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HomeMy WebLinkAbout1997-02-05 Council Minutes• AaBMDA RBNAI CITY COUNCIL - RZOULAR MEETING February S, 1997 7100 P.M. ZZMAI CITY COUNCIL CHAMBERS https//vvv.Benai.net/city 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. Be BCuLD� PV�, CoMUM (10 Minutes) 1. Becky Day - Resource Development Council Update • 2. Sara Pearson Charles Cranston - Youth Court Presentation 3. Alaska Regional Fire Fighting Facility - a. Fire Chief •Burnett/Tim Orthmeyer (Symtron) b. Mayor Williams/Finance Director Larry Semmens c. Ron Simpson, FAA d. Dennis Steffy, MAPTS e. EDD Representative- f. Bob Reynolds, British.Petroleum g. Jack La Shot, City Engineer h. Billie Harris, Nikiski Fire Department i. Will Jahrig, Contractor J. Lou Schilling, Contractor k. Bill Sharrow, Representative Young's office 1. Peggy Arness, Senator Stevens' Office C. PUBLIC HBARINOB 1. Ordinance No. 1733-97 - Appropriating $15,000 of Grants Received for Development of the Alaska Challenger Learning Center and Authorizing the Transmittal of this Grant Money to the Alaska Challenger. Center for Space, Science and Technology, a Not -for -profit Corporation. 2. Resolution No. 97-4 - Awarding a Contract to Kluge & Associates to Perform an Evaluation of Certain Municipal Buildings for Compliance with the Americans With Disabilities Act (ADA) for the Total. Amount of $4,060.00. 3. Resolution No. 97-5 - Transferring $40000 in the General Fund for Street Department Overtime. 4. Ratification of Protests Continuance of 1996/97 Liquor Licenses - a. The Katmai Hotel, Restaurant & Lounge/Eaglechief, Inc. b. The Upper Deck Lounge c. New Peking Restaurant d. Casino, Inc. e. Alaskalanes, Inc. f. American Legion Post 020 5. *1997/98 Liquor License ReneNal - Pizza Paradisos/ Beverage Dispensary. D. COMI88I0N/COMMITTEE REPORT@ • E. F. G. no • 1. Council on Aging 2. Airport Commission 3. Harbor Commission 4. Library Commission 5. Parks & Recreation Commission 6. Planning & Zoning Commission 7. Miscellaneous Commissions and Committees a. Beautification Committee b. Historic District Board c. Challenger Board d. Kenai Visitors & Convention Bureau Board e. Alaska Municipal League Report - MINUTES 1. *Regular Meeting of January 15, 1997. 2. *Kenai City Council Work Session of January 3. *Kenai City Council Work Session of January NEW BU8INE88 1. Bills to be Paid, Bills to be Ratified 2. Purchase Orders Exceeding $2,500 -2- 131 1997. 270 1997. • • 0 3. *Ordinance No. 1734-97 - Increasing Estimated Revenues and Appropriations by $1,445 in the General Fund for the Women's Basketball League. 4. Approval - Assignment of lease for Security Purposes,, Lot 3, Block 4, GAA - Adolf to Bob's Pawn, Inc. and W.W. Wilson, III. 5. Discussion - Assisted Living Center, E$ECUTIVB 8E88ION - None Scheduled. 1. Mayor 2. City Manager 3. Attorney 4. City Clerk 5. Finance Director 6. Public Works Director 7. Airport Manager J. AI8CYA8ION 1. Citizens (five minutes) 2. Council KENAI CITY COUNCIL - REGULAR MEETING February S, 1997 7:00 P.M. KENAI CITY COUNCIL CMMERB http: //we«r.ltenai.met/city ITEM CALL TO ORDER Mayor Williams called the meeting to order at approximately 7:01 p.m. in the Council chambers in the Kenai City Hall Building. A-1. PLED3E OF ALEdIME Mayor Williams led those assembled in the Pledge of Allegiance. A-2. Roll was taken by the City Clerk. Present were: Swarner, Moore, Measles, Smalley and Williams. Absent was Bannock. A-S. Bookey, Mayor Williams reported he had no changes to the agenda. • MOTION: Councilman Smalley MOVED to approve the agenda as presented and Councilman Bookey SECONDED the motion. There were no objections. 80 ORDERED. A-6. CONSENT_ Aa�ND_1� Mayor Williams reported he had no changes to the consent agenda. MOTION: Councilman Smalley MOVED for approval of the consent agenda as presented and Councilman Bookey SECONDED the motion. There were no objections. 80 ORDERED. ITEM a 8CHEDULED PUBLIC _CONNE R 8-JL. Hooky Gay - Resource Development Council Update No. Gay presented an overview of what the Resource Development Councils involvement is within the state. Gay stated RDC is a broad -based membership organization interested in resource development in Alaska. The organization has been operating for 21 years. Their goals are to promote and support sound resource • development in Alaska; continue their leadership position on land, resource and private property rights issues affecting • KBNAI CITY FESRUARY 51 PAGE 2 COUNCIL MEETING MINUTES 1997 multiple sectors of the Alaska economy; provide factual information on land, environmental e is and urce sto RDC entiti members, the general public, the m governmentes; have a broad -based membership e resourceare interested in education of Alaska's development, and, advance th youth. At this time,? RDC has been working on issues such as wetlands; ANWR; Lease Sale 149; salvage timber sales; water andter airquaquality issues (low sulfur air, mixing zones, discharge ity issues). Gay urged council to reconsider their membershipto RDC CKas they would like to have Kenai back as amember. i and Valdez were the first communities who were members to RDC. Gay referred to House Bill 51, which is similar to the water rhe quality bill passed last year and vetoed by the Governor. bill would affect anything in regard �sfol owpermits that.(mixing bill zones). Swarner requested administration to • Gay mentioned municipalities/communities now members as Sewardstol ,Mat -Su Borough, Anchorage, Valdez, PalpBethel, listing of the Bay Borough, etc. She will forward complete membership for the city l s review. s-a . Sara poarson/Charles Craastoa - Youth Court Presentation Sara Pearson and Law Clerk Ken Loredersyouthoffenders. poket offgiving an overview-of what Youth Court offers for first-time They explained Youth Court provides the opportunity for young people who are accused of breaking the law to be judged by their peers. The program is available for students in grades 7-12 or ages 12 through 1S. Court roles (judges, attorneys, bailiffs, jurors, etc.) are filled by young people. It is a real court of law and real sentences are imposed. Parents of first-time offenders choose whether to have fairer ren Courtsthem to tried ailowt heir peers or through regular court. Using Youth resolve their legal problems without a criminal record. Pearson explained their are approximately too youth on the Peninsula who are involved with Youth Court. The youth involved with Youth Court want to make an impact and feel it is a way for them to help their peers. The youth go through an intensive study and have to sit for a bar exam. Lord added, benefits in having a Youth Court include the eletedeSnothing isslisteaeo ourt che system. if the sentence is c p , . KENAI CITY FEBRUARY 5, PAGE 3 COUNCIL MEETING MINUTES 1997 youthts criminal record. A Youth Court coordinator follows up with whoever the youth has been assigned to perform community service time. Those involved in Youth Court also receive school credit. Pearson announced there would be a mock trial held on February 20 at 5:00 p.m. at the court house at which people can attend and see how the system works. Williams asked what the source of funding is for the program. Pearson answered it was volunteer at this time, however they have received cash donations from private businesses and they have talked with the Borough Assembly for funding as well as they are investigating the possibility of applying for a state grant. She estimated the amount needed to be $50,000 excluding that which has already been donated. B-3. Alaska Regional Fire Fighting Facility - a. Fire Chief Burnett/Tim Orthmeyer (Morrison, • Maierle, Inc.) b. Mayor Williams/Finance Director Larry Semmens c. Ron Simpson, FAA d. Dennis Steffy, MAPTS e. EDD Representative f. Bob Reynolds, British Petroleum g. Jack La Shot, City Engineer h. Billie Harris, Nikiski Fire Department i. Will Jahrig, Contractor J. Lou Schilling, Contractor k. Bill Sharrow, Representative Young's Office 1. Peggy Arness, Senator Stevens• Office Fire Chief Dave Burnett began the lengthy presentation by providing a packet of letters of support from FAA, DOT Commissioner Perkins, EDD and Borough Mayor Navarre. Also, he distributed copies of floor plans for four different design options for the design of the building. He explained what FAA found to be eligible for federal funding and gave information in regard to the four options. The four options were: Option I - A two-story building with items not funded by FAA in gray. Basic design, most of second floor unfinished. Option 11 - Like Option I, city's participation $6200000; total project cost $9,906,000. Option III - Same building design as Option ii, but with framed, unfinished area for lease (possibly for Borough Emergency Operation Center). Estimated city participation at $1,020,000 and total project cost of $10,342,000. KENAI CITY • FEBRUARY 51 PAGE 4 COUNCIL MEETING MINUTES 1997 Option IV - Same building design with second floor completed for use as lease space for Emergency Operation Center (management training, earthquake drills, and emergency plan operations), Estimated city participation at $1,320,000 and total project cost of $10, 659, 000. Burnett explained, the center would be used for more than ARFF training. it would be used primarily for unified training and long-range planning, including moving the Alaska Fire Academy into the building. They expect to market the center to the Pacific Rim and in the future call the facility PRISM (Pacific Rim Institute of Safety and Management). Ground breaking is planned for June. Areas of training would include cold water recovery, Emergency Management Services, confined rescue, etc. Also, those in the fishing industry, persons requiring CDL's, etc. could also receive their required training at the facility, turning it into a Alaska Fire Academy campus. . Tim Orthmeyer of the engineering firm of Morrison, Maierle reported they had finished the preliminary design phase and reviewed their letter (included in the packet) which reported what had been completed thus far with the projects orthmeyer explained the original design included two separate buildings. They since consolidated them into one building to reduce the cost of the site. He added, he and a representative from Symtron, as well as city staff net with FAA yesterday -and discussed Airport Trust Funds and found there is a possibility of a congressional delay in receiving the funds. sill kluge, architect for the project, reported the building design was well -functioning and efficient. Through their visits to the Helena, MT and Modesto, CA sites, they were able to note deficiencies in those buildings, as well as their effective details to make a better design. Councilman Smalley asked if there were concerns with the flat - roof design. Kluge explained what material would be used and additional information in regard to the structure and covering on the roof. He also discussed snow capacity the roof would be designed to hold. Councilwoman Swarner asked if the building size was decreased, • would FAA still not fund 20% of the building. Orthmeyer answered, Option I was a floor plan FAA would participate in . KENAI CITY FEBRUARY 5, PAGE 5 COUNCIL MEETING MINUTES 1997 completely, however, no cost estimate had eegprepared for wthat design. He added, if the building was fullyu possibilities of leasing part of the building for EOC use. There was also a question about the use oitrw uldblock masonry which building. Engineer Bill Nelson stated is reinforced for seismic loads. Chief Burnett completed the presentation bsthe roe of yurglcouncil to s consider Option IV and added, education i future. Mayor Williams presented an overview of Airport Fund income investments and fund balances. He reviewed the building options and explained Option I had been dismissed as the design was developed prior to their visits to Helena ta Fh Modestofire and before they knew as much as now known in regard ing business. Williams explained Option IV was what they were explained the hoping to build at a total cost of $10,6590000. He federal government would pay $81774,000 which would er would e Kenai's $700,000 entitlement monies. e • be $1,932,000 for the city to pay. Williams explained the General Fund and the Airport d use the operated separately. He addedFAAe as p�RFFaid andthe City there was money in the Land Airport Fund monies for System Special Revenue Fund, not earmarked d for any cityr ject.He share of proposed using $2 million of that money the ARFF cost. That $2 million, he said, would be recovered within approximately two years through lease payments, etc. There would also be a return to the city through clients srantat eof the training facility using hotel/motel rooms, r well as sales tax into the city. Airport Manager Randy Ernst noted, revenue lus treceived from nues trainees would go back oieratin costsrofFund, facility. take care of operating Dennis Steffy of MAPTS announced they had been recently named the Sakhalin government's official training authority for Sakhalin Island projects. Letters of Intenthad been signed Kenai Communityon, Shell, Mobil , Texaco and Exxon to institute a College of Sakhalin Island. They hope to utilize the skills and talents of people in the community and in every technological area, i.e. engineering, well and gas devin elopments f isheriestetc. The project should be fully every airport wanting scheduled open the Russian/ , KENAI CITY . FEBRUARY 5, PAGE 6 is • COUNCIL MEETING MINUTES 1997 airliner service to develop resourcesand will ille providing airline firefighter and rescue trainings e the closest facility for the training. Ernst added, the base income for the project was somewhat built in because all of the state'$ fireig�hersare have already dreceivedia a year and that fixes a base becausey commitment from the State of Alaska to bring their people to train in Kenai. That requirement could change to four times a year. It was asked how much of the work will be or has been awarded to local contractors. Engineer Bill Nelson answered, because of the size of the project, there may be bidders from Anchorage and possibly Seattle. He believed most of the contractors would subcontract work to local subcontractors. He added, the majority of the work would be done by local subcontractors. Kluge added, there are three contractors on the Peninsula who can bond for this size of a job and the development of the facility should be good for local economy. Williams stated they were asking for council's strong consideration to build Option IV. He added, an ordinance for the engineering work (approximately $3000000) would be introduced at the February 15 meeting and the public hearing would be held on March 5. Mr. Reynolds of British Petrol had to do with Alaska hire and involved in the ARFF, however, ARFF, have the infrastructure facilities. He added, he was support. eum stated his job responsibilities purchases. He was not directly Kenai would, after the building of for building other educational looking forward to giving BP's Will Jahrig stated he thought, at first, General Fund monies for the development funds would come from the Airport Fund. he thought General Fund monies would be the facility would be positive business he felt it would be even more positive. BREAK TAKEN$ 8$44 P.M. BACK TO ORDERS 8$55 P.M. the city would be using of ARFF and now knew He believed, even when used the development of for the community. Now KENAI CITY COUNCIL MEETING MINUTES FEBRUARY 5, 1997 PAGE 7 ITEM g: PVBLIC HEARINGS C-1. Ordinance No. 1733-97 - Appropriating $15,000 of Grants Received for Development of the Alaska Challenger Learning Center and Authorizing the Transmittal of this Grant Money to the Alaska Challenger Center for Space, Science and Technology, a Not -for -profit Corporation. MOTION: Councilman Measles MOVED for the adoption of Ordinance No. 1733- 97 and Councilman Bookey SECONDED the motion. Ginger Steffy - Identified herself as the President of the Challenger Board of Directors and explained the ordinance would allow for pass -through monies. Their intentions were to acquire matching monies to keep the operation moving forward. VOTE: . Moore: Yes Measles: Yes Bannock: Absent Smalley: Yes Williams: Yes Bookey: Yes Swarner: Yes MOTION PASSED UNANIMOUSLY. C-Z. Resolution No. 97-4 - Awarding a Contract to Kluge & Associates to Perform an Evaluation of Certain Municipal Buildings for Compliance with the Americans With Disabilities Act (ADA) for the Total Amount of $4,060.00. MOTION: Councilman Smalley MOVED for adoption of Resolution No. 97-4 and Councilwoman Swarner SECONDED the motion. There were no public comments. Councilman Moore asked which buildings would be evaluated. City Engineer La Shot answered nine buildings would be evaluated; City Hall, Airport Terminal, Visitor Center, Library, Congregate Housing; Public Safety and Recreation Center -- buildings most used by the public. Smalley asked if the evaluation would continue to keep the City in compliance with the mandate. La Shot answered, yes and that it would give a better picture of budget costs. • • KENAI CITY FEBRUARY 5, PAGE 8 VOTES COUNCIL MEETING MINUTES 1997 Councilman Smalley requested UNANIMOUS CONSENT. There were no objections. 80 ORDERED. C-3. Resolution No. 97-5 - Transferring $4,000 in the General Fund for Street Department Overtime. MOTION: Councilman Bookey MOVED for adoption of Resolution No. 97-5 and Councilman Smalley SECONDED the motion. There were no public comments. Councilwoman Swarner stated she thought council had directed that funds should not come from contingency and should come from other areas of the department budget. Ross explained monies were budgeted for overages on budget items. Swarner asked if there were no other areas of the Public Works budget from where the funds could be transferred and Kornelis answered no. VOTE: There were no objections. 80 ORDERED. C-4. Ratification of protests: Liquor Licenses - Continuance of 1996/97 a. The Katmai Hotel, Restaurant & Inc. b. The Upper Deck Lounge c. New Peking Restaurant d. Casino, Inc. e. Alaskalanes, Inc. f. American Legion Post #20 Lounge/Eaglechief, Clerk Freas explained the ABC regulations allow for a local governing body to protest the continued operation of a license during the second year of the biennial license period by sending a protest to the board by January 31 of the second year of the license period. Those businesses listed were owing obligations to either the Borough, the City, or both. She requested a motion to ratify the protests. • 0 KENAI CITY FEBRUARY 5, PAGE 9 NOTIONS COUNCIL MEETING MINUTES 1997 Councilman Smalley MOVED to ratify the protests for continuance of 1996-97 liquor licenses as presented and Councilwoman Swarner SECONDED the motion. There were no objections. 80 ORDERED. C-S. 1997/99 Liquor Licenso Renowal - Pizza Paradisos/ Beverage Dispensary. Approved by consent agenda. D-ie council on Aging Councilwoman Swarner reported the Council on Aging met on Friday, January 31. They reviewed information received through their Town Meeting. They intend on implementing new ideas and functions through the year, i.e. buffets on Wednesdays and Friends Day. Swarner added survey results were available for review. D-a. Airport Commission Councilman Measles reported the next meeting was scheduled for February 13. D-3. Sarbor Commission Councilman Bookey reported the January 13 meeting minutes were included in the packet. The next scheduled meeting would be held on February 10. D-4. Library Commission Councilman Moore reported the Commission met February 4 during which there was a work session with councilmembers in regard to the future of the library. He added, they discussed the Commission0s early process of identifying future needs and functions of the library and legal deficiencies of the building. They also debated methods to expand the library and discussed possible funding. Moore also reported the Friends of the Library would be holding their annual tea on February 16. . KENAI CITY FEBRUARY 5, PAGE 10 COUNCIL MEETING MINUTES 1997 D-S. Parks i Recreation Commission Parks & Recreation Director Frates reported the minutes of the last meeting were included in the packet. At the meeting, the Commission continued their discussion in regard to the Community Needs Survey which should be published by Spring. The Commission also discussed the forming of a Cemetery Committee which would be brought to council in the near future. The next meeting would be held February 6 at the Teen Center. During the meeting, they will be discussing designs of skateboard parks. D-6. Planning i Zoning Commission Councilman Smalley reported the Commission held a short meeting, the minutes of which were included in the packet. The next meeting will be held February 12. D-7, Miscellaneous Commissions and Committees 16 D-7a. Beautification Committee Swarner reported the minutes of the January 14 meeting were included in the packet. The next meeting was scheduled for 5:00 p.m. on February 11. D-7b. Historic District Board Moore reported the minutes of the last meeting were included in the packet. At their next meeting, the Board will discuss the Lindgren/Jones and Cunningham houses. The Board is also working on sign quotes. He also noted Kim Booth handed in her resignation and the Board requested to change their next meeting date from February 17 to February 24. Council had no objections in changing the meeting date. D-7c. Challenger Board Kathy Scott reported an "Experience Challenger" seminar would be held in Seattle on March 15. Room was still available if councilmembers would like to attend. Also, Challenger would have a display at the Health Fair and would be giving a presentation at 2:00 p.m. on Saturday, February S. D-76. Kenai Visitors i Convention Bureau Board . Bookey reported the next meeting would be held on February 10. S KENAI CITY COUNCIL MEETING MINUTES FEBRUARY 51 1997 PAGE 11 D-7e. Alaska Municipal League Report Swarner reported she would be included in a teleconference on February 6 in regard to economic development. During the teleconference, she added, she would bring up HB 51 and request AML to investigate the bill. Swarner requested administration to follow the progress of HB 51. Regular Meeting of January 15, 1997. Approved by consent agenda. 3-2. Kenai City Council Work Session of January 13, 1997. Approved by consent agenda. 0 E-3. Kenai City Council Work Session of January 270 1997. Approved by consent agenda. None. --i '7'wl None. ,ITERAIL NEW BVBINE88 R-1. Bills to be Paid, Bills to be Ratified MOTION: Councilman Smalley MOVED to pay the bills and there were no objections. 80 ORDERED. R-2. Purchase Orders Exceeding $2,500 is • KENAI CITY FEBRUARY 51 PAGE 12 MOTIONS COUNCIL MEETING MINUTES 1997 Councilman Smalley MOVED to pay the purchase orders over $20,500 and Councilman Bookey SECONDED the motion. There were no objections. so ORDERED. H-3. Ordinance No. 1734-97 - Increasing Estimated Revenues and Appropriations by $1,445 in the General Fund for the Women's Basketball League. introduction approved by consent agenda. H-4. Approval - Assignment of lease for Security Purposes, Lot 3, Block 4, GAA - Adolf to Bob's Pawn, Inc. and W.W. Wilson, 111. Attorney Graves noted this was a routine security assignment. He added, there was some confusion due to the lessee going forward with the assignment with an option to buy back first before bringing it to the city for approval. This was brought to their attention and they resubmitted an assignment. MOTIONS Councilman Smalley MOVED for approval of the assignment of lease for security purposes, Lot 3, Block 4, GAA, Adolf to Bob's Pawn, Inc. and W.W. Wilson, III. Councilman Bookey SECONDED the motion. There were no objections. so ORDERED. H-S. Discussion - Assisted Living Center. City Manager Ross referred to his and Attorney Graves' memorandum to council which was included in the packet. The memorandum discussed theirs and Bond Counsel Klinkner's recommended procedures for the use of revenue bonds. Leo Grasso, Continuum Corporation introduced Mark Thomas of Progressive Capital to speak in regard to their proposed use of the city's bonding authority. City Manager Rose - Referred to the memorandum included in the packet. He added, after reviewing the issue with the Finance Director and City Attorney, and conversations with Mr. Grasso, the memorandum was produced with copies of the Charter and Code in regard to use of bonds attached. Also included in the memorandum was a recommended procedure for council to follow if they wanted to entertain the proposed use of government bonds. • KENAI CITY FEBRUARY 51 PAGE 13 COUNCIL MEETING MINUTES 1997 Mark Thomas - Thomas explained, Progressive Capital specialized in industrial revenue bonds and housing bonds. He personally had been working as trustee and investment banker on various bond issues since 1981 in Washington and Utah. Thomas explained, he believed if there is a good project, there's a bond counsel that is trusted and the financing team is experienced, the dangers of a bond issue and liabilities can be mitigated. He added, it was a matter of trust. In regard to conduit financing, the city's name would be on the bond. In this type of financing, the proceeds are lent to the developer and the financial liability remains with the developer. Also, in case of a default the city would not have financial responsibility. The real danger of the issues was if there was something illegal going on. There has to be comfort that things are being done correctly. Thomas referred to Klinkner's concerns from his letter, i.e., the city would incur liability for false or misleading information if • the city disseminated the information with knowledge it was false or misleading or in reckless disregard of facts. He felt that would be fairly easy for the city to avoid. The second grounds for difficulty would lie if, in the opinion of bond counsel, if in fact the opinion of the city's bond counsel was improperly given. He added, he believed it lies in trust of the legal people protecting the city. He stated, he believed the city's ordinance was excellent and if council follows it, based on the recommendations (of the memorandum and Klinkner letter), the.city should.be able to avoid the liabilities that are possible with these bonds. Thomas stated he has been involved with lots of bond issues and with that, lots of successful financing. He has never been involved in putting together a bond package that failed. He added, he never has seen a city run into trouble with industrial revenue bond unless there was illegal activity involved, i.e. confiscation of funds, misrepresentation, or pgrposeful illegal activity. He explained, an industrial revenue bond is an economic development tool for the city. In referring to what the city would get out of it, Thomas stated there would be about 30 jobs and community growth. He.added, he thought it would be a legitimate way for the development of the facility if the city was comfortable with the financing team and bond counsel. He believed it was the equivalent liability of putting in sewer is lines, or a new sidewalk. However, he did not recommend council to go forward with the bonds without a lot of thought. He did KENAI CITY FEBRUARY 5, PAGE .14 COUNCIL MEETING MINUTES 1997 recommend council to go forward with the industrial revenue bond as an economic tool, with discretion, following the outline of the city's rules and if they are followed, the city should be protected. Williams requested Thomas to discuss situations involving financial liability of the City of Kenai with regard to the structuring of the bonds, financing of the project and Possibility of a worst -case scenario, i.e. total default of the bond by the developer. Thomas explained: (1) The city wouldn't incur financial responsibilities up front. If an accountant is required to review financial statements, a bond counsel to review documents, etc., it is understood up front those costs are to be paid by the developer. He added, some cities charge a fee for their own staff to review and prepare documents. He believed that would be appropriate for the city to consider doing. (2) Once the bonds ISare issued, they are held by a trustee bank. Requisitions are made from the funds and as the money is expended for the project the project starts generating funds and pays back the bondholders through the trustee bank. If the project does not succeed, and doesn't generate revenues for whatever reason, in these kinds of projects, there is credit enhancement (an insurance company, a bank, some kind of large financial institution) guaranteeing the payment of the bond to the bondholders. In case of this project, it would be a commercial bank which should have a national rating of A or better. Thomas added, Continuum is investigating two AA -rated banks the strongest financial institutions they can arrange which should give the city some comfort. If the development fails, the banks are irrevocably obligated to pay the debt service to the bondholders in a timely manner; both principal and interest. Williams clarified, if the project goes into default, the bank who is guaranteeing the bonds would be financially responsible for the payments and the financial responsibility would not fall to the city. Thomas stated, yes. Williams suggested there would be a written guarantee included in the documents to that effect. Thomas answered, absolutely and added, the banks name would be on the deed of trust. He added, if there is a default, the bank would take the property and sell it to a developer or company they believe can run it successfully. City Manager Ross asked Thomas if he agreed with his nGravest recommendation that an irrevocable letter of credit isreceived i • KBNAI CITY FEBRUARY 51 PAGE 15 COUNCIL MEETING MINUTES 1997 before any further procedures are taken by council. Thomas stated he thought it appropriate. Thomas added, he believed it would not be a serious project until a letter of credit was in line. Ross asked Thomas if he agreed that they (Thomas and Continuum) had reviewed the ordinances and agreed on the process. Thomas answered yes. Ross added, Council now needed to agree philosophically that they agreed with funding a program using the city's bonding authority and these were the processes to be followed. Ross adddd, that was where council was at now, determining whether to use the revenue bonding authority in the City of Kenai in this manner. Also, that Continuum and Thomas have the ordinances, Charter and recommended procedures which he (Thomas) has stated the other party has agreed to follow. Ross asked if Thomas agreed. Thomas stated yes. Attorney Graves added, the city was not making any commitment at this time. Councilman Bookey asked if using industrial revenue bonding for 10 this project would impact the city's government obligation bonding capacity? Finance Director Semmens answered, no and added, the State had a cap of $150 million for these types of revenue bonds. The State bond boards would have to approve the use of the industrial bonds. He added, through his discussions It with them, he has their assurances the bond board would approve the use. Williams referred to the Klinkner letter and concerns included in it and stated he thought the biggest things the council should be concerned about is the city does not involve itself in anything false or misleading and the counsel assures council there are no false or misleading statements in the package. Also, the city should disclaim any issues that may cause the city concern with regard to false statements and misinformation. Williams added, he didn't think the concern would be false statements and misleading information, because that would be reviewed thoroughly by the AA bank putting up the cash guarantee. He said, he thought the city's concern should be that there is an absolute, undeniable understanding of responsibility by the bank that they are responsible for the payments and the city is not. After council comes to that conclusion, he felt it would as safe an investment as any other the city could make. Thomas stated, there are bond issues where the city would have • liability, but this was not one of them. • RENAI CITY FEHRUARY 5, PAGE 16 �J • COUNCIL MEETING MINUTES 1997 Williams stated he would support the continuation of the examination of the potential for the city's involvement and would agree to administration's recommendation -not to waive any requirements of the city code. Ross stated, whether or not council decided to use revenue bond authority in this manner was council's decision. He added, Continuum had agreed on the processes in accordance with the ordinances and administration had taken a conservative approach. If council decides to proceed forward, the ball was in Continuum's court. Ross added, Thomas had agreed council should not proceed any further until a letter of credit is produced by a commercial bank and a proposal is presented. Thomas agreed and added, he thought this was the wise direction to take. MOTION$ Councilman Smalley MOVED for the city to continue to this process with the Continuum Corporation and that of the memorandum as spelled out, requirements in th VOTES Moore: Yes Measles: Yes Bannock: Smalley: Yes Williams: Yes Bookey: Swarner: Yes NOTION BA88ED UNANIMOUSLY. EXECUTIVE BEBB ON - None Scheduled, I-1. Mayor e Absent Yes Ake Economic Development Assembly - Williams requested a date be scheduled to sponsor a discussion with the top 40 property taxpayers, top 20 sales taxpayers, and ten top personal property taxpayers, as well as other citizens/business owners of the community in regard to the promotion of economic development in the city. Williams added, he had already heard from one organization of the community has offered to co -host the assembly by sponsoring a breakfast. Council agreed it would be a good idea and chose April 26 at 9:00 a.m. as the date. The place • KENAI CITY FEBRUARY 5v PAGE 17 COUNCIL MEETING MINUTES 1997 would be identified later. Williams requested council's permission to go forward with the assembly and for administration to work on the invitation list and mailing the invitations. There were no objections from council. Councilman Bookey requested the Kenai Chamber of Commerce Board Members be included on the invitation list. There were no objections. b. Goals i Objectives Work session - Williams requested council to schedule a work session to review the goals and objectives list and council agreed with Williams• suggested date of May 14. Williams noted, May 14 would be after the economic development assembly on April 26 and what is garnered from that assembly may be included with the goals and objectives of council. t-a. City Manager No report. s-3@ attorney a. BOR Lands - Graves noted Councilwoman Swarner had asked for an update (during last work session) in regard to the potential trade of BOR lands, along the golf course, for other recreational property. The trade of the lands would allow the golf course lots to be sold as residential lots. Graves suggested -he investigate the possibility of their releasing those lots in order for the city to sell them, placing the money received from the sale into a trust account. The sale monies would then be used to purchase property for recreational use. Graves added, during the last discussions in regard to a land swap, the subordinates were sympathetic to a swap, but those in charge were not. Swarner requested Graves to proceed and council agreed. s-se city clerk a. Conflict of Interest Forms - Clerk Freas noted she had distributed the 1997 Conflict of Interest Forms for council to prepare and return to her on or before April 15. b. Budget Draft - Freas requested council to review the draft of the Legislative budget she prepared and return any additions or changes to her by Wednesday, February 12. • KENAI CITY FEBRUARY 5j, PAGE 18 COUNCIL MEETING MINUTES 1997 c. Kenai Alternative school Graduation - Freas noted a letter from the Kenai Alternative School which was included in the packet. The letter requested a donation toward their graduation activities. Freas reminded council they had included $100 in the 1996/97 budget for this purpose. d. Kenai Central High school graduation - Freas noted a letter from the KCHS After -Graduation Committee in which they requested a donation toward their activities as well as a waiver of the Recreation Center use fee. Freas reminded council they had included $300 in the 1996/97 budget for this purpose. However, the request for waiving of the Recreation Center use fee woud be brought to the Parks & Recreation Commission at their meeting on February 6. She suggested, if council approved of the fee waiver, they could include it in a motion, but contingent on the Commission's decision. MOTION: Councilman Smalley MOVED to donate $100 to the Kenai Alternative School and $300 to the KCHS After -Graduation Committee. councilwoman Swarner 8ECONDRD the motion. Smalley requested VMIMOUS CONSENT. There were no objections. 00 ORDERED, MOTION: Councilman Smalley MOVED based on the discussion of the Parks & Recreation Commission meeting tomorrow night that an arrangement be made pending that decision between the City of Kenai Recreation Center and Kenai High -School for after -graduation activities. Councilman Measles SECONDED the motion. There were no objections. 80 ORDERED. 1-8. Finance Director Finance Director Semmens reported he would attend the February 19 Coalition meeting at which personal property and sales taxes would be discussed. He requested council forward any thoughts they had on the subjects to him or attend the meeting. 2-6. Public Works Director Public Works Director Kornelis reported the following: a. Mission street Project - DOT.received word from Federal isHighways the environmental document on the Mission Street project had been approved. Federal Highways did give their go-ahead with • • • KENAI CITY COUNCIL MEETING MINUTES FEBRUARY 5, 1997 PAGE 19 the underground conduit and junction boxes for the lighting system. He added, DOT thought the city would have to bid the light poles and fixtures at a later date. He was still trying to get an answer on the light bases. Kornelis added, DOT had been hanging onto the plans because of a federal requirement that says they are not to start the plan review, right-of-way or utilities until the environmental document is approved. DOT is now starting the review and want an additional three weeks to complete the review. They believe the public hearing would be held the first part of March. They did assure him the project was on DOT's bidding list for April. b. Wellhouse No. 3 - Kornelis reported Wellhouse No. 2 had a broken gasket which caused the wellhouse to flood. It was down for three days, but was now repaired and back up and running. They did have the back up of the tanks, so there was no real danger. Wellhouse No. 3 was running and doing real well. There have been a lot of compliments in regard to the water. The contractor was finalizing punch list items. I-7. Airport Manager No report. Mayor Williams recognized Pat Porter and Bob Frates for receiving the Kenai Chamber of Commerce's Community Service Awards for theirfs and their department's work with the Senior Center and Parks & Recreation Department. ZTEMJt DISCUSSION Citizens None. J-2. Council Hookey - Thanked the team who made the ARFF presentation at the beginning of the meeting. He felt it was an excellent presentation that would make the council's decision very easy. Swarner - Stated her concern that were vehicles being parked on the City Hall lawn. She added, the Parks & Recreation • Department works hard to have the lawn look nice during the summer and vehicles should not be parked on it as it is not KENAI CITY FEBRUARY 5, PAGE 20 COUNCIL MEETING MINUTES 1997 healthy for the lawns. Some of the vehielWasparlack g on of parking the lawn are city vehicles. She didn't feel they spaces in the lot and street parking could also be used. She suggested city and Health Center employees enot park ediinn the front lot when they houldpark ilo k at whatareas. they do that affects other the city departmentsis s city departments. Moore - Also complimented Chief Burnett on the presentation and added, it was very well done. Measles - Agreed with the compliments of the ARFF presentation. Smalley - Stated he also appreciated the presentation and added, it would help make his decision eeveryone. easy.Smalley also agreed that education was the future for Smalley also reported a meeting would be held at the Lake Clark office in regard to its planned • closing* seinformed councilentatives he will make the decision will be theyedecision had already would be attending the meet�eng and felt possibility the office been made. Smalley stated hrewas a would stay open to some degree. Ross stated from his last discussion on the matter, he felt they would have a summer presence in the office only. Smalley asked if council would object to purchasing an airline ticket for a councilmember to attend the "Experience Challenger' in Seattle as he would like to attend. He added, he believed the city would have something to gain from the Smalley noted there will be - very much involved in the Challenger Center was sufficient funds in the Legislative travel budget. There were no objections to Smalley s request. r The council meeting adjourned at approximately 10:03 p.m* s transcribed_and submitted by: Carol Freas, City Clerx e ..