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HomeMy WebLinkAbout1998-02-09 Harbor Commission SummaryKENAI ADVISORY HARBOR COMMISSIO: FEBRUARY 9, 1998 KENAY COUNCIL CHAMBERS 7:00 P.M. CHAIRMAN 'WILL JAHR%G AGENDA ITEM 1: CALL TO ORDER & ROLL CALL ITEM 2: AGENDA APPROVAL YTEM 3: APPROVAL OF MINUTES a. Regular Meeting of November 10, 1997. b. Regular Meeting of January 12, 1998. MEETING YTEM 4: PERSONS SCHEDULED TO BE HEARD a. Paul Date, Snug Harbor Seafoods -Dock Operations ITEM 5: REPORTS b. Director c. Dock Foreman ITEM 6: OLD BUSINESS ITEM 7: NEW BUSINESS ITEM 8: COMMISSIONERS' COMMENTS/QUESTIONS ITEM 9: INFORMATION a. Kenai City Council Action Agendas of January 7, and 21, 1998. %TEM 10: ADJOURNMENT KENAI HARBOR COMMISSYON February 9, 1998 - 7:00 p.m. City Hall Council Chambers Chairman: Will Jahrig *** MINUTES *** ROLL CALL: Vice Chairman Thompson called the meeting to order at 7:00 p.m. Members Present: Barry Eldridge, Michael McCune, Tom Thompson, George Spracher Members Absent: Will Jahrig Others Present: Councilman James Bookey, Public Works Director Keith Kornelis, Contract Secretary Barb Roper 2. APPROVAL OF AGENDA ELDRIDGE MOVED TO APPROVE THE AGENDA. MOTION SECONDED BY MCCUNE. AGENDA WAS APPROVED AS PRESENTED. 3. APPROVAL OF MINUTES SPRACHER MOVED TO APPROVE THE MINUTES OF NOVEMBER 10, 1997 AND JANUARY 12, 1998. MOTION SECONDED BY ELDRIDGE. MINUTES FOR NOVEMBER 10, 1997 AND JANUARY 12, 1998 WERE APPROVED AS WRITTEN. 4. PERSONS SCHEDULED TO BE HEARD a. Paul Dale, Snug Harbor Seafoods - Docle OperatioYis Dale provided an outline describing the type of services and estimated cost should Snug Harbor Seafoods be awarded a private contract to operate the City dock. Dale reported this outline is a result of previous conversations concerning how to close the gap between revenues and expenses at the dock and the possibility of Snug Harbor taking over the fuel operations. Dale continued, when considering the fuel operations it became apparent that Snug Harbor could not blend it's current responsibilities with the work the City performs at the dock. As a result, Dale felt a more radical approach would be to consider a private contract to handle all operations at the dock. Harbor Commission February 9, 1998 - Page 1 Dale reported he chose a 15% gross revenue return to the City for dock operations excluding fuel. Dale thought a smaller percentage on fuel would be sufficient due to the small margin. The figures included in the outline for 1996 and 1997 were obtained from Larry Semmens to include the preliminary figures for 1998. Dale explained the revenue shown for 1998 is probably 100% of what the City would receive. The expenses for 1998 are estimates and include insurance, utilities, telephone, and the same labor costs as described in 1996 and 1997. The net loss figures included in the outline are operational loss figures and don't include a depreciation allowance on the facility nor do they include the general administrative overhead costs the City incurs to operate the dock. Brenda Stoop, Snug Harbor arrived at 7:30 p.m. Dale reported when developing the scenario he jotted down some considerations that occurred to him and he is sure there would be many more from those responsible for operating the dock. Dale's considerations are: 1. Get the City out of a pattern of operating losses so any type of contract would have some type of positive number returned to the City. Dale felt Snug Harbor could make something like this work because there currently is a duplication of labor efforts at the dock both at a management and operational level. Snug Harbor always has people at the dock before and during the fishing season and a lot of the time would be available to perform the tasks the City currently handles with regular and part-time employees. Dale indicated that Snug Harbor could perform the tasks at a break even level or slightly above and guarantee some minimum flow of money to the City. Dale continued, other contractors may be able to do more but that would have to be figured out. 2. The City has become more involved with the dip net fishery and when the facility is operated with City employees they are apt to be more directly in-line for criticism of fairness and access issues. Having a contractor would eliminate the City having to deal with such issues. 3. Diversification at the facility has been discussed previously and Snug Harbor believes there is such an opportunity by perhaps providing boat storage and launching; a repair business; a small marine supply and equipment shop; a Harbor Commission February 9, 1998 Page 2 public salmon market or fish bake; or some type of Kenai cannery tour. Dale explains some of these items are already in place but at a small scale. Dale added, in order for these ideas to work on a medium to large scale they first have to be tried on a very small scale and it could be something a deck contractor could work with. 4. A dock contract would allow the Harbor Commission to concentrate on other work and to pursue some different endeavors. However, the Commission would certainly have a lot of work in structuring a contract and selecting a contractor for the program. Dale also felt there is a lot of opportunity for the City to develop the lower river to include boardwalk extensions with state grants and City funds. He also thought the native lands could be developed as an interpretive sight. Dale stated these positive developmental programs should be looked at and perhaps the Harbor Commission should be viewing their jobs in broader terms. Date suggested a lower river plan be developed. Eldridge asked what the City would actually see in savings with regard to employees at the dock. Kornelis replied, there would be savings to a certain extent but there would still be the start-up costs which include placing floats, pilings, ramps, etc. Dale indicated that Snug Harbor could take that responsibility with the exception of removing the silt from the ramp and road grading. The cost of removing the silt and grading should not be too substantial. Dale indicated the last column in his outline reflected a savings to the City which would not be a savings if the City did not have something constructive and useful for Freden to be doing other than the job he performs at the dock. Dale continued, Freden is a great employee and it's unlikely any individual could run the facility any better. Dale assumes Freden would be a valuable employee in many different areas. Discussion took place on the depreciation as the loss figures did not reflect them. Dale reported the depreciation was backed out of the figures he included. The figures shown are operational differences between revenue and expenses such as wages, salaries, utilities, communication, expense accounts, etc. Dale also stated that Snug Harbor would provide the required insurance which is about $5,000 plus $2,500 for liability. Bookey indicated the City would still maintain some type of coverage. Dale was optimistic that this year could be better for the dock by raising the wharfage, ramp and fuel fees. Harbor Commission February 9, 1998 Page 3 Thompson asked if Snug Harbor would also take over the fuel sales. Dale replied, yes, Snug Harbor would assume the fuel sales but there would be a much smaller percentage rate to the City as there isn't room for growth in fuel sales. McCune asked how Snug Harbor would handle conflicts with their fishers in line for fuel versus other users. Dale replied, the fairness issues would have to be handled in the contract but basically it would remain a first come/first serve basis. Dale continued, this question is valid in all services provided at the dock. Bookey asked if the 15% gross revenue number was the maximum Snug Harbor feels they could operate. Dale answered, that figure is just an idea but that level is taking the total salaries involved in the last three years of operation of the facility and splitting it with the City. Dale continued, Snug Harbor happens to have a great number of employees at the dock that can do an incredible job of accomplishing the same tasks that Freden does. Eldridge asked if the fuel costs could be shared by so much per gallon. Dale felt that could be a good approach. Thompson asked if it was Snug Harbor's intent to also include all of the surrounding land along with the dock operations. Dale indicated he would like to have all the land involved for boat parking, etc. Discussion took place on expanding the boat storage areas. Eldridge felt the Commission should pursue more land at the dock to allow for expansion of boat storage and to allow for road side businesses. Bookey asked if this was a long term goal for Snug Harbor or was it something they were looking at accomplishing before this season starts. Dale replied, it only makes sense to look at it as a long term issue for Snug Harbor. Bookey indicated there were a lot of red flags appearing and he felt although this issue would be voted on by the Harbor Commission it would still have to go to Council for final approval. Bookey did not feel it would go through Council without having an RFP; it would not be a negotiated issue between Snug Harbor and the City. Thompson asked if a long term lease could be considered. Bookey suggested the Commission now look at developing goals and objectives and, if desired, this issue could be incorporated and submitted to Council with recommendations. Bookey continued, it was unlikely anything would be done with this until next year. The City would have to proceed cautiously with the rest of the community on this issue and consider it a long term program. Eldridge expressed his concern with Harbor Commission February 9, 1998 Page 4 the 99-year lease at the old facility and did not want to see the same thing happen with this dock. Bookey pointed out the current dock was built for the general public. Dale indicated that Snug Harbor is perfectly happy with their position at the dock and is pleased with current operations. Dale understands there is risk involved should the City go out with an RFP. Discussion took place on perhaps utilizing the boat storage area for parking during the fishing season. Dale indicated this was discussed previously but a removable fence would have to be designed as the area would need to be secured during the off-season, such a fence could be expensive. Discussion also took place on sport boat storage and launching. Dale thought a tractor type launch system should be considered. Bookey stated there was a lot of activity in privatization and although he wasn't making a commitment one way or the other there may be some potential for such a program. However, there are a lot of questions that need to be asked of the legal department and administration. It was suggested that any additional questions or concerns be directed to Kornelis or Bookey so they can be addressed at the next meeting. Bookey thought the Harbor Commission needed to look at the entire operation from the mouth of the river to the other side to consider various options. Any recommendations would be submitted to Council. Eldridge stated it was not the intent of the dock to be a money maker but rather it was more a service to the community with fuel, etc. Eldridge added, Council should be reminded that the dock was not intended to be a cash cow. Bookey responded, Council did not intend to make money from the dock, the dock was built for both commercial and sport fish use. Dale thought if a contractor situation was pursued then the original intent of the facility should be included. He felt that if this was not included it would cause problems with the agencies who provided the funding for the facility. Bookey reported a discussion on the lease situation at the dock was held not long ago and it was indicated that some things were not right. Dale reported that he asked the City Manager if the concept was something that could be considered. Ross checked with the City attorney and apparently there is no legal impediment to contracting the dock operations as long as the contract includes the original restrictions, covenants and intent, public access, multi-users, etc. Discussion took place on the dock being contracted to another firm other than Snug Harbor and the affect it would have on Snug Harbor's operation. Kornelis pointed out that Snug Harbor has four more years Harbor Commission February 9, 1998 Page 5 remaining on their lease and if another contractor was to operate the facility, Snug Harbor would be required to pay them. A general discussion took place on the 1997 operation of the dock facility and it was agreed that it went very well with minimal problems. The Commission agreed to have the private contract issue included in the goals and objectives, which will be included on the next agenda under New Business. Bookey will present the initial idea to Council since the presentation was made at this meeting. McCune stated he was unable to attend the meeting here in Kenai regarding the new cold storage, processing facility being built in Anchorage but he heard the owners were evasive about buying fish from this area. However, they did indicate their desire for fresh product so there is potential for them to move in here. Bookey responded, this new facility is a real issue now and has the potential of taking the dock operations to a whole different level. Bookey reiterated the fact that the City did not want to lose control of this facility like they did with the other dock and as a Councilman he would not vote to give it away. Bookey continued, private sector can operate more efficiently and he is willing to look at things like this as long as it remains fair to the public. Discussion took place on the garbage at the mouth of the river. Bookey reported that Mayor Williams was in Anchorage to attend the Board of Fish meetings to discuss the problems involved with the dip net fishery. Attempts will be made to get a portion or the river closed to dipnetting. Bookey indicated the clean up process will be time consuming and it is unlikely it would be done on the Board of Fish level. Kornelis reported that Fish and Game will provide two dumpsters for fish waste. The Borough has agreed to take the fish waste at no cost to the City. The only cost involved would be to Peninsula Sanitation for hauling. The State will also provide signage. Bookey indicated that consideration is being given to a rake type vehicle to remove the remains that wash back up on the beach. Bookey continued, these clean up efforts and a good accounting of the cost involved would make it easier to go back to the State in a couple of years to ask for financial assistance. Discussion took place on extending Cannery Road. Kornelis reported the City is waiting for anExxon/Valdez grant but the preliminary work and the scope of the project has already been completed. Kornelis indicated that all agencies need to be involved with the project by sharing ideas and making suggestions on how best to handle the extension. Eldridge added, it needs to be stressed that this road Harbor Commission February 9, 1998 Page 6 provides a single access to the river and parking and would keep individuals off the wetlands. 5. REPORTS a. D€rector Kornelis reported the only activity on the dock recently was the Tustumena Sled Dog race. The City participated by moving snow for the route. b. Dock Foreman - No report. 6. OLD BUSINESS -None 7. NEW BUSINESS -None 8. COMMISSION COMMENTS & QUESTIONS Commissioner Eldridge requested more thought be given to promoting small businesses at the dock. Bookey suggested the item be included in the goals and objectives. Eldridge also asked about the status of the bluff erosion program. Kornelis answered, a new proposal is being submitted to make the scope of work more clear. It was determined the project would cost approximately $150,000 and it would have to be a match. Council needs to decide whether or not the City would provide their $75,000 portion. Commissioner Thompson requested that a copy of the 1997 goals and objectives be included in the next meeting packet. Discussion took place on the direction the Commission should go in and the goals and objectives. It was recommended that perhaps a work session be held to finalize them. Councilman Bookey again reiterated the need to fill the two vacancies on the Board. It was pointed out that applications are available through the City Clerk. Bookey reported seeing a project report provided by the State which included the bridge access road upgrade. Discussion took place on the project and it was suggested that thought be given to enlarging the opening to the dock. Kornelis stated he would provide a memo to see if enlarging that area is possible. 9. Harbor Commission February 9, 1998 Page 7 a. Kenai City Council Action Agendas of January 7, and 21, 1998 10. ADJOURNMENT ELDRIDGE MOVED TO ADJOURN. MEETING ADJOURNED AT 8:30 P.M. The next meeting will be held on Monday, March 9, 1998. Respectfully submitted, ~~.o ~,t~ Barbara Roper, C ntract Secretary Harbor Commission February 9, 1998 Page 8