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HomeMy WebLinkAbout1993-06-02 Council MinutesKENAI CITY COUNCIL - REGULAR MEETING JUNE 2p 1993 7:00 B.M. KENAI CITY COUNCIL CHAMBERS 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 wAll be removed from the Consent Agenda and considered in its normal sequence on the agenda as part of the General Orders. Be SCHEDULED PUBLIC COMMENT (10 Minutes) I. Markhir Representative: Leasing former SouthCentral space at Kenai Airport. 2. ERA Aviation Representative Shirley Roberts: Leasing former SouthCentral space at Kenai Airport. 3. Kenai Peninsula Borough Bchool District Representatives Margie Campbell and Jacquie Inle: Renovation of Kenai Elementary School building vs. construction of new building. 1. Ordinance No. 1542-93 - Increasing Estimated Revenues and . Appropriations by $6,504 in the Council on Aging Title III Fund. 2. Ordinance No. 1543-93 - Adopting the Annual Budget for the Fiscal Year Commencing July 1, 1993, and Ending June 30, 1994. 3. Ordinance No. 1544-93 - Increasing Estimated Revenues and Appropriations by $797,765 in the Evergreen/Haller Paving Capital Project Fund. 4. Ordinance No. 1545-93 - Increasing Estimated Revenues and Appropriations by $11,433 in the Rehabilitation of Taxiway A-3 Project. • 5. 6. 7. 8. 9. 10. 11. 12. Resolution NO. 93-38 - water and sewer utilityApproving an amendment to the issued by the Acting become effective on City and rates Jul y Manager on May which was Y 1, 1993. Y 27, 1993, to Resolution No. 93,39 - Awardinthe Janitorial contract for the Airport Terminal Building 1, 1993 through June 30 g, for the period of a'uly Center for $2,254.24 1996, to Frontier Per month. Training Resolution No. 93_40 property Fixing the rate of and ertytax for the fiscal year commencing J levy of ending June 30, 1994. g July 1, 1993 Resolution No. 93_41 _ Evergreen, Haller Directing the continuation of the Third Avenue, Fourth Avenue North Gill Paving Assessment District. ' Jefferson and Second llies Way Resolution No. 93-42 .. Airport Regulations. Ratifying amendments to the Resolution No. 93-43 construction of 1993 KenaMunicipal A-3 reconstruction to Awarding a contract for the Doyle Construction Airport for taxiway eto amount of $184,873.40, which includes additive to A. the basichbido nd Resolution No. 93-44 Fire Department Roof ' Award waReplae e g the bid for for a total amount of to peninsula $31,638.00. Resolution No. 93-45 - for design a contract to Nelson 6 Associates services on the Strefoet Pdesiign and projeavinct McKin1eY, North Dill g 1993 Hailer, and Radios Way• eeaond, Third, Fourth, $55,677.00. project for a not -to -exceed 13. 1993 Liquor License liquor license from 14. *1993 Games APPlication Association. Application . Casino Liquor of Chance and Alaska State the Kenai Roofing, William J. management Evergreen, Jefferson, amount of Requesting to transfer Store to K-Mart. Contests of Hospital and 15. e1993 Games of Chance and C onte APPliaation - Sons of the American ste Legion of 16. *1993 Games of Chance and APPliaation - Kenai peninsula A cher Contest, of s. Skill Permit Nurs ing Hope Skill Permit Squadron 020. Skill permit • 4 0 D. 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 $. XXWTES i. *Regular Meeting of May 19, 1993. 2. *Board of Adjustment Meeting of May 19, 1993. F. CORRESPONDSXCB 1. Letter from Jim Arness regarding Townsite Historic District. a, OLD SU8IN888 i. *Rights -of -Nay on Fish i Nildlite Service, U.8. survey 1435/Overland Drive. 2. For Approval - Agreement with Tom Manninen for City Manager position. i. Bills to be Paid, Bills to be Ratified 2. Purchase Orders Exceeding $1,000 3. *Ordiaanoe No. 1545-93 - Amending Kenai Municipal Code, Chapter 20.05 Entitled, "Vehicles -for -Hire." 4. *Ordittasrce No. 1547-93 - Amending KMC 7.12 to provide for monthly filings of hotel/motel room tax returns for certain delinquent accounts. 5. *Ordinance No. 1549-93 - Finding that a portion of the Southeast 1/4, Section 36, T6N, R12W, S.M.,. City -Owned Lands, is not required for public use and may be sold. 6. *0r4inaU09 No. 1549-93 - Amending the Kenai Municipal. Code 14.20.150 to Include Revocation of Conditional Use Permits. 7. Letter regarding AML conference in Kenai. 1. Mayor 2. City Manager 3. Attorney 4. City Clerk S. Finance Director 6. Public Works Director 7. Airport Manager 1. Citizens (five minutes) 2. Council 1�. W0P0M AXWOTIVB NINON -- Inlet Woods I & • 4, RENAI CITY COUNCIL REGULAR MEETING JUNE 21 1993 7800 B.M. KENAI CITY COUNCIL CNAMBERS JOEN J. WILLIAXG I MAYOR Mayor Williams called the meeting to order at approximate P.M. in the Council Chambers in the Kenai City lBuilding.7:02 A-1. PLEDGE o ALLEaTawft Mayor Williams led those assembled in the Pledge of Allegiance. A-2. ROLL CALL Roll was taken by the City Clerk. Present were: Monfor, McComsey, Bookey and Swarner (arrived ati7 liams, Smalley, 04 Absent was Measles. A-5, AGENDA Ap1punway. Mayor Williams requested the following changes to the agenda: ADDS C-8, Additional inforatatian regarding Resolution Igo. 93- 41 - Directing the continuation of the Evergreen,, McKinley, North Gill, Second Avenue, Third enue,HFourth Avenue, Jefferson and Eadies Way Paving Assessment District. D-4, Library Co m "GiOn Commissioner Tom Murphy and Appointment to replace y P representative. appointment of student Williams requested C-13 be moved to be heard prior to C-1 in order that Mr. Coffey be able to leave on an earlier flight to Anchorage. MOTIONS Councilman Smalley MOVED for approval of the amended agenda and requested UNANIMOUS CONSENT. Councilwoman Monfor SECONDED the motion. There were no objections. 80 ORDERED. A-6. • t = �� 'T-'IJ!; Mayor Williams requested the following change to the Consent Agenda: ADDS N-81 *Ordinance No. 1350-93 -Amending the Official city of Kenai Zoning Map for a Portion of the SE k, Section 36, T6N, R11W, S.M. (a 200 Foot Strip Along Evergreen Street) . • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 2 MOTION: Councilman Smalley MOVED for approval of the amended consent agenda and requested UNANtMOOS CONSENT. Councilwoman Monfor SECONDED the motion. There were no objections. 80 ORDERED, A 911- _ • _�Y_ Y_ 8-1. Markair Representative: Leasing former SouthCentral space at Kenai Airport, WILLIAMS: The first item of business to come before us this evening under Scheduled Public Comment, we have a representative here from Mark Air regarding the former SouthCentral space at a, leasing space, at Kenai Airport. Please give your name. We have a sign in sheet there. Your name for the record please. JONES: Thank you Mr. Mayor and members of the council. My name is Greg Jones. I'm Vice President of Properties for Mark Air. I um, I came tonight to formally request the opportunity to move our ticket counter in the city's airport into the space formerly occupied by SouthCentral. We um, I believe the space became available in March. We applied very quickly thereafter for that space. I think the city has properly advertised the space. At the time of the advertisement, if I'm not, if I'm correct, I believe we were the only ones to indicate an interest in it. And we'ro still interested. The space that we have now is inadequate for a couple of reasons. Our ah, the back office portion of it is too small for the level of operations we have, both in terms of the administrative activities, as, and the passengers and freight. The operational end of it, the space that we've requested is far, is larger and far more adequate for the level of operations that we provide to the community. We ah, we enjoy serving the Kenai/Soldotna area. We think we've done a good job. We ah, our market share tends to support that contention on our part. We are doing very well here. We're committed to stay in ah, in this area. We are, we try to be good corporate citizens. Provide benefits to the community to the charities and the local groups that need assistance, um, both in terms of donations, as well as travel assistance. And, ah, I KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 3 think, I think that you would find, it, it would be difficult to find better corporate citizens in this type of, in this type of environment. We have had a, as you are all aware, had a much publicized, bout in bankruptcy court. We shortly to emerge from that and ah, emerge as a healthy airline. We've, we believe we've used the bankruptcy codes as they are intended to be used and that's to reorganize our airline to continue to serve this community and the rest of the state and the portions of the Lower 48 that we currently serve. We're here to stay. Ah, we're here, and I'm here to make that commitment to you that we're going to stay and continue to serve this community. We're going to continue to come up with innovative methods to serve the community, such as the van service that we do, and ah, what we'd like is an opportunity to expand our service to iccupy the space that, that we have entered, indicated an interest Um, I guess at this point I an unsure what your procedures are to accomplish this in the future. We're not sure where, where we go from here in order, in order to take the next step. Ah, and I' d be glad to answer any questions about what, what our intentions are and we can and can't do and would, would very much like to hear what we can do to accomplish this. WILLIAMS: Ah, it's interesting to note that we, ah, we've been coasting along here for a few months, and all of a sudden we have both carriers before us this evening requesting that we, you know, that we look at their position with regards to leasing that other space. Ah, we do have a request from ERA Aviation with regards to leasing the space as well. Ah, one of the questions I might pose to you is that if you're willing to apply to the Bankruptcy Court for permission to pay off indebtedness to the city prior to us considering any lease transfer of that sort? JONES: Absolutely. We, as you know, those payments that were caught in limbo during bankruptcy, we're not free to pay. We clearly are able to pay that, that indebtedness. And all we'd need to do is, if it's a condition of the city...if occupancy of that • ticket counter is a condition, if, if payment of that debt is a condition of occupying that ticket counter, we'll simply immediately apply to the Court and we think we'd be able to show KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 4 the benefit necessary to get the Court's approval. Because it is a much better ticket counter. Were, were in the, you know, you have two good ticket counters, we're in the, and you have one bad one and were in the bad one right now. So, we think we could show the benefit necessary to get approval to do that. And would be happy to do that immediately. WILLIAMS: Questions from council? Councilwoman Monfor. MONFOR: Ah, I, I guess this would be a question for either Randy or Cary. We advertised. I saw the advertisement in the Anchorage paper. Mark Air applied for this space. Did ERA also apply or is just this letter from ERA now asking for it. Was this in response to the advertisement also? ERNST: This is their response, their current response to wanting this space. Tr. MONFOR: And its dated after Mark Aims response? ERNST: Right. MONFOR: And they would not be, ERA would not be able to move until the fall and then I'm asking Mark Air just, this is a "what if, "... JONES: I understand... MONFOR: What if we said okay, you pay us all the money you owe us, you can move, and when would you be able to move? JONES: We'd move immediately and would be willing to pay the ah, there ' d be probably a week or two while we were moving in, while we were moving trans...ah, ah, communication equipment and things like that, and we'd be happy to pay the overlapping rent on both spots during the move. SWARNER: Mr. Mayor, I have another... WILLIAMS: Yes, please speak... SWARNER: "what if" question. What if we said we would consider your application, how soon would you pay us? JONES: Well, as, as the mayor pointed out, we have to go to Court to get approval. • KBNAI CITY COUNCIL MEETING MINUTE$ JUNE 21 1993 PAGE 5 SWARNER: How long would that take? JONES: We would apply, if, if, you voted tonight, ah, we would instruct our lawyers tomorrow, we'd have it in court by Monday. Ah, ah, we typically, on an item of this magnitude, can get an answer in a matter of a few days. We would, I think we could get an answer. I believe we could get an answer.. Without my lawyer standing next to me, I hate to commit, but I believe we could get an answer by the end of , by this time next week. And we would, Id just devote my efforts to get that done. MONFOR: Mr, Mayor? WILLIAMS: Yes. MONFOR: Another question for Randy. Cause we don't do this very often, would you refresh our memory, when we have a situation like this, we've put the lease in the paper. We've advertised. We have two applicants for the same space. How have we, have we had this situation before and if so, how have we... ERNST: It's, it's the first time we've had this situation with the airlines and the only other situation: that would be similar was with the car rental agencies and we had two people vying for the same, the same car rental agency's office and we did simply by lottery. We put two names in the hat and who ever drew it... MONFOR: Okay. That's pretty fair. That, or flipping a coin. ERNST: And the reason we did that was, and it's similar to the airlines, is, there is, there is no difference in the lease, or there wouldn't have been for the car rental agencies. MONFOR: Right, right. That's why I was asking how we would do this because there isn't... ERNST: It's the first time it's come up because since my tenure, these were already set. I mean, there was SouthCentral, and at the time there was Valdez Air and then ERA and then blank. And then there was Friendship Air and then Mark Air and Ryan. So that, they just kind of fit into slots as they became available. MONFOR: Thank you. • WILLIAMS: Council woman Swarner. KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 6 SWARNER: Then I guess I have another question. What if we said that we would rent to um, Mark Air, or lease the space to Mark Air. Could you continue to be current on your payments? JONES: Absolutely. I believe, I think, this will airport will concur that we are current post -petition, which is what we're required to be. We've paid, we are current, current with our payments now ah, not counting what was frozen as part of the bankruptcy. We've paid our bank payments since then and we'll have no trouble continuing to do that. WILLIAMS: At this time, as I understand it, no formal application has been made by either company, is that correct? JONES: Well my understanding is that the letter we wrote was in response to the advertisement and it was written ah, you've got the letter, what's the date on it? MONFOR/WILLIAMS: May 25th... JONES: Yeah. And ah, and um, I thought that was the formal application. That's what I need to find out. If that's not, I want to do whatever is necessary to make a formal application. SMALLEY: Mr. Mayor? WILLIAMS: Councilman Smalley. SMALLEY: I have a question for Mr., is this the same type of application we've received en masse from other lessors out at, or lessees at the airport. A letter in response to that? ERNST: Well, basically we request a letter first and take it to the council with what they expect to do in the space, and in this case, of course, it's obvious what, what's happening. And then at that point in time, we just enter into a lease agreement. SMALLEY: Then we draw up the lease agreement so this would suffice... ERNST: Right. And there was, just to refresh your memory, there was a letter prior to this one. MONFOR: Yes. SMALLEY: Yes. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 7 MONFOR: From Mark Air. ERNST: From Mark Air. JONES: Yes, the May 25th letter is not the first one. I think the one in March, actually. WILLIAMS: Does Council have a suggestion? Well, in light of the fact that we have two letters, both in response to a current advertisement for that space, ah, both having been received in a timely manner, there are two ways that council can approach this. Ah, one company says that due to the busy season, they'll not consider moving until fall and the other company wants to move right away. You could either accept it on that basis, or accept both, flip a coin, if the one wins, he moves right away, if the other one wins, we have to wait until fall. Two choices it appears. Any other choices? We will give the opportunity for the ERA people to discuss the matter a little bit. I think what we'll do is we'll combine both of these on the agenda, both one and two, into one discussion. And, if you don't mind, I'll ask the ERA representatives if they care to address the matter at this time. S-a. ERA Aviation Representative Shirley Roberts: Leasing former SouthCentral space at Kenai Airport. ROBERTS: Shirley Roberts with ERA Aviation. Mr. Mayor, city council members, ah, towards the letter that you have in front of you there, I would just like to add another statement in there-. This is the busy season for ERA Aviation, which we have stated in there. We also would like, if this, if this request is not satisfactory, we would also like to apply for the space at this time. And, a reminder that ERA has been serving the community as of the end of this year, for ten years and that we have been stable here at the airport and we would like you take that into consideration. And that's what I would like to add to the letter in front of you. Eye WILLIAMS: Mr. Mayor? Yes. MONFOR: I have a question for Shirley. If, if the City were to award that space to ERA Aviation, then is ERA's plans to pay the space rent on both... • KENAI CITY COUNCIL MBETING MINUTEB JUNS 2v 1993 PAGE 8 ROBERTS: ...until the move is complete. Yes. WILLIAMS: Well we have ah, through the two letters that we've received and from comments given by both companies this evening, we have identical offers ah, as to the space itself. Ah, concern of payment of course, on one side of other funds. Both companies have agreed to pay the interim rents. It appears as though we're down to the syndrome we had with the automobile rental agencies and that's drawing a name out of the hat. Ah, it reminds me of one time of a one-man layoff we had out at a construction job and he's a good friend of mine that was in my crew and we drew his name out and he got laid off. He said it was the first time I've ever won a lottery and lost a bundle of money. Ah, how does council feel about a, just ... Councilwoman Swarner first and then... SWARNER: I've a question of Randy, I guess. What's the fair market value rent up there now? ERNST: It's a dollar -sixty-five a square foot and is what we're charging. Each one of them are paying the same, of course. Ah, there is a little bit of difference, you have to remember SouthCentral Air was one office, and it's the bigger office. I believe it's 480 square feet and the other offices are 420, so there's about a sixty square foot difference there in space. But they're also including the one that used to be the Ryan Air space that's next to it for getting both offices. So it's just a touch more in square footage. You know, it's sixty square feet or so. SWARNER: Well, I guess my feeling is I'd like to know who's willing to pay the most per square foot. WILLIAMS: Well, I think we're pretty locked into that. Councilman Smalley, you had a question? SMALLEY: Ah, not a question, more of a comment. Ah, I know both applicants are, are, agreeable and amenable to pay the rent. Both of them look like they're equal, however, I would have to go with the fact that Mark Air applied back in March. They also applied prior to the ERA letter. So they have two of them actually prior to the ERA letter and I would probably have to, if we consider them equal, I'd have to give ray weight to one that came in first. WILLIAMS: Thank you. Councilwoman Monfor, did you have question? . KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 9 MONFOR: No, I was going to ... I think in this case, you have to put any personal feelings aside that you have about either airline and the fact that SouthCentral is no longer flying. And fair is fair, and the fact of the matter is, Mark Air did come and apply to us right after SouthCentral went out of business. I believe in good faith. We in turn said we are going to do the right thing and we're going to put it out for advertisement. Which we did. They came back. They were the first letter again requesting the same space. I'm not one that's going to point the blame and say you are in bankruptcy. That could happen to anybody or any company. At the time we were not, we were not informed that they could go to Bankruptcy Court and ask for release of past payments. I don't believe that would have made any difference then because we needed to go out and advertise and do it correctly. So, I personally will put my personal feelings aside and I would have to support Mark Air. ONWILLIAMS: Councilman McComsey. MC COMSEY: What was the deadline on the advertisement for the applications to be in? ERNST: There was no deadline. it was strictly an ad saying that we had space available and it wasn't necessarily directed to the two people that are already at the airport. It was directed at... MONFOR: ...at anybody... ERNST: ...a new carrier. MC COMSEY: I, I understand. But, there was no deadline for the letter to come in? ERNST: No. MC COMSEY: Then I think that would be a moot point who ah asked first or wrote the letter first, or whatever. WILLIAMS: I'd ask a question of the Administration. What was the date of the ad? What period of time did the ad run? ERNST: We may not have that information readily available here. We can check. HOWARD: It ran for about two weeks. About three times each week. Shortly after, shortly after that second meeting in March. KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 10 WILLIAMS: It didn't run in May, is that correct? HOWARD: I don't believe so. No, it didn't run in May. WILLIAMS: Did we advertise it both locally and in Anchorage? MONFOR: I saw it in the Anchorage paper. ERNST: It was in the Anchorage paper. MC COMSEY: Again, I think it's a moot point ah, who wrote first or whatever. I think that both companies being equal, that we should draw a name out of a hat, flip a coin, or do something such as 01 that. I just... SWARNER: How about a one-time bonus fee? (lots of laughter) Let's get money into this. was there a second on Halls motion? SMALLEY: I didn't make a motion. SWARNER: Oh, I thought you made a motion. Okay. Can the attorney research that if we can have a... GRAVES: I don't know of any prohibition to charging a different lease rate. If we were going to do that, we would have to put a request for proposals in the paper and open it up with the criteria that we're going to base this on a ones -time bonus and then charge everybody a $1.65 a square foot if that's what the Council wants to do. MONFOR: No, I'm not willing to do that. ROBERTS: May I. may I ask one thing please? Can we lay this out on the table until we find out if Mark Air in deed can clear that money from the Bankruptcy Court? And then come back to Council at that time to draw the name out of the hat? MC COMSEY: That'd have to be part of it anyway. SWARNER: That would have to be part of the deal. WILLIAMS: We can ah, probably in order to expedite the matter, if we were to draw a name tonight, ah, and if Mark Air were the, were is the apparent winner, it would be contingent upon them producing the funds within a specific period of time. If not, then they would • KENAI CITY COUNCIL METING MINUTES JUKE 2, 1993 PAGE 11 naturally default and you know, the other person, that's considering that you might not be the lucky one and win the draw. So, in other words, it would be contingent upon... ROBERTS: And if ERA came out of •the hat first, Mark Air would know tonight they didn't have to go to Bankruptcy... WILLIAMS: That's right. ROBERTS: ...Court to pay the city. WILLIAMS: That's correct. And we're still setting here out our funds until the Bankruptcy Court makes the determination. Councilwoman Swarner. SWARNER: I kind of like Shirley's idea about getting the money first. WILLIAMS:16 Well, as I said in order to expedite the matter, we can go ahead and pull the names tonight... SWARNER: It's been vacant this long, what's another two weeks? WILLIAMS: I'm not at all sure that you can file a petition unless you have a firm offer. SMALLEY: That's right. SWARNER: That's right. WILLIAMS: A comment from the Mark Air representative. JONES (from audience) : If we, if there were to be a drawing, which I think would be unprecedented, but there were to be a drawing, we .would immediately apply for ERA space if we didn't win. So, ah, we don't want to stay where we are. So. I think we're going to be all in the same boat. Especially with which space we began. WILLIAMS: I think in the great Alaska spirit of chance, we should just have a drawing. ROBERTS: Everybody has to pay a dollar first, right? 0 SWARNER: Yes..(lots of laughter). MC COMSEY: Before you get out the door. RENAI CITY COUNCIL MEETING MINUTES JONE 2, 1993 PAGE 12 SWARNER: Right. MONFOR: Mr.' Mayor, I think you should take a vote. WILLIAMS: All right. Would someone pose a question. MONFOR: It could be an informal vote or whatever... WILLIAMS: Okay. Let's just have a little motion on the floor as to how to handle it, whether to have a drawing and then we'll vote on it. Who wants to introduce a motion? MC COMSEY: I can make a motion that we put both names in a hat and draw. WILLIAMS: All right. The motion is to ah, put two names in a hat, draw them, and settle the issue at hand now. Is there a second? BOOKEY: Second. WILLIAMS: It's been seconded. Further discussion of the motion? Clerk will call the roll. FREAS: McComsey: Yes Smalley: No Williams: Yes Bookey: Yes Swarner: No Monfor: No Measles: Absent Three, three. WILLIAMS: All right. We won't do that. Ah, the next question or the next suggestion was that ah, well, we can't have you make a formal application until the offer's been made. That's the problem. The final question is a motion to award to one of the two. That's what I think we're down to. We're not going to draw it out of the hat and we can't be sure that they're going to make the application prior to the offer so we're down to the final element and that's the motion to award. Councilman Smalley? SMALLEY: I would move to lease the space 28, 29, 30, 31, the old SouthCentral Air space at the Kenai Airport to Mark Air, contingent upon their ability to get back debt out of Bankruptcy Court owed to Sthe city. WILLIAMS: So do we have a... • KENAI CITY COUNCIL MEETING MINUTES JUKE 21 1993 PAGE 13 0 • 3MALLEY: ...So they become current. WILLIAMS: Would you have a, would it be fair to assume that could be done in a thirty -day period or sixty-day period or...? JONES (from audience): I, I think we could do this in thirty - day, . 0 WILLIAMS: All right. I think there should be an amendment or an addition to your motion allowing for a thirty -day... SMALLEY: Can we determine that it's going to take thirty days to go through the...that's the problem with putting a time limit on it. Can we determine how long it's going to take to get their bankruptcy clear? WILLIAMS: Well, the representative says he's sure thirty days is sufficient. SMALLEY: So amended. Thirty days. WILLIAMS: All right. The motion then is to award to Mark Air contingent upon a thirty -day period in which they have to recover the funds from Bankruptcy Court. Is there any further discussion. SMALLEY: There is no second. WILLIAMS: Is there a second. Excuse me. motion? MONFOR: I'll second it. WILLIAMS: It's been seconded for... MONFOR: ...for something. Is there a second to the WILLIAMS: ...for discussion. Is there any further discussion. Seeing none then, the Clerk will call the roll. MONFOR: Now wait, Mr. Mayor. WILLIAMS: All right. The Clerk will wait just a moment. The motion is to award the contract to Mark Air, or the space to Mark Air with the contingency. MONFOR: The contingency is thirty days. ICENAI CITY COUNCIL M88TING MINUTES JUKE 2p 1993 PAGE 14 WILLIAMS: Yeah. They must have, we have not addressed the subject within the motion to allow ERA the space. We'd have to do that at a later time. Or make that part of the motion now if you want. MONFOR: To give ERA what space? • WILLIAMS: The second choice if they're money isn't forthcoming. SMALLEY: I, I would not want to cloud this motion with that. WILLIAMS: Okay, so we have a separation of that question. Then we'll deal with the other... SMALLEY: I would prefer that. MONFOR: Okay, never mind. WILLIAMS: Okay. The question then is to whether or not to allow 0 the space to be leased to Mark Air. Clerk will call the roll. FREAS: McComsey: No Smalley: Yes Williams: No Bookey: No Swarner: No Monfor: Yes Measles: Absent. Four no's, two yes. WILLIAMS: All right. The question is to whether or not to lease to Mark Air fails and Councilwoman Swarner has a... SWARNER: I move that we lease the old SouthCentral space and the adjoining space to ERA Aviation beginning immediately. BOOKEY': I'll second it. WILLIAMS: The motion then has been moved and seconded to lease the old SouthCentral space to ERA immediately. Further discussion on the motion. Clerk will call the roll. FREAS: KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 15 Three yes, three no. WILLIAMS.: The 'only other element left then, since we've voted in all directions, is to perhaps suggest a bonus lease and ah, that was Councilwoman Swarner's original position. Now, there are a couple of things 1. I'd like to point out to council before you make that kind of a decision. Enplanements are off dramatically the first quarter of this year. I'm not sure that they're picking up yet, but according to my figure, for the first quarter of this year, we're down about 4,000. Is that right? That's a dramatic decrease from the previous three years. ROBERTS: Airfare has also gone up Mayor, since the beginning of the high... WILLIAMS: Pardon? *' ROBERTS: ...When Mark Air came in and the airfare was at $25.00.. That year you'll see that the enplanements were at their largest and they have typically dropped since the fares have gone back. At that point, there were people that were travelling through the airport that normally would not be able to get an airplane at this rate. WILLIAMS: Our ah, our figures indicate that the first quarter dropped the first three month drop this year is the equivalent of the entire drop between the year of 1991/92. 91 was the highest year at 110,800, We have 4,000 total dropped in the 92 year and we're off 4,000 the first quarter. That's a, kind.of a, so I want you to take that into consideration before we discuss bonus leases. Yes. JONES (from the audience): I guess that I. I'm not sure if the offer, because of the contingency, and that potential thirty -day delay would not, would not because of the potential thirty -day delay. if Mark A r sup for the space, ultimately, we'd be happy to pay for that thirty days it would be tied up I don't think it will take thirty days anyway. But.ME whatever time it takes to go get the Bankruptcy court's approval, since you are, in essence, holding that off the market for our benefit, we would pay for that from tonight's action. WILLIAMS: Council, I'd strongly suggest, since we are at the wall with all of our ideas, that we go ahead with Councilman McComsey's, I don't know if it was a motion or not, to just draw a name from KENAI CITY COUNCIL MEETING MINUTES DUNE 2, 1993 PAGE 16 the hat. We've already exhausted three, three ah possibilities, including his first one at the beginning. So...Councilman McComsey, the Chair will re -entertain your motion again. SWARNER: I think it has to be asked for... MC COMSEY: I thought I was moved to the side, wasn't I? SMALLEY: (laughter) e MC COMSEY: I mean... I think we all were. Let's blame Ray. WILLIAMS: Motion to reconsider... MC COMSEY: Motion to reconsider? WILLIAMS: Yeah, someone will have to have a motion to reconsider. What's the prevailing side when the vote's three/three. It's a no vote. So, someone on the prevailing side would call for reconsider. (Pause) Is there a motion to reconsider? Seeing no motion to reconsider then, ah, I will ask that this matter be set aside. I think that there needs to be some direction though as to the next move that Council would like to ah, before I set the matter aside. Councilwoman Monfor? MONFOR: What, the last vote was ah three/three, right? Three yes, three no? SMALLEY: Four/two. MONFOR: No. FREAS: The vote for, to award ERA was three/three. The award to Mark Air failed at four/two and the draw names was tied. It failed at a tie. WILLIAMS: The simplest way to settle this matter is just to draw names. Mr. Ernst? ERNST: Well, if let me, let me just take the pressure off you a little bit. There, I really don't think that there's a whole big difference here you know, as far as if, if ERA wins and they move • ICBNAI CITY COi1NCIL MEBTING MINUTES JUNK 2, 1993 PAGE 17 forward, Mark Air 's goingto move forward. If Mark Air moves forward, ERA stays where they are. You know, it'.s, there's, it's a pretty small difference. There is some more square footage there and you're getting it a little bit more a month. Someone's going to have to pay a little more a month, but I don't know if it's... WILLIAMS: Councilman Smalley, SMALLEY: Randy, on the automobile rental situation, that was a draw of the hat that determined that? ' .y NI ERNST: Well, what happened was we, we had four car rental agencies at the time and we added one booth. So that made, because we had interest in another car rental agency slot. So then we, we made a whole new booth. w SMALLEY: But how, what was the determination to give the one booth that was a preferred booth to ERNST: It was just, it was the one on the end. It was, it was, at that time, it was AAV s Raven Transit or something and we cut out that little half piece and made Raven Transit over there and had an empty space. SMALLEY: Why was Raven .... okay. But there were two applicants for one space prior to adding the space, is that correct? ERNST: That's correct. SMALLEY: And how was the determination to put Raven Transit in the last one then that was created? ERNST: Well, by the time it came around that Raven Transit was no more so it became a moot point, although we had already built that section. How they just, because there was a limousine, that Raven Transit was a limousine thing and not a car rental agency. WILLIAMS: Councilwoman Monfor, MONFOR: I was just wondering, um, how Mr. Jones and how um Shirley felt about the drawing. I know Mr. Jones said he thought it was pretty unprecedented, but this council has done some different things in the years I've been here. WILLIAMS. Everything in the airline industry is unprecedented. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 18 JONES (from the audience): (inaudible) I deal with 23 different stations in Alaska and I've forgotten how many outside the State of Alaska and have never run into this problem before. Typically, it is, when there is an unopen-ended advertisement, we have space available, first sign in the door gets the opportunity.• Fine. If there is a deadline and a bid or a competition which has, which does occasionally occur, then it's based on-meritorial criteria or set. But, the reason we responded so quickly in March was because we wanted the space badly. We still want it badly, so I think that that's the most appropriate way to award it. The ah, the luck of the draw seems to be like (inaudible) gaming permit (inaudible). MONFOR: I think we have one of those. SWARNER: We have one of those. SMALLEY: Try another motion. I would move to lease space at the Kenai Airport, spaces 28, 29, 30, 31 to Mark Air contingent upon the thirty -day deadline of their getting the back funding owed the city out of Bankruptcy Court. Mark Air will become responsible for the rental rate immediately upon signing the lease and if after thirty days, the funding has not be returned to the city that's owed, the space will automatically go to ERA. MONFOR: Second. WILLIAMS: Councilman Smalley? SMALLEY: Yes sir. WILLIAMS: It isn't clear at this point, there may be an implication here that we'll sign the lease before we get the money by your motion. Before we get the Bankruptcy thing. SMALLEY: What, ah, •the gentleman from Mark Air, Mr. Jones, indicated that they would be willing to be responsible for the rental rate immediately, if memory serves me right. JONES (from the audience): That's correct. WILLIAMS: Is there a second to that motion? MONFOR: I seconded it already. WILLIAMS: Seconded. Further discussion? Clerk will call the roll. • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 19 FREAS: McComsey: No Smalley: Yes Bookey: No Swarner: No Measles: Absent Four no's, two yes. WILLIAMS: We're back to the hat. SMALLEY: We're deadlocked. Williams: No Monf or : Yes MONFOR: It's amazing why anyone does business with us. WILLIAMS: Okay. Ah, Council at this point, the advertisement itself did not lend itself to have anyone believe that there was a deadline. It appeared to be an open-ended advertisement. We did not publish in the advertisement anything to the effect that there was a first -come -first -served situation. We did get two people to apply for the same spot. Therefore, it brings us back to the draw of the hat. Councilwoman Monfor. MONFOR: Mr. Mayor. In March, Mark Air came to the City and asked to lease SouthCentral Air's space. We did not hear from ERA Aviation. Council said, put an advertisement out to say space is for lease to see if there's any other interested parties. Our biggest concern then, and I think it's still one of the biggest concerns now, is the fact that Mark Air was in bankruptcy and they owed the City a great deal of money and there were unpaid taxes. That was a very major problem with this council and I believe still is. So, we did that. Mark Air again came back, and I know nobody wants to use the date, but they did come back on the 25th of May with a letter stating their intent to lease the SouthCentral Air space. On May 28th, ERA Aviation came forward and said they also wanted to lease the SouthCentral Air space. Now this is ridiculous. We have two companies doing business in the City of Kenai and we can't accommodate either one of them? No wonder people hate bureaucracy. You know, personally, I would vote for ERA in a minute. They have been here forever. They're the airline i fly. I flew SouthCentral till they quit flying. That's the airline I want to support. But, • in good conscience, I can't, because of the things that happened before that, KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 20 WILLIAMS: Well, I think we have to let all of those things rest and again we have to come back with the fact that we do have two legitimate offers from two separate airlines, both in a timely manner, because there was no discussion of a specific date or timely manner and um, there has been more than one major issue and indeed, corporate name changes and financing arrangements that have turned on the draw of the card or the flip of a coin or a draw of the hat. I think ah, while we've seen here that we can't seem to get any motion to pass, except (inaudible) no motions, ah, that perhaps the quickest way to settle the whole thing, and the fairest, would be to let the luck of the draw prevail. We're both of the opinion that both will do what they intend to do. Either both indicate that they will do what's right with regard to leasing immediately. The City will be receive its accounting in either case. The question is, which of the two. MC COMSEY: Should we hold a duel? ROBERTS: If I may suggest to Council, thirty days waiting for Bankruptcy Court judgment, if the money's coming to the City of Kenai, and we were unable, we are wanting to move, but we really. did not want to move until our busy time was over, it Council were to allow ERA to reapply at the same time that they were equal with Mark Air and the Council had enough time to make their decision in that time, you wouldn't have to draw out of the hat tonight. WILLIAMS: I'm not quite sure I understand... ROBERTS: Well, if you're willing to wait thirty days to hear from the courts, if Mark Air's even going to be able to apply for this space... WILLIAMS: Yeah, that, that question.... TAPE BREAK. whether the period is there or not, whoever gets the space is going to wind up paying from tomorrow morning on. I don't even see a hat to draw out of today. There's an interested party from the audience who might offer, shed some light. Want .to state your name for the record? JAY SHIP??? (from audience): My name is Jay Ship and I just have a suggestion. I'm new in town and the first time I've come to this meeting... 6 KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 21 MONFOR: And probably will never come again. SHIP: ......if this space is in such a demand, why not to bid? put it out WILLIAMS: Well, we discussed the cash bonus and that's what raised the fact that our enplanement figures are down dramaticall which You know, just compounds the problem of losses. One moreycommentfrom ... FITZPATRICK: Ruth Fitzpatrick. Whydonut you la n o and you both will have y play piggy move up good spots. Just move right up the line, the two of them. ERA and Mark Air and you�ll but have...(inaudible). h SMALLEY: YOU move The this question then becomes do � You way (laughter). I know move to the right or do what you mean. WILLIAMS: All right, well take...yes, Commissioner Bannock. BANNOCK: Mr. Mayor, if I could just comment on this briefs . Clearly, its the hot spot in the ai and i think that if rport, by the testimony today You'll research a little bit of history in the airport in regards to lease out uncommon. I believe it was done on her airport.theo I believtion e is not done with the restaurant the first time and so I don't thinktitas A bad idea. If it is, indeed, the hot spot with two competitors wanting it, if one competitor wants greater than the other, onl the City of Kenai will stand to benefit from it. y WILLIAMS: My only comment to that is if were such a hot spot, ho come SouthCentral shut down, p w BANNOCK: To these two people. WILLIAMS: Yeah. So...well the chair is willing to entertain on more motion and then welre going to move on to other items of business. SWARNER: i would move that we direct the Administration t advertise again for lease proposals, inaludin o payment to the City for that space, g a one-time bonus BOOKEY: V 11 second it. • 0 KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 22 WILLIAMS: It's been, a motion then is on the floor and a second follows that a both, that a new advertisement for lease be posted with requirement of a bid bonus as part of the lease application. MC COMSEY: How long is this bid process taking? WILLIAMS: You want to advertise for how long? SWARNER: Whatever the Administration thinks is necessary. WILLIAMS: Follow normal procedures for leases. Mr. Ernst? ERNST: Well, ordinarily, we advertise for at least thirty days or so, why not just let the two submit bids, a bonus bid. WILLIAMS: Immediately? ERNST: Sure. WILLIAMS: Tomorrow morning. ERNST: They both, is that not equitable? No one else responded to the... WILLIAMS: All right, the chair will entertain a friendly amendment to the motion. SWARNER: To seven days. bonus proposal... WILLIAMS: Bid bonus? SWARNER: A bid bonus. Give them seven days to come up with a WILLIAMS: A formal letter of application and bid bonus. SMALLEY: Has it been seconded? SWARNER: Yes, it's been seconded. WILLIAMS: All right, Councilman Smalley? 9 3MALLEY: A question for the two applicants. Do you have a problem with that? ERA? ROBERTS: No sir. • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 23 SMALLEY: Mark Air? JONES: No, that's fine. SMALLEY: Let's get on with the vote. WILLIAMS: The Clerk will call the roll. FREAS: McComsey: Yes Smalley: Begrudgingly, yes. Williams: Yes Bookey: Yes Swarner: Yes Monfor: Hey, it doesn't make any difference anymore. Yes. Measles: Absent ERNST: As a point of clarity. bonus bid. WILLIAMS: Bonus. SWARNER: Um-hmm. SMALLEY: Seven days. We just ask them to each give us a ERNST: That will be the attorney's office. WILLIAMS: I want to assure those of you that are here this evening that generally items of this nature don't take this long. 9-r3. penal Peninsula Borough School Distriot Representatives Margie Campbell and Jacquie Isle: Renovation of Kenai Elementary School building vs. construction of new building. Jacquie Isle spoke to Council in regard to the possibility of the renovation and reopening of the Kenai Elementary School. The School District will be asking the City's opinion of whether they would support the renovation of the present school or the building of a new school adjacent to the Sears Elementary School. Imle stated if the ballot is approved by voters this fall, the renovated school would be ready for use next fall. The ballot issue last fall was to renovate the building and the cost would have been borne by the taxpayers. Now, with State. monies available, the State may pay a 70* share. 0 KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 24 Imle stated an architect has reviewed the building and has found nothing wrong with the building structurally. A new computer laboratory will be added, as well as an elevator and the playground will be upgraded and perhaps enlarged (if the Borough purchases adjacent property) . Imle left a copy of the schematics for the renovation with Administration for review. Margie Campbell - Past PTA President. Campbell stated the question is to either ask the School Board to build a new school or renovate Kenai Elementary. Campbell., stated they are aware that People Count, Boy's and Girl's Club, and the Alternative School will be dislocated if the school is renovated. Voter approval is still required and they need to think about getting approval of voters in other areas of the Peninsula. Campbell added the School Board needs to know the opinion of the Council by June 14. Campbell reviewed some of the pros and cons for both the renovated school and a new school. Council requested Imle ask the School Board to delay their decision on this item until after June 16, 1993 in order that Council could prepare a resolution in support of either the renovation or a new school at their June 16, 1993 meeting. Williams is to write the resolution. IT=—C-t PUBLIC HEARIN-6 C-13. 1993 Liquor License Application - Requesting to transfer liquor license from Casino Liquor Store to K-Mart. Moved to this position by Mayor Williams during agenda approval. Attorney Dan Coffey and Brad Adams, Kmart Manager, requested Council's approval of the liquor license transfer. Clerk Freas stated she had received word from the Kenai Peninsula Borough that approximately $40.00 was owed by Casino Liquor Store in sales tax and filings. Freas requested a motion from council to approve the transfer of the liquor license upon notification from the Borough that all payments and filings were current. MOTION: Councilman Smalley MOVED to send a letter of non -objection by June 10, 1993 upon notification from the Borough that all taxes and • filings are current. Councilwoman Monfor SECONDED the motion. There were no objections. 00 ORDERED. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 25 C-10 OrdiaaAo• No. 1542-93 - Increasing Estimated Revenues and Appropriations by $6,504 in the Council on Aging Title III Fund. MOTIONS Councilwoman Swarner MOVED for adoption of Ordinance No. 1542-93 and Councilman Smalley 8ECOHDED the motion. There were no public or council comments. VOTE: McComsey: Yes Smalley: Yes Williams: Yes Bookey: Yes Swarner: Yes Monfor: Yes Measles: Absent MOTION PARSED DNANIMOUSLY. BREAK: 8120 B.K. BACK TO ORDER: 8:29 P.M. C-20 Ordinance No. 1543-93 - Adopting the Annual Budget for the Fiscal Year Commencing July 1, 1993, and Ending June 30, 1994. MOTION: Councilwoman Monfor MOVED for adoption of Ordinance No. 1543-93 and Councilman Smalley SECONDED the motion. Public Comment: John Torgerson - 10735 Kenai Spur Highway, Kenai. Torgerson presented reasons for Council to add 1993-94 Kenai Peninsula Caucus membership dues to the 1993-94 budget. Torgerson reviewed some of the activities and lobbying the Caucus had been involved with this past year, i.e. Wildwood reopening, AML Conference to Kenai/Soldotna, etc. Torgerson also discussed the amount of travel in the Caucus' budget and past membership dues.. This year's dues will be $949 for the City of Kenai (based on a $.15 per capita basis). Charlie Pierce -- 555 Dolchok, Kenai. Stated his concern that there was no money budgeted for dust control applications for the 93-94 budget. Pierce stated there are approximately 20 homes in his area KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 26 and because of more traffic, the dust i nor dust control bad. Pierce requested funding placed in the budget applications for his area. Pierce also stated during break-up approximately 18" of water collected where a culvert was blocked up in isarea. Pierce the road should stated when he telephoned City Hall, he was not have been accepted by the City and it was he needed to know when Pierce stated he did not like that answerciates the efforts made by help would arrive. Pierce added he appreciates the City, however he does not believe he should eis v to do hi o the "top" to get a response. Pierce added he is g art if the City does its part. Pierce requested reconsideration and funding budgeted for road treatment. X&thy 800tt - 3080 Kim-N-Ang, Kenai. Scottstated she have is idone,a neighbor. Scott stated the Council and Administration quite adequate job. Scott requested Council fund dust control treatment as it is their civic responsibility added so those citizens a is do not live on paved streets. Scott add safety issue and thinks it an essential service. Scott stated she reviewed the budget to see if there was somewhere she believed money could be cut and added into better left control funding. Scott stated she felt that would be to Council. Scott requested reinstatement of dust coontr�rcontrol asea• apaving district would be at least several years away f (fo Brown stated the cost for one dust control 1r m if or year's budget) was $55,000 ($43,000 for supplies and $2 the contractor). This amount was for a treatment on both the east and west sides of town. Williams stated he was prepared to request council eo has slowrecer on the paving project on Evergreen/Haller, etc. ed concerns from citizens in regard to time to allow illiams suggested and sewer connections to be done prior to paving. to wait until next year and perhaps the interest earned on the funding for the project would cover the additional�ocost for o dine ing the project. Brown stated any interest go back General Fund. Monfor suggested Council return their attention to the budget. McComsey stated he would vote against thebudget in the dget did no t feel a the one police position should be placed back • RBNAI CITY COUNCIL MBETING MINUTES JtlNB 21 1993 PAGE 27 MOTIONS Councilwoman Monfor MOVED to amend the budget by adding $950 to include dues for the Kenai . Peninsula Caucus' 93-94 membership dues. Councilman Smalley SECONDED the motion. There were no objections. SO ORDERED. MOTIONS Councilman Smalley MOVED to increase the budget by $29,882 in regard to the agreement for the new city manager as explained in C.A. Brown's 5/26/93 memorandum included in the packet. Councilwoman Swarner SECONDED the motion. There were no objections. SO ORDERED. MOTIONS Councilwoman Swarner MOVED to increase the budget by $20,000 in the library's budget for books. Councilman Smalley SECONDED the motion. There were no objections. 80 ORDERED. MOTIONS Councilwoman Swarner MOVED to decrease the amount in the budget for the fire pit to $2,500 from $4,000 and prove the $1,500 to Parks & Recreation or Beautification for salaries. (Because there is not enough money in Parks & Recreation to pay for mowing, eta. in the spring.) Councilman Smalley SECONDED the motion. There were no objections. -00 ORDERED. Monfor stated she does not know the price for this, but will be going with the paving for the west side of town. Monfor added there will not be curbs, gutters and sidewalks. It will be strip paving. MOTIONS Councilwoman Monfor MOVED to increase the budget by $30,000 for dust control for the 1993-94 year. Councilwoman Swarner SECONDED the motion. There were no objections. so ORDERED. Williams stated the increases adjust the budget by $62,832. Williams added the General Fund will now be impacted by $6620832. • Williams asked if there were other amendments to be made to the budget three times. KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 28 MOTION= Councilman: Smalley MOVED to approve the budget as amended and Councilman Bookey SECONDED the motion. There was no further discussion. VOTE= MCComsey: No Smalley: Yes Williams: Yes Bookey: Yes Swarner: Yes Monfor: Yes Measles: Absent MOTION PASSED. C-3. ordinance No. 1544-93 - Increasing Estimated Revenues and Appropriations by $797,765 in the Evergreen/Haller Paving Capital Project Fund. MOTIONS Councilman Smalley MOVED for adoption of Ordinance No. 1544-93 and Councilwoman Monfor SECONDED the motion. Public comment: (Verbatim) RUTS FITZPATRICK: I live at 1613 Third Avenue and this dollar amount, how does it affect the total cost then to the residents for the paving and what is this dollar, what is this money for? WILLIAMS: I think Mr. Brown and Administration has prepared a ah, an assessment roll that indicates what the cost of each property owned in the area will be. FITZPATRICK: But will this extra dollar amount add to that is what I wanted to know. WILLIAMS: Mr, Brown. BROWN: See, the ordinance before the Council is to appropriate the money like we would for any capital project. The, the issue you're probably really wanting to speak to is, ah, it's a related matter and you might speak at both, but C-8 in the council packet is the resolution to actually form the assessment district. And that resolution has attached an assessment roll which assesses • KENAI CITY COUNCIL MEETING MINUTES JVNE 2r 1993 PAGE 29 imately $185, approx000. So., this ordinance appropriates money to build the project of almost $800,000, and of that, 185 would be assessed. FITZPATRICK: That's what I wanted to know. Thank you very much. WILLIAMS: I think that ah, what we'll do. Let's, let's take it just for a moment here, I'm not sure if we maybe had our ordinance and resolution reversed. Lets hold mm gts ye North Gill, to continuation of the Evergreen, ad a ropriate the money for the project item 8. We'll go aheadPP now, unless you're adamantly opposed to the appropriation of the money. in that case, you may speak now. if you're concerned about the project itself and related elements such suntil item the time element, and things of that, please hold those 8. Yes. MONFOR: Mr. Mayor? Before, because I believesome Of these to kind oPeople o it haven't been here, I would like gaon��have to pay the money them, in assessing this, that they sun and how tomorrow. They don't have to pay it in one lump exactly the payment schedule runs. Because that may be a fear of many people exactly, it's the money. WILLIAMS: Okay. You want to discuss the lements of the at this appropriation itself. we'll discuss just he time. BROWN: All those questions really didn't deal C 8 with order appropriation. I have, I have to really sp to... MONFOR: Fine. We know that it's going to cost $793,000. But these people are not going to have to paythe $t7o9 3 , a0y0 what at' s . sp 1re only how the they need to know t ygoing p Fitzpatrick asked and they're going to pay it. BROWN: Right. Okay. The assessments are levied when the work is all completed and we know all the costs. If the work were to be done this summer, by the time the contractor'�rpaidhff weithcahis retainage, interest on the retainage, and then a require, if it's a lump sum payment, we can't require a payment for sixty days and if it's a time payment, then it would be due a year later. So, if it were a lump -sum payment, it's hard for me to imagine the payment being due before around December of 1993. • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 30 WILLIAMS: Then explain what constitutes a lump -sum versus... BROWN: If it's a lump sum payment, and Council decides that, I mentioned this in the memorandum, they set a pay-off schedule later when all the job is done and they approve a final assessment roll. If it's a lump -sum payment, then we'd require payment sixty days after December. So, in February it would be due. If it's a time - payment plan, considering the rather small amounts, I would think that a five-year payment plan might be appropriate. Ah, that decision isn't made now. That decision is supposed to be made later, but I understand why you'd want some indication now. My recommendation to Council would be that a time payment plan of a short duration wouldn't be a problem. However, I, there have been schemes in the past that have been discussed where a small assessment is due lump sum and a larger assessment due over a time payment plan. But that causes a problem because some people may zL have small assessments but own multiple lots. My recommendation would be to make them all the same, small or large, if it's a five- year payoff, then so be it. I lean toward a lump -sum payment on small ones, but some of these aren't so small. Some are ah, $4,400. So, I think what would happen is if Council wanted to go with a five-year time payment plan, the people that would have real small assessments, like only a couple hundred dollars, would probably pay lump sum to avoid the interest. And, so we wouldn't really be dealing with that many accounts on an annual, annual billing. SOMEONE FROM AUDIENCE: At what rate of interest? BROWN: In the past, we've charged ten percent interest. Ah. I think the city code allows the council to set the interest rate. On most accounts the city has, the city code will prescribe ten percent interest, but on an assessment district, they can have a different rate. KIMBERLY JACKINSKY - My name is Kimberly Jackinsky and I live at 1803 Fourth Avenue. Um, what he is saying though is that the City is not going to decide on whether we're going to make payments or pay in a lump sum until later. I don't know if any of the councilmen that are going to go out and buy a new car and the dealer tell them either, we'll tell you tomorrow whether you pay for it in full or we give you payments. I can't understand you asking us to decide now before you tell us how we're going to have to pay for it. a • 0 • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 31 MONFOR: Mr. Mayor? WILLIAMS: Yes MONFOR: Can't, on something like that, can't we have some unofficial consensus? WILLIAMS: Well, yes, I was just going to look at Mrs. JackinskyIs amount and see how much it is. JACKINSKY: I'm right at 500. WILLIAMS: One lot? And how much was it? JACKINSKY: WILLIAMS: JACKINSKY: And it's under McCreary. It's under my maiden name. All right. How much is it, do you know? It's right at 500 or, I think it's at $492.00. WILLIAMS: 492? Mrs. Fitzpatrick, your's is at $422.00. All right. I think that ah, you know, if council wants to discuss that matter now, a little premature, but... MONFOR: Well, if they feel more comfortable, I'm game to discuss it. BROWN: From a practical standpoint, I would be the one drafting the resolution in December to do the final assessment roll- and that's the one that sets the payment schedule. If Council were to direct me tonight, that a year from now, or whenever it is, six months from now when I draft the final assessment roll, to put it in that way at a five-year payment schedule or ten percent or eight percent, I'd do that. Ah, it doesn't bother me having the time payment plan as long as they're uniform. WILLIAMS: Councilman Smalley? SMALLEY: Yeah. Unofficially, I suppose, that's probably what I would support when it came time to make that motion is that payment plan. MONFOR: Five years. BOOKEY: Five years. Right. KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 32 WILLIAMS: Has that come to at C-S? BROWN: It hasn't even come then. It comes when the final assessment roll... SMALLEY: It comes later on, but we can still... RERS SCUM: I'm Herb Schaan, 1707 Fourth Avenue. I just have a few information questions. The City is assessing 25 percent of the cost. This percentage, ah, can you just tell me how that was arrived, the 25 percent. I understand that some of you sitting here have a nice pavement in front of your home for twelve percent of the cost. Can you explain that please. WILLIAMS: You want me to explain that? MONFOR: Do you want me to take you off the hook? SCHAAN: I would start at that end of the line please. Anybody. WILLIAMS: Yes, as a matter of fact, ah, in my area, the entire eastern part of town under the last major assessment district, next -to -the -last, we paid 12'h percent. I ran on the basis of having all the roads in that area paved for nothing. I was elected and I was re-elected based on that promise. I don't know if I was re-elected, but I was elected based on that promise and I've never backed up from that promise. At that time, we had a considerable amount of capital money available to us from the state purposely for paving. The people in my area did not feel, since there was a substantial amount of money available, that they wanted to pay anything since it was all grant money. This money that we're using for this particular job, does it contain any grant money at all? BROWN: No. WILLIAMS: There is no grant money whatsoever in this. This money is all being funded by the taxpayers of the City of Kenai, of which I am one and every member of this community is one. So, the 40 elements are slightly different in this case. No grant versus grant money. Free money versus money that we're all paying out of our own pocket. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993- PAGE 33 Also, I believe the elements of this ah, paving project, were brought about by the citizens of the community who petitioned the City Council for this assessment district, knowing full well at the time that there was a 25% assessment district that would apply. I hope that answers your question. SCHAAN: Yeah, I still, I still think that something more equitable, closer to the 12%, you know, I don't know, if you're going to different parts of town and treat people differently, I feel that in our dusty part of town we're treated a little bit more cost -wise and yet we have to suffer with dust and things like that. I think that some arrangement closer to the 12% or less than the 25% ought to be considered. Ah, I have a lot that is more than 150 feet back. I only have 30 feet frontage to the road. I'm charged nearly twelve hundred bucks. My neighbor has three times the frontage and is charged like 500, which is all right with me. I didn't understand the system before, but these rules now, what happens when you're more than 150 feet back, you get charged as if you're fronting the road and things like this. I'm not sure, you know, the equitability of the, of the whole system here. WILLIAMS: The mechanics of how we arrived at the assessment district can be handled by the Administration. They did it based on a per square foot basis, ah, and in some cases where there were very large lots, they subtracted amounts of the rear property as well. SCHAAN: Do we, do we have the ability to appeal the subtraction of this, of this amount or are we locked into this, ah, this whole system? WILLIAMS: Well, you mean as far as the, the total amount is concerned or the method by which the lots were... SCHAAN: Well, let me ask this way. The method by which this all . was arrived at is identical to what is done in all other parts of town. is it? This is identical same method, is that right? MONFOR: Yes. WILLIAMS: Well, it is now. Yes. SCHAAN: it is now, meaning since when, what time? WILLIAMS: Since there was no more free money. Since the money became an issue. Since there is no more capital monies and all of KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 34 the money that's being used to pave roads, build water and sewer, well not water and sewer, but to pave roads in this case, now is money coming from the taxpayers' pockets. It now becomes an issue. Well, now, let me give you an example... SCHAAN: So our...go ahead. WILLIAMS: Okay. We estimate that the cost of this paving job will be 793,000 dollars, of which about 180,000 will be paid for by the residents, leaving a balance of about 613,000 dollars to be paid by the citizens of the City of Kenai. That 613,000, if we did not do the paving job at all, would probably balance our budget this year. It's just about the same amount that we will reach into our savings account ah, to balance the budget. So, effectively, what you might say is that we are actually reaching into the savings account of the people of the City of Kenai and subtracting 613,000 dollars to pave the streets. And the citizens of the City of Kenai are the people that are here. It's your money that we're taking out of the savings account to pave the streets. SCHAAN: Ah, the letter, the letter that I got had a phone number that we could contact the city manager if we wanted. Tonight, I picked up the thing that has the rules of how this all was arrived at, I think I would have appreciated receiving this in the mail along with the letter so that I'd understand the assessment. Ah, it's sort of the process that we, we rely on everybody's ability to track down and to figure out individually to you, as city manager, how all this assessment is arrived at when it could have been done by a letter and we could have gone through this ahead of time as well. I know we had the opportunity to do this, but if everyone of the residents would phone you up and ask you how did you arrive at this, you can see how many phone calls you'd have on here. And I'm, I was following this and I'm belatedly coming into this ah, how all this is being arrived at. Ah, and I would have that as a suggestion, that information ah, your letter, ah, be included in the initial thing that we got. WILLIAMS: You mean the resolution and everything? SCHAAN: The explanation, the memorandum, the May 26 memorandum from the city manager. WILLIAMS: I know that Item C-8, which contains the map of the assessment roll was sent to everyone there. If you did not get it, then your proper address is not on file. Ah, but this map and the assessment roll showing how much your cost was sent to everyone. s • RENAI CITY COUNCIL A9E8TING MINUTES JUNB 2, 1993 PAGE 35 sCHAAN: We did not get the memorandum. Not the memorandum, no. I'm speaking to the memorandum portion. I would just like to register an objection ah, to the 25% assessment and I think I would leave it at that, that I think we're being treated in that part of town for our patience after requesting it already five years ago and more, requesting it that the ah, the paving and that being done in, in deference to Thompson's Park and all these other places and, and ah, other projects going ahead of our part of town, we're rewarded with an, with a 25% instead of a 12% because of the delay in time and now the end of funds and I would just like to object to the 25$t. WILLIAMS: Let the record show, of course, that Thompson Park is not on the paving schedule. SCHAAN: No, I understand, but these were some of the reasons given before...My personal property, if I have hardly any frontage and I'm being assessed a great deal more. I can take that up ah, as a private matter, but ah, I just think, I'd like to just state that I think the 25 jump, to 25% is treating us differently than the other citizens in town. Giving us strip paving, which we appreciate, ah, and that too, at a higher cost... WILLIAMS: Councilwoman Monfor, MONFOR: Ah, Mr. Mayor, I would just like to make a point of clarification for some of our audience that may not know this. The first ah, group of people that ever came to us for paving was Eagle Rock Subdivision and they were charged fifty percent. The next group was the east end of town and that was 12, 12h percent and we almost came to blows over that. The next group that was paved, and they didn't come and ask for it, was VIP Subdivision and they were also charged 25%. The City went a long time ago, when we had the discussion of how much people should pay when they ended the.free money was looming at us, and 25$ was low to some of us, 50% was high, and we said never, ever again would we go under 25% because we had too many of the areas of the city that needed to be covered and everybody should have the chance of paving. SANDRA CARR: My name is Sandra Carr. I have a lot on McKinley Street and I spoke to Charlie Brown prior to myself taking up this petition in order to circulate it and I said no one will be willing to sign a blank check and hand it over to someone else. I needed an approximate assessment in order to give the property owners. He told me, this is how it was explained to me, that we would be assessed by 150 feet. That would be square footage. Not by the • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 36 entire lot which the assessment that I have been mailed out isn't being charged by the entire lot, and I have a 2h, 2'h acre parcel which to me, I don't feel that just because you have a larger lot, you should be assessed for more. I have two ah, road frontage roads. Someone else who also has, who had a 2'% acre parcel, who subdivided, has three sides with roads on it and I'm being assessed $1200 more than he is. I realize the City of Kenai is being charged by the linear foot. Am I correct? On the paving? Then why are we being charged by the square footage of our entire lot, when part of it does not even assess roads. I mean, have access to roads? WILLIAMS: Well, I don't have an answer to that. Ah, I suppose that there, you know, there are methods by which you could change it around. You could take the actual linear feet ah, involved, the total linear feet divided into the cost and ah, come up with a per lineal foot cost in which case you with a 2h acre parcel would be charged for 660 feet and the person with 75 foot of frontage would be charged for 75 feet. I mean, that's a different method of doing it. CARR: Well, I, I feel that everybody that's in this area 'is benefiting. Is it possible to give a flat rate on the first portion and then go in the 150 feet per lot and assess it at that? I mean, just like that gentleman was saying. He has thirty feet of road frontage. He's being charged nearly $1200, where the person next to him has ninety feet of road frontage and he is being charged five hundred. That doesn't make sense to me. If we are, if we are being charged, you're being charged by the linear foot, how it can be so controversy on the amount, the dollar amount. WILLIAMS: I don't understand you're having thirty feet of road frontage. CARR: I believe it's called a flag lot. WILLIAMS: Oh, yeah, I see it. CARR: His are not the only ones, there are several others are being charged that way. WILLIAMS: The benefits accruing to his lot are just as great though, if you consider your access. There are a lot of anomalies • • KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 37 to this thing by the very nature of the subdivisions themselves. You know, there are some instances, there's no rhyme or reason why they were subdivided as they were either. I think, what I'm hearing here the method by which we arrived Keith, do you have a... is that there is a deep concern for at each assessed value to each lot* KORNELIS: Yeah, I'll attempt to I wasn't involved in the actual, square footage. The first thing the City's position is to try and owners, As far as the 2 5 % , we try to explain this, even though the actual determination of the you, we should all realize that, be equitable to all the property set that amount, that amount of dollars is what we're going to assess the property owners. The determination of, of how we arrived at that figure, if we increase one property owner's, or decrease one property owner's amount, that means respectively, the other property owner's amounts are going to have to go up. So, we're trying to be equitable as, as Charlie and, and the city engineer have worked to try to be as equitable as they could to everybody. And, the method, if you have this letter of Mr. Brown's of May 26th, he quotes the code in dark letters here and that says that, "except as otherwise provided by law, ordinance, or by the Council, the approved policy for particular local improvement district..." In other words, the Council can make some changes. "...the cost will be allocated on a square footage basis, extending one lot deep adjacent to improvements in subdivided areas, midway between streets up to 150 feet in depth if unsubdivided residential areas." CARR: Up to 150? KORNELIS: Okay. The big question that you have is whether or not this is subdivided area. CARR: I know that mine is not. KORNELIS: Okay, it's a government lot, and, and, it's sort of debatable whether or not a normal government lot is larger than most cases. But, the question is, is, if it is a subdivided area, then we take the whole size of the lots. If it is an unsubdivided area, then you're correct, it would go back 150 feet. There should be 150 feet from the road. • KENAI CITY COUNCIL MEETING MINUTBS JUKE 2, 1993 PAGE 38 CARR: Is that right Charlie? From my understanding you said it was by the square footage of the entire lot. KORNELIS: That's the way it's set up now. Because we're saying that it's a subdivided area. BROWN: And I did tell you that in the past, we had often used a 150 foot back on government lots. I did tell you that. CARR: Right. BROWN: I apologize if you took that to imply that I was, in this preliminary stage, when you and I were talking, I had never seen a plat of this area and the lots like this behind. CARR: Okay. Well, I brought the map in to you and we discussed it. BROWN: Yeah. But at that point, we were talking, you were pressing me for a figure and I said the average figure would $1,000, a lot more for large lots, a lot less for smaller lots and I believe we even talked about other methods of assessment. That at that point... CARR: No, that was the only method that we had discussed. BROWN: Did we not talk about linear foot method that you just now... CAM: Well, it says from the letter that I got from Jack La Shot, you said, okay this says approximately $40 linear foot. When I talked to you, you said, hey, there's no way, we don't charge by the linear foot. BROWN: No, he's talking about a construction costs. CARR: Okay. BROWN: But, what the code says is that if it's a subdivided area, then you use the entire square footage. And if you look at the plat, look at the entire area, I had to make a decision, is that a subdivided area or an unsubdivided area. Not with each lot, not whether each lot was subdivided or not, but the area as a whole. And I believe it is a subdivided area. i • RENAI CITY COUNCIL M88TING MINUTES JUNE 21 1993 PAGE 39 CARR: How do you derive that? With the City it is? It's on McKinley and Third. WILLIAMS: On McKinley and Third? All right, that a 2% acre parcel? Well, out of the two squares, two are subdivided and two are not, out of the four squares. There are four 2h acre tracts in that block. Two of them are subdivided, two are not. CARR: You're speaking of Andersen and Mr. Peterson? WILLIAMS: Right. That's correct. Your total assessment was $4400, was it? CARR: Yes, WILLIAMS: All night. Most of the 2h acre tracts were written at about $4400. toCARR: Ah, you know, the reason that I picked up this petition is because I had an estimate cost of $2,000. That was approximate. Ballpark figure. WILLIAMS: Do both sides? CARR: Yes. For the entire lot because Charlie said you, what the method that we discussed, you went in 150 feet from either one way or the other, say half way. Then you come in from this direction. You do not assess this portion twice, correct? Approximately $2,000 was what I had in mind, maybe a little more, 500, whatever. But not over double. I just feel it's just way off. When other people were willing to sign the petition at a $1, 000 for an average lot, they are being assessed for less than 500. I don't see why I'm being assessed by so much more just because my lot's bigger. Yet it has less frontage than this. This has three different streets and they're $1200 less than I am. So, if I cut my lot and have another road here, you're saying I would be charged less? That doesn't make sense, I mean, to me that doesn't make sense. WILLIAMS: Well, we can go back and we can redo or take a second look at how we arrived at the assessment per square foot or for linear foot or whatever. What will occur is that if we find what appears to be a more equitable situation for you, it will become less equitable for everyone else. • • KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 40 CARR: Oh, I'm, I'm well aware of that. But when the petition was really, when it was originally sent out by Nancy Gourley, she quoted a price of approximately $1,000 for these lots here. And they were willing to sign at a $1,000. They are assessed 500, 5- 34, right around there. WILLIAMS: For those of you that ah fall in the $500 category, do you have objections to your assessments going up to about 750. JACKINSKY (from the audience): , I didn't sign her petition to begin with. VOICE FROM AUDIENCE: And neither did I. JACKINSKY (from the audience): We're in Farm Homes. We took low- income housing. We just make our payments. We sure don't want to dish out more. That was the whole point of going in there. WILLIAMS: What you're saying is you don't want your street paved. JACKINSKY (from the audience) : No I don't. I live by a bar. They use it as a cutoff. I don't want it paved to make it convenient. WILLIAMS: Well, the problem is we did have 51% of the people who obviously signed the petition. MONFOR: That's right. JACKINSKY (from the audience): Excuse me, Mayor. Now, considering the amount of dollars that's come up, I mean she admits that this is more than a lot of people agreed to and less than some. Let's do another petition. Now that they know what it's going to cost them out of pocket, let's see if they want it paved. CARR: The majority of the people that Nancy Gourley received, I believe were 80 some signatures that were willing to pay a $1,000 to have their road paved. I got approximately 25, 28 signatures after that on the pretense that they would assess by square footage up to 150 feet. WILLIAMS: All right. If we were to use this method that has been proposed by this resolution on C-8, and we sent this list around showing exactly how much everyone else is supposed to pay and ah, 75% of these of people agreed to pay that much, you would be in the same position you're in right now, you see. In KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 41 other words, we'd have 75% of the people in the neighborhood wanting to pave at this rate and your level of payment of $4,400 would still remain the same. The only way... CARR: Why is that? WILLIAMS: ...to alter this is to change it, readjusting your figures down a little bit, their figures up a little bit and resubmit the whole thing and see if everybody's willing to go along with it. CARR: I like this price right here. Maybe $30,200. It makes more sense to me to get that when I only have two roads of good frontage that I'm paying so much more than this person that has three roads when it's by linear foot. WILLIAMS: Well, I say, if we readjust, if we take it and, say we just took it for say, for argument, we took it on the basis of square foot. We took the entire square footage available in the entire area to be subdivided... CARR: And then we wouldn't have, we would not have signed the petition at $4,400. WILLIAMS: Well, now, wait just a minute. it could very well be, if we do that method, everyone else will come up and you'll come down. See what I'm saying, take the entire square footage, total, regardless of depth of lot, width of lot, frontage of roadway -or anything else. Every lot would be benefitted equally by the amount of square footage served. Okay. Take the entire square footage that would be benefitted by paging. Divide that into the cost. Well, they're saying, you know, in some cases they used the 150... KORNELIS: No, no, no... WILLIAMS: All right, so we went to the entire square footage there? Well that's the most equitable way of doing it. CARR: You think it is, huh? I don't see how it could be when you're being assessed what you're being charged by lineal feet. I'm paying more, apparently, don't you own Gill. Street Investments? WILLIAMS: Well, yes, I don't have any problem... . CARR: Is that a bigcontroversy why we're doing it this way? Or Y Y g Y what? KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 42 WILLIAMS: I don't know. I don't have any problem with the assessment myself, but, then I'm not speaking from my standpoint at this point... TAPE CHANGE KORNELIS: not. CARR: That's right. KORNELIS: But we, what they did, and I think Charlie and our city engineer are correct, because they took that whole area in there, they took the square footage there and then they proportioned it out according to each lot proportionately that had the square footage. Just like the Mayor had said. That's how the assessment was done. They thought that was the fairest thing. If you were tomorrow, to go out and subdivide your property and, and have six or eight lots, you would still have the same assessment as you do now, as the other people do. They thought... CARR: Yeah, and then I'd have the taxes on top of that eight times over. KORNELIS: They did it because they thought it was equitable. CARR: I don't agree. Just like that gentleman said, when he only has 30 feet of road frontage and other one has , you know... KORNELIS: In this, in this particular case, if we went 150 feet back, he would have 70 feet by 70 feet in the back of your lot that you would not be assessed... CARR: How could it be $1200? f KORNELIS: ...and he would pick up the extra cost on his flag lot as would all the other property owners. CARR: I believe he already did. Wasn't it all, Charlie just said every lot was assessed by ... KORNELIS: Right, his square footage, total square footage for his flag lot is proportionate to the total square footage for the whole area. Just like your square footage for your lot is proportionate to the whole area. Just like every person who has a lot in there, their square footage for that portion is proportionate to the whole • KENAI CITY COUNCIL MEETING MINUTES JUN$ 2, 1993 PAGE 43 area. So basically, we took, or Charlie and the city engineer, took the total square footage and took the individual one and divided that by, the total square footage divided into that, and then multiplied that times the portion of the cost so that everybody was treated equally. Now, it can be done differently, but if yours went down, then the other method would mean the same amount of money at the end would have to go up somewhere else. CARR: I realize that and they were willing to pay and so was I at the 2,000. Okay? That's all I'm saying. WILLIAMS: It's just, give me kind of an idea Keith, if we were to take the lineal foot method and assess by the frontage only... KORNELIS: We have never done that before. Ah, with a lineal foot method. WILLIAMS: Would that, how would that, do you have any idea how... KORNELIS: That would change all kinds of things. A flag lot for instance, he would only be charged for 30 feet, whereas somebody else that had a wider lot would be, he could have tremendous square footage, because he could have the whole government lot back there all in one lot with just a little three foot, thirty foot entrance to it... CAM: But none of them are that way. KORNELIS: ...but his flag lot is. CARR: Well, it's not a government lot though. KORNELIS: No. MONFOR: Mr. Mayor. WILLIAMS: Yes. MONFOR: I don't really think that this is appropriate now because we've accepted the petition. we've accepted to make ,this an assessment district. We haven't gotten anything from 51% of the other people saying they don't want it to be an assessment district 40 any more. I think what we need to do now is call for the question and vote on this and then... KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 44 WILLIAM: Well, 1, that's why I say I think we've moved into two different categories. MONFOR: That's right. WILLIAMS: We should deal specifically with Ordinance 1544 and appropriate the money now and when we get into C-8 give it some more discussion and at the point we reach C-8, we can, we can, or C-8, we can suggest that we slow this whole thing down as I was going to suggest anyway and let them all go back and take another petition if they want. MONFOR: I'm not willing to do that Mr. Mayor. But, you know, what I think that, what people are also forgetting is that, I'm sure I'd be overwhelmed with a $4,400 assessment, thinking that I'd have to pay it off in five years, but on the other hand, out of the taxpayers' coffers is coming $680, 000 to do everything else but put the stripof pavement down on the road So for p , your money, you're getting a real deal. You're not going to have dust. You're not going to have the graders out there all summer long. You're not going to have to worry about whether the city will money for dust control. It's going to be easier to take care of in the wintertime. It will make a lot of difference and if you don't believe me, ask some of your neighbors that lived on those gravel roads and now have paved roads. So, you know, I know it is a lot of money for some people. Even $500 is a lot of money. But I think that the Council is willing to work so everybody can afford it and you're not even looking at any kind of a payment until next year and over five years and who knows between now and then we can work out, something can be worked out with the assessments. But it took them over a year to get this petition to us and I'm not willing to ask them wait any longer. I call for the question... WILLIAMS: All right. The question has been called for on Ordinance 1544-93. This is the appropriation ordinance only. All right, the Clerk will call the roll. FREAS: McComsey: Yes Smalley: Yes Williams: Yes Bookey: Yes Swarner: Yes Monfor: Yes Measles: Absent • MOTION PASSED UVANIMOUSLY. • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 45 C-4. Ordinance• No. 1545-93 - Increasing Estimated Revenues and Appropriations by $11,433 in the Rehabilitation of Taxiway A-3 Project, MOTION: Councilman Smalley MOVED for adoption of ordinance No. 1545-93 and Councilman Bookey SECONDED the motion. There were no public or council comments. VOTE: McComsey: Yes Smalley: Yes Williams: Yes Bookey: Yes Swarner: Yes Monfor: Yes Measles: Absent MOTION PABBBD MMIMOUBLY. C-5. Resolution No. 93-38 - Approving an amendment to the water and sewer utility regulations and rates, which was issued by the Acting City Manager on May 27, 19931, to become effective on July 1, 1993. MOTION: Councilman Smalley MOVED for approval of Resolution No. 93-38 and Councilwoman Swarner BBCONDDD the motion. Public Comment: Ruth Fitzpatrick - Stated she spoke with Williams before the meeting. Fitzpatrick stated she moved into her home on Third Avenue nine years ago. Rises in water and sewer rates over those years total $160.00. Fitzpatrick stated $160.00 may not be a lot to many, but she is on a fixed income. Williams stated Social Security has gone up in that time. Fitzpatrick stated when Social Security has raised, so has Medicare and other costs. . Williams stated it.has become necessary to raise the rates due to EPA regulations mandating certain items be done; the sewer treat plant upgrade; the lack of federal grants available to defer costs for EPA regulation compliance work; and the vacuum truck needing repaired. Kornelis requested an amendment be made at page PU-1, Item A(d): remove "stop and waste." Kornelis also stated Council discussed, but did not set a raise in permit fees at page PU-9, Item (c). • RBNAI CITY COUNCIL MEETING MINUTES DUNE 2v 1993 PAGE 46 MOTION: Councilwoman swarner MOVED to amend the water permit fee to $100.00 and sewer permit fee to $100 for new hook-ups. Councilman McComsey SECONDED the motion. Councilwoman Swarner requested UNANIMOUS CONSENT. There were no objections. 80 ORDERED. VOTE: McComsey: Yes Smalley: Yes Williams: Yes Bookey: Yes Swarner: Yes Monfor: No Measles: Absent MOTION 8A ORD. Resolution No. 93-39 - Awarding the janitorial contract for the Airport Terminal Building, for the period of July 10, 1993 through June 30, 1996, to Frontier Training Center for $2,254.24 per month. MOTION: Councilman McComsey MOVED for approval of Resolution No. 93-39 and requested UNANIMOUS CONSENT, Councilwoman Swarner SECONDED the motion. There were no public or council comments. VOTE: There were no objections. 80 ORDERED. C-7. Resolution No. 93-40 - Fixing the rate of levy of property tax for the fiscal year commencing July 1, 1993 and ending June 30, 1994. MOTION: Councilman McComsey MOVED for approval of Resolution No. 93-40 and Councilman Bookey SECONDED the motion. Councilman McComsey requested UNANIMOUS CONSENT. There was no public comment. Williams stated to the audience the mill rate will remain at 3.5 mills this year. • MKENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 47 VOTE: There were no objections. 00 ORDERED. C-e. Resolution Mo. 93-41 - Directing the continuation of the Evergreen, Haller, McKinley, North Gill, Second Avenue, Third Avenue, Fourth Avenue, Jefferson and Eadies Way Paving Assessment District, MOTION: Councilwoman Monfor MOVED for approval of Resolution No. 93-41 and Councilwoman Swarner 8ECONDED the motion. Public Comments (VERBATIM): LORI OLBON: My name is Lori OlsOn. I live at 404 Jefferson. Um, I'm one of the people who signed the petition requesting that this paving go through. I am hopeful that you'll pass this resolution. WILLIAMS: Please speak a little louder. OLSON: I'd like to see the streets paved, I think it's a health concern. I think the City would save money because you wouldn't have to come out with the graders in the summer after it rains and all that. You'd still have to come out in the wintertime and I think that the, the city workers who do clear the streets do an excellent job, if I might add that comment. You wouldn't have to oil the streets. we wouldn't have to put up with the dust, it's a safety issue as far as the kids are concerned. More than half of the people who live in this area did sign the petition. Whether they were misled or not or confused about how much it would cost, I think that there will be a for everyone to come to some kind of an understanding and it will be fair and the people who live in the area are the ones that have to put up with the dust and the front end alignments and so on and I would hope that you would pass this resolution. Thank you very much. WILLIAMS: Councilman Smalley. SMALLEY: Just a comment on Mrs. Olson Is testimony if we could change the word oil to CSS-1 for the record, I'd feel more comfortable with it. WILLIAMS: Thank you for that, • • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 48 MC COMSEY: We don't oil roads any more. WILLIAMS: Please state your name for the record. DAWN BARNETTE$ My name is Dawn Barnette. I live at 1804 Fourth Avenue. I've lived in my house now for, let's see, 81, 82, oh, going on about eleven years now and I've put up with a lot of dust and the reason that I have is because I am in a Farm Home and I cannot afford a lot of stuff. I have a lot of children. Ah, when I found out about the paving, I didn't sign the petition asking for it because I knew it was going to be expensive because I'm looking at the other end of Fourth Avenue and I see that beautiful paving, with the sidewalks and the gutters and everything else. You're now telling me that you want to just lay down a strip of pavement. I still have ditches, and you're going to get rid of the dust. That would be great. I'm not happy with being on the other side of Fourth Avenue and not being appreciated as much as the first part of Fourth Avenue that has beautiful paving. If I'm going to have that type of paving, I would rather wait. I don't want it now. I really can't afford it and ah, there is a safety factor here. There are a lot of children in our area. The other day it was noted to us that the, the Sears Elementary bus, when it came by, seventeen small children got off in one spot. Our concern is that there is no stop signs on Fourth Avenue except down by Evergreen Street and down by Forest Drive. We have people that come from Larry's Club, taking the back road, and of course, Fourth Avenue is it, and they barrel down that road. It's a 25 mile -an -hour road. They barrel down that road going 40 and 50 miles per hour. We have not seen any policemen in that area stop anyone yet. I believe there have been a couple accidents that have been, that people have been cited for, for running stop signs or just going too fast. But, as of lately, we have not seen any police officers stop anyone. Now, we hear cars every night. So, right now, like my neighbor said, I don't want to make it convenient for them. I would much rather put up with the dust. I know I have some more stuff I wanted to say, but I can't remember them all. I'll think of it though. WILLIAMS: I note that your assessment would be about $2,200, is that right? BARNETTE: Oh, that's, no sir. Mine's just, I think, was a little over $500. KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 49 WILLIAMS: BARNETTE: Oh, $537. Right. WILLIAMS: Dorothy Cooper is $21,200. Is she here this evening? Don't see... BARNETTE: Oh shoot, now you made me forget what I was going to do... WILLIAMS: I didn't mean to scare you. BARNETTE: Oh, that's it. The assessments. Is what we got in this letter with our names on it, is that carved in stone? Does that change at all? WILLIAMS: I think, we're assuming this based on our best guestimates of cost. Now it could fluctuate a few dollars, ah, one way or the other. But, we've been in the paving business long enough that we pretty well know what those costs are going to be unless, some dramatic thing takes place and the price skyrockets. BARNETTE: Okay. Would our assessments be affected because you've now changed Evergreen Street from RR to an RS and have the ah, having it subdivided and everything, is that going to affect it? WILLIAMS: That has nothing to do with it. The fact of the matter is, the City is sharing in the cost. That strip of land along ah, Evergreen Street, ah, to the west is it? That portion of it is being paved with City funds anyway. So, we'll absorb the cost of 660 feet of paving it looks like, on one hand. BARNETTE: Yeah, but after it's sold, you get it back. WILLIAMS: Well, I can say thus same thing for those who have large parcels that they're planning on subdividing and selling off. They'll get their money back too, you know. BARNETTE: Okay. Now the other thing I just thought of asking you is that if you put this strip paving down, how, how long can you guarantee it's going to be up kept? • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 50 WILLIAMS: That's a, that's a dangerous question if you and it has a lot of political implications to it, ah, and I would be hesitant to answer that question. The City of Fairbanks is considering tearing up a lot of their pavement, going back to gravel roads because they refuse to assess themselves the necessary taxes to maintain them. BARNETTE: Okay. Why are we wasting our money putting it down now then anyhow? WILLIAMS: We don't know that our citizens will choose not to pay the bill later on. In other words, you can't second guess the future. We went through one heck of a economic crunch in 87, 88 and 89. We survived. The City's in better shape than it ever was. We're hopeful that the future will bring us a better economy that we're all working towards. Ah, you know, we can't see in our crystal ball what the future might bring so those kinds of guarantees are pretty hard to offer. BARNETTE: Okay. I'm not.trying to be facetious or anything, but how come the east side of town got paved before the west side of town. WILLIAMS: Because the fellow over there that ran for mayor demanded that the paving be done. BARNETTE: Yeah, but there was grant money for everyone though wasn't there? WILLIAMS: That's true. That's true ... then. BARNETTE: Yeah, but it was all spent on the east side of town. Why not on the west side of town. WILLIAMS: I wouldn't say that. That was another time. BARNETTE: A majority of it is because there is, there is hardly any gravel roads on the east side of town on the Spur Highway, off the Spur Highway. WILLIAMS: Well, I think from the east side of town also includes all of Vahalla and Thompson Park and, and and all of that... BARNETTE: Correct. I understand that wayout there t pas Seaver Creek they do not have any paved roads. I mean, we're sitting . KENAI CITY COUNCIL JUNE 2, 1993 PAGE 51 right town, no on MEETING MINUTES e in the middle of town. We're five minutes from t but all this time, for the eleven years that I've -be middle of has ever suggested that we any paving, en there, MONFOR: No, that's not true. WILLIAMS: That's not true. MONFOR: No, that's not true. WILLIAMS: No, a lot of people have... MONFOR: Even this council has had suggested, made themselves many times. the suggestion WILLIAMS: I think it took the citizens that are finally come forward and say, by golly, we want vi that area to ems, paving. ij a ETTE. Yeah, but we're all lower income peo le. � afford what everybody else is paying though. Thatis We can't it off* why we ve put WILLIAMS: Well, the City of Kenai is reaching into account and taking nearly $700,000 out of everybod else is savings insure that there is paving. Y s money to BARNETTE: Okay. WILLIAMS: It's all your money. SAMETTE: Yeah, that's right. It's my money, 'C'M JACRINSKY: I'm Kim Jackinsky off of Fourth Ave in line with Dawn's comments, is this time i Avenue again. Um find out on the project um , � s there someway we in or what other improvementshtheytrey oing°ing to Put stop signs order to counteract the pavement versus what we to have n the road in the gravel does slow them down a little, it's slowingnow' I mean, much, but pavement is definitely going to send u them down there any, is there anything in the project to m up' Um, is signs. I petitioned the City last Put in more speed months to get a speed limit sign on Fourth Year, nueo at me almost two wasn't one. my end. There • WILLIAMS: We can address the Public Works Director Policy with regards to putting up stop signs. What is our should have got a latter. I got the one on meeting did the first rezoning tonight• notice go out? first one f and then I got the for the notice That's hearing �tCIL MEETING MINUTES KENAI CITY CO JVNE 2, 1993 pAGE 52 iCe pepartment and the with the police ing trf are very al°selY certain gut theretop ELIS , We work they have effect • f our'waY s • • coureet o into engineers °� that would g ways could have later on in the that have f our' you �11 be an award to an requirements would In fact' Y normal procedure where We engineered• there,,, here i our instances he proiect i� not an appropriation' on it- Then we would T there ll t0 do the engineering designed• Own"' — engineer in budget f iris relimil property w as engineering the input far ° this prOiect p involve the p es et would their would be t is hearing that in and actuallystOP have ThOsbe apple have a publ They could come things like actually this area• cuts and um, and s and they would as driveway We W°uld have drawing t0 get of thing eti the drawings• he individuals, going this the fact that to ipOk Ito Eva are we. Mcnf o mentioned the f irst time okay* has come in. This is I didn't know JACKINSKY: this? Councilwoman � et formed# This is the informed time a lot of us I, d didn't g tonight' is the first sgot papew°rk' avement until a lot Of eeting to doPavement of information °n' with the anything about that I g r of the property t meet owns first You the registered KORNE�,15: Areerwork as the Borough? JACKINSKaa owner. register KORNELIS: WILLIAMS' I am, I Im listed on this pap Then YOU When JAC that stated tha BROWN: public Right. the one• tonight? but there, i There was a said that there Monf or to begin with and we notifying You Of the Councilwoman the pavement JACKINSKY : s regard &►g other meeting this was formed... 't missed You haven and weren t in long time ag°' when there Work sessions FOR; Oh, this was a on council year ear we have Public to MON is in past Past Y vite the This a cap where We in With what yea, we have Cts their prioritise that 's••' tal improvement prole sets on our cap ,s when the council come and that KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 53 they're going to go to Juneau and ask for the money. And that's how ah, the congregate housing got built, that's part of the monies. that we used to pave VIP Subdivision. That's how we're getting the sewer line to Thompson Park is by putting these on a priority list and working through the list and as the project is completed then we go to the next one. But truly, where you live, I think ah, Mrs. Olson hit it right.on the head, it's really a health issue also because it's such a large area that's not paved and if we continue to have this weather, and even if we do dust control, all that little dust is up in the air for the whole town to be breathing in. It's the same as the project down on Dolchok Lane, but at least that's a less populated area. So, you know, I, I really understand what you're saying about the money, but if you could look at the fact that... JACKINSKY: The money isn't near the issue as the fact we do butt up to a bar and it is terrible. The traffic on Fourth Avenue is terrible because of the fact that we have no four-way stops. You go on Third Avenue, you're going to get stopped at every intersection. MONFOR: That's something then we can take care of. We can engineer four-way stops. Hey, we can, the City can do about anything you ask as long as it's legal. JACKINSKY: Yeah, but like I'm saying, look how long it took to me to get just a speed limit sign, I mean... MONFOR: That's right, well it doesn't need to take that long and it's .... JACKINSKY: I had to go to the City. I had to go to the Police Department. I had to hassle the Police Department. I had to hassle the City maintenance yard.• I mean it took several phone calls just for a speed limit sign. MONFOR: And that shouldn't happen. And we're going to try to make sure it doesn't happen any more. JACKINSKY: Thank you. HERS SCRAM: I'm Herb Schaan, Fourth Avenue and I just want to express my appreciation for your considering paving in that I think it is important to get it paved and especially since the volcanoes have blown. It's not just dust, it's volcano dust and it is iKENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 54 definitely a different scene. Ah, my suggestion is that a consideration be made, not for developers who own big chunks of land, but for residents, who by fluke of the way it's processed, that we get charged double and triple of what average assessments are, that there be a cap, say eight or nine hundred dollars or something. The excess of which would be taxed at a lower rate, assessed at a lower rate to the excess be spread out over the group again. That there be a cap around a certain medium -high mark that then is at a different rate than is spread over the other to make it more equitable since we all are, are benefiting equally, rather than on the basis of square footage only. Thank you. WILLIAMS: Have, have you looked at the assessment rolls, the whole assessment roll itself? If we take everyone that's there and I don't even pretend to know how many is on this list. There are only... CARR (from audience): There are approximately 133 property owners with 195 parcels. WILLIAMS: We have 195 parcels, only about 27 of them exceed $1,000 in value in assessments. Ah, out of the hundred -and -some -odd, there are ah, there are only ten that exceed 2,000, eleven that exceed $2,000 out of how many, 193? CARR (from audience): I believe it's 195. WILLIAMS: 195 parcels. There are eleven that exceed $2,000 and 27 of them were totalled exceed 1,000. Anything further? One at a time, please. RUTH FITZPATRICK: I have one quick question, Mr. Mayor. You had mentioned that you were going to ask that this be put off for a year possibly. What is that going to do to the cost? Cause you know, as normal, I mean, if you wait awhile, the cost goes up. Which means, I want, I want the street paved. WILLIAMS: Let me address that matter to the Council. It may have some bearing on their thoughts, it may not. We had originally planned on doing this paving this summer and fall. Correct? There has been a number of people come to me from the general area there, ah, and again, those who own the large parcels are the ones I'm speaking about now, who have said, we are either ill -prepared . engineering -wise or financially, to deal with stubbing out water and sewer at this point and time. The City has a rule that you will not cut that paving for five years after it's laid down. That • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 55 would render some properties valueless during that period of time because we also have a rule that says if you're within 200 feet of water and sewer you will hook up to it. If they are within 200 feet and they want to subdivide the property and sell it and they can't hook up to it, they can't sell the property chances are, within that five-year period. I'm not at all set in concrete on that matter. I would still like to hear some more from the general public and have the council discuss that matter of perhaps putting off the paving until next spring or early summer, maybe allowing those who have the opportunity and need to get that water and sewer stubbed out, to do it this summer and fall. Because, remember, there is the five-year rule there that says you will not cut that pavement. MONFOR: Where does the five-year rule come from? WILLIAMS: It's been a part of the rules for... MONFOR: Where is it? Is it written anywhere? BOOKEY: Is it an ordinance? BROWN: No, no it is not. We... MONFOR: Well, then... BROWN: I informed the Council of that in the beginning when we get up this assessment district in concept and then the letters I wrote to the individuals announcing tonight's meeting, I told them that the City would prohibit, I can't remember my exact language, but we didn't want them to cut the pavement. So, if they planned on developing it in the near future, to, or in the future, to go ahead and do the water and sewer stub -outs now. FITZPATRICK: Well, I haven't seen any big flurry of people trying to buy lots in that area. Like I said, I've been there nine years and ah, but I am concerned that if it is put off any more length of time, the cost is going to go up even more and I think this has to be considered also as for these people that just had to leave. I mean, they're having problems paying the bills, let alone, coming up with the money for the pavement. And I mean, I, you know, I mean, I don't have a lot of money either, but ah, I would love to have the dust cut down. It would be fantastic. • WILLIAMS: Al ' 1 right. i think that's strictly a matter that ah, that Council decides to address that issue and give assurances that KENAI CITY COUNCIL MEETING MINUTES JUNE 2 , 1993 PAGE 56 the five-year period is not going to be set in concrete and if the rest of you have no objections, those who have been planning to do water and sewer, understand that once, once the asphalt is down, you're going to have to cut it open and be responsible for proper repair of it and proper laying it back if Council so desires to, to allow you to do that. I don't have any objections to doing it right away. My concern was if we locked you into a five-year period, that it may very well work some hardships. That's an understanding council has to make. DAN MC RIERNAN: Yeah, Dan McKiernan. I have some lots on Fourth and Gill Street. And ah, my concern is that ah, I think it's a wonderful idea and waiting, is them people that wanted, want to wait and stuff, probably don't live there and suck the dust. And as a resident, and the lady says the speeding and stuff, at least you'll be able to see them when the pavement...you know, now you can't see them. I mean, it's a pretty out and dry and ah, I was fortunate enough to buy a piece of property over there that somebody had already subdivided. So. I'm paying three little bits and pieces, but I pay the Borough a lot more money on the yearly basis than the people with the big chunk. So you could give your money to the Borough or you can give it to the City. WILLIAMS: Thank you very much. MONFOR: We really want the money. DENNIS LUOR: Dennis Lusk, 406 Jefferson Street. I just moved in in October. Really liked it. I would like, I'm for the paving. As far as the people with larger lots, maybe you can make an exemption to that five-year deal and for the larger money, maybe you can make a longer term loan available to them. WILLIAMS: Thank you. Any further discussion. JAY SHIP: My name is Jay Ship. Ah, 313 Haller and I would just like to know that I'm very much in favor of paving the roads along there. The dust is terrible and ah, and I' In an asthmatic and so it makes breathing difficult at times. So. I'm sure if you don't get the roads paved very soon, we're going to have more asthma cases on our hands. Thank you. MIRE SEAMAN= Mike Seaman, 408 North Gill Street and I'm one of the big property owners and I say go for it. F: KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 57 WILLIAMS: Any further discussion? seeing no further discussion, then we will bring the matter of Resolution No. 93-41 back to the Council. MONFOR: I'd like to ask for ttlmIMOUs CONSENT. WILLIAMS: Is there any objection to unanimous consent. Seeing none, Resolution No. 93-41 does pass. Now I want to take the opportunity on behalf of the rest of the council and all that's here tonight to thank all of you for coming up and giving us your input on this matter. MONFOR: Yes, very much. END OF ITEM C-9. Resolution No. 93-42 - Ratifying amendments to the 0 Airport Regulations, MOTION= Councilman Smalley MOVED for approval of Resolution No. 93-42 and Councilman McComsey SECONDED the motion. There were no public or council comments. VOTE: Councilwoman Monfor requested UNANIMOUS CONSENT. There were no objections. 80 ORDERED. C-10. Resolution No. 93-43 - Awarding a contract for the construction of 1993 Kenai Municipal Airport taxiway A-3 reconstruction to Doyle Construvtioa for the total amount of $184,873.40, which includes the basic bid and additive Alternate A. MOTION: Councilman McComsey MOVED for approval of Resolution No. 93-43 and Councilman Smalley SECONDED the motion. Councilman McComsey requested UNANIMOUS CONSENT. There wer e no public or council comments. • C7 KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 58 VOTES There were no objections. 80 ORDERED, C-11. Resolution No. 93-44 - Awarding the bid for Fire Department Roof Replacement to Peninsula for a total amount of $31,638.00. MOTION: the Kenai Roof Lag Councilman Smalley MOVED for approval of Resolution No. 93-44 and requested UNANIM0US CONBUT. Councilwoman Swarner SECONDED the motion. There were no public comments. McComsey stated he understood when the new addition was made the fire house, the roof was fixed. Kornelis explained no, at the time it was the rainy season and it was decided to wait and hold the project until now. VOTE: There were no objections. 80 ORDERED. C-12. Resolution No. 93-45 - Awarding a contract to William J. Nelson i Associates for design and project management services on the Street Paving 1993 Haller, Evergreen, McKinley, North dill, Second, Third, Fourth, Jefferson, and Ladies Way Project for a not -to -exceed amount of $55,677.00. MOTIONS Councilman Smalley MOVED for approval of Resolution No. 93-45 and Councilman McComsey SECONDED the motion. There were no public or council comments. VOTE: There were no objections. 80 ORDERED. C-14. 1993 games of Chance and Contests of Skill Permit Application - Alaska State Hospital and Nursing Home Association. Approved by consent agenda. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 59 C-15. 1993 dames of Chance and Contests of Skill Permit Application - Sons of the American Legion Squadron 020. Approved by consent agenda. C-16. 1993 Dames of Chance and Contests of Skill Permit Application - Kenai Peninsula Archers. Approved by consent agenda. BREAKS 10:16 P.M. BACK TO ORDERS 10:33 P.M. COMMI88I01 CONNITTES RE80RT8 D-1. Council on Aging 46 Swarner reported the annual fashion show was held and well -attended at the Senior Center. Swarner added the Congregate Housing facility is filled. D-2. Airport Commission Ernst reported the next meeting is scheduled for June 10, 1993. Monfor requested Ernst update Council in regard to the use of the Float Plane Basin. Monfor suggested giving free rental for six months as an advertisement in order to get more people to use the facility. Ernst reported three of the five commercial slips are rented. Two others should soon be rented. Six of the 25 long-term slips are leased. The basin has been open 33 days and has had 80+ operations, averaging three operations a day. Ernst added he has discussed the idea of a free slip with the Airport Commission. Ernst believes it is a good idea, however the length of time would be for four months due to ice on the basin. Ernst stated they are still waiting on the court's .judgment in regard to the condemnation of property for placing the gates. Ernst added it will help business when the fuel service is situated there. Ernst stated the advertisements that council reviewed at • the last meeting will start on June 15. Ernst hopes a turn -around will occur. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 60 D-3. Sarbor Commission Bookey stated the next meeting is scheduled for Monday. D-4, Library Commission Monfor reported a meeting was held last night. The summer reading program has started and will continue through July 15. A survey is being conducted and will be reported to council in August. Monfor reported Commissioner Tom Murphy has resigned. A memorandum was included in the packet with copies of applications on file. Monfor stated the Commission recommended Ed Meyer to fill Mr. Murphy's term and Amy Price be appointed as student representative to the commission. Williams offer those names for Council's approval. firm MOTIONS Councilman Smalley MOVED to appoint Ed Meyer, to fill Murphy's. position and Any Price as the student representative to the Library Commission. Councilwoman Swarner BECONDBD the motion. There were no objections. 00 ORDERED, D-5. Parke & Recreation Commission McGillivray stated there war, no report. The next meeting is scheduled for Tuesday evening. Monfor requested the Parks & Recreation Commission, as well as other commissions and committees, establish goals and objectives. Monfor also requested the Parks & Recreation Commission ' s first two goals be to complete the municipal park which is now closed to camping and to establish a camping area, within walking distance to the downtown area, etc. for cannery workers as well as other visitors to the area. Monfor added the camping area should provide water and sewer, fire pits, showers, etc. Monfor stated the camping area should be planned for next year. Swarner stated she has been asked that the outdoor ice skating rink, previously in front of the Chamber, be placed at the old football fields by the FAA towers. Williams stated he believed it a good idea for the commissions and committees to establish goals and objectives. Williams stated at the last meeting he suggested Council make a list of small projects KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 61 needing to be done in the area. Williams suggested Council should meet with Mr. Manninen and set goals and objectives. Williams added he would like any CIP projects to be well -documented this year with lots of backup information to take to Juneau. D-6. Planning 6 Honing Commission Smalley stated he was not at the meeting, however he was told the Commission continued their public hearing on the permit for Katerina's Katering. The permits requested were for catering and fine dining. Both permits were defeated. Smalley added the rezone for Evergreen Street was passed. Smalley stated Commissioner Geocke was in the audience if Council had questions. There were no questions. D-7. Miscellaneous Commissions and committees Swarner reported the Beautification Task Force has been busy planting the trees, bushes and perennials. Williams reported the All -America City sign on top of the Welcome to Kenai sign was leaning and needed extra support. Williams requested Kornelis to have more support added to the sign. Regular Meeting of May i9, 1993. Approved by consent agenda. 8-2. Board of Adjustment Meeting of May 190, 1993. Approved by consent agenda. ORREOPONDENC P-1. Letter from Jim Arness regarding Townsite Historic Dietriot. Williams asked if the old ordinance for Townsite Historic had been 40 canceled in regard to the recreational vehicle park being built on the bluff. Smalley stated old pavement, etc.'has been thrown over the bank and is killing vegetation. Williams read a portion of Arness' letter in regard to Councils "non -action." . RENAI CITY COUAICIL MEETING MINUT83 JUKE 2, 1993 PAGE 62 Graves stated there are no "not allowed" uses in the old Townsite Historic zone. That was one of the problems. If a building permit is required, there is a process, however Graves did not know if a building permit was required. Bookey stated he was required to obtain a conditional use permit for the portion of his RV park which was inside the Townsite Historic Zone. Smalley stated he wondered what kind of permits would be needed to make adjustments to the bluff. Williams stated he did not want the Task Force to think the Council has failed to act on the Townsite Historic zoning changes. This was not the intent of Council. Council had decided to review the new ordinance at a later time due to a heavy schedule earlier last month. Smalley suggested a cease and desist be placed on the construction if it is not allowable by code. Kornelis stated he believed La Shot's interpretation different and he has the same question of whether the work is allowable or not. Smalley stated he.believed any development in Townsite Historic is to go through Planning & Zoning first. Williams suggested this item be reviewed very carefully. Williams added he will do a letter to Arness and the Task Force members with information reported by La Shot. Rights -of -Way on Fish & Wildlife service, II. s. survey 1435/Overland Drive. Approved by consent agenda. a-Z. Approval - Agreement with Tom Manninen for City Manager position. MOTIONS Councilwoman Monfor MOVED for acceptance of the employment agreement between the City of Kenai and Thomas Manninen for our city manager for a three-year contract. Councilwoman Swarner SECONDED the motion. Councilman Smalley requested MWXXOOS CONSENT. There were no objections. 00 ORDERED. • 0 E KENAI CITY COUNCIL MEETING MINUTE: JUNE 2, 1993 PAGE 63 Councilwoman Monfor asked Council to consider the fact that Charlie Brown has been the interim city manager for practically the past twelve months, or will have been when Mr. Manninen comes on board, and he has not only been the acting city manager, but has also been the city Finance Director and she felt it was time Council remunerate him no less than $2,000 a month for the last twelve months. Monfor stated she wanted the payment made in one lump sum now that they have accepted Mr. Manninen as the new city manager. Williams stated he believed there is a portion of the codevthat allows for the acting city manager to draw city manager's pay. Monfor stated it was never done and it was definitely time since they have hired a new city manager. Graves stated Kim Howard was paid extra when she was acting city manager. Monfor agreed and added Council set a sum and paid her. Williams stated he wanted to know how the code addresses it. Swarner asked Graves to research the question and let Council know at the next meeting. Monfor stated she thought Council should just give him a lump sum. Monfor added Kim was paid a lump sum when she was acting city manager and there is no reason why Council could not do this at this time. Monfor added, this should not be put off. Monfor stated she believed Council had been remiss in not doing something in the past ten months and that Brown barely took a vacation during that time. Smalley stated he seconded Nonfor's suggestion. Smalley stated he though Council should pay Brown the extra money and then if it is found they cannot pay the amount (by code) , legal counsel can override Council. Smalley asked how much money it will be. Monfor answered $24,000. Williams suggested $22,000 as it amounts to what Monfor proposed: eleven months at $2,000, or $22,000. Monfor was agreeable. Smalley stated Monfor's request was for twelve months. Monfor agreed, but stated she did not want to argue and that $22,000 was good. McComsey stated the it had been motioned and seconded and asked for UNANIMOUS CONSENT. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 64 VOTE: There were no objections. 80 ORDERED. Z= NEW BUSINEBB 8-1. Bills to be paid, Bills to be Ratified NOTION: Councilman Smalley MOVED to pay the bills and Councilman McComsey 8ECONDED the motion. There were no objections. BO ORDERED. 8-2. purchase Orders Exceeding $1,000 NOTION: Councilwoman Swarner MOVED to pay the purchase orders over $1,000, but to add on Greenscapes, the $5, 000 rental for the terminal, that will be paid when their sales tax is current and any other purchase order over $1,o00 that is not current. Councilman Smalley 8E009DSD the motion. Councilwoman Swarner requested UNANIMOUS CONS=T. There were no objections. 80 ORDERED. ii-3. Ordinance No. 1546-93 - Amending Kenai Municipal Code, Chapter 20.05 Entitled, "Vehicles -for -Hire." Approved by consent agenda. 8-4. Ordinance No. 1547-93 - Amending KMC 7.12 to provide for monthly filings of hotel/motel room tax returns for certain delinquent accounts. Approved by consent agenda. N-5. Ordinance No. 1548-93 - Finding that a portion of the Southeast 1/4, Section 36, T6N1 R12W, S.M., City -Owned Lands, is not required for public use and may be sold. Approved by consent agenda. E KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 65 N-6. Ordinance No. 1349-93 - Amending the Kenai Municipal Code 14.20.150 to Include Revocation of Conditional Use Permits. Approved by consent agenda. N-7. Letter regarding AML conference in Kenai. John Torgerson made a presentation to Council and reviewed the memorandum included in the packet in regard to the AML Conference being held in Kenai/Soldotna in November. Torgerson brought Council up-to-date in regard to plans being made, steering committee members, i.e. Mayors Williams, Reeder, and Gilman; Betty Glick, John Torgerson, KBVCC and the KPB Marketing Council. Torgerson stated they are requesting the Chambers of Commerce to join in the project. They hope to divide the committees up and each take a different item of project. Torgerson added that AML's Crystal Smith and Kent Swisher will be in the area in June. Williams added they will be addressing Council at the June 16, 1993 meeting. Torgerson stated $24,000 is needed to accomplish the project and through donations of travel funds budgeted to go to Juneau from Peninsula municipalities and KPB, they have $23,500 of the $24,000 at this time. Administrative Assistant Howard stated Tom Manninen will be in Kenai from June 15-18, 1993. Manninen will be here to look for a house, but will be attending the June 16, 1993 meeting as well. H-8. Ordinance No. 1550-93 - Amending the Official City of Kenai Zoning Map for a Portion of the SE h, Section 36, T6N, R11W, S.M. (a 200 Foot Strip Along Evergreen Street). Added and approved by Consent Agenda. z � 1L .i • .] • L I-1. Mayor 40 No report. I-2. city Manager No report. Swarner stated her concern in regard to the memorandum included in the packet about discontinuing the use of community • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 66 service workers for different city departments. (The memorandum discussed the fact that the State does not cover the workers with insurance.) Swarner stated the community service workers have done a lot of good for the city. Monfor suggested Brown get in touch with Representative Navarre and discuss the problem with him. Brown stated he would work on the problem more and try different angles. Brown added he is not getting anywhere with the State. Brown stated he will try the judicial system. If something cannot be worked out, the judicial system will not have anywhere to put those people to work. Brown added he spoke with the Borough and they do not use community service workers. The City of Soldotna will not use them in high risk areas, only for library workers and washing cars. I-3. No report. I-4 , No report. I -a. No report. I -so No report. I-7. No report. Attorney City Clerk Binanoe Director Public Works Director Airport Manager At this time Council made their comments. Ovarner thanked Brown for his hard work. Swarner asked if a traffic study had ever been done for Main Street Loop and Willow. Swarner asked if a traffic counter could be placed there. Kornelis stated the City does not have a traffic counter. Onalley a. Stated he will be out of town from June 14 through July 6, 1993 to attend an International Education Association meeting. Smalley asked Council if they had any information from the city or Peninsula to take along, please let him know. • KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 67 b. KCHS understood the cancellation of Government Day this year due to scheduling problems with budgeting and city manager interviews, etc., but hopes it will be done again next year. c. Has received concerns regarding the Bed and Breakfast sign on Beaver Loop and Bridge Access. Smalley stated he understood the sign for the business must be on the property of that business. Kornelis stated he believed a letter has gone out in regard to the sign. d. Asked about the vehicle with the sign on top of it in advertising Photo Quick. Kornelis stated he telephoned DOT and they are checking into it (the vehicle is parked on State right-of- way) . e. At the same plaza, a jeep is blocking the alleyway between Photo Quick and the Uptown. Smalley added it may be private property, but if not and is a public alley, the owner should be told to move the vehicle. Kornelis stated he would check into it. f. Appreciates Brown's efforts and believes the monetary payment is barely enough to cover what he has done for the City. ITEM Jl DI8cus8ION J-1. citizens VERBATIM: PEDERSON: Honorable Mayor and distinguished members of the Council, my name is Larry Pederson and I'm chief executive officer of Commercial Financial Group. I came before your body on May lath at your regular scheduled meeting and presented to you a proposal for the settlement of the Inlet Woods matter or at least an outline proposal for the settlement of Inlet Woods matter. Ah, at that time, your body asked that the matter be referred to the Administration. At that point, Mr. Brown and myself carried on numerous, some heated and some cooled conversations, and I believe we're pretty much to a consensus of what might be the foundation of a workable situation ah pending the ratification by your body tonight in your executive session. Ah, it started out what we wanted to have as a simple agreement and of course, along the way we had to bring the attorneys into the matter. I think ah if it was left to Charlie and 1, we could of probably had a real simple agreement. Um, but it's sort of like my KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 68 attorney said the other day when we were um, conferring on another matter, and I was, I was asking him the legal rate of charge on a particular matter, ah between a client and ah, and the lender, and ah he gave me the proper answer and then he said ah, and then I said, well after reading the statute, what you're telling me doesn't look like what the statue has written here. And he said, ah, that's right Larry. He said ah, you got to remember, the law was written by attorneys and attorneys are practicing law and they continue to practice law until they get it right. So, consequently, what started out to be a simple foundation has now become, not a real complex, but um, several issued document. We believe that ah, we have the foundation of what can work. Ah, we originally ah, offered one -million -seven -hundred -sixty-two thousand five hundred dollars ($1,762,500) predicated on the fact that McLane's would have to borrow said funds. Um, and also, ah, we offered that ah, should the offer of sale for any lots come in, � or offer for purchase of any lots come in in the interim, that net proceeds would ah, would go to the city of Kenai and would therefore, reduce the ah amount of judgment and the amount of the offer accordingly. Ah, those, those stipulations have changed somewhat. The dollar amount has remained the same ah, but the nuances of the, of the transaction has changed somewhat. Ah, I believe the new, the new format that will be laid in front of you, in front of the executive session, will state that gross proceeds ah, go to the City of Kenai, rather than the net proceeds. Ah, it also stipulates that ah, that ah, there will be waiver on the part of McLane's ah, in their, ah, to move forward with their appeal process. That's considerable savings to ah both sides if that can happen. Ah, it's all predicated on whether or not the McLane's can borrow the money and every time we add a nuance, adds another pound of weight that this thing has to carry through that loan process. Um, it's important, I think, to put this matter to bed. Both sides have spent a lot of money trying to get to a point where ah, ah, a resolution can be reached. I believe that we're there. I believe if Mr. Brown here right now, in this position, would probably agree that what we have is a ah, a workable outline to come together. Um, all negotiations have to leave something on the table ah, for both parties. Ah, it doesn't work to keep adding poundage to the deal if McLane's can't make it work. It doesn't work ah, if the • 0 KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 69 City gets the lots back lots ah by themselves, tell you that ah, and private sector is still on something like this. body. and the City has to start selling these Ah. I've been the public forum and I can from personal experience, that ah, the where you're going to maximize the return Ah, it just doesn't happen to a government Um, it's not without great stress that this thing is coming before you on the part of McLane's. It's still predicated on the fact of whether or not they can borrow the money. We've made some initial, initial contacts to lenders regarding this thing. But we could not come to them with anything formal, since we didn't have anything formal from the city. One of the successes of this thing moving forward from a loan standpoint, after being thirty years in the lending business as I can tell you, that time is of the essence. We need to move with a decision from you folks, now. The success of this loan moving forward is going to be predicated whether or not a lender believes that the McLane's or any other persons marketing these properties for the McLane Is, can move these lots to perspective buyers .and perspective developers, or builders, this season so that there is identifiable source of repayment for these funds being marketed. If we miss that season, if we get into mid -June, late June, July, we're not going to be there any more and the lender is going to be less enticed to fulfilling what we believe is a reasonable chance of success for 0 Time is of the essence and I would urge, I would urge all of you to approve ah, the proposal that will be coming before you tonight. Again, I appreciate so very much ah, you're giving us the opportunity to ah, come forward and to try to resolve this issue and, and end the costs for both sides. Thank you very, very much. If you have any questions, I would be more than happy to deal with them. WILLIAMS: Let me confer with the Administration for just a moment. LONG PAUSE. WILLIAMS: Council, I've been conferring with the Administration, both now and earlier this evening, regarding this matter. I think Council will agree with me that the time for executive sessions have come and gone. Ah, we know basically what all of the elements of the proposals are. Ah. McLane's ah, intermediary, has been KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 70 working with our people. They're pretty much in an agreement, as we had directed them to come to as to the elements of this whole package. Ah, we cannot move tonight to settle this issue because of the fact, and we, and we're back to the issue of leaving what on the table. The City of Kenai is leaving about a million -nine - hundred -thousand dollars ($1,900,000) on the table. That's our contribution to the failure of this project. Since we are, in fact dealing with public funds and in fact, our on -the -table amount takes public scrutiny, everything that we do from henceforth is going to have to be done in the eyes of the public. So, with that in mind, and with the Administration's comments, I would suggest that what we do is direct the Administration to bring back to us the total package in a form, ready to act upon, at the next regular meeting. And, the only other way we can do this would be to speed the process up by having a special meeting and that element I'm going to leave to Council to decide. I'm very reluctant to call special meetings, ah, especially with regards to this issue, since it's been going on for seven years. PEDERSON: If I could speak to that? Um. I stated earlier, and I'm serious when I say this. No lender is going to look at a project like this .. . First of all. you have to operate off the assumption that McLane's don't have a million -seven -hundred -sixty- two thousand five hundred dollars ($1,762,500) laying in their checking accounts. Ah, most developers, ah most builders, that I have known ovmr the thirty-year period, don't have those kinds of funds laying; ound. They must be borrowed funds. In order for a borrowed project to work there's several things that have to come into play. A history, the management, the source of repayment, the collateral -- all of these things are part of a loan package that's either going to have to be approved or disapproved. And, one basic thing we're talking about here is source of repayment. We cannot get in to June and July before we know, before we're able to take this thing to a bank. It's going to take a bank two to three weeks to act upon this thing. Now we're into July. Ah, and now, only then, are we going to be able to go out and market these, these things. It's really putting a damper on the ability for this thing to be successful. WILLIAMS: Having worked with the Alaska Housing Finance Corporation and having been in the public sector yourself, you understand, I'm hopeful, the need for public notice in these matters. We cannot act without public notice. This matter, • KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 71 having, you know, been so many years in the process, and there having been so many executive sessions regarding the matter that's finally brought us to this point, we are not only not comfortable dealing in an executive session, but the bottom line is, the public must know what the final outcome is. PEDERSON: I certainly don't have a problem with that, I'm just saying, if, if we have to do this in another meeting, I really urge that we do this in a special meeting rather than in another two or three weeks down the road. We just, we're, we're really running out of time to make this thing successful. I mean, I think we have come together, and I have come together in good faith with the City and on behalf of the McLane's and Mr. Brown and you folks saying we want to resolve this issue and put it behind us. Ah, and I think we have done that. I think we have tried to offer some things that didn't come easy. I had to do a sell job on the McLane's on some of these issues. They were not things that they wanted to relinquish. Um, I think we have a window here and we need to seize that moment of opportunity as soon as we can. WILLIAMS: Councilman Smalley, what is your exiting date? When are you leaving? SMALLEY: The fourteenth. WILLIAMS: Councilman Measles will not be here until... MONFOR: Next week. BOOKEY: Next Monday. WILLIAMS: Which would be the seventh of June? MONFOR: Mr. Mayor? WILLIAMS: Yes, Councilwoman Monfor, MONFOR: Even, even if we went in to executive session tonight, nothing, whatever was decided, we wouldn't have done until our next meeting anyway. We could, we could go in and direct the Administration to prepare the documents to bring it to our next meeting. I mean, that's basically what we would do because it's something that will have to be brought before the public. I mean, we wouldn't have a choice whether we went into executive session • KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 72 tonight or did the same thing we're doing right now. It has to come to the public. And the public meeting is the sixteenth of June. PEDERSON: I, I believe that there are many ways to bring it before the public... MONFOR: I know we could go into, have special meetings, but you know, we've had both, I think both sides have had so much adverse ,publicity, that the time now, if we're going to finish it, is to finish it right on a positive note and do it the right way and that's by bringing it to the meeting on the sixteenth for. -.we can do, if we're doing an ordinance, we can do it in one meeting. There's nothing that doesn't, we don't have to introduce it and then bring it back in July. We could do everything the sixteenth. Hopefully, by that time, we can conclude it. WILLIAMS: Councilwoman Monfor, I'm, according to the Administration, there's a probability that we don't really need an ordinance. It can probably be done by resolution. MONFOR: Still it has to be, a resolution has public hearing. WILLIAMS: That's correct. Our problem is that our window of opportunity rests between the seventh and fourteenth if we do a special meeting and the problem with that is our attorney will.be absent until the eleventh. He'll be gone all next week. Ah,_I think that ah, I don't know how the rest of you feel about an open process at this time. I feel uncomfortable with an executive session ah, in any time henceforth from this point since, in fact, we know pretty much the elements of the offer and I don't think there's really, anything to hide in this process anymore. PEDERSON: We, we don't have a problem with an open meeting. Ah, not at all. In fact, that's why we're here tonight. If we had a problem with it, we wouldn't have been at the last or this meeting. WILLIAMS: If we perhaps, hear the main elements of the plan tonight, we could authorize the Administration to proceed on the basis of the main elements of the plan and act upon the whole issue on the sixteenth. Ah, if we in fact, hear the elements, and offer the Administration our comments to act and prepare a resolution for us, that would be our good faith offering to you to say, move ahead with your financing. PEDERSON: Is that what you're telling me? • U KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 73 WILLIAMS: Well, I'm saying, we need to hear the elements of the offer first. But if we hear the..... PEDERSON: Elements of the, the, I will tell them to you now. The elements of the offer are a million seven -hundred and sixty-two thousand five hundred dollars ($1,7620,500)0, predicated on the fact that they're able to borrow the money. Ah, any lots that would be sold, and of course this would be for a 120 day period of time, any lots that may come before the McLane's as a result of other broker, their own broker, whatever, would be a minimum, I believe Charlie, is what, twelve thousand five hundred? BROWN: Right. PEDERSON: That's part, that's... BROWN: Twelve thousand five hundred ($121,500) and that could be net proceeds... PEDERSON: That could be net or gross, but it's the minimum of twelve thousand five hundred ($12 , 500) . Ah, we think that that may be a deal breaker from being able to sell the lots for this 120 day period of time, but we are intense upon making this thing come to a resolution to the extent that we are able to and we are at the straw -that -breaks -the -camel's back here. We're almost to a point where we can't make it work anymore.. Because sales history, at this point, indicates to us that we're not going to be able to sell them for twelve thousand five hundred ($12, 500) net. Gross maybe, but not net. There are costs involved in the sales of these lots. But to make this thing work, to get this whole issue behind us, we're willing to live with that. The second thing is, that ah, you folks wanted a waiver of further ah, further ah, pursuit of the appeal on the part of the McLane's. They've agreed to do that. Ah, and that is... WILLIAMS: Let the Council get a clear understanding of what we're speaking about here. What we're speaking of here is that. McLane I s have agreed to waive pursuit of appeal against the Supreme Court judgment that we now have. In other words, there will be no appeal on their part. Even if they don't get ah, the. loan for the properties. Is that my understanding? PEDERSON: That is your understanding and that is correct. Ah, the basic other elements of the, of the agreement are more window dressing than anything Charlie, I mean that's the basic hardliners. KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 74 BROWN: Yeah... PEDERSON: Go ahead. You fill in if you'd like. You probably have... BROWN: Some of the Councilmembers may be a little confused because I told them, as recently as today, that it looked like no deal and at five minutes to seven tonight, I got word that this last element, the element of them giving up their right to appeal to the Supreme Court, they accepted that issue. And with that, as he's, as he's laid it out and he has a copy of what I have, this is the second draft of it came back to our attorney, I'm in favor of this agreement. This, this is good enough for me. Ah, I think, I'm 99 percent sure, more than that, that we have an agreement. It's just a matter now of having it redrafted the way we just discussed it and put it before you. And I'm sorry we can't do it faster, but I understand the public...had we been able to reach agreement by packet time, you know, last Friday, I guess we could have had the public hearing tonight, but we just didn't have agreement then. So,... WILLIAMS: The law requires and prescribes a period of time in which the public must be notified of the meeting. PEDERSON: Oh, hey, listen, I'm totally aware of that, and, and, having been a public official, I know what, I know some of the burdens you're dealing with and they couldn't be more frustrating to you than they were for me when I was in that forum. The only thing that I can say is that, you know, the success of this particular proposal is resting in the hands of private sector and the private sector could really care less whether your meeting comes up on the sixteenth or the fourteenth or the eleventh. What they really care about is do we have enough time left in this season to sell these lots and make it a profitable and a successful loan project. They, cne thing they're going to be looking at is that the City of Kenai has already looked at an unsuccessful period of time with this, are we just buying problems? We've got a really uphill sell job on this thing and we every day that goes by, lessens my possibilities and chances of being able to be successful. That's, that's the only stickler to me is I need the time and I need every day I can get. WILLIAMS: Well, again, knowing, knowing the full elements, having been disclosed right here, there are no other major elements that we're concerned with, do we feel comfortable with directing the Administration to move straight away with a proposal to bring back • KENAI CITY COUNCIL MEETING MINUTES JUKE 21 1993 PAGE 78 to us? That's the first question. The second question is, when can we act on the proposal? If not the sixteenth, if, if sooner than the sixteenth, when if not, then the sixteenth. If those elements are agreed to by the Council, then you have our good -faith offer that you can move ahead and begin negotiations with the bankers... PEDERSON: That's really important because I can go to the lender and say, hey, everything has been disclosed. At this point there isn't an objection. At this point the City has offered us, you know, advised us to move forward with it and they have a good faith ah, ah, intention of seeing it through. I think I can work from that, but um, it's still an uphill battle and I need the time I can get. WILLIAMS: Well, and of course, I want you to understand our position too from the standpoint of the general public. There are a lot of questions out there unanswered and there's a lot of people fe out there who feel very unhappy about this particular offer. PEDERSON: Oh, I'm sure there are... WILLIAMS: You know, they're not prepared to consider this as, you know, an offer on behalf of the entire City. • PEDERSON: If I can'say something about that and, and, I don't want to interrupt here, but um, when Tom Behand and I took over Alaska Housing in its troubled years, um, every decision we made was second-guessed by somebody else who had, ah, either an opposing or a favorable opinion about it. And, some of the decisions we made back then ah, have been some of the best decisions we made, and some of them have been some of the worst. But, you can't, you can't always, you can't make a silk purse out of a sow's ear. And, this thing has been troubled from the beginning. It's going to have some troubles down the road just by the mere fact that of the dollars they're offered. The dollars they're offering means they're going to have to get somewhere around twelve -five or substitute other collateral to make up the difference, which is what they're having to do. Which means they're taking the bail -out of a bad project out of your hands and now taking on the full responsibility. You're taking the debt, I understand, but you can't go back and relive history. You were there. The best thing we can do is make the best decision we can now and move forward with it and I think that's what we're all trying to here. Um, it doesn't ah, it doesn't do any good to say, well, I should have done KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 76 this twenty years ago only to learn from it. We can make the best of the situation that we have now. I think that's, that's the decision we have to make. WILLIAMS: Should Council decide to go ahead and direct the Administration to prepare this ah, agreement for our approval, it will, the agreement will have to be prepared in total, ah, by the end of this week. The Administration will have had to have done it's work by the end of this week. Ah, we cannot meet between the seventh and fourteenth in a special meeting. Ah, or if we were to meet in a special meeting, it would have to be between the seventh and fourteenth, without Council being here. I'll leave that up...without our, our legal counsel being here, I'll leave that up to the Council. The matter, I suppose, should be resolved if Council decides to have an earlier meeting. Ah, and that's. I think, the only remaining point. First of all, let me ask Council, are we prepared to direct the Administration to move ahead with the agreement? As we understand it? Could I see a show of hands perhaps? SWARNER: I have a question about the property taxes and I, I didn't ever get my question to you Charlie. Um, is that in addition to the 1.7 or is that the property tax comes out of that? BROWN: Well, essentially, it is in addition to because if they would, if they sell some lots, the taxes are liened against the property. They have to be cleared. In the initial agreement, whatever the sales price was, the gross sales price, the taxes would be paid and then we would get money after that. And now, it's, the agreement says it's twelve thousand five or more net. But that means, that means that the taxes have to be paid off a higher sales price to net down to the twelve five that we get. They always have to clear those taxes. There are liens on the property. This agreement only deals with special assessments. MONFOR: John, I just want this, I think it's because it's very late, the bottom line is, the City will be getting a million seven, da, da, da... PEDERSON: And change... . MONFOR: and, a waiver of them not appealing to the Supreme Court. That's it, pretty much. KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 77 BROWN: The deal is, if we sign this agreement, they waive their rights to appeal to the Supreme Court. That's a given. Whether or not we'll get one million seven... MONFOR: That's based on their financing... BROWN: Exactly. I can't guarantee that, nobody will. MONFOR: Well, what happens if they don't get their financing? PEDERSON: You lose. WILLIAMS: We move back to determine... MONFOR: We go back to... PEDERSON: Well, but you don't lose anything. MONFOR: We don't lose anything. PEDERSON: You don't lose anything, in.fact, you gain because you no longer have the battle of the appeal rights and attorneys fees on that issue. WILLIAMS: The remaining element there is that we exercise against the judgment. Ah, we take everything that we can get that is necessary to make the City whole, including the 141 lots and anything that's obtainable. SMALLEY: What about title to those 141 lots. Would that be still be clouded for ten years? WILLIAMS: Ah, we went through this issue. GRAVES: If we foreclosed on them, we have title. The problem is, is the title insurance companies don't feel comfortable with insuring the properties so people who buy it, if we foreclose on it, can't get loans unless... WILLIAMS: The only way to clear that is if the McLane's ah issue a warrant... PEDERSON: Quit claim... WILLIAMS: m Quit claim Q 1 i deed to their entire rights,.. KENAI CITY COUNCIL MEETING MINUTES • DUNE 2, 1993 PAGE 78 if we have the property, is to GRAVES: ...to us. The other walct. If, if they get the loan and do a quiet title action on every the 1.7 milli on and Pay use then they have the lotsfree•andeclear clear the lien off of the lots the they're - have marketable title and they can market them and Y would have clear assuming we pay the real estate nd we wouldn'te have the property title that would be marketable We'd take our 1.7• • one other element in this is that if we exercise ak against WILLIAMS. O with all of the properties the judgment, we wind up We become responsible position, or in our posses h on ganstourithree-and-one-half mills or for the taxes to the Boroug we would less. Everything that's owed to the Borough ithe difficult element . wind up having to pay. That's, that's another PEDERSON: McLane's are buying a 120 day window to try to perform, �.. to try to make a proposal that will be palatable to both sides. just for a moment, speak in WILLIAMS: I think ah, if I might, a whole idea, we go back to 1984, we take a look at that favor of theon. Th window of time and all of the thing viable.** going project, at that timer Seemed very MONFOR: Yes, it did. • ... not only to the McLane' s, but to the gait council, oefor WILLIAMS. of_Kenai because they, i the people of the city It became very apparent late in the the bonds to do cnstructi n. of the project, that things were not history of the c . There were a lot working out well and in 1987, everything failed of people that failed during thateriod of time. the deal, simply from the I think that I'm inclined to buy of Kenai were willing to standpoint that the people of the city in chance during the good times and they votefoh it bonds in. take the c1'i The city council went The project looked good* things turned around and turned sour through no fault or fact, g of Kenai, or the either the people of the city the McLane's. is everybody is going to lose in this deal. Everybody. The result, ' e lost a million nine hundred thousand do nll r eoe enththat I'm We v of the city of Kenai. I'm not sure that, the Y about, is how much we rightfully should b askett 1 Bese' not sureshould be rightfullyasked versus how much the McLane's KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 79 If the McLane's are able to make themselves whole through the sale of these properties to the point that their debt of one million - seven -sixty-two is paid, they skate. The people of the city of Kenai get stuck for a million -nine. PEDERSON: That's not half bad, I can assure you. WILLIAMS: If they can't, then they lose whatever the difference is between what they can make and the million -seven -sixty-two. I personally don't know how you're going to pull it off given the interest rates, the taxes that have to come on top of it, the realtorIs fees, and all of those things. I, I'm personally skeptical of the plan would work as a business deal. PEDERSON: I'm not, I'm not kidding anybody when I say, there's a reasonable chance that if we can pull it together, but I want to tell you, it's very, very thin. We're going to try our darndest and best effort all the way around to make it work. I, I work ah, in brokering these. transactions. I brokered all in Anchorage. I brokered to many, many lenders ah, in the lower forty-eight. Ah, Anchorage, Anchorage lenders right now are probably more warm on deals in Alaska than anyone else is. You still have to go outside when you're going to get a long-term lender or even short-term lenders and drag them up here. Their, their message information on Alaska is still four and five years behind time and it's not a good, it's not a good image. I've coupled with the fact that if you're talking with the east coast lenders, they're unraveling themselves back there because of an overbuild situation. All of the banks now in New Hampshire are failed. Every single last one of them. Ah, all but one in Connecticut has failed. Ah, it's been a real estate crash as we've seen it here. So, you know, getting lenders from outside to come to Alaska where the rumor mill is still very much told, it's a tough deal. It's not going to be an easy sell, but I believe there's a reasonable chance that ... WILLIAMS: Let me ask you two more questions and certainly we can make a decision. There's an element of 51 lots floating around out there at six hundred and, six hundred and how many thousand dollars? 0 PEDERSON: $600,000. • U KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 80 WILLIAMS: $6001000. That money would come directly to the City. That money would reduce from the one -million -seven -sixty-two the principle amount, is that an element of this? BROWN: Exactly. It's an element of it, but that deal would have to go back to between the McLane's and the, the ah, buyer because it wasn't enough money... PEDERSON: .....together as it was proposed so it would have to go back again. e WILLIAMS: Let me, let me rephrase the question then. Whatever the Element of financing or how much ever cash there is involved in that element of financing, the City would expect to get the majority of it. BROWN: All of it. WILLIAMS: All of it. Okay. Whatever it winds up at. We would then reduce that from the principle amount. PEDERSON: That's right. WILLIAMS: Now, would your clients also be willing, in 120 days if they fail, to finance this thing, without any further discussion, without any more concern for the legal process, be willing to deed to us, in total, the entire remaining lots of the subdivision. PEDERSON: I don't think so. I think we're at, I think we're at a place in time where we have packaged all of the weight that this thing can carry. WILLIAMS: I'm only, I'm looking for protection here. PEDERSON: I don't know that there is that protection out there for anyone 0 Ah, I just don't know that there is, I mean, ah, they've g ven up rights they have under the law to try to make this thing, and that's the appeal right. That's very important to that family.. Ah, I had to go back and discuss that with them at great length. That did not, that was not an easy, that was not an easy issue of negotiation. I, I think what we're. going to do is cause it all to be something in history if we start trying to pack more camel's weight on it. WILLIAMS: Where do you see us in 120 days if the deal fails? If you fail to obtain... i KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 81 PEDERSON: to predict the future. WILLIAMS: Well, if you fail to obtain the financing for the remaining amount and we accept the deal in which a purchaser's bought off on 51 of the lots, what now remains.... PEDERSON: couple of options I could tell you that as a public official, you can't get as mucc out of a lot as a private entrepreneur can. We've tried it both ways at Alaska Housing and that's when we finally went to the designated broker program and then, I don't know what we finally ended calling it, but we found that we were able capitalize and get more dollars for repossessed and foreclosed properties when it was in the hands of the private entrepreneur, entrepreneur,. making a private entrepreneurial transaction. One of the options that may be able to you is ah, the McLane's have the interest in making something come together as, as close to maximizing the transaction as possible. I mean, they're the ones that have everything to lose, along with the City if it doesn't work. One scenario might happen in 120 days if this doesn't come together is the McLane Is actively market the property for the city. I mean, they would have every interest to maximize the dollars out of every single lot transaction if they were put into that position WILLIAMS: So you would see us entering into a new agreement? PEDERSON: see that, I said, that's a scenario, but one, one may want to look at if this, if the lending transaction don't work. It's a way for, instead of working against each other, for you to team up with each other and minimize the losses for the McLane's, as well as the City yourself. WILLIAMS: In other words, we'd be looking at ah, developing some new and unknown agreement if, if this one fails. And that's an area the City doesn't want to get in to is a partnership arrangement of any kind where we're involved in trying to be a partner to a marketing scheme of some sort. PEDERSON: No, and I know that and I know the reasons why you don't and sometimes though, I think, to make the best out of a bad situation, sometimes you have to entertain those kinds of things. We didn't want to get into, as Alaska Housing, want to get in to business with every real estate broker in town, but we found out shortly, and very soon, that, that it made sense to have the . KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 82 private individual, and maybe you don't want to use McLane's, maybe you want to use somebody else, I mean that's a possibility, but, but I think it's important that it be, that it be marketed privately to minimize the losses on both sides. But, we found out that it was to our advantage to have, to have that unity between private and government sector, and it worked for us. Sometimes it does not and I understand the problems with it, but it did work for us. To give you an example, at 20 months time, we moved 5, 000 repossessed properties down to less than a thousand, and at the same time all this was happening, we were foreclosing on four hundred new ones every month. We could not have done it without the help of the private sector. WILLIAMS: I understand that. PEDERSON: The last thing, I think, anyone wants to do here is for Mboth sides to fold up and whatever happens is going to happen because I can tell you, that's disastrous, for both parties. WILLIAMS: Well, well the... PEDERSON: I can see two years' delays if that happens. Two years of more attorney fees and costs escalating and living with an attorney on one leg twenty-four hours a day. That's just exactly what happens... WILLIAMS: The alternative to it is, I've explained to Council one time before, is that we take the entire amount of property ourselves. Wash the debt that the McLane owe, McLane's owe, we foreclose on the property. We put it in the bank until the bonds are paid. We retire the debt and we give this whole thing to our children when they become councilmembers and we say, kids, here's an estate for you to handle. We screwed it up, you fix it up. That's in the year 2004. That's, that's the -only other alternative. I'm inclined to go along with it but Council, we're taking a big chance. We're taking a big chance of getting the entire million - seven -hundred -sixty -two -thousand -five -hundred dollars ($1,762,500). Ah, ... PEDERSON: Well, you're taking a chance, but you're taking an upside chance. The downside chance is still there and if they don't come up with the money, you've eliminated some attorney • i KENAI CITY COUNCIL MEETING MINUTES JUNE 2, 1993 PAGE 83 costs. If they don't come up with money, you're right back to where you are tonight, making another decision, but only 120 days later. The upside is, you and up with a million seven -hundred and some odd thousand in cash. WILLIAMS: Let me poll the Council one more time. Are you ready to direct the Administration to proceed with drafting an agreement? TAPE CHANGE. (from Clerk notes) Councilwoman Monfor MOVED to have Charlie Brown prepare the agreement between the City of Kenai and McLane's as discussed tonight, for the next meeting. Councilwoman Swarner SECONDED the motion. (from tape) SMALLEY: I will not be here at that meeting if it's a regularly scheduled meeting, but it's my assumption that this is something that will be discussed before 11:30 at night? WILLIAMS: Absolutely, I'll request that the Administration bring it to us as the first item on the agenda, position it at C-1. SMALLEY: And, there will be, it will be posted in the paper of the public hearing and all the good stuff? WILLIAMS: Yes. MC COMSEY: Legal counsel will be at that meeting? WILLIAMS: Meeting of the sixteenth? GRAVES: Sure. WILLIAMS: GRAVES: WILLIAMS: Absolutely. Will be back Friday. Ah, further discussion. Clerk call the roll. • 6 0 KENAI CITY COUNCIL MEETING MINUTES JUNE 21 1993 PAGE 84 FREAS: McComsey: No Bookey: No Smalley: Yes Williams: Yes Swarner: Yes Monfor: Yes WILLIAMS: Another remaining question is, does the Council want to entertain a special meeting between the seventh and fourteenth? (no) Okay. The vote is very, very narrow as is every element of this agreement. It's four to two. We will only have six members at the meeting of the sixteenth. Smalley will not be here. Measles will be here. So, we all need to go into this with our eyes wide open at ten minutes past twelve, and understand the margin of acceptance is very narrow. PEDERSON: I appreciate your time and I consideration very, very much. Thank you. Council Discussed during Item I. ITBM 9 s None held. IT= & I appreciate your PR0P08ED BRLCVTIVE 8E88iON -- Inlet Woods The meeting was adjourned at 12:12 a.m. Minutes transcribed and submitted by: