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HomeMy WebLinkAbout1980-02-05 Harbor Commission SummaryKENAI HARBOR COMM I SS ION P.O. Box 580 Kenai, Alaska 99611 AGENDA - February. 5, 1980 REGULAR HARBOR COMMlSSION~iMEETING· HARBOR COMMISS ION MEMBERS' EX-OFFICIO MEMBERS- A-G- E-N-D-A · , February- 5, 1980 - 7;00 p.m., the Public Safety Building Kenai, Alaska at Mr. Robert Peterkin, Chairman Mr. John ~Wi'l 1 lams, Vi ce,-Chai rman Mr. Mr. Mr. Mr. Mrs~ Tom Ackerly, Member Wi l 1 tam Burnett, Membe.r Bob Tepp, Member Tom Wagoner, Member Betty G1 ick, Councilwoman Vince O:Reilly, Mayor 1, Call to Order 2. Roll Cal. 1 3. Approval of Minutes .- January' 22, 1980 4~ Introduction of Guests _ : .. (a) Len McLean, Pacific' Alaska LNG 5. Communications (a) (..b). (.c) Letter to Mr.. Don Tewsksbury Letter to Colonel Nunn Senator Gravel :'s office e Reports ,, (.a) Mayor'O.'Reilly,.Port.of Seattle (_b) Chairman Peterkin, Tele-conference (c) Commissioner Burnett, Port of Entries (d) All Commissioner Status Report on Perspectus, Corps Study .7. Old Business 8. New Business (a) (b) Jack Green, Pacific Alaska LNG, February 12. Port o.f Seattle visit, February 6. e 10. Persons present not scheduled to be heard. Adjourn KENAI HARBOR COMM I SS I ON MEETING PUBL I C SAFETY BU I LD I NG KENAI, ALASKA February 5, 1980~ HARBOR COMM ISS ION MEMEBERS: EX-OFF I C I~O MEMBERS: OTHERS PRESENT: CALL TO ORDER: ROLL CALL: AGENDA APPROVAL: APPROVAL OF MINUTES: INTRODUCTION OF GUEST: Mr. Mr. Mr. Mr. Mr. Robert Peterkin, Chairman John Wi 11 i ams, Vi ce-Cha i rman Tom Ackerly Wi 11 i am Burnett Bob Tepp Tom Wagoner Mrs. Mr. Mr. Mr. Mr. Betty Glick, Councilwoman Vi nce O' Rei 1 ly, Mayor Jim Swalley, Airport Operations Manager and Mrs. Waldo Coyl e Leo Oberts Commissioner Peterkin called the meeting to order at 7:20 p. m. Tom Ackerly, Present William Burnett, Joined the meeting at 9'30 p.m. Robert Peterkin, Present Bob Tepp, Absent Tom Wagoner, Absent, Excused John Williams, Present The agenda for February 5, the fol'l owing changes; 1980 was approved with COMMUN I CAT IONS #5 (d) Memo from Ben Del ahay (Roper-Dean) OLD BUSINESS #7 (a) Additional funding for reports etc. NEW BUSINESS #8 (c) State of Alaska Municipal Agreement. Public Works Contract The minutes of January 22, 1980 were approved as read. Chairman Peterkin then turned the meeting over to Mayor O'Reilly and asked him to introduce Mr. Len McLean, of Pacific Alaska LNG. MR. LEN MCLEAN PAC I F IC ALAS KA LNG- Mayor O'Reilly ~introduced Mr. McLean to the members of the Kenai Harbor Commission, and explained the responsibility of the commission He commented that the commission may assume the responsibi'lity of the airport and will become the City of Kenai's Port Authority or Port Commission. The commission has also taken an interest in making the City of Kenai a Port of Entry. It has offered a helping hand in the soon to be formed Energy Committee, dealing with the 6nergy situation in Kenai. He asked'~ Mr. McLean to give a history of the project and where it stands at this time. Mr. McLean stated that in the past 'five or six years Pacific Alaska LNG and the community had done a lot of learning. ,The concept was'that we might" p~t in',a temporary dock to unload the modular parts to the plant, spending origionally about 2 million dollars and then destroy that dock when we were through. He keep hearing thata port"was needed in this community so he approached the Borough and told them that when we finished it would be no good to us, maybe we could turn it over to the Borough and save Pacific Alaska LNG the expense of tearing it down. Since that time a lot of.additional ideas have formed. At that time and since then they're has been no ~need for us to have the Borough or the City involved.. We could accomplish what we needed without that help but we saw it as a convience for some future possible dock site. Then the Borough started the Harbor Study. What Mr. McLean understood from that study was that the area wouldn't really support putting in another barge dock. The idea then was could that barge be .something that could reach to deep water? Mr. McLean then showed the commission a map showing the depths of the water. He said they. would have to extend th~ pier just short of 1/2 mile and do a little dredging to reach that deep water.' He said that they would just as soon opt for going across rig tenders dock. They have been in discussion with Crowley's in the past. He didn't think Kenai s'hoUld ~be~.i'ntere~t~d in a sit'e that would require 1 mile of pier out into the inlet. The place for that roll off equipment is in the area of rig tenders or above it or at the old standard Cook Inlet ,Pipeline Dock. That's where the deep water gets close to shore and is an ideal~ spot. That is my non- engineering layman's analysis of~it. The total, old cost of putting in and taking out a temporary dock was about 13 to 15 million dollars. Since that the time the figure has probably escolated. We haven't refigured that because our interests aren't really there. A couple of things we thought were viable were not so viable. We need more facts about the needs to the community. Alaska Industrial 'Development Authority (AIDA) has formed and has reduced rates, which makes it sort of difficult for the City to compete. There is one other problem, and that is to get tax exempt bonds, you~have to have IRS clearance on it and is dependent on environmental protection or if there are ports and harbors involved. Valdez's dock 'is considered a public dock because of the different nationalities that use it. The docks, pi.peline system and including the reserve tanks were included in that package and became tax exempt by IRS. Our MR. LEN MCLEAN PACI F IC ALASKA LNG' product and the tanks that we, store the LNG in should also fall in that umbrella. When AIDA money became possible, we came to the Borough and asked them for a site. Before AIDA will give you a loan it must have the holy water of the local authorities. We got some sort of statement from the Borough saying they approve. We filed with AIDA for a loan of 400 million dollars, figuring that would most likely cover the cost of the pier and tanks that environmentally might possibly be included would be the clean up of the waste water. There is still a question whether our dock would be built to match one or two ships that are going to be in there. Does it really fit that discription of being a public area? We suggest that the public own that land. All of these are to get cheaper money ~for the 400 million dollars. Roughly one-third of the money needed for the project, we could borrow it at lower interest rates so the project dosen't hinge on the IRS making that clearance. We would pay the additional money if we needed to/we could borrow it at a higher interest rate. There was then some dis.cussion on the types of docks. Mr. McLean commented this would be similar to the one at Colliers, it would have a flat platform, barge would be on it, then the tide would go out. It sits on the bottom. The boats would come in front- wards instead of sideways, and then run off to.their established dock.. Commissioner Williams asked if they would have to build a new roadway. Mr. McLean said there would have to be, it would be a temporary.thing, but a possiblity that it could be made into a permanent roadway ~Pacific Alaska LNG approached Crowley's and asked for a package deal. Since the delay's have come along they have not come back with a concrete proposal. Mr McLean said that if in any of Pacific Alaska LNG's temporary opera.tions that they can open something up beneficial to the community, they would do that, either to the City or the Borough. If the City of Kenai coUld cut itself into the act they would want 'to work with us as cl'osely as they could even if it wOuld mean a little more cost. Mayor O'Reilly asked about the time frame Pacific Alaska LNG had in mind. He mentioned that we are talking about two items; a barge unloading dock, and a prodUct unloading doCk. He remarked that in order to issue bonds AIDA would have 'to have a municipality attached. Mr. Len McLean added that Mr. Jack Green will be coming up next week to talk about the financing. He is the finance man. . Commissioner Peterkin asked about the time ~chedule on bringing facilities here. Mr. McLean reported that in~1981 strictly ~'ground preparation and cement work would be done.. This would not include a modular dock. It would probably be 1983 when modulars would be on site. It would probably be late 1984 when the first product would arrive in Los Angeles. MR. LEN MCLEAN PACIFIC ALASKA LNG: ~ere was some' discussion on'the road into Rig~Tenders. Mr. McLean remarked that at Phillips they skidded equipment across to the dock. Salamantof Road was not in. Pacific LNG would roughly follow the same route. There was then some discussion about the erosion problem. Mr. McLean noted there is a fairly serious erosion problem beyond Rig Tenders dock. They tried to stabilize by putting some piling in at the base of the cliff. They may put in another stabilizing row of piling which Would be underwater most of the time, it would be above water at low tide. Commissioner Williams asked Mr. McLean if he saw any major difficulties or developments that may come along'that might hold up things. Mr. McLean said he 'nor his company didn't anticipate anything, but anything you put your money on you have to take some risk. Solar wouldn't work, not gasification, which, would be more expensive, not atomic, Commissioner Williams ~asked about' improved relations wi th.' Mexico, Mr. McLean commented.that they still must pay the OPEC price. You-are at the whim of the foreign countries, both Canada and Mexico are good neighbors but will still Put themselves first, 'and are not going to make us a price below the market. There is an insignificant amount coming across the border. Mexico is not the answer at this time, nor is Canada. The United States number one priority at .this time is'sel-f-sufficiency' Commissioner Williams asked how close is Pacific Alaska LNG to contracting for all the gas it needs. Mr. McLean went over some of the perimeters. First, 100% of their supplies must be under contract. They also can't count State Royalty Gas. 80% of the gas. they have is State Royalty. This is a problem that they have tried to address to the State, but the State is bound by the laws that say you must burn State Royalty Gas and oil in the State. They have very nearly 100%. With one good discovery they would have beyond the. necessary amount. Commissioner Williams asked when the construction of the gathering systems and shipping systems for the gas to the plant would start. Mr. McLean replied the summer of 1983 or spring of 1984, assuming that we are going to start in 1981. There are four groups in California opposed because of the terminal site. They have filed for a re-hearing to the U.S. Court of Appeals. The hearing extended over 2 1/2 years. We feel they have a rather weak case. We feel they think by stalling for additional time it might cause us to give up and inflation would destroy us. They forget that th~s is th_e Only business we~are in. The decision should be made before this year is over. That gives us about 6 months to get our financing together. Commissioner Will iams remarked that we are trying to determine the maximum effect thai~ the LNG will have on the community of Kenai, what can the City do to help in the construction of the LNG facility. Mr. McLean replied that if the municipal,bonding that 'the City has on its books now were used instead of the AIDA bonds- that would be one way that the City could help. Another possibility is that you could own the property out there. We should be good neighbors as our people will be living in the City of Kenai. MR. LEN MCLEAN PACIFIC ALASKA LNG' Chairman Peterkin' asked if there were any questions from the audience. Mr, Waldo Coyle asked how far the dock would extend. Mr. McLean· answered 1/3 again of the length of the Colliers dock. If you located a temporary dock down the road you would be a mile from deep water. This dock is an advantage to us and to Colliers. Ships would not collide with the Colliers dock and we would act as an ice buffer for.the Collier dock, especially with a westerly wind. Mrs. Ruby Coyle asked .how long they had been working on this project. Mr. McLean rePlied 10 years. Mr. Leo Oberts asked the size of the modulars.. ~Mr. McLean answered that the biggest is 90 x 90 x 90. They are not.heaVy but bulky, they are going to use air cooling and fin fans. Further questions were asked, Mr. McLean replied that the dock would be similar to Phillips, single pier mounting, 1 vehicle would be able to go down and back, no passing. The cost was estimated at 400 million dollars for the dock and tanks, so the dock would be about 150 - 200 million. In response .to Mrs. Ruby CoYl e: s question on' the possi bi 1 ity of any law suits being filed, Mr. McLean replied there coul.d be, there are some clever lawyers, but hopefully enough is enough. Chairman Peterkin thanked Mr. McLean for briefing, the Commission... Mayor O'Reilly offered to'give Mr. McLean a ride to the Airport,' Prior to leaving the meeting Mayor O'.Reilly .reminded the Harbor Commission that. the Ordinance on the $5,000 would go in front of City Council the following night and hopefully it would be favorable. He also wanted to personally thank Mr. Wagoner for the recommendation of Mr. Keith Speckling in Juneau. RECESS' At 8'30 p.m. by general consent, a recess was called. RE-CONVENE- At 8'35 p.m. Chairman Peterkin called the meeting back to order. COMMUNICATIONS' Chairman Peterkin commented that the need for a harbor is twice what it was· 10 years ago. A letter was sent to Mr. Tewksbury asking for any information he might have on cOst benefit ratio. A letter was also sent to Colonel NUnn thanking him for the attendance of Captain Reynolds. Senator Gravel would only be in Anchorage for one night, maybe in the future we could meet with him. Chairman Peterkin had a tentative appointment with Ruth Harris a representative of Senator Gravel's on the follow~ing day. 'Commissioner AckerlY mentioned that Don Young would be in Kenai the following week Chairman Peterkin requested the Administrative Assistant contact his office and find out his schedule and the Schedule of Senator Stevens. Chairman Peterkin referred to the memorandum from Ben Delahay and commented that he did not know what the Council has is mi nd. ~" RECESS' At 8;40 p,m. Chairman Peter. ki'n .requested a ,,recess: RE-CONVENE' At 9-10 p.m. Chai:rman Peterkin called the meeting back to order, REPORTS' PORT OF SEATTLE. Chairman Peterkin reported that on the 'following day the representatives from the Port of Seattle would be visiting Kenai.. There would be a reception at 6;00. p.m:. at the Sheffield REPORTS PORT OF SEATTLE: TELE-CONFERENCE' PORT OF ENTRY' .ALL COMMISSIONER STATUS REPORT.' House. Chairman Peterkin requested that all Commissioner:s attend. Chairman Peterkin reported on the tele-conference. He and Commissioner Ackerly attended, and gave an up-date on the City and the business of the Harbor .Commission. Mr. Till ion cut him off and said he didn't have time for them, he said. this is not the time or place, and to write a letter' Mr. Tillion's response to anything north of Anchor. River is slight and we Will have to put our finger on some way of educating Mr. Ti 1 lion to the needs of the rest of the' Peninsula. He then asked for Commissioner Ackerly's reaction. He replied the tele-conference was very negative. Mr. Tillion seems to be saYing what is convenient'at the time. Perhaps someone ets~...'i'could help us more, such as Senator Holman of Bethel" Chairman Peterkin discussed Mayor O~Reilly:s move in Juneau regarding the transfer of monies. A few years ago the State transferred monies .to a State Revenue Sharing.' When they cancelled the Gross Business Tax in 1977-1978 the State decided to share 11% of the State income tax on the corporation level. At that point Kenai:'s share was $120,000.. The 11% at the time the government did this was about the same, now with OPEC and the price of 'oil we have 11% of 480 million dollars, Mayor O:Reilly made a connection with Mr. Sullivan in trying, to get the Anchorage based legi'slators.and senators in a joint cause, Also, 'to get a. response to have a small boat harbor with those people for thei'r own recreational facilities. If we could help 'them, they cOuld do something to help us. Through this Mayor's Conference we may have a meeting with them and see who can help. Chairman Peterkin reported that Commissioner' Burnett had. written a letter requesting the prerequisites for Port of Entry. By those prerequisites there-should be only one Port of Entry in the whol.e State of Alaska. Mr. Burnett is finding out how Valdez got their Port'of Entry and will report on this when he gets back, Councilwoman Gl ick noted that Homer may be working on getting a Port of Entry, so this may be why Mr. Tillion has been working against us.. Commissioner Ackerly added that Mr. Tillion represents all of us, not just Homer, Seldovia, and Halibut Cove area. Chairman Peterkin added that we have the population base here in this area, so how does he become elected? Chairman Peterkin reported that he had 'two different meetings with Captain Reynolds. Captain Reynolds will be the presiding person to do our study, At the previous meeting with Mayor O'Reilly, Captain Reynolds, Chuck'Walling, Mr._ Tully and Mr. Statter it was in mo%ion unofficially. He must send the report to the clearing house to notify everyone involved and they do not want him to do anything for 30 days. Then he will get with us.. What he would like is specific objectives. His , department can take care of design, prelimina'ry engineering and this 'sort of thing, What he wants is a priority list of exactly ALL COMMISSIONER STATUS REPORT' COMMISSIONER W~LLIAMS' what we want there. He suggested that a dry ha.rbor is in that priority list. He suggested this through earlier complications with Mr. Statter's office. The Commission should address them- selves to the objectives of the dry harbor. Commissioner Williams suggested that we could incorporate a dry with a wet harbor. Perhaps we could use the dry harbor for winter storage. A problem with a dry harbor situation is we are susceptible to fire, maybe we could show the negative portion of a dry harbor. A fire could 'take the whole fleet. Chairman Peterkin ~commented that with the negative aspects there is the Physical room, It will knock out all development of all taxable, leaseable grounds, Captain Reynolds says we should concern oursel'ves with the objective that we' want. This would help him tremendously, I told him we would get that report to him the day after the'19th, They will boil- it down and send it back to us. The cost benefit ratio will be one of the last things he does. The Corps has the people, 'it depends on the person in charge what he wants his back up people to do. Captain Reynolds said he would call al! the engineers in design feasibility and hydrolic engineers then they will-put this'total f6rce into action and try to brainstorm and try to figure a way to get the cost and fight the sediment problem. I don't believe this was done before. Captain Reynold's is trying to be in the neutral state but he will help us. He needs a location. They can;t go into this thing blind and say somewhere in four miles of this river we're going to have a harbor. Further, when he comes down, around the 19th, he would like to be here for 2 days. He wants an open hearing, but not a full blown public hearing at this point. He would like to talk to bOat owners and processors and get ideas from the people directly involved. Cost benefit is a problem and our major concern, we must be ready for i t. Commissioner Williams asked if the Admin. Assistant had heard from the Coast Guard yet on the marine casualties in the Kenai Area. She had not, and would contact them if she hadn't heard from them by the following week. Commissioner Williams reported that he had contacted the Borough and they came up with the assessment values for packers, which seemed relatively low to him. What he thought they were doing was assessing the value of the land and buildings but not the equipment. They say Kenai Packers land value is only $49,000. That's prime water frontage. Somewhere we have to look at real value versus assessed value. Columbia Ward is listed worth $612,000; Sea Catch $3.98,000; Dragnet $240,000. I would like to buy any one of these for that price. Jim Swalley added that .the foreclosure on Sea Catch was 1' million, 850 dollars. Commissioner Williams also reported that the Admin. Assistant did a telephone survey on the Sport Fishing Guides. Five were called, and of the three that answered better than 1,000 people were guided in the summer months. STATE MUN I C I PAL PUBL I C WORKS CONTRACT AGREEMENT' Chairman Peterkin reported on the State of Alaska Municipal Public Works Contract Agreement, Wince, Corthell, Byrsow & Freas requested the Harbor Commission more define the project to specific needs. Why get into things like engineering and hydrolics at this point. Mayor O'Reilly wants this by April 1, so it can go to the legislature. They could touch base on all these points, it would mean nothing and the $10,000 would be gone. Craig at Wince, Corthell, Byrsow & Freas would like to come to the meeting on 'the 19th and bring a hydrolic engineer from R & M engineering with him. Then they could do something productive and still fall' in the time frame of April .1. If this hits council tomorrow with passage as is, I don't know whether we can go back ~and change it. Councilwoman Gl ick said she could request council to postpone any action until the 20th and give the Harbor. Commission time to think it over. COMMI SS IONER wAGONER' S LETTER TO PROCESSOR' S: Chairman Peterkin read a letter from Commissioner Wagoner to be sent to the processor's. There was some discussion on this and it was agreed that the admin, assistant would notify Commissioner Wagoner that the Harbor Commission requested a dollar figure from the processor. Also, to emphasis the time frame involved. Commissioner.Ackerly requested that the letter address more specifically .items #2, 5, 6, 9 and 10 of the "Questions to 'Ask" list that Captain Reynolds sent dOwn. Commissioner Williams stated that Bob Thomas of the Kenai Employment Center was doing a survey on the labor force in fishing in the Kenai area. He requested the admi'n, assistant call and find out the progress of this report. Chairman Peterkin suggested Commi.ssioner Wagoner's. letter~ r~quest representatives of the processor.'s to be at a Harbor Commission meeting in the later part of February. Commissioner Ackerly sUggested that a letter of invitation-be sent. COmmissioner Wil 1 iams noted' that there, was a computer run-out ' on catch by species'by area. He requested that the administrative assistant call Ron Issac at IRS Marine and ask where he saw this breakdown.' OLD BUSINESS: Chairman Peterkin reported that the HarbOr Commission needs a fund obtainable for'odds .and ends which would not be included i.n normal office supplies. There was considerable discussion on how to go about budgeting for reports and things of this nature. Commissioner Burnett joined the meeting during this time. MOTION: Commissioner Williams moved that the City'Council adopt an ordinance creating a temporary budget for the Harbor Commission in the amount of $3,000 with the understanding that the. Commission will prepare an official budget prior to the beginning of this fiscal 1980-1981 year. Commissioner Burnett seconded the motion. OLD BUSINESS (Con t i nued) NEW BUSINESS' PORT OF ENTRY' NEXT SCHEDULED · MEETING' Chairman Peterkin requested that Commissioner Burnett prepare a budget for the Harbor Commission. Commissioner Burnett said he woulc need ideas immediately on what we are going to need. Jim Swalley reported that Charles Brown, Finance Directo.r has .work sheets that would help. Chafrman Peterkin stated that on February 12 the Harbor Commission may need to call a special meeting which 'is tentatively scheduled for 5'30 p.m. 'at the Public Safety. Building. This is a meeting that will have to do with Pacific Alaska LNG involvement with the Energy Committee. Chairman Peterkin wil 1 be in Anchorage with Mayor' O'Reilly, the Borough Mayor and some of his staff and people from AIDA: If thi.ngs go well there and the LNG people want to.come down and discuss the possible situation with electrical power and the use of the City's natural ga~s under lease there .will be .a need for a meeting to put that into motion. We will be coming back. on the 5:00 p.m. flight, As soon as Chairman Peterkin finds out if we will have the meeti.ng or not, in the early afternoon, he will call the administrative .assistant .and have her contact the commissioners. Chairman Peterkin requested the administrative assistant ask Ben Delahay, the City' Attorney about Sea Catch, If Sea Catch goes into bankruptcy does the City assume that lease baCk?' Will it come up fo'r renegotiation or w-ill it be transferred to whomever buys Chairman Pete?kin requested that commissioner Burnett to. give an up-.date on Port' of Entry, .Commi-ssione'r Burnett reported that he has contacted the U.S. Customs and they provided us ~with a list of Port of Entries. All of these permits are old with the exception of Valdez, Valdez was captured in 6. months and had the backing from everyone involved. Commissioner Burnett. sent a letter to the port director .of Valdez and asked'~for guidelines that .were followed by the City. of Valdez. He hadn:t heard anything back, yet. Chairman Peterkin asked'why Anchorage had three Port of Entries. Commissioner Burnett noted that Anchorage has three separate Port of Entries. One is the Port of Anchorage, one is the Airport and one is Headquarters, downtown. The City 'of Anchorage .does not control Anchorage International Airport. The only airport the City controls is Merrill Field and Campbell Airstrip. Chairman Peterkin commented that the prerequisites stated that you must have two of three modes, rail, air and harbor. Commissioner Burnett replied that we have that 'and there is no reason why we can"t have a Port of' Entry that 'he could see. Tentative meeting of February 12, 1980, at the Public Safety Buildin( at 5' 30 p.m. NEXT REGULAR SCHEDULED MEETING DATE: ADJOURN: The next ~regUla? schedUled~meet~n§ date .Ss. febru~r~y,. 19~ at the Publ!'c Safety. Bui.'!di~n§, ~t'7::'O0 p~m, 1980. At 10:30' p..m~ Commissioner' ~"!lia~s moved for ~d~ournment, C~ommissioner Burnett seconded' thegn)or!on, ResPectful fy. sub]mitted ~ K!m Howard Admi~n, si st~n~ ~ AP; '~ ~'/~R~ , , , Robef,t 'Pel:er'k[)., VCha i m~n Harbor Commission