages than lost jobs. In Delaware, those wages are 43 percent lower, in Colorado, 35 percent lower; in West Virginia, 33 percent lower. In fact, the low-pay shift has hit all but two of the fifty states. · , . ~ ~ ~'- ~ .......... _ ........... , ........ ;,i C-..- ':' .... · ' .: .~:~'.'~:~: :~!.'; ;."-'"~-'.'..'..7:.i "~'~."A,' , ,'.',f ~ ........ . .:.. ~ ...--',...'" :..' :-' '..,:... -. ' - ,- ....-. WaI-Mart's Labor Record Report by Representative Georqe Miller February 16, 2004 Page 12 of 25 Moreover. these changes in the labor market reveal themselves in a marked decline in living standards for low- and middle-income workers. The real weekly earnings for full-time workers age 25 and older fell for the bottom half of the workforce between the fourth quarters of 2002 and 2003. In particular, workers in the l0th percentile saw their weekly earnings fall 1.2 percent: in the 20t~ percentile, bv 0.5 percent, in the 50t~ percentile, by 0.1 percent.66 Conversely, earners in the top percentiles of'income experienced growth. The 90t~ l~rcentile, for instance, saw a 1.1 percent increase in weekly earnings. As the Economic Policy Institute points out: "This pattem of earmngs growth suggests that while the econom,v is expanding, the benefits of growth are flowing to those at the top of the wage scale.''~? These lower-paying jobs are largely service sector jobs, like retail, replacing traditionally higher-paving and uniomzed manufactunng jobs. Between January 1998 and August 2003, hie nation experienced a net loss of 3 million manufacmnng jobs.~s Dunng the "recovery,," 1.3 million manufacttmng jobs disappeared.69 Amencan manufacturers fred it increasingly difficult to keep jobs in the U.S., given the availabiliW of cheap labor abroad. In 2003, the U.S. trade deficit hit a record high of $551 billion, increasing 15 percent from 2002 and exceeding 5 percent of GDP.TM Wal-Mart plays a curiously illustrative role in this jobs phenomenon - not just in the creation of low-paving jobs and the downward pressure on wages and benefits, but also in the export of existing manufaaxmng jobs to foreign countries offering cheap labor. Wal-Mart markets itself with a patriotic, small-town, red-white-and-blue advertising motif. But Wal- Mart's trade practices are anything but small-town. Indeed. Wal-Mart conducts intemational trade in manufactured goods on a scale that can bring down entire nations' economies. While the red-white-and-blue banners remmn~ long-gone are the days when Wal-Mart abided by ~e mottos of"Buy American"-and "Bring It Home to the USA." In 1995, Wal-Mart claimed only 6 percent of its merchandise was imported. Today an estimated 50-60 percent of its products come from overseas.TM In the past five years, Wal-Mart has doubled its imports from China. In 2002. the company bought 14 percent of the $1.9 billion of clothes exported by Bangladesh to the United States. Also in 2002, the company purchased $12 billion in merchandise from China, or 10 percent of China's total U.S.-bound exports, a 20 percent increase from the previous year. In 2003, these Chinese purchases jumped to $15 billion, or almost one-eighth of ail Chinese exports to the Umted States.72 Today, more than 3,000 supplier factones in China produce for Wal-Mart.TM Wal-Mart maintains an extensive global network of 10,000 suppliers.TM Whether American,, Bangladeshi, Chinese, or Honduran, Wal-Mart plays these producers against one mother in search of lower and lower prices. American sup, pliers have been forced to relocate their businesses overseas to maintain Wal-Mart contracts. '~ Overseas manufacturers are forced to engage in cutthroat competition that further erodes wages and working conditions of what often already are sweatshops. To keep up with the pressure to produce ever cheaper goods, factones force employees to work overtime or work for weeks without a day off. A Bangladeshi factory worker told the Los Angeles Times that employees at her factory worked from 8 a.m. to 3 a.m. for 10 and 15 day stretches just to meet Wal-Mart price demands. And still, Wal-Mart's Wal-lVlart's Labor Record Report by Representative George Miller February 16, 2004 Page 13 of 25 general manager for Bangladesh complained of his country's factories, telling the Los Angeles Times. "I think they. need to improve. When I entered a factory in China, it seemed they. are very fast.''76 While low-wage jobs displace higher-paid manufacturing jobs in the United States, undercutting living standards at home, living standards abroad are not refiping the benefits one might expect. Reports indicate that Wal-Mart's bargaining power is able to maintain low wages and poor working conditions among its foreign suppliers. The Washington Post has explained: "As capital scours the globe for cheaper and more malleable workers, and as poor countries seek multinational companies to provide jobs, lift production, and open export markets, Wal-Mart and China have forged themselves into the ultimate J.OT?t venture, their symbiosis influencing the terms of labor and consumption the world oven" Thanks to a ban on independent trade tmions and a lack of other basic human fights, China offers Wal-Mart a highly-disciplined and cheap workforce. A Chinese labor official who asked to remain anonymous for fear of punishment told the Washington Post that "Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay. And the workers have no options.''*~ One employee of a Chinese supplier described the difficulties of surviving on $75 per month. She could rarely afford to buy meat, and her family largely subsisted on vegetables. Over four years, she had not received a single salary increase.TM Wal-Mart has countered that it imists that its suppliers enforce labor standards and comply with Chinese law. One-hundred Wal-Mart auditors inspect Chinese plants, and the company has suspended contracts with about 400 suppliers, mainly for violating overtime limits. An additional 72 factories were permanently blacklisted in 2003 for violating child labor standards. Still, critics point out that the Wal-Mart does not regularly inspect smaller factories that use middlemen to sell to the company. Nor does it inspect the factories of subcontractors. A Chinese labor organizer explained that the inspections are "ineffective," since Wal-Mart usually notifies the factories in advance. The factories "often prepare by cleaning up, creating fake time sheets and briefing workers on what to say.''8° ....... The factories themselves complain that, because Wal-Mart demands such low prices, they have slim profit margins - if any. A manager of one Chinese supplier told the Washington Post, "In the beginning, we made money... But when Wal-Mart started to launch nationwide distribution, they pressured us for a special price below our cost. Now, we're losing money, on every box, while Wal-Mart is making more money.'~l Obviously, one way to regain a profit for such suppliers would be to begin cutting back on labor costs. , .. ".: -..'. Finally, as testament to Wal-Mart's stalwart anti-union policy, none of its 31 stores in. ..... China are unionized, despite the fact that the Communist Party-controlled official union has told the company that it would not help workers fight for higher pay.~2 Oddly enough, Article 1'0 China's Trade Union Law reqtdres that a~ establishment with 25 or more workers must have a union. Wal-Mart, however, claims that it has rec~ved asstwances from the central government that it need not allow unions in any of its stores? Az one reporter has explained, "The...,.~.~ explanation for the apparent contradiction may be that the government's desire for foreign . WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 14 of 25 investment and jobs tromps any concern for workers' rights. That wouldn't be surpnsmg in the Chinese environment, where strikes are forbidden and the official labor grouping activelv supports the government's efforts to block the rise of independent unions.''84 With Chin~. any company in search of pliant and cheap labor has found a perfect mix of cooperative government officials and workers made submissive through fear. 2- DISABILITY DISCRIMINATION The Americans with Disabilities Act (ADA) prohibits discrimination against persons with disabilities in employment matters. In particular, an employer ma.v not discriminate against an employee or prospective emps~oyee who is otherwise qualified to perform the job if given reasonable accommodations. In addition to laxvsuits over lost wages or unequal pa.v, Wal-Mart has faced a barrage of lawsuits alleging that the compan.v discriminates against ~vorkers ~vith disabilities. In 2001, Wal- Mart paid over $6 million to settle 13 such lawsmts. These cases were brought by the U.S. Equal Employment Opportuni .ty Commission (EEOC) on behalf of disabled persons whom Wal-Mart failed to hire. The settlement also required Wal-Mart to change its procedures in dealing with disabled job applicants and provide more training for its employees on anti-discrimination laws.~6 Yet, on January. 20, 2004, the EEOC filed another lawsuit against the retail giant on behalf of a job applicant who claims he was not hired because he needed a wheelchair. The lawsuit was filed in Kansas Ci.ty after the EEOC failed to obtain a settlement with Wal-Mart.s? WORKER SAFETY The Occupational Safety and Health Act (OSHA) is designed to protect workers from workplace injuries and illnesses. OSHA is enforced by the Department of Labor's Occupational Safe .ty and Health Admimstration. Regulations issued by. that agency, lay. out clear roles for such safety matters as the provision of exits for employees,s9 The latest Wal-Mart scandal to hit the news is its reported lockdown of its mghttime shift various stores mound the count. According to a January 18, 2004, New York Times report, the company institutes a "lock-in" policy at some of its Wal-Mart and Sam's Club stores.9° The stores lock their doors at night so that no one can enter or leave the building, leaving workers inside trapped. Some workers are then threatened that, if they ever use the fire exit to leave the building, they will be fired. Instead, a manager is supposed to have a key that will unlock doors to allow employees to escape. Many workers have found themselves locked in without a manager who has a key, as the New York Times story detailed, gt The company has claimed that the policy, is designed to protect stores and employees from crime. Former store managers, however, have claimed the real reason behind the lockdown is to prevent "shrinkage"- i.e., theft by either employees or outsiders. It is also designed to eliminate unauthorized cigarette breaks or quick trips home? WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 15 of 25 Locked-in workers have had to wait for hours off-the-clock for a manager to show up to let them go home after they completed their shift. One worker claims to have broken his foot on the job and had to wait four hours for someone to open the door. Another worker alleges she cut her hand with box cutters one night and was forced to wait until morning to go to the hospital, where she received thirteen stitches.~3 ;- In the history of American worker safety, some of the worst tragedies have revolved employees locked in their workplaces in an emergency, including the Triangle Waist Company fire of 1911 in which 146 women died in a fire because the garment factory's doors were locked. As recently as 1991, 25 workers perished in a fire at a chicken processing plant in North Carolina. Tho plant's owner had locked the doors for fear of employee theft and unauthorized breaks. According to recent reports, ten percent of Wal-Mart's stores are subjected to the nighttime lockdown.~a In 2002, in a telling junction of alleged labor law violations, the National Labor Relations Board (NL~) issued a complaint against a Wal-Mart in Texas regarding health and safe .ty threats made by management against employees. According to the complaint, a company official told workers that, after a worker filed complaints regarding unsafe conditions with the Occupational Safety and Health Administration (OSHA), any fines imposed upon the company would come out of employee bonuses.9~ WAL-MART'S RESPONSE .. Wal-Mart's response to this extensive list of labor problems has been to treat the charges as a public-relations matter and not a substantive issue of workplace fairness. Seemingly, Wal- Mart believes only its image - not its behavior- needs to be adjusted. In that regard. Wal-Mart has undertaken aggressive advertising campaigns, has financed its own economic-impact studies to counter those that show the costs of Wal-Mart to local communities, and has become a major political campaign contributor. · o On the advertising from, Wal-Mart launched a television ad series called "Good Jobs" in early 2004. The ads feature Wal-Mart employees talking about how great it is to work at Wal- Mart. Spots also show Wal-Mart's community involvement. One ad rear, es a Wal-Mart employee who attests that Wal-Mart health insurance made it possible to treat his 7-year-old son for liver disease? It is not known what the total cost of the ad series will be in the end. ,~ ..... * - ,,, · .... ~ .,- ~ ' . . . .. ~ .... :,,_ ....... . ... : ~ lt ]~}ata :*?- :"t~. ;.?~. _.'-,;.:,. ? .- · . .. '"::. "'Wal-Mart has also financed its own studies, to counter publicly commissioned reports which detail the burden that Wal-Mart imposes on communities. After the Rodino report was commissioned by Los Angeles City Council members, the Los Angeles Economic Development Corporation (LAEDC), a private non-profit corpo~on, released its own study. The LAEDC study was commissioned and financed by Wal-Mart Stores, Inc. Unsurprisingly, it claimed that Wal-Mart Supercenters would provide extraor~~ benefits for the Los Angeles economy. .. · WaI-Mart's Labor Record Report by Representative Georcje Miller February 16, 2004 Page 16 of 25 Because Wal-Mart wotfld be charging lower prices, according to the report, households would experience greater savings. If Wal-Mart penetrates 20 percent of the market in the seven Southland counties, the savings, an estimated $3.6 billion, would then translate into the creation of an incredible 36,400 jobs annually. That is, while the study estimales that 3,000 to 5,000 jobs would be lost in the grocew business, consumer savings on food prices would mm into more consumer spending on non-grocer3.' goods, creating more jobs in those s~tors.97 Of course, it is not at all clear why job loss would be limited to the grocery, business, since Supercenters, by their very. nature, sell virtually any consumer good, except for durables like automobiles. According to the study, California consumers "may opt to spend their savings on sports equipment, continuing education classes, or restaurant meals.''98 The study failed to mention that Wal-Mart already offers an extensive line of"sports equipment.''99 The "continuing education classes" were presumably listed because they may constitute job training for better jobs. And where would those better jobs be? It can only be assumed, as more people spend their grocery savings for "restaurant meals." much of the claimed job creation would be in restaurants and similar low-paving service sector businesses, for which continuing education classes offer little advantage. The ultimate household.savings projections by tho LAEDC study should also be questioned. First, downward pressure on wages and benefits, spurred by the giant employer, would cause people to have less money to spend. Thus, while they, may spend less on groceries, they also make less or may be spending more on former benefits like health care. Indeed, the study appears to not take into account the loss of such benefits as health care and pensions that workers are likely to experience. Second, when Wal-Mart has successfully reduced the number of surrounding competitors, there is less pressure on the compan.v to keep its prices low. Third, the claim that Wal-Mart does in fact charge comumers less is open to question. Economist Kenneth Stone has found that Wal-Mart lowers the prices of "price sensitive" items such as milk and bread. Consumers pay attention to the prices of these items - the kind of everyday items consumers buy most often - and less attention to the prices of other items such as light bulbs - which are not reduced and may be more expensive at Wal-Mart than at other retailers. The lower-priced items are displayed prominently, grabbing customers' attention and leading them to mistakenly believe that they. are getting similarly low prices on other items throughout the stor~.1°° The LAEDC study also disputed the extent of wage and benefit differences between Wal- Mart employees and other retail or groce~ workers. According to the LAEDC, wage comparisons are often skewed for two reasons. First,' most Wal-Mart Supercenters have not been open long enough to allow employees to accumulate seniority and. therefore, higher rates of pay. Second, because Wal-Mart promotes to management from within its own ranks, those employees with the greatest longevity are usually no longer counted as hourly employees.TM The first mason does not appear to square with prolific reports about the imense pressure on stores to keep labor costs down. This story first appeared in the ~all Street Journal: At Wal-Mart Stores Inc., managers are judged in part on their ability, to keep payroll costs at a strict percentage of sales, according to former managers. Some WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 17 of 25 . .. s~ that puts extra pressure on higher-paid workers to be more productive. "You keep people making $10 an hour to a high standard," putting more pressure on them for small mistakes, said Lyndol Jackson, a Wal-Mart manager until he left for another job in 1998. /- Often. those workers quit and can be replaced less expensively, added Jackson, who lives in Memphis, Tenn. Former Wal-Mart cashier Dana Mailloux, 33, worked for eight years at a store in Fort Myers, Fla., moving up to $ 9.15 an hour. Last fall, her manager called her and more than a dozen other longtime employees into his office and told them he had to lay them off because of lack of work. That same da.v, Mailloux said, she passed a room with six new hires, red vests in hand: filling out paperwork. Returning to the store that weekend, she said, she saw newly advertised positions listed on a bulletin board. "Basically, I was thrown out like a piece of trash," said Mailloux. Wal-Mart spokeswoman Sarah Clark said the company continually lays off and hires workers as sales rise and fall. She said that if "labor adjustments are necessary.," the company before making cuts asks for volunteers to take time off and carefully controls hours. "It is ludicrous and contrary to our business model to think the company would benefit from replacing experienced associates with new, lower-paid ones," Clark said in a statement. "It's clear that experienced associates are golden with us." Clark declined to discuss Mailloux's dismissal, citing employee privacy. 102 In other words, there may be other reasons for the wage difference than just the frequency of store openings. Nor does the lack-of-longevity reason for the wage differences square with previously-mentioned accomm of actual pay raises ofjust a few cents per year. The second reason claimed for wage differences - that Wal-Mart promotes its best employees to management- would appear to be exaggerated. To the extent that such promotions do happen, their effect on the average Wal-Mart wage must be minimal. Wal-Mart is not promoting half of its worlcforce. ~ average Wal-Mart store has one manager, one-to-three assistant marmgers, and 15 depatunent heads (who may or may not be counted as hourly), compared to 300 to 350 "associates ,,~m .... ..~ .,,.,.; , . . .. > .~: . , . WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 18 of 25 Moreover, according to the study, Wal-Mart's health care benefits are better than often portrayed. The authors acknowledge that the Wal-Mart health insurance plan is not as comprehensive as the unionized grocery, store plans in Southern California and that Wal-Mart employees must pay part of the premium while union workers pay nothing. However. the authors note, the Wal-Mart plan does not include a cap on medical expenses, thereby protecting participating employees from the bankrupting costs of catastrophic illnesses. The umonized store plans do have a cap, according to the LAEDC study. ~o4 The relative worth of a catastrophic plan versus a more comprehensive health plan comes into focus when considering the frequency, with which workers utilize various services. While childrens' vaccinations are covered b.v the union plans, such routine medical needs are excluded from Wal-Mart's coverge. Such out-of-pocket costs for these low-wage employees might be $75 per shot at a private clinic. On the other hand. Wal-Mart touts the 60 trmasplants it covers per year at a cost of $1 million each. 'As one commentator has noted,. 60 transplants amounts to slightly over one-hundredth of one percent of Wal-Mart's 500,000 insured workers,m On the issue of health care coverage, the LAEDC study explained: Since they must pay some of the upfront costs of medical care, many Wal-Mart employees who are eligible for the coverage choose not to participate. This leads to much lower participation rates among Wal-Mart employees than among mon workers, virtually all of whom participate since their up front costs are paid by their employer. It is worth noting that more than 90 percent of all Wal-Mart employees have health coverage from some source, including the compan,v itself, a covered spouse, parents, through retirement benefits (from another job), etc.~°~ According to the LAEDC, low participation rates in Wal-Mart's health plan are a matter of mere "choice," not affordabili~. Nevertheless, most Wal-Mart employees, according to the study, have health care from "some source," including "a covered spouse"- that is, a spouse at another company with better health care benefits, now subsidizing what should be Wal-Mart's labor cost. The study did not go into any further detail on what these unnamed other sources of coverage might be, but did not role out public assistance programs. In July 2003, California Assemblywoman Sandy Lieber (D-San Jose) released copies of employee handouts from Wal- Mart which explained how to use an employment verification service when applying for Medicaid, food stamps, and other public services.~°? The LAEDC study continued on the topic of health care coverage: 'Whe issue of participation rates may become moot in California, however. In October, Governor Davis signed SB2 - Health Care for Working Families that mandates large employers to provide health coverage to all of their employees.'a°8 While Wal-Mart currently covers about two-thirds of the costs of employee health care, SB2 would require Wal-Mart to cover 80 percent. The long waiting periods for Wal-Mart coverage would also have to be cut by 3 months for full-time workers and one-year and nine months for part-time workers. While the study claimed SB2 might render the debate over participation rates moot, it failed to mention that Wal-Mart has helped finance an employer-backed campaign for a referendum to repeal SB2. ~09 WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 20 of 25 proposed rule. 8 million working Americans ~511 lose their ovemme p~,. In exchange, the Bush Admimstration claims 1.3 million Americans will gain the right to ovemme pay; the real number is actually much less. according to analysts at the Economic Policy_ Institute. President Bush's Department of Labor has issued public advice to employers on how to skirt the law and avoid paying even those additional workers any overtime pax,. 2- Other proposals aimed at improving workers' living standards include tax cuts targeted to working families and making higher education more affordable by boosting funding to Pell grants and increasing the HOPE Scholarship tax credit. Congressmembers and Senators have fought the Bush Administration's efforts to privatize Social Securi .ty and have worked to shore up the private pension system of emplo.ver-based retirement plans with proposals to protect the pensions of older employees and give workers greater control over their pension savings. CHILD LABOR Representative Tom Lantos (D-CA), along x~4th over 40 cosponsors, has introduced HR 3139, "The Youth Worker Protection Act," ~vhich imposes limits on the amount of hours teenagers - who should be focused on their education- mm' work. Wal-Mart's intemal audit in 2000 pointed to extensive child labor violations. Longstanding research has established the detrimental impacts of excessive work on school performance. SWEATSHOPS Democrats. led by Representative George Miller (D-CA), have introduced HR 3550, "The Recruiter Accountability Act." This bill holds labor recruiters and employers accountable for the promises th~, make to foreign workers when they. lure them to the U.S. Recruited workers often find that. despite promises of good pay. and healthy xvorking conditions, their new jobs provide poverty, wages - if any wages, at all- and no benefits such as basic health insurance. Additionally, workers are kept in debt to their recruiter for bringing them to the U.S. Democrats x~511 put an end to this practice- which not only amounts to exploitation of foreign workers but undercuts the wages and benefits of working Americans. Democrats are also introducing a bill to prevent federal agencies from comracting with anyone who operates or does business with a sweatshop. Taxpayer dollars should no longer be used to enrich those who violate basic human rights at home or overseas. AFFORDABLE AND MEANING~L HEALTH INS~CE Congress continues to look for solutions to the health care crisis in this counuy. Democrats have offered mixes of public and employer-sponsored plans to achieve universal care - a key policy, goal of the party. They have also focused on the cost of health care. As Wal-Mart demonstrates, offering a health care plan to employees is not enough if employees cannot afford to participate. Proposals include providing tax credits to small businesses to assist them in providing a health plan,, reducing the prescription drug prices by making it easier for generic WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 19 of 25 On the political front, Wal-Mart has stepped up its campaign donations. The company contributed about $475,000 in soft money to the Republicans in the 2000 and 2002 election cycles, compared to $50,000 for Democrats in the same time period. Il0 In 2003, Wal-Mart contributed over $1 million to federal campaigns - 85 percent to Republicans and 15 percent to Democrats -jumping from the 7 l't biggest campaign contributor in 2002 to the second biggest single contributor in 2003.TM These contributions come at a time when the public outcry, against Wal-Mart's behavior is louder than ever. CONGRESSION~ RESPONSES Wal-Mart is certainly emblematic of structural changes within the U.S. economy. Unfortunately, as a rising standard-bearer of those changes, its employment practices pose a real and growing threat to U.S. labor standards. Indeed, Wal-Mart's sheer size and market power render it more than just an emblem but a leading agent of these changes. While Congress has failed to address the issues posed by W/fl-Mart's ascension, Congressional Democrats advocate a legislative program that tackles issues such as growing income disparities, the plight of the working poor, the lack of health care, unemployment and the shift from high-paying to low-paying jobs, the exodus of manufacturing jobs from the country, and the lack of effective enforcement of workers' fights. LABOR LAW REFORM AND THE RIGHT TO ORGANIZE Representative George Miller (D-CA) and Senator Ted Kennedy (D-MA), along with over 130..cosponsors, have introduced HR 3619 "The Employee Free Choice Act." This bill consists of comprehensive reform of the nation's labor laws in order to give meaningfifl effect to workers' fight to organize- an internationally-recognized human right The Employee Free Choice Act proposes triple damages for unlawfifl firings of pro-union workers during organizing drives, instead of the meager straight backpay remedy which allows employers to violate rights and destroy orgamz~g drives at very little cost to them;, imposes civil fines on employers who commit serious or repeated violations of the right to organize, instead of often meaningless and ineffective notice postings; provides for a card check system for choosing a union, rather than the emily-manipulated NLRB election process; and provides for first-con~t mediation and binding arbitration, so that employers cannot stall bargaining until workers give up and abandon their PROPOSALS TO INCREASE WAGES AND PROTECT OVERTIME Democrmic Members of Congress and Senators continue to fight for a higher minimum wage so that one day no one working fifll-fime will be forca~ to live in poverty. While Wal-Mart typically pays more than the winimmn wage, its average hourly rate still puts many working families below the poverty line. Additionally, Democratic Members of Congress and Senators are fighting the Bush'.- Administration's attempt to gut the nation's overtime laws. Under the Bush Administration's WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 21 of 25 drugs to be sold, and ensuring a Medicare prescription drag benefit that obtains the best prices for seiners. FAIR TRADE AND THE FIGHT TO SAVE GOOD-PAYING JOBS Democrats have led the call for fair trade agreements - with envirbnmental and labor standard protections. American manufacturers simply cannot compete with foreign workforces that are paid pennies per hour, utilize child and slave labor, and do not enjoy basic human rights. Democrats are exploring ways to end sweatshop practices around the world; to ensure basic hmnan rights at home and abroad for all workers; and to ultimately stop the exodus of jobs out of the country. Proposals include tax deductions for manufacturers who expand their U.S. operations and fully funding job training and manufacturing development programs. CONCLUSION Wal-Mart's success has meant downward pressures on wages and benefits, rampant violations of basic workers' fights, and threats to the standard of living in communities across the country. The success of a business need not come at the expense of workers and their families. Such short-sighted profit-making strategies ultimately undermine our economy. In the past few years, Wal-Mart has been subjected to dozens of class-action suits seeking backpay for hundreds of thousands of shortchanged workers, dozens of unfair labor practice complaints by the U.S. government for violations of workers' fight to organize, and other legal actions stemming from the company's employment pracfic~. At the same time, it has managed to keep its wages low and put suppliers on a downward spiral to cut their own wages. To keep up with Wal-Mart's low-cost demands, U.S. manufacturers have found it increasingly difficult to remain inthe U.S. Cuts in health care benefits to Wal-Mart employees are pushing' other U.S.' grocers to do the same. Wal-Mart's current behavior must not be allowed to set the standard for American labor practices. Standing together, America's working families, including Wal-Mart employees, and their allies in Congress can reverse hhis race to the bottom in the fast-expanding service indust~. The promise that every American can work an honest day's work, receive an honest day's " wages, raise a family, own a home, have decent health care, and send their children to college is a promise that is not easily abandoned. It is, in short, the American Dream_ . ,! , ENDNOTES WaI-Mart's !,,~bor Record Report by Represemative George Miller February 16, 2004 Page 22 of 25 ,, ,,, Anthony Bianco and Wendv Zellner, "Is Wal-Mart Too Powerful?" Business Week 100 (October 6, 2003). Charles Stein, "Wal-Mart Finds Success, Image Breed Contempt," Boston Globe H,D(November 30, 2003). 29 U.S.C. § 141 et seq. International Labor Organization, Convention No. 87, Freedom of Association and Protection of the Right to Organize (1948'}, and No. 98, Right to Organize and Collective Bargaining (I 949). 5 [ntemational Confederation of Free Trade Unions (ICFTU), Internationally Recognised Core Labour Standards in the United States: Report for the WTO General C)mncil Review of the Trade Policies of the United States (Geneva, January 14-16, 2004'). o Id. at 3-4. . Wal-Mart, A Manager '~ Toolbox to Remaining Union Free at 20-21 (no date). Available online at http://www.ufc~v.~rg/issues-and-acti~ns~wa~mart-w~rkers-campaign-intb~re~ant-~inks~an~-uni~n-manua~s.cfm. s pan Demetrakakes, "Is Wal-Mart Wrapped in Union Phobia?" Food & Packaging 76 (August 1. 2003). ~ Dan Kasler, "Labor Dispute Has Historical Precedent," Scripps Howard News Servwe tNovember 3, 2003). to Bureau of Labor Statistics, Deparmtent of Labor, "Union Members in 2003." Table I (January. 21, 2004). ~ Stephen Franklin and Delroy :\:~,.a,,:der, "Grocery Walkouts Have Broad Reach," Chicago Tribune C 1 (November 12, 2003). 12 Bureau of Labor Statistics, Department of Labor, "Employee Benefits in Private Industry, 2003," Table 1 ~,September ! 7, 2003). ~3 Id. ~4 Charles Williams, "Supermarket Sweepstakes: Traditional Grocery Chains Mull Responses to Wal-Mart's Growing Dominance," The Post and Courier (Charleston, SC) 16E (November 10, 2003). ~ Id. ~6 "Unaffordable Health Care, Low Wages, Sexual Discrimination- the Wal-Mart Way of Life," http:llxxa,,av.ufcw.omlworkplace connections/retail/industry nexvs/index.ctin (lamm~.-26. 2004). ~' Doug Dorit3.,, "TI~ People's Campaign: Justice(diWal-MarC" Air Line Pilot 55 (Febnmrx., 2003). ~s Bianco and Zellner, supra KlOt¢ I. ~9 PBS, "Store Wars: When Wal-Mart Comes to Town." http://w~.~av.pbs.org/itx's/storewars/stores3.htmi (Febrtm~.: 2, 2004). This percentage of part-time employees was based on the earlier Wal-Mart definition of pm-time as working 28 hours or less per week. In 2002, Wal-Mart changed the definition to less than 34 hours per week, which likely increased the company' s number of part-time workers. ~0 Wal-Mart. mm, "3 Basic Beliefs," http: lt,,x.ww. ~'a lmarcstores, conm~ m storea'x~ms tores/Mamabout, l sp)paget_~pe=a bout -&catcgon-OID=- 8 242 &ca tlD=- 8242&template=ContentLandmg.lsp ($anuars.' 26, 2004). 't Karen Olsson. "Up Against Wal-Mart." Mother Jones 54 (March/April 2003). :2 42 U.S.C. § 2000e et seq. "~ 29 U.S.C. § 206. z-~ Nell Buckle)- and Caroline DarneL "WaMVlart vs. the Workers: Labour Grievances Are Stacking Up Against the World's Biggest Company," Financial Times 11 (November 20, 2003'}. ~ Sheryl McCarthy, "Wal-Mart- Always Low Wages for Women!" Newsday {,May 1, 2003). 26 29 U.S.C. § 201 et seq. 27 Associated Press, "Federal Jury Finds Wal-Mart Guilty in Overtime Pay Case," Chicago Tribune, Business 3 (December 20, 2003). 28 Id. 2~ Steven Cn'eenhouse, "Suits Say Wal-Mart Forces Workers to Toil Off the Clock," New York Times Al (June 25, 2002). 30 Associated press, supra note 27. ~ Kristian Foden-Vencil, "Multiple Lawsuits Accuse Wal-Mart of Violating Workplace Regulations," NPR Morning Edition (Janum3t 14, 2004). ~ Gwendolyn Freed and John Reermm "Wal-Mart Suit Gets Class Status," Star Tribune ID (November 6, 2003). Wal-lVlart's Labor Record Report by Representative George Miller February 16, 2004 Page 23 of 25 33 Gr~'nhouse, supra note 29. 34 United Food & Commercial Workers (UFCW), "Wal-Mart's War on Workers' Wages and Ovemme Pay," http://x~v.ufcw.o~press room/thct sheets and back~rounder/x.~lmart/xvages.ctin (Jamaary 26. 2004). '~'~ Grec'nhouse. supra note-29. - - 36 Steven Greenhouse. "In-House Audit Says Wal-Mart Violated Labor Laws." .\'ew Fork Times 16A (Januas3.' 13. 2004). 37 I'd. 38 Id. 39 jrd. 4o Kaiser Family Foundation, The Uninsured: A Primer- Key Facts About Americans Without Health Insurance, at I (December 2003). 4~ AFL-CIO, Wal-Mart: An Example of ~Fhy FForkers Remain Uninsured and Underitana'ed, at I (October 2003). 42 Id. at 11. 43 Id. 44 John Holaham "Changes in Employer-Sponsored Health Insurance Coverage," Snapshots of America's Families III, Urban Institute (September 17, 2003). ~5 AFL-CIO, supra note 41, at 16. 46 Id. at 12. ~7 Panjak Ghemawat, Ken Mark, and Stephen Bradley, "Wal-Mart Stores in 2003," case study, Harvard Busm~a School (revised January 30, 2004). ~ Sylvia Chase, "The True Cost of Shopping at Wal-Mart," Now with BillMoyers, Transcript (December 19, 2003). 4~ Id. ~0 Laura Mecoy, "Health Benefits Fight Heats Up: South State Grocery Strike Spotlights a Contentious Trend in Contract Talks," Sacramento Bee Al (January 19, 2004). 5~ Nancy Cleeland, "City Report is Critical of Wal-Mart Supercenters," Los Angeles Times C 1 (December 6, 2003). ~ Rodmo Associates, Final Report on Research for Big Box Retail/$uperstore Ordinance, prepared for Industrial and Commercial Development Division, Community Development Depataxtent, at 18-20 (October 28, 2003). ~3 Mich¢lle Maitre, "Wal-Mart is Suing Alameda County: Retail Giant Challenges Law that Bars S~centers in Unincorporated Ar~as," Alameda Times-Star (Alameda, CA) at More Local News (January 27, 2004). ~4 Jessica Hall and Jim Troy, "Wal-Mart Go Home! Wal-Mart's Expansion Juggernaut Sannbles as Towns Turn Thumbs Down and Noses Up," Warfieid's Business Record I (July 22, 1994). ~ Bianco and Z¢llner, supra note 1. ~6 Matthew Swibel, "How to Outsmart Wal-Mart," Forbes. eom (November 24, 2003). ~7 Bianco and Zellner, supra note 1. ~s Williams, supmnote 14. · .-..;,~:;~, .-.. : , . .. :.,. st,,= 11, 2003). . .... :..~: .., _ ....... ,o Schn=ia ;ma moghaaay, 5, 2003) ...... -__ .................. SI (~~OUS~, supra note 59. 62 Sarah Paoletti, "Q: Should illegal aliens b~ able to su~ U.S. employers for labor ranketeermg?; Yes: Employees who have suffered discrimination or exploitation in tl~ work~hme are c-miffed to su~, regardlc'sS of th~ immigration status," Insight Magazine 46 (January 19, 2004). 6~ Stmren ~ouse, "megally in the U.S., and Nc-vc-r a Day Off at Wal-Mart," International Herald Tribune.2 ~s F. cono~¢ Policy Institute, "Jobs Shift from High~-Pa~.'~ to Lo~r-Paying Induslries."' Ectnto~e Snapshots 2004). , ,.. .... .. _.:_, ...... ~ Economic Policy Instim~, "Economic Growth Not Reamlimg Middle,- and Lower Wag~ F, amexs," Econ°mic Snapshots (Jantuny 28, 2004). --.' · WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 24 of 25 0s Josh Bivens, Robert Scott. and Christian Weller. "Mending Manufacumng' Reversing poor policy decisions is the onlv way to end current crisis," EPI Briefing Paper ~44 (September 2003). 0~ Economic Policy Institute. "Job Groxvlh Up, Job Quahty Down," Economic Snapstmts ~ December 17, 2003). 70 Economic Policy Institute. "Souring Trade Deficit Threatens to Destabilize U.S. Financial Markets," Economic . Snapshots (January. 7, 2004). ,T Nancv Cleeland, Evelvn Iritani. and Tyler Marshall, "The Wal-Mart Effect: Scouri~ the Globe to Give . Shoppers an $8.63 Polo Shirt,." Los Angeles Times Al (November 24, 2003). ,2 Peter S. Goodman and Philip P. Pan, "Chinese Workers Pay tbr Wal-Mart's Low Prices." [Yashington Post A1 (February 8, 2004). .-.3 Cleeland, Iritani, and Marshall, supra note 71. 74 Id. "~ Abigail Goodman and Nanev Cleeland. "Tbe Wal-Mart Effect: An Empire Built on Bargains Remakes the Working World," LM. Times I (November 23, 2003~: Charles Fishman. "The Wal-Mart You Don't Know," Fast Company 68 (December 2003). ;6 Cleetand, Iritani, and Marshall, supra note 7 I. '* Goodman and Pan, supra note 72. ',8 Id. -o Id. so Id. Id. 82 Id. Earl Goldstein, ~Wal-Mart m China," The Nation (November 20, 20033. Id. 29 U.S.C. § 706 et seq. "Disabled Man Sues Wal-Mart," Business Journal (Kansas City) (January 20, 2004). 87 Id. ss 29 U.S.C. {~ 651 et seq. s9 29 C.F.R. 1910.35 et seq. 90 Steven Greenhotme, "Workers Assail Lock-Ins by Wal-Mart," New York Times 1 (January. 18, 2004). Id. Id. 93 Id. Id. Walmartwateh.org, "Wal-Mart's War on Workers: Frontlme Report from Texas and California," http://x~a~"w.walmartwatch.com/mfo/lntemal.cfm?subsecnon ld=130&internal id=351 (Ma.,,' 2. 2002}. .0~ Greg Schneider. "Wal-Mart's Damage ControL" II'ashington Post E 1 (Januar~., 24. 2004). '~' Gregoo' Freeman. Los Angeles Economic Developmem Corporation. II'al, llart Sttpercenters: Jl~tat's irt Store for Southern Califot,ua? 1-2 (Jantmtx' 2004). Cs Id. at 21. ~ See, e.g., http://x~xxv.walmart.conv'cataloe/catalog,g~p?cat=4134&lr=-B&path~)°..$3A41 ~,o.,-'I .~ ........ 114 (Jantmtx., 27, 2004~). 100 --, "Stone's Advice on Wal-Mart: You've Got to Change," Aurora News Register (Aurora, Nebraska), http ://~vww. auroranewsremster, comi 128News 1. html (Jammr~., 27, 2004). . ~01 Freeman,. supra note 97 at 22. ~02 Source: Wall Street Journal "Too Valuable to Be Kept Employees Fred that Success Leads to Higher Pay- and Vulnerability when Companies Look to Cut Costs," Omaha ~orld-Herald (Nebraska) 1D (June 23, 2003). 10a Simone Toth, "Retailers Stock Up for Ano~ Strong Year of Salcs,",.gan Diego Business Journal 14 (January 4, 1999); Bill Saporito, "A Week Aboard the Wal-Mart Express," Fortune 77 (August 24, 1992) ..... ~0~ Freeman, supra note 97 at 23-24. 10~ Michael Hiltzik, "Wal-Mm't's Costs Can't Always Be ~" Los Angeles Times ~,Fcbnmry 2, 2004). 10~ Freeman, supra note 97 at 23-24. 107 Janet Adamy, "Wal-Mart's Benefits Come Under Fire," Contra Costa Times (Contra Costa, CA) (October 19, 2003). WaI-Mart's Labor Record Report by Representative George Miller February 16, 2004 Page 25 of 25 ~o~ Freemam supra note 97 at 24. ~0~ Carl Ingrain. "Court OKs Health-Care Refereadum.'' Los An~eeles Times B6 (Janua~, 23. 2004'). ~ ~o Openseerets.org, http://x~nvxv.opensecrets, ore/softmonev/softcomp i .asp ?txtName=Wal-mart (JanuarF.' 26, 2004). l~ Schneider. s,pra note 95:http://w~,x~'.opensecrets.org/overviexv/topcontnbs.asp'!cycle=2004 (FebruarF.' 2, 2004). o. .... E AGENDA ~ ~~~>~AI CITY COUNCIL- REGULAR MEETING DECEMBER 7, 2005 7:00 P.M. .... KENAI CITY COUNCIL CHAMBERS KENAI. ALASKA h ttp://vvvcw, ci. k enai .ak. us ITEM B: SCHEDULED PUBLIC COMMENTS (10 minutes) 1. Tim Dillon, Arctic Winter Games -- Funding Issues. ITEM E: PUBLIC HEARINGS 1. Ordinance No. 2133-2005 --Increasing Estimated Revenues and Appropriations by $36,370 in the Airport Land Fund for Repairs at the Flight Service Station. 2. Ordinance No. 2134-2005 -- Increasing Estimated Revenues and Appropriations by $1,000 in the General Fund for a State Library Grant. 3. Resolution No. 2005-51 -- Setting the Public Hearing Date on the Proposed McCollum and Aliak Drives Paving District. 4. Resolution No. 2005-52 -- Adopting the City of Kenai Capital Improvements Plan Priority List Fiscal Year 2006 - 2011 as the Official Six-Year Capital Improvements Plan for the City of Kenai. 5. Resolution No. 2005-53 -- Awarding Non-Exclusive On-Airport Car Rental Concessions to Corporate Sales & Leasing, Inc., d/b/a Budget Rent A Car of Kenai; Alaska Rent A Car Inc., d/b/a Avis; The Hertz Corporation; and, Alaska Dial A Car Inc., d/b/a Payless for the Period January 1, 2006 Through December 31, 2010. 6. Resolution No. 2005-54 -- Approving the Sale of Lots One (1), Two (2) and Three (3), Block One (1), Evergreen Subdivision, Kim Addition. 7. *Liquor License Renewal -- Kenai Golf Course Cafe, Inc., d/b/a Kenai Golf Course Cafe. ITEM G: OLD BUSINESS 1. Approval -- Lease Application/Tract B-l, Baron Park No. 10; Tract C, Baron Park No. 5; and, Lot 1, Baron Park No. 5 -- Lounsbury and Associates, Inc. on Behalf of Wal-Mart Stores, Inc. (Clerk's Note: A motion to approve the lease application was postponed from the November 16, 2005 council meeting to December 7, 2005.) ITEM H: NEW BUSINESS 1. Bills to be Ratified 2. Approval of Purchase Orders Exceeding $15,000 3. *Ordinance No. 2135-2005 -- Increasing Estimated Revenues and Appropriations by $6,100 in the General Fund for a Donation to the Peninsula Art Guild for Building Repairs. 4. *Ordinance No. 2136-2005 -- Authorizing the Sale of Four (4) Parcels of Land to The Conservation Fund for Fair Market Value and Placing Certain Conditions on the Sale. 5. Discussion -- Schedule Work Session/City Manager Search 6. Discussion -- October 2006 Council Meeting Schedule EXECUTIVE SESSION -- Personnel Issues. ITEM N: ADJOURNMENT. The public is invited to attend and participate. Additional information is available through the City Clerk's office at 210 Fidalgo Avenue, or visit our website at http://www.ci.kenai.ak.us. Carol L. Freas, City Clerk D663/211 MAKE PACKETS COUNCIL PACKET DISTRIBUTION COUNCIL ~EET:I:N~ bATE: .~o¥or/Council' ~/ Attorney ~ ~'/ T~yl'or/Sprin~lcr/Kebschull Clerk / City Manager , / Public Works Police bepartment / Finance . / Engineer ~" Senior Center . ~. Airport ~ Kim Library ~ P~ks & ~ecre~tion /~ Fire beportm~nt ~ Schmidt ' ~" ~ellish V~.TA - Student Rep. ~ ~ ~ ~renckle A6ENDA DISTRIBUTION Sewer Treatment Plant Streets Shop Dock Buildin~ Maintenance Animal Control Water/Sewer ~ Counter DELZVER Council and Student Representative Packets to Police Deportment Dispatch desk. The Clarion, KSP, M, Mellish & Schmidt's Office will pick their pocket up in my office. The portion of the ~gend~ published by the Clarion should be ~mailcd as soon as possible after Noon on packet day. The camera-ready agenda c'/myfile$/document$/minute$/~genda form for paper') is emailed to Denise ~t Peninsula C/ar/on (at email folder Work Session/Special Meetings, or Composition in Contacts or Ibell~acsalaska.net). Home Page documents (agenda, resolutions, ordinances for public he, ring, and ordinances for introduction) ~r¢ u~u~lly cm~iled to me and I hold them in my HTML file. Place them onto the city's website from there os soon os possible before leaving the office for the weekend.