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Home My WebLink About1983-07-06 Council MinutesAO AGENDA KENAI CITY COUNCIL - REGULAR MEETING JUI.Y 6. 1983 — &&IM PH 7;p0 PLEDGE Of ALLEGIANCE A. ROLL CALL 1. Agenda Approval B. PERSONS PRESENT SCHEDULED TO BE HEARD 1. Kevin Tabler, Robert Anderson - Union Oil - StAtus of Shut-in Wells C. PUBLIC HEARINGS 1. Ordinance 863-83 - Amending Kenai Municipal Code - and Adding Utility Locations Within the City's Right -of -Ways. 2. Ordinance 870-83 - Establishing a Public Use Easement Along Candlelight Drive Extension Through City -Owned Lands 3. Ordinance 871-83 - Increasing rev/appns - State Library Grant - $968 4. Ordinance 872-83 - Amending Kenai Municipal Code - Competitive Bidding Exemption Up to $6,500 5. Ordinance 873-83 - Increasing rev/appns - Paint Selected City Buildings & Equipment 6. Resolution 83-95 - Allowing One Year Extensions to the 1 Drilling Permits Pursuant to KMC 5.35.080 for Cannery Loop Units p1 A #3 Wells as Requested by Union Oil Company of California � (a) Memo on Union Oil; Letter from Kevin Tabler 7. Resolution 83-103 - Transfer of Funds - $1,389 - For the Purchase of a Smokeeter for the Council Chambers. 8. Resolution 83-104 - Transfer of Funds - $20,000 to Purchase Playground do Park Equipment for Various City Parks 9. Change Order #11 - Gym - Blazy Construction - $1,980 �f (a) Resolution 83-105 - Transfer of Funds - Change Order #11 - Blazy Construction - $1,980 j 10. Resolution 83-106 - Award Contract for Construction of first & Second Streets Paving, Storm, Drain, h Sewer Improvements - 1983 - to Prosser Construction. Co., Inc. 11. Change Order p6 - Airport - H. Halvorson - $6,235 (a) Resolution 83-107 - Transfer $6,235 for Change Order #6 to the Halvorson Inc. Construction Contract on Airport Terminal Building i 12. Resolution 83-108 - Awarding Contract for Project Lonstruction Surveying Services to Malone Surveying for the Surveyinq ofs First do Second Streets Paving, Storm Drain do Sewer Improvements - 1983 13. Resolution 83-109 - Awarding a Contract for Project , Management, Coordination h Engineering Inspection Services to Wm. J. Nelsen 6 Associates for the Inspection of the Project Entitleds First do Second Streets Paving, Storm Drain do Sewer Improvements - 1983 D. MINUTES 1. Minutes of Regular Council Meeting of June 15, 1983. 2. Partial Verbatim of June 1, 1983 Meeting. E. CORRESPONDENCE 1. Lotter from Senator Jay Kerttula 2. Letter from Representative Malone 3. Letter from Senator Josephson F. OLD BUSINESS if U C. NEW BUSINESS 1. Bills to be Paid, Bills to be Ratified 2. Requisitions Exceeding $1,000 3. Ordinance 874-83 - Amending Kenai Municipal Code, Repealing & Re-enacting KMC 17.25, and Repealing h Re-enacting KMC 21.05.050 - Abandoned Vehicles. 4. Ordinance 875-83 - Amending KMC 13 - Incorporating Title 28, Motor Vehicles by Reference 5. Ordinance 876-83 - Increasing rev/appns - $59,495 in "Kenai Borough Senior Citizen Grant" for FY 83-84 6. Ordinance 877-83 - Increasing rev/appns - by $2,901 for a Chore Helper for Senior Services 7. Ordinance 878-83 - Amending Title 1 of Kenai Municipal Code by Creating a New Commission "Advisory Museum Commission" do Adding a New Section, KMC 1.58 to Code. S. Ordinance 879-83 - Amending the 1976 Kenai Municipal Airport Regulations, as Found in the Kenai Municipal Code. 9. Ordinance 880-83 - Amending KMC 16 to Provide for Processing of 100,09' Assessment, Local Improvoment Districts to Effectively Implement the Charter Change Approved by Electorate of City of Kenai on June 7, 1983 10. Change Order 01 - Airport Security Fencing - Alaska Fence Company - $0 11. Change Order 02 - Airport Security Fencing - Alaska Fence Company - $19798.50 12. Lease Application - ERA Helicopters 13. Use Permit - Airport Facilities - Grizzly Aircraft Services 14. Recommended Concept Design for FAA Tract A-1 Daubenspeck Sub. Tract C 15. Discussions Purchase of Lots 9 & 10, Black 2, Fidalgo Subdivision - James E. Carter, Sr. 16. Memo - Advertising Space in Airport 17. Discussion - Lack Project Water Main on 25th Avenue 18. Discussion - Thompson Park Design Alternate I or II 19. Discussion - Airport Main Apron Extension Lighting 20. Discussion - Section 36 - Platting, Engineering, 6 Disposal. H. REPORTS 1. City Manager 2. City Attorney 3. Mayor 4. City Clerk c 5. Finance Director 6. Planning 6 Zoning 7. Harbor Commission 8. Recreation Commission i I. PERSONS PRESENT NOT SCHEDULED TO BE HEARD ADJOURNMENT 4 1 1 r KENAI CITY COUNCIL, REGULAR MEETING, MINUTES JULY 6, 1983, 7$00 PM KE_NAI CITY ADMINISTRATION SUli.OING MAYOR RONALD MALSION PRESIDING PLEDGE OF ALLEGIANCE A. ROLL CALL Presents Sally Bailie, Betty Glick, Ray Measles, John Wise, Ron Holston Absents Tom Ackerly (excused), Tom Wagoner (arrived 7s10 PM) AGENDA APPROVAL 1. Mayor Holston asked that item C-69 Res.83-95, be moved up with item B-1, Union Oil Shut -In Wells. 2. Mayor Malston noted the hour listed for the meeting was typed incorrectly. 8. PERSONS PRESENT SCHEDULED TO BE HEARD 6-1 Kevin Tabler, Robert Anderson - Union Oil - Status of Shut -In Wells Robert Anderson, District Land Manager, Union Oil. He introduced Kevin Tabler, Land Man; and Ray Barnes, Operations Manager for the Cannery Loop Unit. Union Oil has 3 drilling sites in the City, #2 is inactive. Union Oil entered into an exploratory agreement in 1976 with Pacific Lighting. They advanced money for work in 9 Cook Inlet areas. They wanted to find additional gas areas for their LNG project. They proposed to spend $35 Million. Union Oil contributed the land, geophysical ideas, etc. Councilman '�agoner arrived at this time (700 PM) Mr. Anderson continued, the Cannery Loop unit was the first successful unit, the 3rd drilled. It was a Government/Union Oil joint venture. The unit was approved in 1978. Unit #1 was started and completed in 1979 on land owned by the City. This was of commercial value. They started Unit #t2 on the Pelch property in Feb. 1980. It was determined it might be wetlands, they received their wetlands permit in Dec. 1980. This wee a dry hole and was abandoned. Cannery Loop #3 was started and is active, there will be additional drilling. They did not find any oil. The agreement was to drill a new well one year after the old one. The 4th unit was extended to this year, on the Coyle property. The price of oil has declined. Marathon, Union Oil, Pacific Lighting, Cook Inlet Regional Corp. all had interests in it. The cost will be $6 Million. Marathon approved the drilling, but would not be involved. Pacific Lighting said they would not be able to handle the cost. Cook Inlet Regional Corp. was not able to contribute more than $2 Million. Union Oil could not come up with the rest. They asked for a waiver till this year. #1 and #3 are in suspended statue, plugged off from the surface. #f2 has been plugged. The Oil and Gas Conservation Committee has approved them. Union Oil has committed their share of gas for 5 years to Pacific Lighting. In Unit #!1, in 19849 they can take their share or pay for 2 more years or they can pay for not taking the gas. He has not received any commitment. Union Oil Can find a market in 1984 if Pacific Lighting does not want it. They have no market at this time. PUBLIC COMMENTS 1. Loretta Breeden. Regarding the lease with Union Oil and Pacifi., Lighting, it seems Pacific Lighting has not bean a good neighbor to the Peninsula. Marathon got out of tho agreement with Pacific Lighting because of t v �) %ENAI CITY COUNCIL JULY 6, 1983 Page 2 non-performance. Mr. Anderson replied Union Oil had contracts for gas with Pacific Lighting, the terms of the contract expired and Union Oil did not renew. They have spent $35 Million. Union Oil is in a different relation regarding Cannery Loop than Marathon was. Mrs. Breeden asked if the City has entered into any negotiations for the naturaloaa franchise that will be up for renewal. And will there be special rates for residents of the City? Mayor Malston replied, there has been preliminary work done. Mrs. Breeden asked ter. Anderson if he could say what area they were going into and when will it be put into production. Mr. Anderson replied it will go into production when it is approved. There is a lease sale in Sept. with open State lands in that area. He added, if the company designated the area, everyone would know. They will establish the participating area by Dec. 1983. They are hamstrung till June 1984 because of the contract with Pacific Lighting. A portion of the Berglund, Kahl offshore land may be participatory. Mrs. Breeden asked if they planned to drill unit #4 or just put into a participating unit. Mr. Anderson replied they plan to drill this year. After a 5 year term, the area will contract in size. Added Items Mayor Malston introduced the Legal Dept. Administrative Assistant, Margaret Restucher. C-6 Resolution 83-95 - Allowing One Year Extensions to the Drilling Permits Pursuant to KMC 5.35.080 for Cannery Loop Units 01 do #3 Wells as Requested by Union Oil Company of California a. Memo on Union Oil; Letter from Kevin Tabler MOTION: Councilwoman Glick moved, seconded by Councilwoman Bailie, to adopt the resolution. MOTION, Amendments Councilwoman Glick moved, seconded by Councilman Wagoner, to amend the resolution, in the NOW THEREFORE paragraph, line 2, and "and Unit #3" after "Unit 01" and change "is" to "are." Change "June 17, 1984" to "July 1, 1984" and delete the rest of the sentence from "and the Drilling Permit," etc. Motion for Amendment passed by unanimous consent. There was no public comment. Councilman Measles asked Mr. Anderson about the Union Oil letter dated June 219 1963, asking that all wells be granted as one unit rather then having each one separate, plus any additional wells. Mr. Anderson explained it would be advantageous to have all coming up simultaneously so they can address them as one. The amendment would cover this. Atty. Rogers noted one problem in this is that in no case does the City want to extend for more than one year. The Code has limitations. VOTE, Main Motion as Amended: Motion passed unanirrously by roll call vote. L KENAI CITY COUNCIL JULY 6, 1983 Page 3 C PUBLIC HEARINGS C-1 Ordinance 963-83 - Amending Kenai Municipal Code - Adding Utility Locations Within the City's Right -of -Ways MOTION, Postponements Councilwoman Glick moved, seconded by Councilman Wagoner, to postpone action till the Aug. 3, 1983 :�-eeting. There was no public comment on the ordinance. Motion passed by unanimous consent. C-2 Ordinance 870-83 - Establishing a Public Use Easement Along Candlelight Drive Extension through City -Owned Lands MOTIONS Councilwoman Glick moved, seconded by Councilwoman Bailie, to adopt the ordinance. City Manager Brighton explained, this has been considered by the Recreation Commission. The street divides a park -designated property. Administration recommends the Council do nothing with the road regarding an easement, but the developer be allowed to use the road. By giving an easement, it could never be used as one unit. Councilman Wise asked if there was an easement, City Manager Brighton replied no. Councilman Wise asked, now does the power line go down? Mr. Brighton replied, it is for utilities, it is designed for a road and just used that way. Public Works Director Kornalis said there is no recorded easement that he is aware of. PUBLIC COMMENT: a. Jill Burnett. There are power and phone lines there. The road has been in use for 15 years, and has been maintained for snow removal. Mr. Kornelis said for 3 or 4 years the City entered into the pit there, but that was not for down the road. It has not been used since. There is no access to the pit now. The developer is making access, it may have been maintained for a short time. City Manager Brighton explained it is not Administration's intent to preclude the owner from using the street, but if Council gives an easement, it cannot be joined at a future date. b. Recreation Commissioner Hansen. This will be a widely used area in the future. It is ideal for cross-country skiing. The Recreation Commission has no objection to permissive use by Mr. Burnett without an easement. They asked Atty. Rogers to review if it had been used for easements, it appears it has been used primarily by the City. If the road is allowed to be continued to be used, it could be theirs. There is access to the property where a road could be built. Councilman Wagoner suggested the City look at the feasibility of re -platting to put the park at one side or the other. c. Jill Burnett. The road referred to that could be developed is just a cow -path. It would cost much to develop. For them to be provided only temporary access would be unsatisfactory. It is imperative they have something permanent. The road has been used for 15 years, there was a family there originally. Councilman Wise said the gully that bisects the land is fairly deep. Councilwoman Glick said this is the old Helen Jones property. There may be prescriptive rights KENAI CITY COUNCIL Illy 6, 1093 Page 4 established. She suggested re -platting for proper -! access. Atty. Rogers noted thie down --I I prescriptive right a / 44oy are differentoith City ' lends./ �Q ;F�'� �.►, l�- 1v c b -�o. � h ( MOTION, Postponements _ Councilman Wagoner moved, seconded by Councilwoman Glick, to postpone action till the Aug. 3, 1903 meeting. 41 Councilman Wagoner explained he would like Administration to research the easement already there for power lines, the width of the easement and status. tiro. Burnett said, even - for park lands, there has to he access. There is a gravel pit on one side and forest land on the other. Having a road there would not ruin park lands. d. Ruby Coyle. The Helen Jones homestead is there, an HEA power line is there. It was used for many years. Councilwoman Bailie noted that is the only piece of property that could be used for cross-country skiing. It is the largest area the City owns. Councilman Wagoner asked Administration prepare a proposal that would propose re -platting vs other proposals in that contiguous piece of property. A road might be advantageous to the City also. Notion passed unanimously by roll call vote. C-3 Ordinance 871-83 - Increasing Rev/Appns - State Library Grant - $968 NOTIONS y.; Councilwomen Glick moved, seconded by Councilman Wise, to adopt the ordinance. There was no public comment. Notion passed unanimously by roll call vote. C-4 Ordinance 872-83 - Amending KMC - Competitive Bidding Exemption up to $6,500 NOTIONS �l Councilwoman Glick moved, seconded by Councilman Measles, to adopt the ordinance. There was no public Comment. Councilman Wagoner asked, if this is paseed, instead of bids, would Administration solicit proposals? City Manager Brighton replied yes. Motion passed unanimously by roll call vote. C-5 Ordinance 872-83 - Incressing Rev/Appns - Paint Selected r City Buildings h Equipment MOTIONS Councilwoman Glick moved, seconded by Councilwoman Bailie, to adopt the ordinance. There was no public comment. Councilman Wagoner asked about the quonset huts. He thought Administration was going to get rid of them when the new storage area was built. Public Works Director Kornelis i B qb KENAI CITY COUNCIL JULY 6, 1983 Page 5 explained, they have torn down 2 huts, these are 2 others an FAA land. Councilman Wagcner acid about a year ago Council had talked about moving the huts from FAA land. MOTION, Amendments Councilman Wagoner moved, seconded by Councilwoman Glick, to amend the ordinance, in the first WHEREAS, change "huts" to "hut" and add, "in the City compound" after "hut." VOTE, Amendments Motion passed by unanimous consent. Councilman Wise objected, stating we are "nickle and diming" in various funds without an overall plan. We are doing this with federal funds. VOTE, Main Motion as Amended (Passed)s Yess Bailie, Glick, Messles, Wagoner, Malston Not Wise C-7 Resolution 83-103 - Transfer of Funds - f1,380 - Purchase of Smokester for Council Chambers MOTIONS Councilman Wagoner moved, seconded by Councilwoman Glick, to adopt the resolution. PUBLIC COMMENTS James Hansen. He suggested Council take a look at legislation passed in Juneau. Mayor Holston noted this does more than take in omoke. Motion passed unanimously by roll call vote. C-8 Resolution 83-104 - Transfer of Funds - $20.000 to Purchase Playground do Park Equipment for Various City Parks MOTIONS Councilwoman Glick moved, seconded by Councilman Measles, to adopt the resolution. There was no public comment. Recreation Director McGillivray reviewed the resolution. This is for all parks with playgrounds - additional equipment, some fountain units, fire pits, back stops for ball fields. They had a State grant. A portion went into equipment, w portion into construction. They transferred some from construction because they did not need it. Councilman Wise asked if they were going to gravel by the old Oiler's field. Mr. McGillivray replied hopefully they will. VOTE (Passed)s Yost Bailie, Glick, Measlee, Wagoner, Wise Nos Holston C-9 Change Order Oil - Gym - Blazy Construction - $1,980 s. Resolution 83-105 - Transfer of Funds - Change Order Oil - Blazy Const. - $1,960 i ., 0 KENAI CITY COUNCIL JULY 6, 1983 Page 6 MOTION s Councilman Measles moved, seconded by Councilwoman Usilie, to approve the change order. Councilman Wagoner noted the wall already has 6" of insulation. Public Works Director Kornelis explained there is a distinct and disturbing sound from belle hitting the court. The contractor suggested styrofoom instead of fiberglass. He wanted to do the walls while the hard wood floors were being aged. He said he would do them as a risk if Council did not approve. If it is done later, the wall would have to be torn down. Mr. Kornelis recommended approval. Councilwoman Glick asked, the contractor has already done this? Mr. Kornelis replied, yes, it should be done by now. If it to not approved, he will be stuck with the costs. Councilwoman Glick said if they do it, they feel they have us over a barrel. She objected to these things being done before Council approval. VOTE (Failed)s Yess Measles, Wagoner, Wise Not Bailie, Glick, Holston C-90 Res. 83-105 No action was taken on this item. C-10 Resolution 83-106 - Award Contract fer Construction of First & Second Streets Paving, Storm, Drain & Sewer Improvements - 1983 - Prosser Construction Co. MOTIONS Councilman Wagoner moved, seconded by Councilman Measles, to adopt the resolution. There was no public comment. Councilman Wise objected to putting sidewalks on both sides where no one lives. MOTION, Amendments Councilman Wise moved seconded by Councilwoman Bailie, to reduce the amount by W,350 and delete added alternates 01 & Y2. Councilwoman Glick asked if there was some building being done there. City Manager Brighton replied yes. Councilman Wagoner said for the cost, it would make it a more desirable area. Councilwoman Bailie noted the rest of the subdivision has no sidewalks. Councilwoman Glick asked. what kind of sidewalks. Public Works Director Kornelis replied, concrete. Councilman Wise said we could find a better use for the $61,000. If we wanted to do it later, the people could form an assessment district. Mayor Holston noted the Public Works Director had said eventually the rest of Mommeen Subdivision %could have to be done and sidewalks will be done at that time. Councilwoman Bailie asked, how will driveways and sidewalks be handled where there are no residences. Mr. Kornelis replied, the same as Woodland, the engineers have provided curb cuts. VOTE, Amendment (Failed)s Yes Bailie, Glick, Wise Not Measles, Wagoner, Malston t I i f •. 110 M KENAI CITY COUNCIL 301.Y 60 1963 Page 7 Councilman Wiae objected to the coat of $8,000 per lot for individual property owners in that area. VOTE, Main Motion (Passed)s Yess f ailie, Glick, Measles, Wagoner, Malston Nos Wise C-11 Change Order #6 - Airport - H. Halvorson - $6,235 a. Resolution 83-107 - Transfer $6,235 for Change Order 06 to the Halvorson Inc. Conat. Contract on Airport Terminal Building MOTION$ Councilwoman Glick moved, seconded by Councilwoman Bailie, to approve the change order. VOTE (Passed)s Yess Bailie, Glick, Measloa, Wise Not Wagoner, Holston C-11a Res. 83-107 MOTIONS Councilwoman Glick moved, seconded by Councilwoman Bailie, to adopt the resolution. There was no public comment. VOTE (Passed)s Yess Bailie, Glick, Measles, Wise, Malston Nos Wagoner C-12 Resolution 63-108 - Awarding Contract for Project Construction Surveying Services to Malone Surveying for the Surveying ofs First 8 Second Streets Paving, Storm Drain do Sewer Improvements - 1983 MOTIONS Councilman Wagoner moved, seconded by Councilman Measles, to adopt the resolution. There was no public comment. f Motion passed by unanimous consent. i i C-13 Resolution 83-109 - Awarding Contract for Project { Management, Coordination A Engineering Inspection Services to Wm. 3. Nelson do Associates fo: the Inspection of the Project Entitleds First & Second Streets Paving, Storm, Drain & Sewer Improvements - 1983 MOTIONS Councilman Wagoner moved, seconded by Councilman Measles, to adopt the resolution. There was no public comment. i Motion panoed by unanimous consent. I i I 4 � W KENAI CITY COUNCIL JULY 6, 1983 Page 8 D. MINUTES D-1 Minutes, Regular Council Meeting, June 15, 1983 Clerk Whelan asked that page 14, item H-6, paragraph 1, line 3, the line be changed to read, "plan land ur.e map." Council approved the minutes as changed. E. CORRESPONDENCE. E-1 Letter from Sen. Jay Kerttuls E-2 Letter from Rep. Malone E-3 Letter from Sen. Josephson Council took no action on the correspondence. F. OLD BUSINESS None G. NEW BUSINESS G-1 Bills to be Paid, Bills to be Ratified MOTIONS Councilwoman Glick moved, seconded by Councilwoman Bailie, to approve the bills as submitted. VOTE (Passed): Yeas Bailie, Glick, Measles, Wise, Malston n Nos Wagoner G-2 Requisitions Exceeding s1,00O MOT ION: Councilwoman Glick moved, seconded by Councilman Measles, to approve the requisitions as submitted. Councilman. Wise noted Kenai Hydraulics is located in a residential area, why haven't we closed them down, and why is the City doing business with a firm operating illegally? City Manager Brighton said Building Inspector Hackney has —'-1 spoken to them. He would have a report at the July 20 meeting. Mayor Malaton said they had been there many years, -T_- the sign was just put up, there is much equipment there now. {, Councilwoman Glick said that does not preclude us from paying the bill. Councilman Wise noted it is a requisition. MOTIONS Councilman Wise moved, seconded by Councilwoman Glick, to QQ separate the Kenai Hydraulics requisition from the rest of the requisitions. Motion approved by unanimous consent. °i VOTE, Requisitions: r Motion passed by unanimous consent. G-2 Kenai Hydraulics Councilwoman Bailie asked if this had been purchased. Public t� Works Director Kornelis replied no, he is having problems ii getting this work done. He did not know about the location. Councilman Wagoner said the person may be doing businaus ' a h :L i - J KENAI CITY COUNCIL DULY 6, 1983 Page 9 illegally because of the location, but that does not preclude the City from doing business with a locally owned business. Administration should discuss this and ask them to move their business - especially if they are the only hydraulic firm in the area. G-3 Ordinance 874-83 - Amending KMC - Repealing A Re-enacting 12.25, Repealing do Re-enacting 21.05.050 - Abandoned Vehicles MOTION$ Councilwoman Glick moved, seconded by Councilwoman Bailie, to introduce the ordinance. Councilwoman Glick said she noted there art some vehicles at the long term parking area of the airport that have been there a long time, will the ordinance handle this? Atty. Rogers replied yes - this and some other problems regarding vehicles parked for sale. It also amends some airport regulations. The authority is diminished from the Airport Manager and centralized on the Police Dept. He reviewed some suggested changes. MOTION, Amendments Councilwoman Glick moved, seconded by Councilwoman Bailie, to amend the ordinance, page 3, paragraph (d), line 19 change "12.25.030(b)" to "12.25.030(c)." Also, page 5, item (b), line 79 delete "at the poet office nearest the place where the sale is to take place," and add "on the official City bulletin board." Motion passed by unanimous consent. Councilman Wise asked about provisions for impounding on private property. Does it jibe with the zoning code and if so, how to it enforced? Atty. Rogers explained item (d) on page 3 covers this. He explained removal of private property is sticky, it will be the prerogative of the Council. ADDED ITEMS Councilman Wise asked if ord. 874-83 would solve the problem with the Quandt property. Atty. Rogers replied, he has been in communication with the State regarding this, he has offered to join in a suit. G-3 Ord. 874-63, contds Councilman Wise said the problem of junk vehicles should be directed. There are many around the City. Police Chief Rose said he would not like to see this ordinance used to enforce zoning. This is not a police function. MOTION, Postponements Councilwoman Glick moved, seconded by Councilman Wagoner, to postpone introduction to the August 3, 1983 meeting to allow Atty. Rogers and Chief Ross to further discuss. Councilman Wise said abandoned vehicles on right of way is a police function. On private property it is not. It appears to be a police responsibility in the ordinance. They should be addressed together but with different responsibilities. VOTE, Postponements Motion passed unanimously by roll call vote. a �- i 9 KENAI CITY COUNCIL JULV 6, 1983 Page 10 G-12 Lease Application - ERA Helicopters Mayor Malston asked that this item be considered early becsuce the participants had to leave. 1"Pli PILT Councilwoman Glick moved, seconded by Councilmen Mossla6, to approve the lease application. David Baumeister, ERA Helicopters, spoke. He intended to start operations Aug. 1, with Alaska Airlines. There would be 5 flights a day. They will be flying twin otters, larger planes - if needed - at a later date. They serve Valdez now. Councilwoman Glick asked for Administration recommendation. City Manager Brighton said, they recommended edoption of the lease. Councilman Wise asked if they are taking all the spaces. Mr. Brighton replied, 1/2 of the remaining space. Councilman Wagoner noted this brings up something that has not been done. When Architect Gintoli did research regarding SeaAir coming in, the consultants said there is a way of restricting the number of commuters using the terminal by adopting an ordinance covering that. This has not been done. We are getting to the point of saturation with commuter flights. Competition is good, but with too many, it will be a detrimental situation to several carriers. City Manager Brighton said he will pursue the ordinance. He added, it is the prerogative of the airlines if they want to come in. He would like to see all the expansion spaces occupied. Councilman Wagoner said we should be able to deny people till we make proper accommodations for those already there. It was not to restrict private enterprise. Councilman Wise asked about baggage handling. Airport Manager Swalley replied, not at this time, but the petitioner does not feel this is a hindrance. Motion passed by unanimous consent. G-4 Ordinance 875-83 - Amending KMC 13 - Incorporating Title 280 Motor Vehicles by Reference MOTION: Councilwoman Glick inoved, seconded by Councilman Measles, to Introduce the ordinance. Motion passed by unanimous consent. G-5 Ordinance 876-83 - Increasing Rev/Appne - $59,495 in Kenai Borough Senior Citizen Grant for FY 83-84 MOTION: Councilwoman Glick moved, seconded by Councilman Measles, to introduce the ordinance. Motion passed by unanimous consent. G-6 Ordinance 877-83 - Increasing Rev/Appne - $2,901 for a chore Helper for Senior Services MOTION: Councilman Wagoner moved, seconded by Councilwoman Bailie, to introduce the ordinance. Motion passed by unanimous consent. i y � KENAI CITY COUNCIL. JULY 69 1983 rage 11 G-7 Ordinance 878-83 - Amending KMC Title 1 by Creating a New Commission - Advisory Museum Commission 6 Adding a New Section, KMC 1.58 to Code MOTIONs Councilman Measles moved, seconded by Councilwoman Glick, to introduce the ordinance. Motion passed by unanimous consent. G-8 Ordinance 879-83 - Amending 1976 Kenai Municipal Airport Regulations as Found in Kenai Municipal Code MOTION: Councilwoman Glick moved, seconded by Councilwoman Bailie, to introduce the ordinance. Councilman Wise asked how will they make a determination for more than 30 days? MOTION. Postponements Councilwoman Glick moved, seconded by Councilman Wise, to I' postpone introduction till Aug. 3, 1983 meeting. Motior, passed unanimously by roll call vote. s G-9 Ordinance 880-83 - Ames.ding KMC 16 to Provide for Processing of 100% Assessment, Local Improvement Districts to Effectively Implement the Charter Change Approved by 4 Electorate of City of Kenai on June 7, 1983 E MOTIONS Councilman Wise moved, seconded by Councilwoman Glick, to introduce the ordinance, with the following amendmentes in i� the heading, line 3, change the word "lease" to "local." In Section 1(b), line 1, change the word "should" to "shall." Finance Director Brown explained this is taking the normal 60 and 30 day periods and moving them to 30 day periods. --,; Administration has the ability to do that now. If Council f.l wishes Administration to speed the process, they have that ability now. He had thought Councilman Wise was trying to speed up the advertising time, this was not addressed. A 45 day limit means the advertising must be done immediately, so there is an opportunity for administrative error. Councilman Wise said by putting these things in, it would give someone i working with an assessment district a clesn schedule. It forcee tighter scheduling. There is it limited building season. We should be able to tell a potential developer what they con expect. Councilman Wagoner wondered if the City was taking total responsibility that should partly rely .,c on the developer. He noted there may be cases where the City wants to drag its feet. VOTE (Passed): ` } Yes: Glick, Measles, Wise, Malston -' No: Bailie, Wagoner G-10 Change Order #1 - Airport Security Fencing - Alaska Fence Company - $0 MOTION: Councilman Wise moved, seconded by Councilman Measles, to approve the change order. KENAI CITY COUNCIL JULY 6, 1983 Page 12 Notion passed by unanimous consent. G-11 Change Order 02 - Airport Security Fencing - Alaska Fence Company - $1,798.50 MOTIONS Councilmen Wise noved, seconded by Councilwoman Glick, to approve the change order. Public Works Director Kornelis explained they had a request form Dr. Pitts, who is leasing airport property. The City had the fence designed to go on the outside, he has requested it be right up against the building, so a portion will be deleted. Motion passed by unanimous consent. G-13 Use Permit - Airport Facilities - Grizzley Aircraft Services NOTION: Councilwoman Glick moved, seconded by Councilwoman Bailie, to approve the use permit. Atty. Rogers explained this permit differs in that it is a one year permit, subject to 4 year renewal if they are in compliance. Normal lease is 5 years. This gives the City a chance to look at it. Councilman Wise asked if this was related to the existing fuel facility, is the existing facility adequate and safe. He added, planes are getting extremely close, is this a good thing for the City? Is it safe, are the facilities safe? Airport Manager Swalley said they are looking into estimates of extensions of the fuel pit line to the north with installation of 2 more pits. VOTE (Passed): Yess Bailie, Glick, Meaoles, Wagoner# Malston Nos Wise (1-14 Recommended Concept Design for FAA Tract A-1 6 Daubenspek Sub., Tract C Land Manager Labahn explained P&Z has been looking at the FAA tract and the Daubenspek property and trying to get a development scheme. On the FAA portion, they will not be willing to release it till the City has a concept development plan. They oleo wanted to look at a design plan to use the antenna area and the area for a pioneer home. This is not a binding lot and block situation, it will have to be platted. MOTIONS Councilman Wagoner moved, seconded by Councilman Measles, to recommend the concept design to FAA. Motion passed unanimously by roll call vote. ADDED ITEMS Mayor Malston asked about the property between Walker Lane and Beaver Loop Extended. P&Z was supposed to come back to Council with a report. Land Manager Labahn said it has not been done yet. E KENAI CITY COUNCIL JULY 6, 1983 Page 13 G-15 Discussion - Purchase of Lots 9 do 10, Block 2, Fidalgo S/D - Jones E. Carter Sr. City Manager Brighton said Mr. Carter has proposed to buy his presently lesoed land. Administration had an appraisal and they hired their own appraiser. this is different then the norm. Land Manager Labahn noted their appraisal has 3 sets of figures for lots 9 do 10. On lot 9, the appraisal is based on property as if owned in fee simple. That is the way we normally have an appraisal,. Lot 9 is $05,000, $3.17 sq. ft. Lot 10 is $98,0009 $3.33 sa.ft. The other figures are based on $2.60 and $2.00 sq. ft. and deducting the lease hold estate fron free simple. These are lesser figures. Normally we would ask for fee simple figures. Mr. Carter is asking for the looser figure. Also, the 1983 asssaament listed is actually 1901 sosessment. The Borough is 3 years behind. Also, in a nor@ recent appraisal in that area, lot 11 was $2.60 sq, ft. in March 1983, lot 5 was $2.61 sq. ft, Mr. Carter to asking for a negotiated sale. Mr. Labahn interprets the report at $3.17 and $3.33 sq. ft. He added, the City only has appraisal on lot 10, at about $2.50 sq. ft. They will get one on lot 9. Mayor Holston asked, we have gone through an alternative appraisal on the lease and sale? City Manager Brighton replied, yes, but in each case we have had a legitimate appraisal and he has difficulty in accepting this as a legitimate appraisal as we have had in the past. Mr. Labahn said $2.00 sq. ft, is not appraised value as listed by Mr. McCarthy. MOTIONt Councilman Wagoner moved, seconded by Councilwoman Bailie, that the price is our appraised price, and till Mr. Carter has a legitimate price that is less than ours, this is the legitimate price. ADDED ITEMS City Manager Brighton said they have had the lots appraised =- that the Post Office to interested in, at $2.60 sq* ft.. f The end lot to $2.70 sq. ft. The Post Office will hire their own appraiser and will submit it to us. } '. G-15 Carter Land Purchase, contds Councilwoman Glick said she had a problem with the terminology, the description of the lots and comparing to a Soldotna location. G-16 Memo - Advertising Space in Airport Councilwoman Bailie asked, why are we using counter telephones instead of wall phones? Airport Manager Swalley explained they have designed in the new facility counter and telephone hook-up for direct lines so they can write while talking. Councilman Waqoner said he has received many positive comments on the airport. The only negative one is asking not to put up wall posters. The money derived is not worth defacing the walla. The only advertising should be for vendors in the'sirport. Mr. Swalley said he has received many requests for advertising space. The blank wall above the baggage claim area could be used. Councilman Wise said a poster above the direct line phones is appropriate. A kiosk should point out facilities in the City. Councilman Wagoner suggested we should set aside money for art in public places. Councilman Wise nuked why we are asking for liability insurance and workmen's compensation on conditional use pormito. Mr. Swalley replied he has asked Administrative Aust. Gerutlauer to KENAI CITY COUNCIL JULY 6, 1983 Page 14 check on this. Mayor Malston asked if the advertising in the kiosk is professionally done. Mr. Swalley replied it must be of professional quality, he will approve them. Ruby Coyle. Some airports use a punch system on the wall for getting hotels and facilities available. There could also be a map of locations provided, rooms and eating establishments - real estate is not appropriate. Father Targonsky. He would like a map of the City with points of interest and places to eat. Also, the pay phones do not have enough privacy. Council agreed all the phones should be the some t.ype- G-17 Discussion - LACK Project Water Main on 25th Ave. Public Works Director Kornelis explained the contractor has extra pipe. He has not contacted Spruce Const. yet.He estimates about $25,000, it would open more area for water. NOTION% Councilman Wise moved, seconded by Councilwoman Glick, to approve the request. Notion passed unanimously by roll call vote- G-16 Discussion -Thompson Park Design Alternate I or II Public Works Director Kornelis explained, in both cases, if we ever go with water & sewer we would lose all material. We need to decide whether to put in water & sewer or pave without water & sewer. Councilman Wagoner said Council has said there will be no paving without water & sewer. Also, we discussed having someone look into the feasibility of a separate waste system for Thompson Park. It should include Valhalla, Thompson, areas south and north. Even if people went to establish an assessment district. There is no problem now, but there will be. Councilman Wise said we need an EPA type analysis of what needs to be done. Councilman Wagoner said the preliminary step is to get with EPA and review, ask what they will allow. City Manager Brighton said about $800 will permit us to do the job. The engineer has run across a problem and feels Council should be aware. 1984 Capital Improvement Projects will do this job. Councilwoman Glick said it is time to make a decision regarding water & sewer. The Administration survey are interested in sewer, not water. City Manager Brighton said it is very close on both. Councilwoman Glick said also, we have had real estate people say people cannot sell their houses because of the condition. We should look at the water situation there. City Manager Brighton asked Public Works Director Kornelis, if we put water in the area, will that alleviate the restriction of DEC regarding dry wells and septic tanks? Mr. Kornelis replied no. He added, Administration did contact DEC regarding funding and were told they do not fund any more for feasibility & design. NOTION: Councilman Wagoner moved, seconded by Councilwoman Bailie, to direct Public Works to proceed with alternate #2. Councilwoman Glick asked, if we postpone to come up with an analysis of the situation to present to DEC and EPA, will that make a hardship? How long would it take to get this? If we fund a feasibility study, how long would it take to do this? Mr. Kornelis replied, about 6 months or more. Mr. Brighton suggested it would be more practical to ask what A I n KENAI CITY COUNCIL JULY 6, 1983 Page 15 would the cost of water & sewer be. Mr. Kornelis said he could have that at the next meeting. Mr. Brighton estimated at least $3 Million. Councilman Wagoner said no one in Thompson Park or Valhalla can afford this. The City would have to assess all owners or wait till we have contamination and get emergency funds. Councilman Wise said we need to find out the scope of the problem. Councilman Wagoner suggested the City Engineer could come up with a fairly accurate number. Mr. Kornelis said Wince, Corthell, Bryson has a clause for additional services, they could come up with the cost. Mayor Holston said the question is not alternate #29 but if we really want to do this till we get more information. Councilman Wagoner said there is no reason for the study, it will be many years before we do it. Councilwoman Bailie said at the public hearing for CIP, the residents said they wanted roads. Ruby Coyle. The people of Thompson Park are residents of the City and have paid taxes. If Council is not going to do anything for Thompson Park, let's have service areas or let us get out of the City. The people cannot get FHA financing because of contamination, that is an emergency. Councilman Wagoner said that is not because of contamination but C because of lot size. There are financing packages available. Mrs. Coyle sold Dick Mueller had said he tried b -" to sell and could not because of contamination several years ago. Councilwoman Glick said in the LACK project we -, - postponed so we could get water & sewer. We try to put water sewer in other areas. That whole area is not on system. VOTE (Failed): p Yess Bailie, Meseles, Wagoner Nos Glick, Wise, Holston Councilman Wagoner said this has been a priority for 4 years -tj ect. Councilwoman Glick said Ca ital Improvement Project. on the Capital till we have some kind of preliminary figure on water & k^, "- sewer, to spend $600 000 is a waste of money. Councilman � said he doubted if we could get this done this year. He Wise s would like to see a review of all of East Kenai and thon Thompson Park as an entity. Councilwoman Glick said C&RA has been appropriating to do community block grants, one is a health grant. She suggested Administration review this. j Public Works Director Kornelis explained we are ineligible -- because of our income. There is a slim chance it could be waived. Councilman Wagoner asked, where are we going to ;.- get funds from Juneau? Valhalla Hts. was worse than Thompson Park. Their roads were repaired, Thompson Park was ° next. He has asked Dick Mueller for proof of his statement. Fz Rick Ross spoke. As a resident of Thompson Park, he felt roads were the major issue. He thinks the people are entitled to a dollar figure. Council would be subject to adverse comment if they waited for contamination. MOTIONS Councilwoman Glick moved, seconded by Councilman Wise, to -" request Administration to add to the contract of Wince, Corthell, Bryson for alternate ways of addressing sewer specifically & water problems, and come up with preliminary cost figures so the citizens have cost figures, by the July 'q 20, 1983 meeting if possible. Mayor Holston emphasized the intent of Council is not to kill the road project. KENAI CITY COUNCIL JULY b, 1983 Page 16 VOTES Phil Bryson - Wince, Corthell, Bryson. Council has requested rough figures only, specifically Thompson Park but roughly the whole area, such as general routing, pressure vs gravity system, and a treatment plant. Public Works Director Kornelis reviewed work already done in Thompson Park. Some roads were upgraded, N. Lupine was 1/2 upgraded, but was cut back. Motion passed unanimously by roll call vote. G-19 Discussion - Airport Main Apron Extension Lighting City Manager Brighton asked Council not to consider at this time. It is a proposal for lighting on the ramp space. The only time we have planes there is during fish haul when it is always light. It could be done later when a need is established. Council took no action. G-20 Discussion - Section 36 - Platting, Engineering & Disposal Public Works Director Kornelis reviewed the memo. He said we have the potential to make this the best subdivision in the State, as we own 160 acres. Councilman Wagoner said he did not know why we had to hire an engineer. Even if we divide the 160 acres into 4 subdivisions, we are getting too involved with design of the subdivision. We should establish minimum criteria, put it on the market and let private individuals do the development. Mr. Kornelis explained it was on his TO DO list. Councilman Wagoner said we had a request from an individual for the City to advertise Section 36. Atty. Rogers replied the request was made, but we had an ordinance that nullified it. The price was quite low. City Manager Brighton explained the individual requested we advertise the entire 300-plus acres and take the highest bid for the entire package. The decision was made that it was not in the best interests of the City. We would be selling at a very low sum. The City has not taken legal action to make it available for sale. Councilwoman Glick asked, with some guidance as to covenants, do we need to do more? Mr. Kornelis replied, the only problem i¢ you would have 4 different owners, with water do sewer drain problems. Councilwoman Glick noted it would be subject to P&Z approval. Councilman Measles said there should be a development deadline. Mr. Kornelis said he would like a work session to decide this. City Manager Brighton said the less the City has to do with this, the better the City will be. Councilman Wagoner said the City should not be in the land development business. Mayor Holston added, Council has an obligation that it be done with some semblance of order in development, and minimum standards. Council scheduled a work session for Wednesday, July 20, 1983 at 4s00 PH. Councilman Wise said overall engineeriny is critical for roads, sewer & water. C-6 RECONSIDERATIONS Resolution 83-104 - Playground and Park Equipment KENAI CITY COUNCIL JULY G, 1983 Page 17 MOTION, Reconsiderations Councilwoman Bailie moved, seconded by Councilwoman Glick, for immediate reconsideration of Resolution 83-104. Councilwoman Bailie noted, this will be taken out of construction when we may be discussing a camp ground the funds could be used for that. Motion paused unanimously by roll call vote. Councilman Wagoner asked if any of these projects were currently under construction or not complete. Recreation Director McGillivray replied no. He added, the only problem is this is the only money we have for park or playground Eequipment. We have $30,000 available left in construction. e, Also, we have money in the fund for development of parks if used for camping. He was not sure if it could be taken from Capital Improvement Projects and used for this. City Manager Brighton said he had planned to ask for a work session on this subject. He noted the Recreation Commission is recommending a tremendous amount of parks, with the added responsibility. Their #1 priority is the cannery workers. We cannot do that for free. Finance Director Brown said the .'J 1981 municipal aid was based on a Recreation Commission memo regarding types of project, it could be used for construction or equipment within specified parks. He was not sure of new parks, but he did not think the State would care. NOTION, Postponements . Councilman Measles moved, seconded by Councilwoman Glick, to postpone action on the resolution till after the City EManager report. Motion passed by unanimous consent. H. REPORTS ----- �_= = H-1 City Manager City Manager Brighton spoke. a. The proposed agreement by HEA and the City says if the City requires HEA to relocate for a City road project, and at a later date we ask them to relocate, the City pays. Administration does not agree on a recommendation. Councilwoman Glick asked, how many times does he anticipate we would have to change? Public Works Director Kornelis said when we ask the utility companies to relocate, we do not tell them where to relocate. We have problems with changing roade, 1/2 roads. The right-of-way is a question; he thought it was City right-of-way. One utility pays for use of the roadway. Councilwoman Glick asked if we are " upgrading 1/2 streets. Mr. Kornelis replied, private developers are. Councilman Wise said it we had a utility ordinance it would be cleaner. Mr. Kornelis said sometimes we get into an area where we do not know exactly where the lines are. Councilman Measles said with this ordinance we will be telling them where to put the lines. Mr. Kornelis said there will be costs we have not had in the past. Atty. Rogers said the utility companies have tried to change the law but have failed. If you have case law on your side, you should use it. The utilities can only go back to residents by law. It has no validity beyond t,ie present suit if ,. they won the suit they could go back to the initial ` cost of relocating. He did not see what the City was :p : ,b It .1 . KENAI CITY COUNCIL JULY 6, 1983 Pang 18 getting in return. If the City loses the suit, the City would be gaining, but that does not appear to be the case. Council interpretation of fair is in variance with the State. The other concern is what about the other utilities? Now will they be treated? There is a perception by the utilities that we will pay relocation costs. This is attempting to do by contract what they attempted to do by legislation. Councilman Wagoner said he thought we agreed REA would relocate till it was settled. Atty. Rogers concurred. Mr. Brighton said what they tried to do legislatively was make the municipalities pay for all moves. Also, the agreement in itself says they will move their utilities at our request one time. NOTIONS Councilman Wise moved for approval of the agreement. Notion failed for lack of a second. Council took no further action. b. A telephone poll was conducted June 17, 1983, for emergency repair on the sewer treatment plant. Information is in the packet. NOTION$ Councilman Wise moved, seconded by Councilwoman Glick, for ratification of the telephone poll. Notion passed by unanimous consent. c. Mr. Brighton asked for a work session to discuss the Recreation Commission. We have 14 parks now. The Commission is recommending we set aside all the area between 4th and Spur on the west side of Spruce for parkland (about 7 acres). They want a new park in Nommsen S/D, 2 view points & 2 playgrounds in Section 36, a park in Woodland SID, they are attempting to address the cannery workers camp site, they have 60 acres off Candlelight, and a fitness trail on Ryons Creek. We will have more parks per capita than any community in Alaska. It will take additional money and personnel. The Council needs to take a long look at the situation. After the Summer, Recreation Director McGillivray will only have one helper. We have added $15,000 to the budget for beautification. He has some question how much more we can assume without doubling the budget. d. Regarding the cannery workers camp site. There has been a great deal of fill at the corner of Marathon and Spur. We could seed this year; build an unenclosed shelter about 3Ox6Os the City could provide water & sewer, rest rooms & sinks outside of the shelter. It would provide for campers only and be the only place they could camp in the City. We could substantially reduce the problem. He gave an estimate of not more that $100,000 for water & sewer, shelter, showers, eanitary facilities, cooking units. They have not objected to camping on the Doubenspek property because they have always camped there and we had no immediate use of the property. But P&Z ties proposed a plan, it may be developed and we will have to move the campers. Councilman Wise suggested asking the Roc. Commission for a master plan, with needs and population growth. He added, we will need a deed of release from FAA for the Marathon Rd. It needs to be platted and leased. a a —. KENAI CITY COUNCIL JULY 6, 1983 Page 19 He questioned the use of City crews for water.' 6 sewer. It should be a single purpose thing so we do not have to go back, he questioned if Marathon Rd. should stay where it is. Councilman Wagoner asked about liability, who is responsible for the workers. How many are not working for canneries? If the City builds a facility for the campers, we will compound the problem. Councilwoman Glick asked if Administration had been in touch with them regarding development, Mr. Brighton replied no. Councilwoman Glick suggested contacting them as to degree of participation and number of employees that would use the facility. She asked if our liability would be any greater in Marathon than it is now. She asked if Administration is providing port -a -potties and are they being maintained, Mr. Brighton replied yes. He added, he and public Works Director Kornelis figured they would have to put a road about 5001. Marathon area is not buildable because of the material dumped there. Atty. Rogers said the liability would not be greater, it is an insurable risk, Ruby Coyle. She naked what liability does an individual have when they put a dwelling on her property? Mrs. Coyle also asked about the road that was opened on her property when the derelict boat was moved. Campers have moved in. She asked that the road be blocked in. Mr. Brighton said if an individual is injured, he may be able to sue. e. Mr. Brighton asked that. Council review the material distributed this date regarding the Bielefeld request and the post office location. C-B Res. 83-104 - VOTE (Failed): Voss Wagoner, Wise Nos Bailie, Glick, Measles, Holston f. Councilman Wagoner asked about the junk at Arctic Aviation area. Atty. Rogers said he spoke to them and they assured him they would put up a fence. Councilman Wise noted it was known they were a salvage yard when they signed the lease. g. Councilman Wagoner asked if Administration was taking steps to ensure that changes are being made in the Candlelight, Linwood area since the ordinance was passed to bill people in the proximity whether they are hooked up or not. City Manager Brighton said the Finance Dept. has made a study. There will be a memo listing those not hooked up and what has been done. The people will be put on the billing system by July 15. H-2 City Attorney Atty. Rogers spoke. s. There will be a hearing July 20 in bankruptcy court regarding Mortgage Investors and CIE. We have realized over $49000 form Mortgage Investors. CIE was in bav-e" immediate4reesk of stipulation of the bankruptcy court. They have 30 days to come up with $14,000. They will not have the protection of the bankruptcy court after July 20. a —. KENAI CITY COUNCIL JULY 6, 1983 Page 19 He questioned the use of City crews for water.' 6 sewer. It should be a single purpose thing so we do not have to go back, he questioned if Marathon Rd. should stay where it is. Councilman Wagoner asked about liability, who is responsible for the workers. How many are not working for canneries? If the City builds a facility for the campers, we will compound the problem. Councilwoman Glick asked if Administration had been in touch with them regarding development, Mr. Brighton replied no. Councilwoman Glick suggested contacting them as to degree of participation and number of employees that would use the facility. She asked if our liability would be any greater in Marathon than it is now. She asked if Administration is providing port -a -potties and are they being maintained, Mr. Brighton replied yes. He added, he and public Works Director Kornelis figured they would have to put a road about 5001. Marathon area is not buildable because of the material dumped there. Atty. Rogers said the liability would not be greater, it is an insurable risk, Ruby Coyle. She naked what liability does an individual have when they put a dwelling on her property? Mrs. Coyle also asked about the road that was opened on her property when the derelict boat was moved. Campers have moved in. She asked that the road be blocked in. Mr. Brighton said if an individual is injured, he may be able to sue. e. Mr. Brighton asked that. Council review the material distributed this date regarding the Bielefeld request and the post office location. C-B Res. 83-104 - VOTE (Failed): Voss Wagoner, Wise Nos Bailie, Glick, Measles, Holston f. Councilman Wagoner asked about the junk at Arctic Aviation area. Atty. Rogers said he spoke to them and they assured him they would put up a fence. Councilman Wise noted it was known they were a salvage yard when they signed the lease. g. Councilman Wagoner asked if Administration was taking steps to ensure that changes are being made in the Candlelight, Linwood area since the ordinance was passed to bill people in the proximity whether they are hooked up or not. City Manager Brighton said the Finance Dept. has made a study. There will be a memo listing those not hooked up and what has been done. The people will be put on the billing system by July 15. H-2 City Attorney Atty. Rogers spoke. s. There will be a hearing July 20 in bankruptcy court regarding Mortgage Investors and CIE. We have realized over $49000 form Mortgage Investors. CIE was in bav-e" immediate4reesk of stipulation of the bankruptcy court. They have 30 days to come up with $14,000. They will not have the protection of the bankruptcy court after July 20. .-� m• - - 4 9ENA1 Cl;: COUNCIL DULY 6, 1983 Page 20 b, Regarding HEA, complaints have been filed, the City has sent an answer. c, Regarding Cable 1V, there is a letter in the packet. d. He will review the impound of vehicle ordinance with Police Chief Ross. e, Regarding the City ve AA19 $89500 in back fees has been received. f, Administration had a meeting with Union Oil regarding shut-ins and gas supplies. g, The litigation regarding the personal injury at the airport has been resolved. h, Regarding the radio station application. He has followed up on it. A permit say have been granted. I. Atty, Delshay is finished with his work in the office. J. Atty. Rogers will be attending a meeting July 14 through July 16 in Portland, Ore. k. Regarding the cannery workers, there are no statutes regarding the responsibilities of the canneries. 1. Regarding designating lands for a civic center. He has been in contact with the State regarding release for a civic center and alternate lands. s, Councilman Wagoner suggested Administration have a discussion with the processors and Job Service for local hire in the highest amount posoible, H-3 mayor Mayor Holston spoke. of He recommended Bob Oloson for P&Z Commission. NOTION: Councilwoman Glick sovod, seconded by Councilman Vise, to appoint bob Close" to the P&Z Commission. Notion passed by unanimous consent. / b, Councilman Wagoner asked if we were any closer to oiling the gravel streets. Public Works Director Kornelis said DEC is getting strict on ailing the roads. They have s permit on non-residential roads only. H-4 City Clerk Clerk Whelan said the girls in the office asked to explain the condition of the packet and the delay. There were problems with the copy machine. H-5 Finance Director None _u. KENAI CITY COUNCIL JULY 6, 1983 P:..z 21 H-6 Planning & Zoning Councilman Wise asked if we are clear as to what the NcBrides have to do. Land Hanger Labohn replied they have been in to talk about it. CLERK'u NOTEs This was a request to vacate portion of right-of-way adjacent to their property. H-7 Harbor Commission None H-8 Recreation Commission Recreation Director McGillivray spoke. He wished to note the director does not always agree with the recommendations of the Commission. 1. PERSONS PRESENT NOT SCHEDULED TO BE HEARD None AOJOURNMENTs Meeting adjourned at 2s45 AN. giy'�Gt,L.(Gf' 1r3net Whelan City Clerk NPOM Vr aaW= V 7-;W- L,,ZaA-. dmmew-m--_. a►Z vmr auw I 9 o ' PARTIAL VERBATIM 1 .... / ! stG Z !'IL ....5 ... i lA .. ..! Robert Andersoi-ij many of you probably have seen Kevin down here as he comes down periodically to talk to the City officials and also to the various lessors in the City of Kenai as they're an intrical part of this Cannery Loop Unit. I also have invited Ray Barnes who's sitting in the next to the last row. Ray is our operations manager out at Anchorage and his responsibility is for the drilling and facilities and the operations in the inlet, well throughout the State but the gas field operations in the Kenai gas field, the Sterling gas field, and the Grayling Platform and the Monopod Platform and the Granite Point Mobile Platform which we are currently operating. Rik also is responsible as the head of the Trading Bay Unit which Union is the operator and that unit encompasses not on'y the Grayling Platform, but the Dolly Varden and the King Salmon Platform. Kevin Tabler: I probably should start at the beginning of this Idea of a Cannery Loop Unit. And it started several years ago, as a matter of fact, we entered into an agreement with the Pacific Lighting Development Company back in 1976 and this was an exploratory agreement whereby they would advance money for ' drilling prospects that we, Union Oil Company had identified, for doing seisinic work, geological work, and land acquisition, in some bind prospects in the Cook Inlet basin. Their motivation for entering into this agreement was to find additional gas resources that were not committed to existing contracts in support of their proposed LNG project. As a result of this contract, they were to spend over a period of years within these 9 prospect areas, the sum of about 35 million dollars, which they did willingly and have even exceeded that amount of money. Union's contribution to this was land that we already had on the = prospects and the geological ideas supported by geophysical information that we had in our possession. So basically what they were doing was funding additional exploration in the Cook ti Inlet. And if you'll remember in that time frame exploration in i' the Cook Inlet was woefully lacking primarily because all the emphasis was directed towards the North Slope at the time. In =, any event, as a result of this, (long pause), unfortunately that i well was dry. The second well that they drilled was the well we call Clam Gulch down the road a few miles. That also was a dry well. The third well that they participated in and paid the cost of was the Cannery Loop Unit li 1. Prior to thein drilling that well, Union Oil Company put together the Cannery Loop Unit which - is a joint Federal - State Unit. The reason that it is is that the (inaudible) lessor was the Federal Government, excuse me, the State Government. The Federal Government had a couple of leases �i just on the north end of the Kenai goo field outside of the :1 existing boundary, so it was a jointly administered exploratory - unit. That unit called for the drilling of 2 wells of identified - areas on block A which was basically the west side that came up I to a line about here that jogged over to block 8 called for a well in each one of those blocks at a designated time. That unit agreement was improved in June of 1978 and become effective as of that date. In March of 1979 we started drilling the initial test well which was the r annery Loop Unit #1 well and that's depicted on the your far right there is the drill site. As you remember that was on land that was owned by the City of Kenai and we secured the necessary permits to drill that well. That well was completed on June 25, 1979 and designated as a well capable of commercial production by the State. This triggered our obligation to drill the block 8 well in this area, so subsequently we moved over to the Pelch property and drilled 02 well. It wasn't quite as easy as that. At about that some time frame, which I'm sure you're all aware, the Corp. of Engineers got involved with talking about wetlands and designating wetlands and a portion of the drill site which was a 5 acre site on Mr. Pelch'o property appeared that it might be wetlands. Unfortunately, this was in the time frame of early February in February of 1980. And the Corp. indicated to us that they couldn't make a determination it was wetlands or whether it wasn't wetlands primarily because of the (inaudible) which really made sense. So we worked along with them, we needed to get an extension on our drilling obligation from the State and Federal Government under unit primarily because we could't located where we chose to locate until we had a determination whether or not the drill site itself was wetlands. That determination finally came down; we got a wetlands permit although only a portion of the drill site was declared wetlands in December of 1980. We commenced drilling that well shortly thereafter and unfortunately the Cannery Loop 2 well, the stray hole was tested several Intervals in (inaudible) it was a dry hole. Thereby disproving and idea that the accumulation, there were 2 accumulations in the area, the next obligation was to drill the Cannery Loop 03. We negotiated with Mr. Frederickson and acquired by purchase a 5 acre drill site called the Autumn Subdivision and that drill site is currently, we deem it an active drill site, additional wells well be drilled from that drill site. That well was drilled and it was also designated as a well capable of commercial production. So now we hLve 2 straws in what we think is a gas accumulation. We did not find any oil, I can't say that oil is not there, but certainly not at the depths that we have drilled. The next obligation was to drill a 4th well, and basically the obligation under the unit agreement was to drill on an annual basis a year after the completion or abandonment of a well in the unit required the drilling of another well. We requested an extension of that obligation until May 31 of this year and we went about permitting the drilling of that well. As you probably remember we solicited a drilling permit from you and that was going to be drilled on the Coyle property down basically in this area here. Well, several things had happened, the price of oil had gone down and as the State was hit very much in the pocket book in their revenues conversely we derive a 100% of our revenues from oil and gas, we're hittin' a little bit more than 2 they were and so we took a look, a very careful look at the projects that we're required to drill. This obviously being a eequired well was one we were going to drill. Under our unit operating agreement, there is a mechanism for allocating the cost of a well Uy iJrming a drilling bolack at 640 acres around the well basically the bottom hole location of the well. And the cost would be a portion to the interest owners, the oil companies if you will, that had interest within that area and in that drilling block Marathon had an interest who was a small interest, 2 or 3 percent, Union and Pacific Lighting had similar interests somewhere around 24, 24 percent apiece and the Cock Inlet Regional Corporation, whom we have entered into an agreement with, had a working interest of about 420. The estimated well cost of that well was 8 million dollars. We sent this proposed drilling block out to all the working interest owners that would be affected and we got a response very shortly from Marathon indicating that they approved the drilling block but elected to go non -consent on the drilling of the well. That was not too much of a problem since they had a small interest, that meant the others would have to pick up the rest. The second entity we heard from was Pacific Lighting and this was late on into to our plans, as a matter of fact we had already done some surface coring on the site to ascertain what type of stability and what type of gravel and foundation we'd have to put in for the drilling rig. When Pacific Lighting indicated that they would not be able to handle their 24, 25% of the well costs, well that left 2 of us; that left the natives Cook Inlet Regional Corp. and actually the entity they were operating under was the Cook Inlet Production Company which is a wholly owned subsidiary of theirs. And Union Oil Company that carries this 8 million dollars. Then Seery told us there obligation initially was the 40: of the 8 million dollars, 3.2 million dollars, under their 7- I settlement. This is where they make an allocation to all the other native regional corporations and as you remember they were in litigation for an extended period of time on who got how much of what. In their settlement, apparently there was a prohibition against contributing more, under some formula, more than 2 million dollars of the wealth. So all of a sudden you have Union Oil Company and the natives, the natives can only carry 2 million dollars, not their disproportionate share which they'd have to pick up from the other entities. And any oil company was unwilling to come up, at that time, with a substantial disproportionate interest, even though there was a penalty, there's a penalty involved, for those who didn't come up to scratch with their money, that penalty was paid out of production and we couldn't project when that production would start. So as a result we went to the State and the federal Government in a joint meeting with the Cook Inlet Region and we asked for a waiver of that drilling obligation during the plan period which ran till December 25 of this year. We are under the obligation of establishing a participating area during this plan period so a participating area will be established around what we think the 3 I I i i z:, - i . s f gas field is and what we can demonstrate to the State are the limits of the gas field by December 25 of this year. That will be met. Robert Anderson: Well, as result, when you have a well that's capable of production, you don't leave it in a producible condition. You put in a shut-in status. And that's, as you can well understand, you wouldn't want a well out there with valves that some vandal could come in and turn on or somebody could run into and cause a problem so those wells, the 2 wells, #1 and 03, were left in a suspended status and part of that suspended status is that it's plugged off to the surface and wi:l have to be when it goes on production, it'll have to re-enter the well, drill out those cement plugs and then put in a production string. The number 2 well was plugged at the various test intervals, we have surface casing in them, we have, I think 3 strings of casing in that hole down to about 10,000 feet, all of which have been cemented back, the casing itself has been cemented back to keep it in place. And then there's a plug from the surface down to a 182 feet, I believe it is. So that's in a static condition, abandoned position and that abandonment has been approved by the Gas Conservation Commission. Where do we go from here? Under our agreement with the City Lighting, they honestly wanted the gas for the support of the building of the plant, so in our arrangement with Pacific Lighting, we committed our share of any gas that was found in these 9 prospects, for a period of 5 years after the discovery in the prospect. Now as a result in Cannery Loop, the discovery was made in 1979, 5 years from that is 1984. So our committment to them ends in 1984 with the exception, there is an additional 2 year period that they can keep a handle on our share of that gas by a take or pay mechanism. In other words, in the end of June 1984, physically taking gas, taking deliveries of gas, or in lieu of that, paying a sum for not taking it. I don't know, what Pacific Lighting is going to do. I talk to Pacific Lighting, probably once a month, if that infrequently, and I don't get any commitment from them or an indication of what they want to do or they will do. So, in so far as Union Oil Company's share of the gas is concerned, and I think in so far as the Cook Inlet Region share of the gas is concerned, it's committed for a period of time, the end of the first committment will be in the end of June 1984. At that time we can, if Pacific Lighting does not exercise its take or pay option, then we'll be in a position to see if we can find a market for oui chore of the gas. I don't know if we can or not, we have people, as matter of fact as I was telling Mrs. Coyle, on the phone this morning we had a meeting in Los Angeles just to review the uncommitted gas reserves in the Cook Inlet to see where a market might be. I don't have a market in my pocket, I don't at this time. When a market develops, if it's not committed to Pacific Lighting, gas will start flow in August, the royalty will paid to the owners, many of whom are probably in the audience. It's a unique thing in that I did a lot of work in California, the City of Los Angeles when we were drilling wells in the City, and a lot of the lot owners own the r. 4 r 6 minerals. They were not reserved in the early days, this was the western part of Leas Angeles. It was quite a chore as you can imagine., not only ascertaining who the owners were, ascertaining whether there were minerals reserved in a block or individual minerals reserved and then putting toget`:er leases, figuring out the o"nership of the streets, and what the allocation formula wnitIA hp. fnr Parh Int heratine you have to physically calculate the size of each lot to figure out the relationship of that lot to an overall participating area. And I was very glad to leave California because that was quite a chore and it took many, many hours. And we came to Kenai and probably one of the very, very few spots in the state of Alaska that the people, people like you and I, (inaudible) and here we are in a town lot situation in the City of Kenai. It's a lot of work but with the background that I have had and several other people have had, it's kind of fun to get back into it. But, it is a benefit to the people, you're not gonna get rich on it, I can guarantee you that, but it will mean something, someday, hopefully to you and not your grandchildren. But as the market develops, and it will develop, the gas will be produced and soon. I do, I open up to any questions you might have, I kind of broad brushed it, I'd be more than happy to address any that might be of concern to you or not. Mayor Malston: Thank -you Mr. Anderson. Does Council have any questions of Mr. Anderson? Is there anyone in the audience that would care to ask any questions? Loretta. Loretta Breeden: Yes, I have several, Mr. Anderson and also maybe the Council might have some comments on my questions. It seems like Pacific Lighting and Gas... Mayor Malston: Loretta, would you mind taking the microphone. Loretta Breeden: Oh, sure. Ok. Do you want me to state my name. My name is Loretta Breeden, and I'm a resident of the City of Kenai and I'm also under lease to Union, formerly Marathon, and now Pacific Lighting and Gas and it just seems to me that Pacific Lighting and Gas hasn't been a very good neighbor to the City of Kenai, matter of fact the entire peninsula and I do believe that Marathon Oil Company got out of their negotiations with Pacific Lighting and Gas in the Beluga Bay area, am I correct on that? Because of non-performance or whatever it was? And I'm wondering how that could work here in this situation. Robert Anderson: Union Oil Company also had contracts for some of our uncommitted gas. Some in Beaver Creek and some in the Shallow Gas in the McArthur River Field with Pacific Lighting in addition to this exploratory agreement. The term of those gas contracts expired and we did not renew them. We were pressed to a certain extent by Pacific Lighting to renew them, but we felt that keeping those gas reserves committed under those contracts was not (inaudible) at that time. And I think that's paid out by lack of activity. In so far as this contractual arrangement is f> z I concerned that we have with them, you have to recognize that they spent the 35 million dollars plus in drilling the prospects. As a matter of fact the last une they drilled was a 20 million dollar well in the Susitna Basin called the Trail Ridge Unit #1 and we got to about 10,000 feet; logistics there w;�re worse than the North Slope primarily because we're dealing with small plan. It was a dry hole also, so I think we're at a different relationship in so far as the Cannery Loop is concerned than we were in the Marathon was with the Pacific Lighting and Gas contracts. Loretta Breeden: I got several questions. I'm wondering, has the City of Kenai entered into any negotiations with Union, Marathon, or Pacific Lighting and Gas for a natural gas franchise that will be coming up for renewal soon? The reason I ask this, I'm wondering if there could be any special rate consideration to the natural gas users here in the City of Kenai with perhaps the granting of the extension that these gentlemen are asking for tonight. Have you entered negotiations with Union Oil or any of these companies and can anything be done for the people of the City. Mayor Nalston: Loretta, I believe there has been some preli.,,inaries and I will let Tim or Bill speak to that. Tim Rogerss We have been talking with various people about the end of the contracts presently that we have for gas for the City of Kenai and we will continue those discussions. But as far as tying them to permits and such, no. Loretta Breedens I see, all right. OK. Now, Mr. Anderson, I'a wondering where, can you say where you're going to put in the participating area. That was a no -no question. All right, when are you going to put it into a production unit then? Robert Anderson: Basically the participating area, when it is designated and when it's approved by the Department of Natural Resources, State of Alaska, and I guess it's the Bureau of Land Management, it used to be the MMS or the OUSGS of the Federal Government, we have to satisfy them that we encompass within that participating area all lands that are reasonably deemed productive by the wells that have been drilled. I can't tell you where it is now for several reasons. One, there's a lease sale coming up in September and there are some open state lands that lie within the Cannery Loop area. If we designated a participating area today we would tell the whole world where we make productions and the state would (inaudible)... Loretta Breedens Well, you can't blame me for asking. Robert Anderson: No, no, that's right. But I do say by December, by Christmas, by December 25, is when our obligation to establish participating area, we will be establishing participating area with the approval of the State and Federal 6 r. n Government and at tnat time those that lie within a part icipatinc , area will now the percentage of the total participating area that their land will bear and the overall perimeter area that (inaudible) p81'a iCi at Ni;�y area itself. Now as to when wP can put it into production, there again, we're hamstrung until June of 1984. Just by the agreement we have with Pacific Lighting. I would assuma, I do not know this, but I would assume that the Cook Inlet Region has a similar committment to Pacific Lighting and as Marathon. They are separate agreements with these other companies with Pacific Lighting and I would imagine that they follow the same lines as ours, just recognizing that Pacific Lighting was trying to secure numbers to build their LNG plant. So, I'm assuming, I know what our situation is, I'm assuming what the other working interest owners are, what their situation is : and I would assume that they have made a committment of the gas (inaudible) at least under our contract till 1984 and if they are willing to pay it, if they pay it, it's gonna take a pay situation, they have a portion of that payment to morally share with flow to the people that lic in the participating area. Loretta Breeden: Ok, if this is this area here, (inaudible) , about 12, 13, 14, 15 hundred acres that are within that agreement with you Pacific Lighting and Gas and Cook Inlet Region of Mr. Berglund out of Fairbanks or is that going to... Robert Anderson: Yes, Cliff Berglund and (inaudible) Kahl jointly own a lease that, I don't have a lease (inaud:ble) on here but I think it runs from all this water here and I know part of the uplands here and a part of this, as a matter of fact, the n Cannery Loop Unit #1 surface location sits on their property, on their lease land. There are provisions under the lease that we can get drill crew rights since to prospect. This well is not a straight hole it's directionally drilled and we shared the information on this well. Mayor Malston: Mr. Anderson, could you maybe, for the record, be a little more explicit on the areas as opposed to just pointing to them. Robert Anderson: Ok, the Cannery Loop 01 drill site sits in Section 7 of by north 11 west. The Cannery Loop 3 drill site sits in Section 4 of the some township and range. Now the lands that we're gonna call, it's a state lease that they have, lies in Section, part of Section 6, part of Section 7, part of Section 18. I think they also have lands that lie further to the west, I'm not sure where that boundary is currently. Whether their lands participate or not will be up to the State. We think that a portion of their land may have some participation in this accumulation. Loretta Breeden: Ok, I do have one last question. Do you plan to drill #4 or do you plan to just put this in the participating unit or production unit not drill. Thank you. 7 t& Robert Anderson: Well we plar-to drill 04 this year but we didn't get the support. We will eventually drill #4, I cannot tell you when that will happen. If we do not drill :4, if it's rout included in the next plan of development which would carry a time frame from about the 26th of December 1983 for the next year. The unit will contract this boundary will shrink down to the then existing participating area which has been approved by the State. Because this is the end of a 5 year term after that unit was established. So the participating area will come before the drilling of #4 because the drilling of #4 now is put off until at least after December of this year. And our obligation to establish a participativia area is December of this year so it just follows that we will have a participating sees before #4 is drilled. Mayor Malston: Is there anyone else in the audience with questions for Mr. Anderson? Back to Council. Council, do you have any further questions? Mr. Anderson, thank you. Robert Anderson: Certainly. End of Verbatim Sharon Reese 8 • fi 1 o