HomeMy WebLinkAbout1961-09-05 Council Minutes— - - - - - - - -- ---
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Minutes of Meeting Tuesday, Sept. 5, 1961
Meeting was called to order by Mayor John Swanson at 8:00 pm. Roll call
shooed all members of the Council present. (Messrs. McGahan, Morgan, Seaman, Cone,
C. Swanson and Hayes.)
Minutes of the last meeting were read and approved.
City Attorney, James E. Fisher presented the foilowing recommendations:
1. The City should increase their efforts to secure a Garbage Dump.
2. Council members should give some thought to buying the volumes of
McQuillan on "Municipal Corporations".
3 3. The Council should meet with Civil Defense administrators and find out
the responsibilities of the City in time of war or emergency.
The Clerk presented bills to be paid; Mr. Morgan moved, Cone seconded the
bills for Dr. Isaak, Ted Gaines, and Roland H. Lane be allowed. Motion passed.
Carl Swanson
Mr. Seaman moved, gate seconded, that plans, as presented by the School Board,
regarding Sec. 25 and 33 for future school sites be sent to the Land Office. Mr.
Morgan moved, Cone seconded, we table the motion for action on the plans until the
Council can meet with mr. John Ault of Alaska Housing Authority. The motion to
table was voted on by roil call as follows: Messrs. Morgan, McGahan, Hayes and
Cone - affirmative, Seaman - nay, C. Swanson - abstained by consent of Council.
Mayor John Swanson presented orally an application for Magabar Co. to use
the City dock Site in return for some Cat work. Council members objected to de-
ciding on t 1 cl8 ion w t ut gr more thought, but Magabar had to have
an answer :!eitydock
much discussion Mr. Morgan moved, Hayes
seconded, Ma abor be allowed to site for $100.00 with the stipulation
that the cargo be removed after 30 days, and permission is granted to clear land east of
Beaver Loop Road if required,, Mr. Cone moved, McGahan secrmded, to amend the motion
to read $1000.00 instead of $100.00, and 60 days instead of 30, and the land east of
the road be cleared for storage. Roll call vote on the amendment was: Affirmative -
Messrs. Cone, McGahan and Seaman; Negative - Morgan, C. Swanson, Hayes. Mayor
Swanson broke the tie vote in the negative. Motioq/,failed. Roll call vote on the
for nding
question was as follows: Affirmative - Messrs. C. Swanson, Hayes, Morgan; neg-
ative - McGshan, Cone and Seaman. Mayor Swanson broke the tie with a vote in the
affirmative. Motion Passed.
Chief Peavley recommended the present taxistand of Stan's Cab remain where
It is now operating. If another stand is desired he suggested some location near
the center of town - possibly near the Rig Cafe, but not in any bar.
He also recommended the City approve the application of Phil Wilson's to
sell his taxi business to Messrs. Johnson and Arnold with the stipulation they be
subjected to the normal police investigation.
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Chief Peavley also presented his plan to establish a police auxiliary,
using four men at $2.00 an hour. He said the maximum hours worked a week would
_ be 36. The City would outfit them and they could be used as guard detail and be
on standby status. He would set up a police school, doing some instructing him-
self and using FBI and police officials from other cities as additional instructors.
He estimates the cost of the project to be around $3744.00 a year.
Page two 9/5/61 Minutes
Mr. Morgan moved, Swanson seconded, Phil Wilson be allowed to sell his taxi-
cab business to Johnson & Arnold. Motion passed by roil call vote{ unanimous consent.
The Mayor set neXt Tuesday evening, Sept 12, as night for public meeting at
8:00 pm in the Fire Hall.
Mr. Rod Franck presented a rehabilitation report and a report of Kenai Power
Corporation's activities.These reports are included in the minutes.
Mr. Mark Chisum spoke briefly for Peninsula Power reiterating their program
as set forth in the letter presented at last week's meeting.
Speakers from the floor were Mesdames Donnis Thompson and Helen Statzer, and
Messrs. George L. Jaynes, Jr. William Wells, Jack Hinerman, Stan Thompson, Phil
Stetzer, D.W.Hobbs, Carl Robrts, M.L.Mullen and Frank Rawley.
After much discussion Mr. XxMdm Morgan moved, Swanson seconded.,Kenai Power
Corporation be invited to present a franchise -agreement for Council approval or re-
jection, at the earliest date possible. Mr/ McGahan moved, Hayes seconded, to amend
the motion to include Peninsula Power in the invitation to present a franchise.
Roll call vote on the amendment was: Affirmative - Messrs. McGahan, Seaman & Hayes;
Negative - Morgan, Swanson and Cone. Mayor Swanson voted "lies" breaking the tie and
the amendment passed. Roll call vote on the motion was: Affirmative - McGahan,
Seeman, Hayes; Negative - Morgan Swanson, Cone. Mayor Swanson broke the tie with
an affirmative vote. Motion passed.
Mr. Carl Seaman presented the Council material for consideration with re-
gard to buying the Moose River Bridge which is being replaced with a new one. Mr.
Wm. A. Smith owns the bridge and Mr. Seaman thought the City might be able to use
it across the Kenai River to connect Kalifonsky with Kenai.
In response to suggestions from several council members the Clerk had
written Lee Hubbard,,Secondary Roads Engineer, regarding a possible meeting with
him in conjunction with the Kenai Chamber of Commerce. Mr Hubbard expressed his
desire to meet with the two groups and stated any time after October 1 would be
convenient. The Clerk will try to arrange a suitable date for the Council, the
Chanber of Commerce and Mr. Hubbard.
Mr. C. Swanson moved, Cone seconded, the double door taken from the former
sage room for the ambulance be given to the fire department. Roll call vote
passed the motion unanimously.
Mr. Seaman moved, Morgan seconded the City clean up the town square. Motion
passed unanimously by roll call vote.
Mr. Morgan moved, McGahan seconded, we publish bids for gravel for Kenai Streets.
Motion passed unanimously by roil call vote.
,� Counsellor Fisher is instructed to get permission from Kenai Joe to dump
l I wrecked cars over the bank to prevent more erosion.
Mr. McGahan moved, Cone seconded, any taxicab out of operation over thirty
days should have the permit cancelled unless the owner, appearing before the Council,
can show just cause for the delinquency. Motion passed unanimously by roll call vote.
Mr. Morgan moved, Hayes seconded, The Council concur with the school board
recommendations to add $300.00 cost of living allowance to the school budget.
Roll call vote passed the motion unanimously.
Meeting adjourned 12:00 pm ,, /1V z1�� ��
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RLI IABIL I TAT ION ,PRO GIL-11
Kenai Power Corporation
t?e iBP"Q5 Corp.
enai, hAska
Honorable Mayor
Members of City Council
City of Kenai
Alaska
Gcxticman:
The following is a brief revein7 of the rehabilitation program as it
stands now:
In April 1619 rehabilitated line on Birch Dr., now 1st class toad.
In May 1619 new line to Standard, Kenai Packers and Talker's subdiv.
In Oct. 160, new line on Homesite Loop Rd.
Rehabilitated line from plant to airport last fall.
In May 161, new line on Vildwood Rd.=
The above represents about 2 1/2 miles of rehabilitated or new lines
in a system of 8 miles. This is a ratio of 25% in rehabilitation and meeting
new growth needs, and in dollars, about y20,0009 in the last year alone.
In addition an immediate expenditure for $30,000 of new transmission
line from the new plant site to Kenai, which because of its duel design will also
serve as distribution line. This line will open up at least 7 miles of new
service areas, or a distribution expansion of nearly lU0°p.
In addition, for the forthcoming year, Kenai Power Corp. has allocated
620,000 additional for grovith and replacement as the need arises. Additional
capital needs are unlimited provided Kenai Power Corp. has a service agreement
with the City of Kenai.
It is the opinion of Kenai Power Corp. that the service and condition
of its distribution as it will stand in 90 days will be adequate to serve current
demands. The life span of a service line is 35 years and even if more than 60%
of the current poles were stubbed, the cost of this item would not exceed v12,000.
There is no question in the mind of this company that any financing
necessary for rehabilitation or any growth needs is available, provided Kenai
Power Corp. can work within the framework of a franchise . Vk Z�e
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STATUS LET
Kenai Power Ccorporatiss
Consel/deted Utilities# Ltd.
Kenai Poem Corp•
P.O. BOX 99
Kenait Alaska
September 5s 1961
Honorable Nam
Umbers of City Cotiueil
City of Kenai
Alaska
Gentlemena
In accordance with the agreement made a week age during the discussion
rooting of the City Council and Kenai Power Corps we hawith sW a3lt ova report
which sets forth the wastisge, stan3_7 and proposed increase of generation fae-
ilities for the City of Renai. The report also outlines the problesm8 of the pro-
posed rebabilitation progrm of the distrifttien syst % rate schedulers the need
alit franchise right of new t
� for as electrical code and electrical utility s $� x+1�s P�
sites ether data and exhibits. We Note asked tm restrict our report to faetss
which we will attempt to doe
Despite the unusual inereasse is dem+. s ju the last two yearns Kenai
Power Corp• has managed to meet most of the generation dewndss although admit-
E kk' to4ly with a few occasironal trouble spots. During the forthcoming winters devr
f pLU the mWected increase of 33% more demand in generation over last yeare
Kenai Power Corp, *ill be in a position to most this with an increase of over
400% In generation eapaeity. Putting it another ways this year the City of
R
Kenai will probably require peaks of 600 XW and Kenai Power Corp. will be in a
position to meet peaking capacities of 2000 ON
PEAKS
3 !linter of 9" - *60 ... 375 peaks (NN)
a a #60 .. e62. ... 450 Eff pew (20% incr.)
erected s " 161 - e62 ... 600 IN peaks (33% incr.)
ACTUAL GEKESATIM AVAILABLE WINTER +61 - 162 ... 2000 Ml
(over)
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Henan Power Corp. in conjunction with Consolidated Utilities* Ltd.* (a
private business manufacturer of electrical power which is not in the trans■- ;
aission and distribution business*) have a 20 year contract which in offset
'
P72vides for CUL to furnish all electrical poser demanded by JaM during
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the tent of the contract.)
TEE NO GOMWICH PL= i
Consolidated Utilities* Ltd.* intends to generate and sell electrical
power on a wholesale basins fob their plant site. Their mesas of generation
will be through the use of natural gas as the main fuel component* The initial
generating units are 600 H!f converted Worthington and a 700 mr converted Nash,
ington for a total initial capacity of 1300 Eff of electrical power available to
IMF" The generation plant site is located adjacent to the new Union-Wo
Sterling Unit gas wells In addition to the advantage of being 4 mod 4ste to the �
E
fuel source* the new power Plant site is located on the shore of a lance which
lwiU.
nest all the demands for water cooling requirements. CUL has a favorable
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purcha gass has a lease with
contract with Unla s-0hio in the ss of the natural
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the State of Alaska for the 5 acre sites has cleared the sits* is in the process
of hauling gravel for the base and constructing forms for the pouring of the coat
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crate foundations and bmildinge The engine and generator equipment is presently
.
located the Salifons Beach site and will sir be moved to the new site.
loco at l� Bea ��Y
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She completion of all this activity and the availability of this new power is
expected within 90 days.
i Kenai Potter Corpe has a 20 year contract to buy wholesale power Iron
Consolidated Utilities at the new plants site* install 0=2s ow transmission
line from the CUL plant site to the city of Kenai along right of ways already
i�
.; filed for to the State of hlsakas then distributed Lhrough the City of Kenai,
(ever)
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We would Bice to point out that this new transmission line in itself opens a
whole new area for service. In addition to the available 1300 HN from CULs
MW has its existing 550 IN plant with two 75 W standby units ready for
the lines altogether totaling an available 99 capability of 2000s more than
four time the anticipated needs of the City of Kenai for the forthcoming
winter.
&[F.=CAL RATF3
iPreviously the Kenai Po ner Corpe has used diesel fuel. to generate else-
tricityo Operating cost records up to last Spring will bear out that this fuel
represented 35% of the production cost of generations The national average far
this same factor is a maxism 15%e Since last Spring and during this changeover
periods because of the layering of the ratess this fuel cost factor has jumped
to 50%* The decrease in rates was made to show good faith and intentions even
though the switchover period has been longer than originally intended. Howver
it can be said that with the new source of generations the ftiel cost factor will
be nab closer to the national average of 15%j, which is what the new eleat#iaal
rates wens predicated one
Now much has Kenai Power Corps reduced its rates within the last year?
for a residential customer using about 500 ME per months the bill was approm-
iaat&4 $50,00 per month wader the old rate. Under the new rates the bill for
the same 500 MM per month will oast abowx $20s00 per month* Plus an additional
10% discount if the bill is paid in 10 dep s About a 60% DFCREME IN AN ELt-
TRICAL BILL for an all electric residence compared to a year agot
For the commercial oustamers we offer the followings A year age the bus-
inessman paid approximately W900 per month for 50D MR* Today the same businp-
easasan is paying $32s00 for the same uses plus the 10% disocunte Or a rate re-
duction of about 35%e
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These are ezanrplea of rates that have existed since March 3Os 1961 and will
continue to prevail under the new generation and distribution system. We hope
that someday they can be reduced even further.
We would like too at this points summarize two points. Kenai Power
Corp* in a few weeks will be in a position to offer four times the power
it offers vows and secondlys not only offersp but has established some of
the lamst electrical rates in the State of Alaska* These points should disc
poll son fears as to whether there is sufficeint power available# and also
whether the rates are detrimental to attracting newcomers.
On Thursdays August 24ths 1961s Union -Ohio completed their final tests
an the gas well contemplated for gas -electrical generatime Four days later#
may$ August, ohs the plant site lease was executed with the State of Alaskas
hater the sane days, Consolidated Utilities and Kenai Power had an informal
session with the City Council of Kenai to confirm these and other activitiese
On the day fallowing# Tuesday# the new plant site was being cleared for con-
structione During this periods right of way for the transmission line from
the plant site to the City of Kenai had been filed* As of tonight# ten days
has elapsed since the final testing of the gas wells all this has been done#
end mores as mentioned previously. There is a contract with Union -Ohio for
the gasp 2000 IN of generation equipment is on hand and in posessions local
labor and contractors are being used wherever possible and even the building
Is being purchased through local channels.
WMBnZATION# ELWMICAL CCEE AND FRANCHISE
As Kenai Power Corporation has previously pointed out# it is well aware
(over)
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that a certain amount of rehabilitation of the distribution system is necee-
sary. This is of course a continuing operation with a utility, as wen as
meeting the growth needs. A good part of both of these factors usually depend
on a well laid -out program of the city itself. We understand than once com-
pleteds, the city itself will have an excellent developoent program which will
guide Kenai Power in the most efficient and least expensive approach to serve
all the residents of the City of Kenai at the lowest possible cost, The prob-
lem of running lines down non-existent streets and alleysp expensive distribur.
tion to too few customers aM other such similar situations will only lead to
increase rates.
It is for these reasons anti other matters of equity or inequity to all
current electrical users that a city requires a franchise holder to perform its
obligations for the benefit of all ..e equally. This is the basic purpose of
a franchise, to give a city the control necessary to determine its own k:ad of
electrical service* Questions of single metering amltiple dwellings, multiple
metering of a single dwelling* determialig gquitable rate structures, the safety
and sufficiency of service and installations can really only be accomplished
throw a franchise agreement drawn up by two parties. The terms of a franchise
are what obligates the power company to serve the city in the manner the city
desires*
The terms, rules, regulations and obligations of a city franchise in coup.
Junction with an electrical code will solve 90% of the KaaA electrical customer
problems existing today As an example, Kenai Power Corporation has refused to
sake connections to dwellings with unsafe wiring systems* This has been done not
only for the safety of the occupants* but their neighbors and the city,* "Faulty
wiring" as cause for a fire is the home all too often makes the pages of news-
papers-D
(otter)
We believe at this point that the lack of a franchise and electrical
code is detrimental to the safe$ orderly growth of the city of Kenai and we
would like to see the City Council of Kenai undertake immediate steps to
institute both of these programs. An electrical code is self explanatory
and applies not only to homeowners: but industrial users and the power compa:W
itself* A franchise is nothing more than a right to -operate subject to
mutually agreeable terms*
OWMMMG NATURAL GAS DISTIRIMION
We would like to briefly comment here on a subject that may have certain
supporters* This is the feasibility of transmitting natural gias to the city
of Renai$ and its subsegnant conversion to electrical pourer• This has been
investigated by many people and many firms, including this one. We have found
it is mach cheaper to install electrical transmission lines than it is to lay
a gas pipe Line over the same distance. Besides the economics of too few a=-
tomers for the cost of a new gas transmission arA distribution lines: the pros-
pective venture vicars the potential competition resulting from two incoming
refinerys and the inevitable decrease in home fuel oil heating costs. Again$
the city of Kenai may not only be in the enviable position of having one of
the lowest electrical bills$ but may also have one of the lowest heating bills
in the state of Alaska•
SU�RY
1. Consolidated Utilities$ Ltd,$ and Kenai Power Corporation have equipment
and facilities with a total valuation of $$3438000 to S400$000 at the pre-
sent time ... and with practically no indebtedness.
2, Beeause of the lack of indebtedness and a source of economical fuel$ Kenai
f
2. Because of the lack of indebtedness and a source of economical fuel* Kerr i
Power has been able to offer the lowest electrical rates of any sources in
this area•
3e The expected Increase of 33% more electrical demands this forthcoming winter
i
Will be net by a 400% increase in generation capabilities@
4z Construction is actually progressing at the new plant site and 1300 M7
of power will be available Within 90 days.
5. Kenai Power Corp* is in the process of acquiring the necessary poles* trans-
mission limes eta* to connect the new plant site and will be ready for the
power when it is turned one
6* Power load will be increased from a current 550 21 to the increased capacity
of 2000 KIT.
7* Kenai Power Carps awns no stock in Consolidated Utilities* Ltd.* nor doss
Consolidated Utilities* Ltd.* own any stock in Kenai Poser Corp•
e
S. Semi Power is continuing with its rehabilitation of the distribution system.
It has been assured by its banking firm that necessary capital needed for
Improvements or major expansion is available* provided there is firm agree■-
ment under what conditions Kenai Power Corp. is to operate within the city.
are
9. An electrical code and franchise agreement Iowa necessary and beneficial
to the city* the taxpayers* electrical customers and the power company.
10* Kenai Power Corp* will submit all necessary records* data* proof and cony
traetural agreements at the time the city seeks to establish just cause for
I
Kenai Parer Corpse desire for a franchise agreement.
11. We maintain that sufficient faith has been sho9m with the constructing of
a new plants a now rate structure and by virtue of having already served
ill
rpm
the city of Kenai for 11 years s that Kenai Power Corperation .mould j ik„
to have the City Council of Kenai make some expression as to the position
of Send Poorer Corporation in its application for a franchise agreement.
12e We will make every attempt to answer any questions by members of the
council or the audiencee
Respectfully.
J/
Frank R 1eyp
Kenai Parer Corp
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The Honorable John Swanson
Mayor of Kenai
Kenai, Alaska
Dear Mr. Swanson:
0
August 29, 1961
Re: Electric Energy Facility
City of Kenai
Peninsula Power submits the following proposal for the consideration of
the City of Kenai.
The undersigned has been advised that the present facility available within
the corporate limits of the City of Kenai are not sufficient for the present and
forseeable needs of this city. We are further advised that it is the ultimate
desire of the City of Kenai to establish a municipally owned and operated electric
utility. The following proposal is based on these assumptions and the assumption
that the City of Kenai is a first class city with full charter power in the State
of Alaska.
1. Upon receipt of a letter of authority to conduct the same and a letter
of intent to grant a franchise under the terms and conditions hereinafter set
forth, the undersigned proposes to engage an independent qualified professional
agency to conduct a feasibility study of the power needs of the City of Kenai
at no cost to the city.
2. Should such study indicate to the satisfaction of the undersigned that
the required installation to furnish adequate power to the citizens and businesses
of the City of Kenai at reasonable rate would be economically feasible, then and
in that event the undersigned is prepared to provide guarantees of performance
and in return for such guarantees would require an exclusive franchise from the
city for the furnishing of electric power to all consumers within the corporate
limits of said city, having due regard for the accrued rights of producers now in
existence, for a period of twenty (20) years.
3. The conditions of the franchise would include but would not necessarily
be limited to, a provision that the city in its capacity of a public utility
commission would have the authority to review the rates charged by such facMity
and that the city would have the privilege of purchasing the entire installation
at any time after the first five (5) years of such franchise, at the cost of such
installation plus fifteen percent (15%). Such franchise agreement would further
provide that unless the same was renewed for an additional term that at the term—
ination of such period, towit: 20 years, the undersigned, its successors or assigns,
would sell and the city would purchase the entire installation at fifty percent
(50%) of the appraised value of the facility as established by three independent
competent appraisers, one to be chosen by the City, one by the undersigned, and
the third by those appraisers so appointed, such value determination to be binding
on both parties.
It is appreciated that this proposal is merely a broad outline or statement
of position and the undersigned stands ready at any time to refine or modify this
proposal.
JRC:pvs
Sin
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hn R. Connol ys
Attorney for Peninsula over