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HomeMy WebLinkAbout1986-12-02 Economic Development Commission SummaryECONOMIC DEVELOPMENT COMMITTEE December 2, 1986 - 7:00 PM Kenai City Hall Vince O' Reilly, Chairman AGENDA 1. ROLL CALL 2. APPROVAL OF MINUTES of November 18, 1986 3. REVIEW OF PROGRESS TO DATE 4. PRESENTATION OF NEW MATERIAL ~5. PRESENTATION OF TESTIFIERS AND/OR SPECIALISTS a. Alaska Dept. of Labor b. Alaska Statebank, Dick Stettler c. Kenai Peninsula Board of Realtors - Jackie Russell d. /~ Kenai Peninsula Borough - Frank McIlhar~y COMMITTEE DISCUSSION ADJOURNMENT (9'30 PM) ECONOMIC DEVELOPMENT COMMITTEE December 2, 1986 Kenai City Hall Vincent O' Reilly, Chairman 1. ROLL CALL Present- O'Reilly, Miller, Scott, Shelden, Thomson Absent: Carter, Elson, Meeks NOTE- a new member joins the Committee this evening, Mr. Barry Thomson. Mr. Hugh Malone has declined the seat based on a prior commitment to the State. Chairman O'Reilly asked that item 2 become Agenda Approval; and that item 6 become Public Testimony or Comments; item 5-c be deleted, Mrs. Russell not in attendance. The agenda was approved the the changes. 2. APPROVAL OF MINUTES of November 18, 1986 Chairman O'Reilly asked that on page 2, paragraph 2, the word "within" be added so that the sentence would read: "preferably within the City". The minutes were approved with the addition. 3. REVIEW OF PROGRESS TO DATE Chairman O'Reilly brought the Committee and the speakers up to date. 4. PRESENTATION OF NEW MATERIAL The Committee asked how up to date the material was contained in the Comprehensive Plan, answer; the date on the Plan was April 1986, however the Plan has not been adopted. The Committee questioned whether Mr. Kevin Waring could be contracted to update the economic portion of the Plan. Mr. Waring had been a subcontractor through CCC Architects, the original drafter of the Plan. As the Plan was under contract with CCC Architects through the Borough rather than the City, Mr. McIlhargey was asked if he · could check the contract to ascertain whether Mr. Waring could do the update. ECONOMIC DEVEL ~ENT COMMITTEE December 2, 1986 Page 2 NOTE' The minutes are not intended to supply details of reports handed out, only general reports and discussion 5. PRESENTATION OF TESTIFIERS AND/OR SPECIALISTS a. Neil Fried, Alaska Dept. of Labor Mr. Fried passed out graph material to the Committee Members. The first graph refers to employment indicators for the City of Kenai alone. This is a new format this year. Prior to this year, Kenai had been taken together with Soldotna, however, this graph does include Nikiski to a point. (Mr. Fried also explained that he works closely with Kevin Waring and this report and material will update much of the material in the Comp Plan.) The first graph also compares Kenai with the rest of the State. The two largest employers are government and manufacturing for Kenai while the state shows government and, trade, and services. Manufacturing includes the fish industry and refining. The employment factor in this graph shows that Kenai has 3 times the amount as the rest of the state. The average is actually closer to that of the national level. Mining is also closely related to the national average. In secondary categories, F.I.R.E or finance, insurance, real estate, eating & drinking services shows less employment than the rest or the state. When Soldotna is included, the category becomes larger and is closer to the rest of the state levels. Because the two areas are so close in area and do interact, we must look at as a whole. Over the last 5 years, all three of the main categories had rapid growth. There were no indications in 1985 that employment would decline as it did. 1985 will be looked at as a benchmark year. During the period of 1980 through 1985, Alaska was the fastest growing state in the U.S. Until 1985, the mining categories (or the oil platforms in Cook Inlet) were counted with the Anchorage population, therefore the unemployment reports reflected in Anchorage. This was changed in the latter part of 1985 making the Kenai area reflect higher. Construction fell by more than half, however, even if the oil dollar had not fallen, construction would have had to fall or decline. Usually, overall,.the government category does not fall, however, this is not the case. Our overall employment levels are still above that of 1980-1984. There are 2900 unemployed on the Peninsula . The population has not decreased as much as expected. The prediction is that the employment levels will actively decline through 1987 and no decline in oil yet. Committee Member Thomson noted the meaningful vs permanent jobs, the seasonal jobs have such a large impact on the area. Chairman O'Reiiiy agreed stating that the seasonal jobs have no impact on the cost of schools for instance. Dick Stettler asked if the figures included fishermen, answer no as they are self-employed. ECONOMIC DEVEI .~ENT COMMITTEE December 2, 1986 Page 3 Chairman O'Reilly asked if the figures were broken down by age and academic levels, answer somewhat, mostly be age no academic levels. b. Alaska Statebank - Dick Stettler Mr. Stettler of Alaska Statebank presented statistics relative to the lending institution. Mr. Stettler observed that the underemployed are almost worse than the unemployed. Where a wage earner would enjoy $16/hour a few years ago, he now earns $9/hour. This affects litterally everyone. During the first quarter there was a large decrease in the taxable amounts, however, the total bank accounts are not down in this area. Mr. Stettler attributes this to people being more prudent, saving instead of spending. Commercial lending is up 3% while residential is down 10% and we can expect to lose more people, however, keep in mind that you can play with numbers which are relative to what? Mr. Stettler felt that by August 1987 we will hit the bottom of the decline. Committee Member Shelden noted that Alaska Statebank is pretty much a local bank as opposed to say NBA. The number of "bounced" checks from other banks is very high which may indicate that your bank is healthier than others. Mr. Stettler informed the Committee that in Kenai alone the figure was 46 million in 1982 and up to 65 million in 1985. There are no 1986 figures available as yet, however, preliminary figures appear to be good. Committee Member Thomson asked Mr. Stettler if he felt people were over-reacting in anticipation of something that may yet to be, answer; if you look around, everything on the peninsula is for sale, people are cutting down to basics and many are out of work. Chairman O'Reilly asked Mr. Stettler for his opinion on mortgage foreclosures, Mr. Stettler answered that he had no solid figures, however, the peninsula is still heavily dependent upon outside investments. The lending policies have changed, where a certain person would easily obtain a loan a couple of years ago, would have a difficult time now. People are buying real estate more for a tax advantage and less on speculation. Chairman O'Reilly asked Mr. Stettler for his feelings regarding what the City can do referring to a generalized gripe, "if only the City were doing ...... " Mr. Stettler answered that a part of the answer lies in availability of land. The City has priced itself out of the city. The cost of facilities is high which is why K-Beach has seen a rise in growth. c. Kenai Peninsula Borough - Frank McIlhargy Mr. McIlhargy produced material which spoke to sales tax information. The Committee reviewed this material alone with the Situation and Prospects. After 1985 construction would have had to slow down due to over-buliding regardless of the oil industry. Once the figures are in it will show an increase. When you have a boom as a result of state spending private businesses are attracted. Services result, however, are not supported in a down ECONOMIC DEVEL~ ~NT COMMITTEE December 2, 1986 Page 4 trend. Referring to page 58 of the Situation & Prospects, Kenai has not kept pace with sales growth. In the same period the assessed values increased by 140%. Mr. McIlhargy agreed that there is additional unemployment and a loss of population. The Committee discussed taxable sales as opposed to gross receipts and agreed that further information is necessary. The figures also include residents but who do not work here and does not include fishermen. Mr. Stettler estimated that the salmon fishery would reach 50 million this year, however, very little of that stays here, rather it goes to the states through itinerant cannery workers, boat handlers, etc. The Committee asked Mr. Scott to estimate what percent of the local population is employed by the canneries, Mr. Scott felt that his company hires about 20% locally and is a fair average for other canneries. 6. PUBLIC TESTIMONY None 7. COMMITTEE DISCUSSION CommitteeMember Thomson felt that the figures are somewhat elusive and the members need to define what we are looking for. There are large sums of money that are not reflected in the data, the Committee agreed. Mr. McIlhargy agreed to send a representative to the next meeting with additional information requested by the Committee regarding the gross sales records, etc. 8. PREPARE NEXT AGENDA a. Representative of Board of Realtors b. Representative of Homebuilders Association c. Airport - Economic Impact d. Representative - Frank McIlhargy's Office 9. ADJOURNMENT (9- 30 PM) There being no further business, the meeting adjourned at 9'34 PM. The next regular meeting of the Committee is Tuesday, December 16th. Janet A. Loper, Planning Specialist Secretary to the Committee