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HomeMy WebLinkAbout1998-01-19 Council Minutes - Work Session• SlNAI CITY COUIfC1L WORK BHSBIOiI JANUARY 199 1998 6:30 P.M. KBNAI CITY COUNCIL CHAMBERS Council Present: Bookey, Bannock, Smalley, Williams, Swarner, Moore and Measles. Staff Present: Freas, Graves, DeForest, Kornelis, Porter, La Shot, Springer, Elson, Ross and Semmens. Others Present: David Lucas (Peninsula Clarion), Bill Popp and Ginger Steffy (Challenger). BUDGET PROJECTION 1"ATE, Finance Director Semmens reviewed the information included in the packet as well as raid -year financial update regarding the City's budget projections. He noted, the assessed values are less than what was projected. With sales tax, he had not made any adjustments as yet because only one quarter for this fiscal year had been reported. He noted, the first quarter amount was up slightly and the projected for the year was not much over last year's total. iState revenues (primarily grant revenues, electric & telephone taxes, gaming revenue) were reviewed and Semmens noted the amounts were slightly less than what had been budgeted. Fish tax, he believed, would come in higher, as he was told to expect a 30% (approximate) increase over the previous year. He added, he was projecting slightly less total revenues than originally budgeted. Semmens then reviewed expenditures over the last several years. He stated, he was projecting approximately 93% of the 97/98 budget would be spent which will result in a projected deficit of $132,125. There will also be encumbrances of $225,000 which will roll over and increase next year's budget like in past years' budgets. - Semmene added, the budgeted year started with $11,075,974 (ahead of what was projected in last year's budget document). If the Equipment Replacement Fund is funded as it is proposed and in subtracting out encumbrances and other reserved/designated amounts, an approximate unreserved undesignated balance of $6,980,539 will result. He noted, the projections made in the budget were basically holding steady and the budget would not all be spent. EQUIPMENT RESERVE F A copy of the Equipment Reserve Fund ordinances were included in the packet of information (they were introduced at the 1 / 7 / 98 council meeting). Semmens . explained, to fund the Equipment Fund, there will be a decline in interest earnings 0 . KENAI CITY COUATCIL WORK SESSION JANUARY 19, 1998 PAGE 2 (about $70490,000/year), but the funds will be placed in the -Equipment Replacement Fund which will provide financing for the equipment. The General Fund will not have to make annual contributions of a significant size to the Equipment Replacement Fund. Semmens added, money won't be saved, but the Equipment Replacement Fund will level out the General Fund expenditures. Sennmens reviewed the cash flow for the Fund. He noted, in the first year, $ 1.5 million will be shown corning into the Fund and expenditures will be made of $335,000 for purchase replacements of the Seagraves engine and Elgin sweeper. The General Fund will immediately begin making payments to the Equipment Fund which will be calculated by taking the cost of the equipment and dividing it by the equipment life. Semmens added, he had also included a salvage value at 5%. Semmens reviewed the purchase list with council. He noted, basically the money in this Fund would be invested along with the rest of the city's portfolio and then, interest earnings will be allocated back to the Fund. Semmens noted the equipment purchase list would be reviewed and adjusted each year. It was also noted, equipment to be purchased from the Fund would cost S $50,000 or more. Pick-up trucks, police cars, etc. will come out of the General Fund as there won't be a spiking effect because such equipment is purchased annually. • Ross explained the Elgin sweeper will be brought over from the Airport and placed in the General Fund. He added, the sweeper was not good for the airport and by bringing it to the General Fund, it can be used on the streets and will in turn, extend the life of the other sweeper. The Airport will purchase a blower in the future. Semmens noted, the purchase and cash flow schedules will be incorporated into the budget document each year. He also explained, the ordinance -states the Fund won't be required to have an annual budget, but cash outlay for equipment purchases shall be approved by a yearly resolution. Ross noted, an advantage of the Fund will allow equipment to be purchased outside of the budget year if needed. Williams added, it will also allow for piggybacking purchases with the State. Bookey stated he was pleased to have the Fund being established as it was something council had wanted to do for some time. BVILDIN�4 MAINTENANCE BCIiEDULFC: Ross explained, the schedule will appear in the back of the budget and will change from year to year. They are projecting $230,000 will be needed for scheduled building maintenance for 98/99, but felt the costs would not go that high. Ross added, by keeping this type of document in the budget, council will be able to see what . KENAI CITY COUNCIL WORK SESSION JANUARY 19, 1998 PAGE 3 infrastructure needs are being held and what is being recommended for funding. Swarner, noting in the schedule the repainting of exteriors at every three years, asked if there could be some improvement made to lessen the amount of times the painting is needing to be done. Williams noted he was pleased with this long-range plan for maintenance, and added, administration should proceed with implementing this maintenance plan. There were no objections from council. CHALLENGIEIt SITE: Ross explained, until the $2.5 million grant language was received Administration was unable to put together an RFP because it was unknown if a management agreement would be required, whether the funds would be required to be passed through the city, or a lease/management approach would be required. At this time, the city and Challenger were still working under the Memorandum of Agreement. He added, administration was working toward a target of putting together either a lease arrangement or a management agreement. Ross continued, it was necessary for council to determine a site for Challenger for inclusion in the RFP as well. At this time, several locations had been discussed: along Marathon Road, Dust Bowl, a portion of the Rogers Road gree-i strip, or KCHS property. Ross stated, Mayor Navarre has been working on transfer of Mental Health land at KCHS; the Rogers Road property would have to be purchased from Airport Lands as well as the Dust Bowl property; along Marathon Road is city land and would not have to be purchased. Council agreed two sites to be included in the RFP would be a portion of the Rogers Road green strip and the Mental Health Land at KCHS (by the proposed ice facility) . Council's general agreement was first choice was the KCHS property as parking area would already be available and adequate room would be available for parking buses, as well as the connection between the school would be an advantage. Second choice was a portion of the Rogers Road green strip. Discussion followed in regard to "overnighting" of students at the Challenger facility. Measles noted, he felt the overnighting would take away business from the local hotel/motel operators. Ginger Steffy explained, most overnighting would be done by local groups and would not be a daily occurrence. Bill Popp added, he would want council to consider enough acreage for future expansion. • • KENAI CITY COUNCIL WORK SESSION JANUARY 19, 1998 PAGE 4 Ross explained, Mayor Navarre felt fairly comfortable in obtaining the Mental Health. Land by KCHS. Ross added, he was more and more convinced the BOR land solution would have to come congressionally. He believes the simplest way to make the exchange would be to substitute the legal descriptions of the properties (golf course and KCHS properties) in the agreement with BOR. He will be calling Seattle next week as to the progress of the proposal. He added, he expected to be coming to council (in March or April) requesting to send a letter to the congressional delegation for a resolution of the matter. PUSLI HEALHEALTH FACILITY: Ross explained, Mayor Navarre is investigating a proposal to build a new Public Health facility in Kenai as an extension of the hospital. Ross asked council for site suggestions for such a facility, noting the feasibility study suggested property in Etolin Subdivision (Barnacle Way). Ross added, this property was Airport Land and is would have to be purchased and the last appraised price was $135,000. It was decided the Etolin Subdivision property would be better than across from the Police Department (that lot would be much more valuable if developed privately). JyV-ENILE DETENTION FACILITY• Ross reported, through the city's representative on the committee, placement of the facility on Wildwood property will be suggested as meal access, laundry, transportation, etc. would be accessible from there. If that is not acceptable to the. committee, Ross will come back to council to consider the end of Willow Street as a potential site or property by the Care Center if there is enough property and if it is deemed appropriate for the facility. AIRPORT MANAGER POSITIONIE—UBLIC WORKS RESTRUCTIMULO Ross reported he had the employee classification committee review the job description and salary range of the Airport Manager position. A recommendation for reclassification will be brought to council in the budget document. Ross noted, in last year's budget discussions he reported he had begun a restructuring of the Public Works Department and he will be requesting council to 40 formalize that restructuring proposal in the near future. • KENAI CITY COUNCIL WORK SESSION JANUARY 19, 1998 PAGE 5 • Bannock asked if the pay scale and job description for the Airport Manager would be modified. Ross answered, the pay scale would be increased. The job description will be modified to include overseeing of the general operations of the airport and the marketing of the airport. The job description of the Operations Specialist will be like an assistant manager whose responsibilities will be taking care of the day-to-day operations of the airport. Ross added, the advertisement for the Airport Manager stated these responsibilities, but the job description had not been updated. Now the job description will be what was included in the advertisement and the salary will be increased. BAL/►RY STEP INCREAqE BCHEDtTLE: Williams stated, he became aware again at the holiday party, there are a number of employees who have longevity with the city, but no longer receive step increases. He suggested council have administration investigate the extension of the incremental increases another five years. Ross explained, when the ordinance was first written (mid 1970's), the step increases were set out to 10% years. He suggested, what are now yearly increases (steps B, C & D) be set to every two years and the AA, BB, CC set to every three years. Administration is reviewing the matter. Williams also suggested the COLA increases be investigated, i.e. whether the City of Kenai is keeping up with the norm. CHALLENGaER REPORT: Bill Popp, Challenger Administrator, reported the Board of Directors met in Homer on January 10 and 11 to work out a building design. They have completed a document, which was approved by the Board of Director. A copy of which was forwarded to Ross and City Engineer, Jack La Shot to incorporate into the RFP. Popp also reported Kathy Scott and Bob Sizemore were placed on the Board of Directors. Mike Tarr is now the Vice President and President -Elect for next year. Ginger Steffy is President and Duane Bannock is now the treasurer. Popp continued, the Board decided to engage teachers from local schools to help in development of the educational content for the project. Also, an announcement of a substantial grant will be made during the Chamber meeting on Wednesday. He added, there were several other corporate -donor grants under discussion as well. Swarner referred back to the earlier discussion in regard to overnight stays at the facility and noted, this was the first time she had heard overnight stays would take • KENAI CITY COUNCIL WORK SES3ION JANUARY 19, 1998 PAGE 6 place. She added, to sell the community on the project, statements were made as to bringing business into the city. She asked if this was always in the plan. Williams explained, in this case, the students would be staying up late, planning projects. and watching movies in regard to the Challenger program. It was noted, many student extra -curricular outings include sleeping on gym floors and that would be much like this would be. Popp noted, the overnighters would be only one component. There would be other business seminar programs, etc. that would be overnighting in local hotel/motel establishments. Also being developed is a science center tour of the Peninsula, which will include the Volcano Observatory, Pratt Museum, Challenger, Sealife Center, etc. Swarner asked the percentage of people who will be spending the night at the facility compared to other users of the facility. Popp answered, maybe one night a week and maybe more at the end of the school year. He added, business group users would be year -around. Those staying at the facility would be school -aged children. Based on other Challenger Centers, overnights are twice a month. Popp added, the Challenger Board of Directors recognizes their responsibility to the community. Bookey asked why the Board met in Homer instead of Kenai. Popp answered, they wanted to meet out of town. Williams added, they were making in -roads to Homer people for garnering contributions for the facility. Bookey stated, the Board should have met in Kenai to benefit the community. He added, he felt Challenger was out of line to go to Homer for their meeting and noted, one more time and they would lose his support of the project. Bannock added, when they chose to go to Homer, they were choosing a "spot." They may travel to Fairbanks to do the same thing. LFQiSLAT1VE PRiORITIEB: Ross noted, council had set the legislative priorities as Wellhouse No. 4(# 1), Roads (#2) and the Maintenance Shop (#3). He asked if council wanted to amend the list because he didn't want to be recognizing those projects as the main projects if there were others council preferred to emphasize. Williams stated, he doubted there would be any money awarded for the STP or roads . due to the amount of the request. However, there may be $250,000 in funds available for the maintenance shop. He added, he plans to discuss the projects with Commissioner Perkins who may be willing to emphasize the need for the shop funds. Williams continued, he didn't expect any one of the legislators to be amenable to large public grants. If money comes at all, it will have to come from another department. • • KENAI CITY COUNCIL WORK SESSION JANUARY 19, 1998 PAGE 7 • • Ross added, Senator Ward had mentioned support of the maintenance shop.. Also, the projects outlined in the council's resolution will be the ones he represents to legislators, unless council makes a change. Williams stated, he believed the list should stay the same. AML ALERT Ross noted a fax had been received from AML stating their belief the Department of Community & Regional Affairs had been targeted for elimination and their responsibilities to be absorbed by other departments. It was noted by Semmens, the city is involved with DCRA in regard to revenue sharing, etc. ADJDUItN 1M: The work session ended at approximately 8:20 p.m. Notes transcribed and submitted by: Carol L. Freas, City Clerk ayr'dv¢a BY coin DAIS