HomeMy WebLinkAbout1966-09-14 Council Minutes - Special MeetingAGENIM
SPECIAL MEETING OF THE
KPNAI CITY COUNCIL
Wednesdays Sopt. 1#1966 - 8s00 P.M.
)�l• Submit 1966 Audit Report - General Government Including the Terminal System
and Water and Sewer.
�2. DisauM electric problems concerning ft and Peninsula Growers Inc.
I
3e Receive report on Health Insurance for City Employees.
49 Discuss repairs to X-Ray Machine.
MINUTES OF SPECIAL COUNCIL MFETING
14 SEPTEMBER 1966
Roll call: Members present - Bob Bielefeld, Chester Cone, Roger Meeks, Cene Morin,
Carl Seaman and Mayor James G. Dye; Members absent - Bud Lofstedt.
Also present: J. W. Harrison, City Manager; Jim Goff, Electric Supt., Odin
Strandberg, Pros. CUL; Zell Wright, Mgr. Peninsula Growers; Jess Nicholas, Board
member Kenai City Development, Inc.
Item 1: CPA Audit for General Fund, Water and Sewer and Airport Funds was Riven to
Council for perusal. Formal presentation will bo made by Mr. Ted Gaines at Council's
5 October meeting. If there are any questions, get them in writing to Citv Adminis-
tration office by the end of September, and they will be forwarded on to Gaines for
answers.
Item 2: A brochure, prepared by the City Manager, titled "Electric Study, C.U.L. and
Peninsula Growers" was given to each Councilman and was read aloud by Harrison for
benefit of audience as well as Council. Said Study is on record in City Files.
Harrison summarized the report:
1. There has been no formal contract between Peninsula Growers and the City,
definitely stating the amount of power to be used. The only document is an agreement
(p. 4 of the Study) stating the cost of power at .012 cents per kwh.
This 12 mill rate was predicated on estimates from Peninsula Growers' consul-
tants who stated the minimum power to be used would be 2,000,000 kwh. This would
qualify P.G. for the City's industrial rate of 12 mills. All through the correspon-
dence references are made to intention of executing a final contract, but this was
never carried out.
Also, the year's reacord shows PG used only 527,400 kwh. This definitely puts
PG in the Commercial rate bracket. Any use over 10,000 kwh per month would cost 44
per kwht.
Mr. Wright says PG simply could not operate on this rate, and suggested the
City consider an "agricultural rate" of 20 mills.
Strandberg says if the City paid him 20 mills, he could come out all right.
He also thot he would be selling waste heat to PG and could live with the 12 mill in-
dustrial rate as the gas sold to PG would off -set the loss he sustains from sale of
power--expecially since the load is so much less that predicted.
Nicholas; sitting in for Kenai City Development, Inc. said he could not speak
for KCD, but he doubted if SBA would approve the commercial rate as the loan was made
on the basis of the Industrial rate.
There was much discussion as all parties concerned do not want to see PG's
business jeopardized, neither do they want CUL or the City to operate at a loss.
CUL has already waived part of the requirements for the 12 mill rate; i.e. Sec, ild
of the City-CUL Agreement. He is selling the City power for PG at 8.5 mills and it
costs him 9.55 to generate it.
Council says it is not fair to other Commercial users to have PG pay the indus-
trial rate when they don't qualify. There should be some way to use a "development
rate" as suggested by R. W. Beck 6 Associates. (p.20 of the Study.)
Council instructed Harrison to work with Beck and SBA people to try to solve
the dilemma.
The Mayor asked Strandberg if CUL could supply all the power PG might need.
He said he could guarantee power for the one acre unit --even in the winter.
Father than change the Industrial Rate, Harrison says the City could acopt a
Development rate, starting with Commercial rates, easing into agricultural rates and
finally into industrial --over a 5 yr. period. This would give impetus to business,
and would mean something like 4* power at first, graduating to 20 mills then to 12 mil
Morin moved, Seaman seconded, to direct R. W. Beck to come up with a report on
the City's ability to set a Development Rate, or Agricultural rate, on the lines set
forth by the City Mgr., and still stay within the Bond Ordinance. Motion carried
unanimously.
Seaman moved, Morin seconded, if something is not resolued within 30 days, the
rates to Peninsula Growers automatically go to Commercial.
Wright will work with SBA to ascertain what the minimum power load will be,
and to review the rates they could live with.
Special Council Minutes
14 Sept 66 p. 2
Meanwhile the present rate will be in effect for 30 days. Strandberg requests
PG keep its load to minimu during this period. Wright gave him his word he would do
so.
Wright says he has put $85,000 of his own money into thu PG Project, and he
will do all that's humanly possible to work with all parties concerned. Ile also says
his now soil seems to be working out very well, and he invited Council to take a "look
see".
Item 3.: For over a year the City has tried to get an insurance plan for City em-
ployees, but were not able to find anything that was economically feasible. Now the
City can come under the State Plan. Also, two plans wore given to Council for study:
1. From Troy Rice, representing New York Life, and 2. from Cal Calvin, representing
Occidental Ins. Council will study these two plans, and will hear presentations made
by both agents at the 5 October meeting if they can both be present then.
Item 4: The tube is out on the X-Ray machine used by Dr. Struthers and he is asking
the City to repair it. He has a machine of his own, but prefers the City$% as it's
a bigger, better piece of equipment. Cost of the tube is $1,000. The City had
$367.77 left from Clinic money at the end of the fiscal year, but this was turned
into surplus, and there are no provisions in the budget for this expenditure. The
City Mgr* does not recommend this be turned over to them as it was not budgeted, but
said he would do what Council instructed.
Seaman thinks the City should be as responsible to a Dr. as to the Fire Dept.
They both can save lives.
The Mayor and Seaman then reported on problems and status of the Dr.'s business.
At the beginning, the City used Clinic money to pay the airfares, room and board at
R/R, for the Dr. and his wife, to come to Kenai for an interview. Then several bus-
inessmen contributed to help him move hero. Now, he says he simply cannot get along
without a place to put his surgical patients, or to give post -natal care. tie must
have a place for surgical work and for lying-in patients.
Oehler has offered to finish the 2nd story of the Professional Office Bldg. to
meet the requirements, as far as possible, for a hospital--'tho he cannot furnish
a place for preparation of food. There must be 8' corridors, an elevator, etc.
J. W. Thompson has also offered the store building in Thompson Park which will
soon be vacant.
The State Dept. of Health man, Mr. Bordan, was here to look over both bldgs: to
see if they would be acceptable. The first criteria is to be sure they are fireproof.
The assistant to the State Fire Marshall will be here tomorrow to inspect.
The Mayor suggested the Central Peninsula Hospital to Dr. Struthers, and he
said this would be fine, but he needs something for right now.
Oehler says if he puts in the facilities, he would have to borrow the money,
and would have to have the loan underwritten. It was suggested the City under -write
the loan. The rent would be about $3,000 a month--(50¢ a sq. ft.). Seaman pointed
out the first six weeks, or two months, there would be no revenue, and it was likely
the City would have to meet the payments for the first two months.
Bielefeld wanted to know if all the City would have to pay would be the rent,
or would there be other expenses as time passes. Evidently, the City only guarantees
the loan, and rent payments would take care of payments on the loan. The Dr. is not
asking for more oquipment--he has his own Outside.
Cone says the City should do all it can to keep a Dr. h"re. He thinks if it
came to a vote, the people would vote to keep a Dr. here, 'tho' a bond issue would
raise taxes.
It was reported 40 surgical patients were sent out of here in one mont
Harrison put in a call to Juneau and the Fire Marshall said they would very -
thing they could to approve the bldg. on a temporary basis.
Seaman and Bielefeld will meet with the Fire Marshall's assistant tomorrow.
They will also see the Dr, tomorrow about the equipment, etc.
Seaman moved, Cone seconded, to replace the tube, not to exceed $1,000, in the
X-ray and to negotiate a lease agreement with the Dr. and arrange the $1,000 be paid
back. Roll call vote passed the motion unanimously.
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Special DIeeting, Council Minutes 14 Sept 66 Page 3
The City Mgr. reported on 5 items:
1. EUA approval has been received for the City to use force account work on the
Industrial Air Park. This is the first force account work approved by EAA.
2. Word was received the $39,000 (plus) has been granted for the C ity's Centennial
Plans,
3, The Hospital corner stone ceremony will take place Friday at 2:30 p.m., with no -
host dinner at Royal Redoubt later.
4. He and Jaynes, Airport Supt., will be in Anchorage tomorrow re airport land
leases, etc.
S. Final approval from FHA has been received on the apartment house.
Jess Nicholas reported he attended the last annual meeting of ARECA in Fairbanks. He
was elected President and they will have the next annual meeting in Soldotna. They
hope to have it one of the best meetings in ARECA's history; have planned a seminar
on Management expecially for Municipalities; have invited speakers from Washington;
hope to work on changes in the Electrical Code, etc.
Harrison said he hoped they could work out an over-all power grid for the
area.
Seaman said the Borough Centennial Comm. is holding a big meeting next Wed., 21 Sept.
The City has already written them stating this was the regular published meeting
night of the Kenai City Council, and asking if they could possibly make it another
night.
Meeting adjourned at 10:40 p.m.
Re ctfully submi ted,
F,11ko
rances Torkilsen
City Clerk
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