HomeMy WebLinkAbout2009-05-20 Council Minutes - Work SessionFuel Flowage Fee:
Mike Kelly Noted the following:
KENAI CITY COUNCIL WORK SESSION
MAY 20, 2009
KENAI CITY COUNCIL CHAMBERS
5:30 P.M.
MAYOR PAT PORTER, PRESIDING
NOTES
Council Present: P. Porter, J. Moore, R. Ross, B. Eldridge, R. Molloy, H. Smalley, M.
Boyle
Staff Present: City Clerk C. Freas, City Attorney C. Graves, Airport Manager M.
Bondurant, City Manager R. Koch, and Finance Director T.
Eubank
Airport Commissioners: L. Porter, H. Knackstedt, G. Feeken, J. Bielefeld
Harbor Commissioners: A. Poynor, G. Foster, and B. Peters
The work session was called to order at approximately 5:30 p.m. It was noted, the
work session was scheduled to discuss the Airport fuel flowage fee with members of
the Airport Commission and users of the airport and the Kenai River Special
Management Area Boundary with members of the Harbor Commission.
City Manager Koch reviewed his memorandum included in the work session packet,
noting setting a fuel flowage fee was suggested by the consultants in their study of
approximately two years prior; the $.03 /gallon fee was applied to all fuel at the airport
(wing and bulk) which earned approximately $68,000 a year; if the fee would be
applied only to the wing fuel, the airport would earn approximately $13,000 a year.
Koch requested comments from the Airport Commission as well as users.
Bob Everts Noted the following:
Felt their customers were being singled out by the fuel flowage fee.
Wing fee is normal in other parts of the state.
Believed all carriers should be subject to the same expense.
Suggested the Kenai airport be mirrored after the Anchorage and
Fairbanks airports; increase the landing fees across the board; the fuel flowage fee
should be like other airports so not to have to have a special programs to manage the
costs to their customers. Additionally, he suggested transient fees be raised; promote
airport space for non aviation activities; and, consider that their customers were
taking the brunt of the fuel flowage fee.
KENAI CITY COUNCIL WORK SESSION
MAY 20, 2009
PAGE 2
He agreed with Everts' comments.
His business was mostly cargo, i.e. grocery freight to the Bush.
Was not sure his business could remain at the Kenai airport with the
raising of the fees.
He compared the Kenai Airport to Soldotna, Homer and Nikiski.
Crowley Stated he supported the community and would continue business in
Kenai; hauling from Nikiski would not be beneficial to them.
Bielefeld Stated his business paid the fee as well; he would rather keep it simple by
having one fee; and, thought the airport should make money by leasing land.
Knackstedt Stated he believed fuel flowage was a fixed cost.
Council comments continued, including:
Council should be looking at the business side of the airport; look for
alternatives for the loss of revenue from the fuel flowage fee; and, need to be more pro
business on the airport.
There needs to be consistency and charge equally.
Porter Stated he initially believed the charging of a fuel flowage fee was way to raise
funds for the airport and the cost would be passed on to the customer. Though he
believed he had changed his opinion, but felt it needs to be easier for people wanting
to build hangars, etc. without jumping through hoops, i.e., he did not believe the
airport was business friendly.
Everts Stated he believed it would be a better strategy to rely on the land leases for
income to the airport.
Council comments continued:
City Manager should investigate the business friendly aspect of the
airport.
Not interested in changing the fee again.
Council may want to consider reviewing the airport situation again.
Overall, council wants the airport to work for its customers.
Kenai River Special Management Area (KRSMA) Boundary:
KENAI CITY COUNCIL WORK SESSION
MAY 20, 2009
PAGE 3
Koch gave an overview of the material included in the packet, noting a consultant was
hired to verify ownership of the Lower Kenai River tidelands and submerged lands.
That preliminary find determined the city of Kenai owns the tidelands and submerged
lands within Alaska tideland Survey 272; the State owns property adjacent to the
Kenai River tidelands and submerged lands; the State did not own the tidelands or
submerged lands and the City of Kenai did not grant management authority over its
property to the State.
Koch requested direction from council of what it wanted to do, i.e. do nothing and
allow State Parks to impose management authority over the statutory boundaries of
KRSMA; request a legal opinion from outside an law firm specializing in this area and
define the city's position; request the Governor /Legislators to introduce legislation to
correct /modify the statutory KRSMA boundary; or negotiate with State Parks to
accomplish a desired outcome.
Discussion followed with comments including
The city's position was that KRSMA did not have the legal right to exert
its rules on regulating the river on the city's part of the river.
Do not concede the statutory construction that the actual ownership of
the city is 2.5 miles above the bridge.
Starting point should be what was described in the resolution to the
Legislature (2.5 miles above the bridge).
Pursue a Memorandum of Understanding /Memorandum of Agreement
with the State.
Start negotiations with the State and if it comes to a point when it is felt
outside counsel needs to be hired, do so.
The work session ended at approximately 6:50 p.m.
Notes prepared by:
Carol L. Freas, City Clerk
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