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Home My WebLink About1979-09-11 Harbor Commission Summary' ! ~ . ~4~'~ ' . ... ~ ~ . ¢ ~ . . t~ y ' ~ KENAI HAR60R COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 197~ ~ AGENDA ______ PLEDGE OF aLLEGIANCE . A. ROLL CALL . AGENDA APPROUAL ~ B. MINUTES 1. Minutes of the regular meeting of August 28, 1919. C. OLD BUSINESS 1. Option to Lease Tract D 2. Kenai Split Subdivision - for Planning & Zoning Commission 3. John Merrick, BLM - Change~of Authorized Use of Land 4. Merger of Harbor, Airport Commissions to Transportation Commission 5. Prepare Phase J.I~Y of Tidelands Ordinance for Council. .~ ADJOURNMENT 1 KENAI HARBOR COMMISSION REGULAR MEETING TUESDAY, ~EPTEMBER 11, 1979 A. ROLL CALL Present - TOM ACKERLY, CHESTER CONE, BOB PETERKIN, BOB TEPP, TOM WAGONER Absent - BILL BURNETT, JOHN WILLIAMS, EX-OFFICIO MEMBER BETTY GLICK, EX-OFFICIO MEMBER MAYOR UINCE 0'REILLY ~ Oath of Office administered to Tom Ackerly. 1. AGENDA APPROVAL The agenda was approved as presented. B. MINUTES - Minutes were -fo~^ the meeting ~f August 2~, 1979. Page 2, paragraph 4 of the minutes, last sentence was corrected to read '"the council will accept the recommendation of the commission." Page 7, paragraph 6 of the minutes, line 12 was corrected to read "would sti11 have control over fees, etc." C. OLD BUSINESS l. Chai,rman Bob Peterkin stated Mr. Roper ha~ requested the commission hold on discussion of the Option to Lease Tract D until he can come to a commission meeting. There have been some problems with the Kenai Harbor Development Corp. MOTION Commissioner Wagoner made a motion that until further notice by either party involved, the Harbor Commission table the lease considering Tract D as presently established. Commissioner Ackerly seconded the motion. The motion passed unanimously. Commissioner Wagoner asked At~y. Schlereth if the City had protection of liability insurance. With development at a standstill, there is a chance of kids getting hurt. Atty. Schlereth replied he will check into this. Chairman Peterkin stated that the commission should consider the super-high tides in the fall and spring, that the green belt and dock should be planned considering this. He also noted the lease with Kenai Harbor Development for Tracts B& C was for 9~ years, the Tidelands Lease now under consideration is for 55 years. He asked Atty, Schlereth if there was time given to Mr. Roper to de- velop his land. Atty. Schlereth replied that he had two years to do his improvemer~ts, the lease was not up until Apri1 1981. 2. The Planning & Zoning representative did not come to the meeting. 3. With concurrence of the commission, Chairman Peterkin suggested KENAI HARBOR COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1979 Page 2 the commission discuss Phase II of the Tidelands Ordinance, the lease: . Atty. Schlereth reviewed the preparation of the lease. The lease is taken from the airport lease, with two main differences. One - the airport lands are leased on a first come, first served basis. The tidelands have a limited amount of available land, the commission can select the leases. C~a~r~~n~Peterkin asked if the land has to go all at once, or in selected parcels. Atty. S.chlereth replied that airport lands are not all surveyed. On the surveyed land, the people can just select the desired area. On the unsurveyed land, the people can select the area and then have lst choice as it comes available. Most of the tidelands area is already surve,yed. We can lease by tracts, or go by lst come, lst served basis if the commi ss i on wants . The second di~fference is that the commission can set fees charged to the public if they wish to, acting as a mini-utilities commission. Commissioner Wagoner asked Atty. Schlereth if the Harbor Commission establishes use rates the same manner as done with Salamatof. Chair- man Peterkin replied that the Harbor Commission has the right to set rates. Commissioner Wagoner stated the Harbor Commission has no jurisdiction over Columbia Wards and Sea Catch. Commissioner Tepp said he thought the Commission only set rates for public use. Chair- man Peterkin replied it was up to the commission. Commissioner Wagoner stated that~if a lessee set prices too high, they would be run out of business. Chairm~an Peterkin replied that the c~,~~ should protect the public. He explained that Salamatof fees are set because of BLM restrictions. Mr. Roper's tract C lease is different because Mr.~Roper wi11 be using has land for bo~t and harbor use. If there are any problems with Salamatof, ~LM will take the land back. In other leases, the City will take the land back. Atty. Schlereth suggested that although the competition of smaller businesses brings the price down, larger businesses ~ive better service. Chairman Peterkin then began the review of the lease by line item. 11.20.010 - Lands Available for Leasing Commissioner Wagoner asked how does this pertain to land outside the river (the set netters). ~tty. Schlereth explained the set netters have prior ri~ht, that the lease might i~~nclude them as preference rights, but it is more like grandfather rights. Chair- man Peterkin noted that his land borders the Inlet, that set netters are using the beach. He actually owns approximately one acre along the beach. When the Borough begins selling the land near Wild- wood, there will be conflict. The commission should be aware of this probable problem. Atty. Schlereth said that an oil company on the North Road used a set net site to build a temporary land- ing dock, and paid the set netter for the expected loss. However, the value of the fish increased. Chairman Peterkin noted that land sold as city land is not, it is private to mean high tide 1 i ne. __~ ~ . ~\ ~ KENAI HARBOR COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1979 Page 3 Chairman Peterkin noted the term "classified lands." Can the City hold out some lands? Atty Schlereth explained, yes, that's why it is listed as classified. Chairman Peterkin asked if the Borough Planning & Zoning would classify, not the City. Atty. Schlereth replied, yes, further on in the ordinance it states the application lst goes to the City Planning & Zoning, then to the Borough Planning & Zoning. Commissioner Wagoner suggested to be added to l~~ne 3: "provided, excluding existing set net sites currently under lease, for", etc. Chairman Peterkin asked if, when they get their set net perm~t from the State, does it specify site? Commissioner Ackerly and Commissioner Wagoner explained there are two permits issued, one for the site, and a set net permit. Chairman Peterkin asked the administrative assistant to prepare a list of al1 set net locations for dist,ribution to the commissioners. 11.20.050 - Applications Commissioner Tepp questioned the $100 filing fee. Atty. Schlereth replied that fee was set at the last meeting, to match the fee for City leases. Commissioner Ackerly requested ~7~ be added to the development plan: a detailed financial plan showing their ability to carry out the plan. 11.20.080 - Public Notice-Public Hearing Commissioner Ackerly asked if there was a set number of days for the pub1ication in the paper. Atty. Schlereth replied the usual was three, but the exact number is not listed. The Borough has a specific number on foreclosures. The State statute says the City shall place notice in the paper. He will check if adequate notice is necessary. 11.20.110 - Appraisal and Surve~r of Leased Lands Commissioner Ackerly asked why the applicant has to bear cost of appraisal and survey. Atty. Schlereth said it can be changed. Comm~ssioner Ackerly suggested the land be divided into lots, and the City lease number of lots requested. Also application and survey costs should be deleted~. They are the City's responsibility. Commissioner Wagoner asked wha wi11 select the appraiser. Chairman Peterk~n said the Harbor Commission should have to have the ability to select their own appraiser. This points out again the need to have a fund income for the commission. Commissioner Tepp said the City should be able to pick its own appraiser. Chairman Peterkin asked Atty. Schlereth to change 11.20.110 to read, "The City of Kenai will furnish appraisal and survey." Commissioner Cone suk~gested if the lessee challenges the appraisal, they should pay for the new survey. The commission agreed to this addition. 11.20.120 Ch~~rman P~terki n sai d the fai r market val ue ~rate ~ s 6/, whe~^e i s KENAI HARBOR COMMISSION RE~ULAR MEETING TUE'SDAY, SEPTEMBER 11, 1979 Page 4 this stated. Atty. Schlereth replied,11.20.140. 11.20.130 - Lease Document-Terms Commissioner Ackerly asked why the lease was 55 years, instead of 99. Atty. Schlereth said it should be 99 years. Chairman Peterkin said The Roper lease has an open time for the lease, why not use that in our standard lease. Atty. Schlereth said some lessees want a shorter term. Chairman Peterkin stated that land or situation can change, and they wouldn't want to be held to a long-term lease. Commissioner Tepp suggested we enter into the lease: if the land changes we are not liable. Chairman Peterkin said also, if the engineering is wrong, we shouldn't be liable. Atty. Schlereth answered we could always put provisions to protect us, but insurance on the 3rd party is better protection, the City - as landholder - would be held liable in any suit.~ Commissioner Peterkin said that in case of a natural disaster, the government would step in with "cheap money" for rebuildin~, probably no one would sue. But if the lessees change land, how are others on the water protected? Atty. Schlereth replied, only by insurance. Commissioner Wagoner noted if the lease is for a short-term, as less than 5, they can make a temporary dock and return the area to normal when use is completed. ~Example - Collier's). A long- term lease would~make this harder to do. Commissioner Tepp sugg- ested the time should be up to the Harbor Commission. Commissioner Wagoner said it should be at least one year. Commissioner Ackerly requested the minimum be changed to 2 years, and the maximum be 99 years. 11.20.140 - Principles and Policy of Lease Rates Commissioner Cone noted the increase is limited to 50/ for 30 years, why? Atty. Schlereth answered this is the same as the airport lease. An example is the Carr-Gottstein lease, the City fe1~~~ith the ~nflation rate as it is, the City would be stuck at a 50/ gain. The, lessee has its own protection, in that it can bring in its own appraiser. Chairman Peterkin felt that 50/ was alot, Atty. Schlereth replied that some applicants are turned off by 50/, but that is the~hi hest it can go. Commissioner Cone said we are only considering an increase, can't it decrease? Atty. Schlereth said it is built in both ways. Commissioner Cone asked if the appraisal is of land only, or land with improvements. Atty. Schlereth explained that it will be the land, plus water & sewer only; possibly roads, if paved. Fair market value is on the best use of land. Commissioner Cone mentioned low lying land, With gravel fill for a dock, this is an improvement and would raise value of the land. Chairman Peterkin suggested a clause listing an ex- clusion of gravel build-up in the appraisal. Commissioner Cone used the example of the land being with $10,000, the gravel worth $4,000, the total value would be $6,000. Commissioner Wagoner agreed the survey would be total, improvement could be subtracted. Commissioner Cone noted landscaping is an improvement. Chairman Peterkin also KENAI HARBOR COMMTSSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1979 Page 5 noted that whoever builds up his land, also builds up his neigh- bor's land. Commissioner Wagoner said the Borough also has to appraise. Atty.~ Schlereth said he will check with the Borough apprais:ers. Chairman Peterkin said maybe we could compare to un- impraved land, but eventually all land will be improved. Chairman Peterkin asked Atty. Schlereth to explain the bottom paragraph. Atty. Schlereth replied that some tideland leases exist now. Their leases wi11 start with 50/ increase maximum at the date of lease plus 30 years. Th~s is at their option. Chairman Peterkin asked if they have the five year appraisal requirement. Att~. Schlereth replied that most do. The City does a reappraisal,sends a letter to the lessee, and if they don't agree, they get their own appraisal. This le~se will have a 3rd appraisal option for arbitration. 11.20.160 - Lease Utilization C~airman Peterkin noted the last line does not designate a term for the development plan. It should be a two year plan unless the lessee wants to negotiate. Atty. Schlereth said that stipu- lation is further on in the lease. 11.20.190 - Subleasing Atty. Schlereth used as an example B&C Supply is subleasing to a laundromat. The Council and the Harbor Commission would be inundated if they had to approve each one. A sublease cannot be in violation of the main lease. Chairman Peterkin asked if the lessee could sublease the whole parcel. Atty. Schlereth said yes, but the lessee is responsible for rent. etc. On an assign- , ment they are not responsible. Chairman Peterkin asked which was better for the City. Atty. ~chlereth said it depends on the individual situation. Chairman Peterkin requested we add to lease, "can only sublease a portion." 11.20.240 - Rights of Mortgagee or Lienholder _ Chairman Peterkin asked if lessee has financing problem, can the lending institution come in and foreclose. Atty. Schlereth replied yes, a lending institutiQn wants that protection. Chairman Peter- kin replied that the City shouldn't be penalized. The lending institution could divide up the land and se11 it off. At~y. Schlereth replied that they would have to abide by conditions of the lease. Chairman Peterkin said not after construction was complete. Atty. Schlereth said he thought tearing down the construction would be in violation of the lease, but he would check out that. Commissioner Wagoner said we should also require a performance bond. Chairman Peterkin stated it should be added to Kenai Harbor Development lease. He asked Commissioner Ackerly how his lease was handled. Commissioner Ackerly replied h~ assigned his lease to the State of Alaska. Commissioner Cone noted that a recent Supreme Court ruling that if a city is heir, anything that is torn down that would be damaging to the rest of the area, is illegal.. KENAI HARBOR COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1919 Page 6 He felt this would protect us. Cha~r~an ~eterkin said in that case he withdrew his comments on 11.20.240. 11.20.280 - Expiration of Lease Co~missioner Wagoner asked if the length o~ lease is changed (11.20.130), is this changed. Chairman Peterkin and Atty, Schlereth answered no. 11.20.310 - Building and Zoning Codes Commissioner Ackerly said that a bui1ding pe~mit is needed from the City. The builder shou]d be protected as City does not find all deviations. Commissioner Wagoner said it is a#'buyer beware" situation. Commissioner Ackerly emphasized that the ermit fee . . . .p . should protect the bu~lder. Commiss~oner Wagoner sald the City does not check on the State code. Commissioner Tepp said if the City was li~ble, it cou]d be hard on the City. Chairr~an~Peter- kin asked the Harbor Commission to review the problem for the next meeting. Commissioner Wagoner asked Atty. Schlereth to find those regulatory agencies involved in construction and make a list. Atty. Schlereth suggested a note be attached to the list stating, "we are not responsible, but these are suggested agencies."' 11.20.370 - Warranty Commissioner Ackerly noted this could be used to cover river change, etc. as discussed in 11.20.130. Commissioner Tepp said that ~s only at time of signing of lease. Chairman Peterkin noted it didn't say that. Atty. Schlereth said to be safe, he will add: geograph- ical changes, etc. 11.20.400 - Liability Insurance Commissioner Tepp asked what are the coverages on liability ins- urance. Chairman Peterkin and Atty. Schlereth rep1ied $250,000- single, $500,000-multip]e, and $100,000-property damage. Commi- ssioner Wagoner asked if that was adequate. Chairman Peterkin asked what was the umbrella of the City. Atty. ~~Schlereth replied it is not known. Commissioner Wagoner said with the courts as liberal as they are, that is not much. Commissioner Tepp noted that if a business was large, it would have more for ~ts own protection. Atty. Schlereth said he would check with the City ins. agent. Commissioner Ackerly asked if there was any special hazard coverage for the harbor. Chairman Peterkin replied each company would have its own coverage. This is just liability. Workman's .Comp. does not cover those selling fish to boats. Commissioner Tepp asked if the lend~ng institutions require insurance. Chair- man Peterkin said no. Commissioner Wagoner said loan insurance only. 11.20.410 - Annual Report~ Commissioner Ackerly asked if this was in the airport leases. KENAI HARBOR COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1919 Page l Atty. Schlereth replied it was usually in the terminal leases. If the Harbor Commission sets the fees, reviews wi11 be necessary. Commissioner Wagoner said we should regulate fuel prices, costs of dock goods, etc. , but not rental fees. If the fees are too high, they will price themselves out of market without Harbor Commission intervention. Chairman Peterkin said the State sets fuel prices. Commissioner Ackerly suggested we leave it in if needed, delete if not wanted. Chairman Peterkin replied then all will have it in their lease, and small corporations shouldn't have their finances made public. He asked the Commission to study this, he suggested the annual reports be confined to those companies with public use only. 11.20.420 - Tidelands Claims Chairman Peterkin said we need a date of preference rights claims beginning. He asked Atty. Schler~th what Statute 38.05.320 was. Atty. Schlereth replied it was in the packet from a previous meeting. Commissioner noted there should be some agreement be- tween the City and claimant to protect lessee. Chairman Peterkin didn't agree. Commissioner Wagoner said it is something we must live with for 2 years. Commissioner Tepp said there is insurance to cover this. Chairman Peterkin noted this was mentioned on page 6 of the minutes for August 28, 1979, the administrative assistant was to get a representative to speak on this. 11.20.430 - Subje~ction to Harbor Ordinance Comm~ssioner Cone noted that "all amendments and regulations hereafter enacted" could cause problems. Atty. Sch~ereth said yes, the ordinances are pretty strict, he suggested the Harbor Commi~sion exercise their right of authority. City has certain police powers they can exercise, and pvlice regu1ations hold above lease regulations. Commissioner Cone said as the construct- ion is complete, future regulations might negate grandfather clause. An example would be EPA standards, zone changes, etc. Atty. Schlereth agreed it should be changed, he suggested the Harbor Commission update the harbor ordinance. Commissioner Tepp requested the administrative assistant send a copy of the harbor ordinance to a1] commission members with the next packet for review. 11.20.460 - Public Use: Defined Commissioner Wagoner asked if a restaurant fit in to these de- finitions. Atty. Schlereth said no, the City would not set rest- aurant charges. Chairman Peterkin noted ~.b) and (g) are open to interpretation. Commissioner Tepp also noted the 1ast paragraph should be "tightened up.'' Chairman Peterkin rep1ied this is per- tinent only if the original lease is added to. Atty. Schlereth said those 1ots not on the water will not be regulatea by the Harbor Commission. Chairman Peterkin asked the commission to study this for the next meeting. 11.20.470 - Schedule of Improvements ______ KENAI HARBOR COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1979 Chairman Peterkin said the time date will be two years. 11.20.490 - Hours of Operation Page 8 Chairman Peterkin said he disagrees with this. The lessee should not be required to give a sublease. It may cost the lessee a great deal. Th~ commission concurred. Chairman Peterkin said it should be made so it can be worked out, but don't require it. Atty. Schlereth said he will change it. Commissioner Tepp said we cannot lock up the whole harbor. Comm- issioner Wagoner said it should be spelled out more clearly. He suggested the sentence be stopped after "premises." Commissioner Tepp noted fishing times are variable. Commissioner Wagoner said the public access gate would be open. Chairman Peterkin asked Atty. Schlereth to reword 11.20.480 and ~1.20.490. 11.20.510 - Use Charges Chairman Peterkin said the rates will go through Council. Commi- ssioner Tepp said just at the harbor area. Chairman Peterkin told the commission to think about 11.20.510; do we want to be a utilities commission. 11.20.520 - Ma~ntenance af Docks Chairman Peterkin noted this is another example of funds needed to regulate the ordinance. The Commission will review this later. Commissioner Wagoner asked that (8) be added to 11.20.050, requiring a performance bond. 4. Chairman Peterkin asked the administrative assistant to request the Planning & Zoning representative come to~the next meeting. 5. Merger of Harbor and Airport Commissions. - Commissioner Wagoner requested that be placed on the agenda for the next meeting. The Commission concurred. Chairman Peterkin ask~ed the administrative assistant to request Mayor 0'Rei11y be there. 6. The next meeting will be September 25, 1979 at 7:00 at the Public Safety Building. Chairman Pete~^kin asked Atty. Schlereth to have the application forms ready for review. Commissioner Wagoner asked Atty. Schlereth if there was any map of the leased and unleased lands. Atty. Schlereth said ~ yes, but not those near the harbor. Chairman Peterkin asked if the requested map was started. Atty. Schlereth stated he will ask Fin~ance Director Charles Brown to get engineering to draw it. Chairman Peterkin told the administrative assistant he would like the map by the October 9 meeting. The specifics are listed in the minutes of August 28, 1979. HARBOR COMMISSION REGULAR MEETING TUESDAY, SEPTEMBER 11, 1979 Page 9 Atty. Schlereth noted Mrs. Vic Tyler had come into the office asking for information on leasing harbor lands. He told her of the commiss- ion motion that no new business would be introduced unti] the ordinance was complete. Chairman Peterkin said she also contacted him, he told her it would probably be October before he could help her. Meeting closed at 11:00 PM. Janet Whelan Administrative Assistant