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HomeMy WebLinkAbout2014-09-03 Council PacketCITY OF KENAI NOTICE OF ORDINANCES AND RESOLUTIONS ADOPTED AT THE SEPTEMBER 3, 2014 KENAI CITY COUNCIL MEETING NOTICE IS HEREBY GIVEN the City of Kenai Council passed the following Ordinance(s) and/or Resolution(s) at the above -referenced meeting. 1. Resolution No. 2014-60 - Amending its Comprehensive Schedule of Rates, Charges, and Fees to Remove Certain Fees for the Use of the City Boat Launch Ramp and Dock Parking Before and After the Personal Use Dip Net Fishery Season. 2. Ordinance No. 2790-2014 - Waiving Certain Lease Provisions Imposed by Kenai Municipal Code Chapter 21.10 -Leasing of Airport Reserve Lands, and Approving a Non -Standard Lease Form for the Lease of Lot 2, Block 1, General Aviation Apron, Located within the Airport Reserve, to Legacy Electric. 3. Ordinance No. 2791-2014 - Declaring that T 5N R 11 W Sec 5 Seward Meridian KN 0003025 East Addn Townsite of Kenai - US Survey 3025 A & B Lots 12, 13, 14, 15 and 16, Block 3, Kenai, Alaska, also Known as 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, whose Last Record Owner Under Borough Assessment Records was the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska, Shall be Retained by the City of Kenai for a Public Purpose. 4. Ordinance No. 2792-2014 - Accepting and Appropriating a Grant from State of Alaska Division of Health and Social Services EMS Division Passed Through Kenai Peninsula Emergency Medical Services, Inc. for Travel and Training. 5. Resolution No. 2014-61 - Authorizing a Budget Transfer within the Personal Use Fishery Fund - Parks, Recreation, and Beautification Department for 2014 Fishery Rentals in Excess of Budgeted Amounts. 6. Resolution No. 2014-62 - Requesting the Alaska Board of Fisheries Hold its 2017 Upper Cook Inlet Finfish Meeting on the Kenai Peninsula and Approving Joint Resolution 2014-01. Copies of the ordinances and/or resolutions are available in the Office of the Kenai City Clerk. Please be advised, subject to legal limitations, ordinances and/or resolutions may have been amended by the Council prior to adoption without further public notice. Sandr od 6 C City Clerk Posted: September 9; 2014 ACTION AGENDA KENAI CITY COUNCIL — REGULAR MEETING SEPTEMBER 3, 2014 7:00 P.M. KENAI CITY COUNCIL CHAMBERS 210 FIDALGO AVE., KENAI, AK 99611 htto://www.ci.kenai.ak.us A. CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval 4. Consent Agenda (Public comment limited to three (3) minutes per speaker; thirty (30) minutes aggregated) *All items listed with an asterisk (*) are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. B. SCHEDULED PUBLIC COMMENTS (Public comment limited to ten (10) minutes per speaker) C. UNSCHEDULED PUBLIC COMMENTS (Public comment limited to three (3) minutes per speaker; thirty (30) minutes aggregated) D. PUBLIC HEARINGS (Testimony limited to three (3) minutes per speaker; thirty (30) minutes aggregated) 1. ADOPTED Resolution No. 2014-60 —Amending its Comprehensive Schedule of Rates, Charges, and Fees to Remove Certain Fees for the Use of the City Boat Launch Ramp and Dock Parking Before and After the Personal Use Dip Net Fishery Season. POSTPONED INDEFINITELY Ordinance No. 2789-2014 — Amending Kenai Municipal Code Section 11.05.050, "Condition as to Equal Services and Rates," to Require that the City Provide Residents of the City of Kenai with Free Services at the City -Owned Boat Launch and Parking Facility. (Clerk's Note: At its August 20' meeting, Council postponed this ordinance to the September 3`d meeting. Motion to enact is on the floor.) 3. ENACTED UNANIMOUSLY Ordinance No. 2790-2014 — Waiving Certain Lease Provisions Imposed by Kenai Municipal Code Chapter 21.10 -Leasing of Airport Reserve Lands, and Approving a Non -Standard Lease Form for the Lease of Lot 2, Block 1, General Aviation Apron, Located within the Airport Reserve, to Legacy Electric. 4. ENACTED AS AMENDED Ordinance No. 2791-2014 — Declaring that T 5N R 11W Sec 5 Seward Meridian KN 0003025 East Addn Townsite of Kenai — US Survey 3025 A & B Lots 12, 13, 14,15 and 16, Block 3, Kenai, Alaska, also Known as 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, whose Last Record Owner Under Borough Assessment Records was the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska, Shall be Retained by the City of Kenai for a Public Purpose. 5. ENACTED UNANIMOUSLY Ordinance No. 2792-2014 — Accepting and Appropriating a Grant from State of Alaska Division of Health and Social Services EMS Division Passed Through Kenai Peninsula Emergency Medical Services, Inc. for Travel and Training. 6. ADOPTED UNANIMOUSLY Resolution No. 2014-61 — Authorizing a Budget Transfer within the Personal Use Fishery Fund — Parks, Recreation, and Beautification Department for 2014 Fishery Rentals in Excess of Budgeted Amounts. 7. ADOPTED UNANIMOUSLY Resolution No. 2014-62 — Requesting the Alaska Board of Fisheries Hold its 2017 Upper Cook Inlet Finfish Meeting on the Kenai Peninsula and Approving Joint Resolution 2014-01. E. MINUTES 1. *REMOVED FROM AGENDA Regular Meeting of August 20, 2014 F. UNFINISHED BUSINESS — None G. NEW BUSINESS 1. *APPROVED BY CONSENT AGENDA Action/Approval —Bills to be Ratified. 2. *APPROVED BY CONSENT AGENDA Action/Approval — Purchase Orders Exceeding $15,000. 3. *INTRODUCED BY CONSENT AGENDA; HEARING SCHEDULED FOR 09/17/14 Ordinance No. 2793-2014 — Reappropriating State Grant Funds in the Municipal Roadway Improvements Capital Project Fund to the Senior Center Improvement Capital Project Fund. 4. *INTRODUCED BY CONSENT AGENDA; HEARING SCHEDULED FOR 09/17/14 Ordinance No. 2794-2014 — Accepting and Appropriations Federal/State Emergency Management Grants for the Recovery from the 2013 October Kenai Peninsula Borough Flood. H. COMMISSION/COMMITTEE REPORTS 1. Council on Aging 2. Airport Commission 3. Harbor Commission Kenai City Council Meeting Page 2 of 4 September 3, 2014 4. Library Commission 5. Parks and Recreation Commission 6. Planning and Zoning Commission 7. Beautification Committee 8. Mini -Grant Steering Committee REPORT OF THE MAYOR J. ADMINISTRATION REPORTS 1. City Manager 2. City Attorney 3. City Clerk K. ADDITIONAL PUBLIC COMMENT 1. Citizens Comments (Public comment limited to five (5) minutes per speaker) 2. Council Comments L. EXECUTIVE SESSION 1. Consultation with Legal Counsel Regarding Litigation Concerning CINGSA's Purchase of Mineral Rights, Easements, and Access to Pore Space, Matters which by Law, Municipal Charter, or Ordinance are Required to be Confidential [AS 44.62.310(c)(3)]. M. PENDING ITEMS 1. Ordinance No. 2782-2014—Enacting KMC 14.20.171 —Group Care Facilities, and Amending KMC 14.20.320 - Definitions, and KMC 14.22.010 - Land Use Table, to Define and Provide Zoning Regulations for Group Care Facilities. [Clerk's Note: At its August 6h meeting, Council postponed this ordinance to the September 17th meeting.] 2. Ordinance No. 2783-2014 — Enacting KMC 14.20.172 — Emergency Shelters, and Amending KMC 14.20.320 - Definitions, and KMC 14.22.010 - Land Use Table, to Provide Zoning Regulations for Emergency Shelters that Provide Temporary Housing for Homeless and Others in Need of Safe Accommodations. [Clerk's Note: At its August 6' meeting, Council postponed this ordinance to the September 17`h meeting.] N. ADJOURNMENT k*** "*"rt i*******h*****:Yk********fFkfF***h************h** INFORMATION ITEMS 1. Purchase Orders between $2,500 and $15,000 for Council Review. The agenda and supporting documents are posted on the City's website at www.ci.kenai.ak.us. Copies ofresolutions apdor Clinances are available at the City Clerk's Kenai City Council Meeting age 9 of 4 September 3, 2014 Office or outside the Council Chamber prior to the meeting. For additional information, please contact the City Clerk's Office at 907-283-8231. Kenai City Council Meeting Page 4 of 4 September 3, 2014 September 3, 2014 CITY COUNCIL MEETING REQUESTED ADDITIONS TO THE PACKET: ADD TO REQUESTED BY: D.1 Resolution 2014-60 City Manager Koch o Memorandum from City Manager D.4. Ordinance 2791-2014 Memorandum City Attorney Bloom o Memorandum from City Attorney G.S. Appointment of Student Representative Mayor Porter o Letter from Alan Fields re Allison Ostrander J.2. Administrative Reports — City Attorney Council Member Molloy o Email from Fred Braun o KMC 7.15.045 Local Preferences August 28, 2014 Kenai City Council: Kenai Central High School Kenai Peninsula Borough School District 9583 Kenai Spur Highway -Kenai, Alaska 99611 (907( 283-2100 Fax: (907) 283-3230 Alan Fields Principal Briam Randle Assistant Principal Btacia Austad Athletic Director Jesse Bettlemyer Activity Director Kenai Central High School is very appreciative of the support it has received from the City of Kenai. The partnerships between the Council and the School have provided outstanding "real life" learning experiences for our students. This letter is an introduction of the student selected to fill that vacant position. Allison Ostrander, currently a senior at KCHS, will be an excellent Student Representative to the Council. Allison possesses the knowledge, leadership, and character necessary to fill this position. She is person who gets along with all students and treats everyone with the greatest level of respect. She is always thoughtful and trustworthy in her actions. We are proud to have her selected as the next Kenai Central High School Student Representative to the City Council. We have greatly appreciated the support that the City of Kenai has given to our school. Thank you for making a difference in the lives of the young people in our community. Sincerely, Alan Fields, Principal HOME OF THE KARDINALS u 'Village with a Past, C# with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 i1111. II II 1992 MEMO: p{ 1 TO: City Council FROM: Rick Koch, City Manager N \ DATE: September 3, 2014 SUBJECT: Resolution 2014-60, Amending the Comprehensive Schedule of Rates, Charges, and Fees The purpose of this correspondence is to provide information regarding the above referenced resolution, whose effect is to eliminate non-commercial launch and parking fees at the Kenai Municipal Dock. Further, this memorandum is neutral as to the resolution itself. In response to Council questions regarding elimination of revenue, the estimated amount of lost revenue is approximately $6,000 annually. The following are questions were raised by staff: Will there be an increase in traffic at the Municipal Dock as a result of eliminating fees, since all other public launches in the area will continue to charge fees? Will there be an increase in boat traffic on the river traveling from the Dock upriver, especially during the early -run king salmon season? If so, are there negative effects of increased boat traffic? It may be appropriate to solicit comments from the Alaska Division of Parks & Outdoor Recreation, and the Kenai Watershed Forum to determine what their opinions to these questions may be. Prior to taking action, the Council may wish to refer this resolution to the Harbor Commission for discussion, comment, and recommendation. Under KMC 11.10.010(a)(3), the code as presently written provides "Make investigations regarding harbor facilities, tide or submerged lands. Thank you for your attention in this matter. If you have any questions, please contact me at your convenience. u "Villaye with a Past, C# with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 MEMORANDUM TO: Mayor Porter and Council FROM: Scott Bloom, City Attorne DATE: September 3, 2014 SUBJECT: Fill in the Blank Lay Down Memo for Ordinance No. 2791-2014 The following information is needed to complete Ordinance No. 2791-2014: 1. Amend the third WHEREAS to read: WHEREAS, on August 29. 2014 the City paid the outstanding balance for property taxes in the amount of $ 8.175.25 of which $ 4,788.17 relates to Kenai Peninsula Borough taxes and interest and the remaining $ 3,387.08 relates to City of Kenai taxes and interest; and, 2. Amend the fourth WHEREAS to read: WHEREAS, on September 3, 2014 the Borough conveyed Lots 12 through 16, Block 3, East Addition, Townsite of Kenai to the City by quitclaim deeds dated; and, 3. Amend the second to last WHEREAS to read: WHEREAS, on August 21, 2014 the Clerk sent a copy of the publicized notice of the hearing on this ordinance to the last record even of the property as the name appears on the Borough assessment rolls by certified mail; and, YACity Council\Memorandums\2014 0903 Laydown Memo to Council RE 2791-2014.docx From: Fred Braun <brauncom@ptialaska.neb Subject: Local Vendor Preference Date: September 3, 2014 8:08:26 AM AKDT To: bob@molloyforcouncil.com Cc: kenaimayor10@msn.com Good Morning Bob, Thanks for dropping the Local Preference information off yesterday. I had a meeting last night but will be taking the information home and reviewing its content tonight. Yesterday I was once again behind another City of Kenai owned vehicle, this time a Parks and Rec. pickup with Kendall Auto logo mud flaps. It struck me once again that the City is proudly not only offering free advertising for a out of town dealership but is also sending a message to both the locals and the many out of town tourists and visitors that the City does not and is not supporting its own local auto dealerships. I believe that most every small City like Kenai has done its best to promote local hire as well as having very strong and ongoing "Buy Local" slogans and campaigns. Seeing the Kendall advertising made me think that if I was in the market for a new vehicle and saw the various different out of town dealerships bumper stickers, decals, mud flaps and license plate holders I might just assume that "the City has already done my best price shopping for me" ---- certainly judging by all of the City vehicles purchased from out of town dealers they must know where the best deals are so why would I want to waste my time even looking here locally. One more point of concern is that in all my years living here 1 have yet to see Kendall Auto, Cal Worthington, Nye Ford or any other out of town Dealer support the City of Kenai in any way. There is not currently a single bigger supporter of Kenai and Soldotna than Stanley Ford and Chrysler. When I made my unprepared visit to Council Meeting and spoke for a few minutes on the 20th. it was only to state my observations as I drive through town daily and see the many different City owned vehicles that were not purchased locally. I was not there representing any one single business or even the Chamber, just myself, but I must say that I'm sure that most every other person sitting behind the wheel at the different intersections has certainly see what I'm referring to. I do realize that the City has a current Vendor Preference Policy in place and certainly has the obligation to its citizens to be prudent and conservative in its spending but I also believe there should perhaps be another level of preference or consideration when bidding for vehicles, especially when we do have the full and total support from Dealerships such as Stanley. I truly do hope that Mayor Porter, Council and City Manager review the Policy soon and consider making changes to benefit the local Dealerships and their many employees and families that live and work here that rely on one thing --------- their continued sales and quality service to our Communities from customers such as the City of Kenai. Thanks again Bob, feel free to share this note with others, I appreciate you taking the time to forward me the information. Fred Fred Braun Associate Broker In Charge September 2, 2014 By Council Member Molloy KMC 7.15.045 Localnreferences TABLE FORMAT MUNICIPALITY LOCAL PREFERENCE LOCAL DEFINITION PEFERENCE APPLICATION City of Kenai "Local Bidder": Award may be made - Holds a current if "Local Bidder's" SOA business bid is more than 5% license; and for higher than the lowest construction responsible non -local contracts, a current bidder's bid appropriate SOA contractor's But no application if: registration certificate - The difference is more than - Bids under the $25,000 licensee's name ("local preference - Has continuously shall never maintained a place exceed" of business within $25,000) the Borough staffed for 180 - The other days immediately provisions of preceding date of KMC 7.15.040 bid opening are not met - Proves compliance - The City uses with requirement non - of continuous competitive place of business purchasing under KMC - If joint venture, all 7.15.050 venturers qualify UTILIZATION OF GOV. CONTRACTS Yes, without competitive bidding - "This preference will not be granted where the City uses non-competitive purchasing" AGENDA KENAI CITY COUNCIL — REGULAR MEETING SEPTEMBER 3, 2014 7:00 P.M. KENAI CITY COUNCIL CHAMBERS 210 FIDALGO AVE., KENAI, AK 99611 httD://www.ci.kenai.ak.us A. CALL TO ORDER 1. Pledge of Allegiance 2. Roll Call 3. Agenda Approval 4. Consent Agenda (Public comment limited to three (3) minutes per speaker; thirty (30) minutes aggregated) 'All items listed with an asterisk (*) are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. B. SCHEDULED PUBLIC COMMENTS (Public comment limited to ten (10) minutes per speaker) C. UNSCHEDULED PUBLIC COMMENTS (Public comment limited to three (3) minutes per speaker; thirty (30) minutes aggregated) D. PUBLIC HEARINGS (Testimony limited to three (3) minutes per speaker, thirty (30) minutes aggregated) Resolution No. 2014-60 — Amending its Comprehensive Schedule of Rates, Charges, and Fees to Remove Certain Fees for the Use of the City Boat Launch Ramp and Dock Parking Before and After the Personal Use Dip Net FisherySeason....................................................................................... Pg 5 Ordinance No. 2789-2014 — Amending Kenai Municipal Code Section 11.05.050, "Condition as to Equal Services and Rates," to Require that the City Provide Residents of the City of Kenai with Free Services at the City -Owned Boat Launch and Parking Facility. [Clerk's Note: At its August 20" meeting, Council postponed this ordinance to the September 3"tl meeting. Motion to enact is on the floor.]................................................................................Pg 7 3. Ordinance No. 2790-2014 — Waiving Certain Lease Provisions Imposed by Kenai Municipal Code Chapter 21.10 -Leasing of Airport Reserve Lands, and Approving a Non -Standard Lease Form for the Lease of Lot 2, Block 1, General Aviation Apron, Located within the Airport Reserve, to Legacy Electric. Pg 37 E. F. Le 4. Ordinance No. 2791-2014 — Declaring that T 5N R 11W Sec 5 Seward Meridian KN 0003025 East Addn Townsite of Kenai — US Survey 3025 A & B Lots 12, 13, 14, 15 and 16, Block 3, Kenai, Alaska, also Known as 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, whose Last Record Owner Under Borough Assessment Records was the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska, Shall be Retained by the City of Kenai for a Public Purpose ............................... Pg 79 5. Ordinance No. 2792-2014 — Accepting and Appropriating a Grant from State of Alaska Division of Health and Social Services EMS Division Passed Through Kenai Peninsula Emergency Medical Services, Inc. for Travel and Training. ............................................................................................................ Pg 83 6. Resolution No. 2014-61 — Authorizing a Budget Transfer within the Personal Use Fishery Fund — Parks, Recreation, and Beautification Department for 2014 Fishery Rentals in Excess of Budgeted Amounts .................................. Pg 87 7. Resolution No. 2014-62 — Requesting the Alaska Board of Fisheries Hold its 2017 Upper Cook Inlet Finfish Meeting on the Kenai Peninsula and Approving Joint Resolution 2014-01........................................................................Pg 89 MINUTES 1. *Regular Meeting of August 20, 2014.......................................................Pg 95 UNFINISHED BUSINESS — None NEW BUSINESS 1. *Action/Approval — Bills to be Ratified................................................Pg 109 2. *Action/Approval — Purchase Orders Exceeding $15,000 ................... Pg 111 3. *Ordinance No. 2793-2014 — Reappropriating State Grant Funds in the Municipal Roadway Improvements Capital Project Fund to the Senior Center Improvement Capital Project Fund ........................................................ Pg 113 4. *Ordinance No. 2794-2014 — Accepting and Appropriations Federal/State Emergency Management Grants for the Recovery from the 2013 October Kenai Peninsula Borough Flood............................................................Pg 117 H. COMMISSION/COMMITTEE REPORTS 1. Council on Aging 2. Airport Commission 3. Harbor Commission 4. Library Commission 5. Parks and Recreation Commission 6. Planning and Zoning Commission. 7. Beautification Committee ........................................Pg 121 8. Mini -Grant Steering Committee REPORT OF THE MAYOR ADMINISTRATION REPORTS 1. City Manager 2. City Attorney.........................................................................................Pg 127 3. City Clerk K. ADDITIONAL PUBLIC COMMENT 1. Citizens Comments (Public comment limited to five (5) minutes per speaker) 2. Council Comments L. EXECUTIVE SESSION 1. Consultation with Legal Counsel Regarding Litigation Concerning CINGSA's Purchase of Mineral Rights, Easements, and Access to Pore Space, Matters which by Law, Municipal Charter, or Ordinance are Required to be Confidential [AS 44.62.310(c)(3)]. M. PENDING ITEMS 1. Ordinance No. 2782-2014— Enacting KMC 14.20.171 —Group Care Facilities, and Amending KMC 14.20.320 - Definitions, and KMC 14.22.010 - Land Use Table, to Define and Provide Zoning Regulations for Group Care Facilities. [Clerk's Note: At its August 6"' meeting, Council postponed this ordinance to the September 17'h meeting.] Ordinance No. 2783-2014 — Enacting KMC 14.20.172 — Emergency Shelters, and Amending KMC 14.20.320 - Definitions, and KMC 14.22.010 - Land Use Table, to Provide Zoning Regulations for Emergency Shelters that Provide Temporary Housing for Homeless and Others in Need of Safe Accommodations. [Clerk's Note: At its August 6'h meeting, Council postponed this ordinance to the September 17`" meeting.] N. ADJOURNMENT INFORMATION ITEMS 1. Purchase Orders between $2,500 and $15,000 for Council Review........... Pg 133 The agenda and supporting documents are posted on the City's website at www. ci.kenai. ak. us. Copies of resolutions and ordinances are available at the City Clerk's Office or outside the Council Chamber prior to the meeting. For additional information, please contact the City Clerk's Office at 907-283-8231. [PAGE LEFT BLANK INTENTIONALLY] Sponsored by: Councilman Boyle CITY OF KENAI RESOLUTION NO. 2014-60 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING ITS COMPREHENSIVE SCHEDULE OF RATES, CHARGES, AND FEES TO REMOVE CERTAIN FEES FOR THE USE OF THE CITY BOAT LAUNCH RAMP AND DOCK PARKING BEFORE AND AFTER THE PERSONAL USE DIP NET FISHERY SEASON. WHEREAS, the City generates the majority of its dock funding from user fees during the State's personal use dip net fishery season; and, WHEREAS, in preparation for and during the personal use dip net fishery season, the City dedicates significant resources and manpower to operate the dock; and, WHEREAS, outside of the personal use dip net fishery season, the City often does not staff the dock and provides limited services; and, WHEREAS, the City does not collect significant funds from users of the boat launch and dock parking outside of the personal use dip net fishery season; and, WHEREAS, allowing free use of the City dock boat launch and dock parking before and after the personal use dip net season for recreational users is intended to benefit residents of the City of Kenai at little cost to the City itself; and, WHEREAS, limiting the free use to recreational users as opposed to commercial operators should reduce any impact on other launches. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the Section City Dock Fees, of the City's Comprehensive Schedule of Rates, Charges and Fees is amended as follows: New Text Underlined; DELETED TEXT BRACKETED) Page 5 of 133 Resolution No. 2014-60 Page 2 of 2 CITY DOCK FEES Product wharf age (with crane; without forklift) $ 0.07/lbs. Non -product wharf age (ice, nets, staples, etc.) $ 0.04/lbs. Used Oil Dumping Boat Launch Ramp Excludine days of the personal use din net fishery Non -Commercial Users NO FEES Commercial Users -(Includes Parking with Trailer) - First 10 minutes $ 25.00 (-SENIOR CITIZEN (INCLUDES PARKING WITH TRAILER) - FIRST 10 MINUTES, EFFECTIVE AUGUST 1 -JULY 9 $ 0.001 -Each minute over 10 $ 1/minute -Season Boat Launch Pass $ 150.00 Personal Use Fishery Days — All Users -(Includes Parkine with Trailer) - First 10 minutes $ 25.00 -Each minute over 10 $ 1 /minute -Season Boat Launch Pass $ 150.00 Parking Only Excludine days of the Dersonal use dip net fishery Non -Commercial Users NO FEES Commercial Users -Per day (Vehicle with trailer must pay launch fee also) $ 15.00 )-SENIOR CITIZEN (VEHICLE WITH TRAILER MUST PAY LAUNCH FEE ALSO), EFFECTIVE AUGUST 1 -JULY 9 $ 0.001 Personal Use Fishery Days — All Users -Per day Nehicle with trailer must Dav launch fee also) $ 15.00 -Season Parkine Pass $ 100.00 Tie Up Fee -Skiff tied to land side of concrete dock - per day $ 7.00 -Skiff tied to land side of concrete dock - season pass $ 150.00 -Boat tied to buoy in river - per day $ 10.00 -Boat tied to buoy in river - season pass $ 150.00 Forklift with operator (1 /2 hour minimum) - per hour $ 50.00 Labor charge for call -out (2 hour minimum) - per hour $ 40.00 Section 2. That this resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 3rd day of September, 2014. PAT PORTER, MAYOR ATTEST: Sandra Modigh, City Clerk New Text Underlined; [DELETED TEXT BRACKETED] Page 6 of 133 Sponsored by: Council Member Mike Boyle 0 CITY OF KENAI ORDINANCE NO. 2789-2014 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AMENDING KENAI MUNICIPAL CODE SECTION 11.05.050, "CONDITION AS TO EQUAL SERVICES AND RATES," TO REQUIRE THAT THE CITY PROVIDE RESIDENTS OF THE CITY OF KENAI WITH FREE SERVICES AT THE CITY -OWNED BOAT LAUNCH AND PARKING FACILITY. WHEREAS, the City has put into place certain fees for taking advantage of City - provided services at the City -owned and operated boat launch facility; and, WHEREAS, although the City of Kenai Dock launching ramps and floats are facilities that provide access to waterways for the entire public, the costs of operating these facilities are supported not only from user fees but by the residents of Kenai who support governmental operations through taxes; and, WHEREAS, it is in the best interest of the City to acknowledge the contributions of the residents of the City of Kenai in payment of taxes by offering free City services at the City's boat launch and floats. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. Form: This is a Code ordinance. Section 2. Amendment of Section 11.05.050 of the Kenai Municipal Code: The Kenai Municipal Code, Section 11.05.050, Condition as to equal services and rates, is hereby amended as follows: 11.05.050 Condition as to equal services and rates. It shall be a condition of all permits granted by the City Council that the facilities to be constructed and the services to be supplied in connection with them shall be made available to all carriers upon equal terms, at equal rates, and without discrimination of any kind. Notwithstanding. the Citv shall provide services at its launch ramp and adiacent parking facilitv to residents of the Citv of Kenai at no charge. New Text Underlined; [DELETED TEXT BRACKETED Page 7 of 133 Ordinance No. 2789-2014 Page 2 of 2 Section 3. Severabilitv: If any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 4. Effective Date: Pursuant to KMC 1.15.070(1), this ordinance shall take effect one month after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 20th day of August, 2014 ATTEST: Sandra Modigh, City Clerk PAT PORTER, MAYOR Introduced: August 6, 2014 Adopted: August 20, 2014 Effective: September 19, 2014 New Text underlined; ]DELETED TEXT BRACKETED] Page 8 of 133 u "Villaye with a Past, C# with aFuture" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 MEMORANDUM TO: Mayor Porter and Council Members FROM: Scott Bloom S DATE: August 14, 2014 SUBJECT: Ord. 2789-2014, Boat Launch Fees 1 have no reason to disagree with the main conclusions reached by former City Attorneys Krista Stearns and Cary Graves in the attached opinions on the issues presented by Ordinance 2789-2014. If anything, the recent use of dedicated dip net revenue for dock funding has made it more difficult to legally support free use of the boat launch fees for residents only. Enc. Opinion of Krista Stearns dated 6/1/2011 Ord. No.2559-2011 Opinions of Cary Graves dated 9/5/2003, 9/9/2004 and 5/11/2007 Page 9 of 133 p,1ltialt4- "Villaye with a Past, C# with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 1'III 1991 MEMO: TO: Mayor Porter and City Councilors FROM: Krista S. Stearns City Attorney DATE: June 1, 2011 SUBJECT: Resident Preference at Boat Launch Proposed Ordinance No. 2559-2011 At the May 18, 2011 Council meeting, the Council introduced Ordinance No. 2559-2011. This ordinance, sponsored by Council Member Boyle, provided for an exception to the City's general policy of non-discrimination with respect to harbor facilities. Specifically, the ordinance would allow the City to provide services at its launch ramp and adjacent parking facility to residents of the City of Kenai at no charge. During the meeting I opined that this ordinance probably violated the public trust doctrine.' The Council requested further analysis of the issue, and specifically asked for an analysis of whether the ordinance would put the City in violation of conditions of funding sources used by the City to construct or maintain the facility. Council Member Moore made specific reference to monies received under the Dingell -Johnson Act and asked for additional analysis about the meaning of the term "resident" as used in the ordinance. ISSUES PRESENTED A. Does Proposed Ordinance No. 2559-2011 Violate the Public Trust Doctrine? Preliminary Answer: Yes. The boat launch is clearly covered under the doctrine, although there continues to be a question about whether the parking area- -an area upland of the mean high water mark --is subject to the doctrine as applied ' I also suggested that the ordinance also raised issues of potential violation of the Commerce Clause of the United States Constitution and the equal protection clauses of the United States and Alaska constitutions. Memorandum on Ordinance No. 2559-2011 Page 1 of 9 Page 10 of 133 in Alaska. If challenged, it is likely that the ordinance would likely be invalidated by a court. To best survive a legal challenge, an ordinance that had the effect of charging a differential fee benefiting local residents should be keyed to recapturing capital expenditure already paid by residents. B. Would Adoption of Ordinance No. 2559-2011 put the City in Violation of Conditions of Funding Sources Used by the City to Construct or Maintain the Boat Launch And/Or its Adjacent Parking Area? Preliminary Answer: Maybe. There are federal laws and some federal regulations associated with grant programs that suggest that fees for use of these facilities be fair and equitable and/or based upon the cost of services provided. These laws create serious questions about a resident preference. Separately, the patent conveying land used for the dock and boat launch facility includes language that might restrict the City's use of the land to benefit residents. C. What is a "resident" as That Term is Used in Ordinance No. 2559-2011? Preliminary Answer: The term "resident" as used in the ordinance, should be understood to mean a person physically present in the City and who has the intent to remain in the City indefinitely and to make the City their home. If you want to read further, a more detailed analysis is set forth below. ANALYSIS A. Does Ordinance No. 2559-2011 Violate the Public Trust Doctrine? In my opinion, if Ordinance No. 2559-2011 was enacted, an Alaska court would find that it violates the public trust doctrine. I have attached three opinions issued by former City Attorney Cary Graves on this issue.2 1 concur with the conclusions he draws in the opinions. The third memorandum dated May 11, 2007, is the most comprehensive and addresses the boat launch area specifically. In summary, Mr. Graves concluded: i. The public trust doctrine is a legal doctrine that established the right of the public to fully enjoy public trust lands, waters, and living resources for a wide variety of recognized public uses such as navigation, commerce, and fishing. It means that there is a public use easement on tidelands between the mean high and low water marks. This 1 The opinions are dated September 5, 2003 (Beach Parking Fees and the "Public Trust Doctrine"), September 9, 2004 (Beach Parking Fee Discounts for City Residents), and May 11, 2007 (Public Trust Doctrine and Differential Fees). Memorandum on Ordinance No. 2559-2011 Page 2 of 9 Page 11 of 133 doctrine is incorporated in Article VIII, section 14 of the Alaska Constitution and further incorporated into statute at AS 38.05.126(c). ii. The public trust doctrine does not prevent municipalities from regulating wet beach areas; but, the fees must be reasonable, must not discriminate against non- residents, and must be designed to fund maintenance and operations of the area. iii. Case law on the public trust doctrine focuses on two separate areas of the beach or tidelands. The "wet beach" area is the space between the mean high and low water marks. The "dry beach" area is the area above the mean high water mark. The boat launch is clearly covered by the public trust doctrine as it is part of the "wet beach." There is some question, however, about whether the parking areas are covered by the public trust doctrine because those areas are in the "dry beach" area. There are no controlling cases in Alaska clearly establishing the extent to which the public trust doctrine affects the "dry beach" area. Predicting how a court would rule is to provide you with an educated guess. It is an issue is one upon which reasonable persons could disagree. iv. Whether a differential non-resident fee would be upheld by the court would depend upon whether the court felt that the fees were an attempt to give Kenai residents preferential access to and use of the resources that are held in trust for all state residents or whether the differential fee was a legitimate attempt to fairly recapture capital expenditures already paid for by City residents. As drafted, the ordinance reflects a clear intent to give preferential access to Kenai residents. This ordinance is unlike a seasonal discount pass already offered by the City. Seasonal discount passes may have an incidental effect of benefitting residents over non- residents because a resident is more likely to benefit from a season pass than a non- resident. But, the benefits are not restricted only to residents. And, by its proposals to provide absolutely free use of the facility for residents, it is evident that the difference favoring residents is not tied to an attempt to recapture capital expenditures or municipal dollars used to staff and maintain the facility and already paid by city residents. Under these circumstances, the ordinance is likely to be invalidated by a court if challenged. Since Mr. Graves issued his last memorandum on this issue, the Alaska Supreme Court has considered the public trust doctrine in detail in one case.3 In State, Dept. of Natural Resources v. Alaska Riverways, Inc., the Alaska Supreme Court examined a DNR requirement that a tour boat operator, Alaska Riverways, lease state shorelands for purposes of a wharf even though Alaska Riverways owned lands adjacent to the 3 State, Dept. of Natural Resources v. Alaska Riverways, Inc., 232 Pad 1203 (Alaska 2010). Memorandum on Ordinance No. 2559-2011 Page 3 of 9 Page 12 of 133 shorelands subject to the lease. Alaska Riverways challenged the lease requirement and the fee structure setting the rent. The court upheld the State's right to require a lease to wharf out; but, it rejected the State's computation of rent that was based on a per passenger fee. The court concluded that the lease fee was in violation of a federal law, 33 U.S.C. § 5(b), the Rivers and Harbors Appropriation Act of 1884. (It was also in violation of the Commerce or Tonnage clauses of the US Constitution.) The laws prohibit a fee for the use of navigable waters "unless those fees do not impose a significant burden on interstate commerce and represent a fair approximation of the benefit conferred or cost incurred by the charging authority.s4 The court concluded that the proposed lease fee based on passenger count was clearly impermissible because it does not approximate the benefit conferred or cost incurred by the State of Alaska. The State had not shown that it incurred cost in leasing the unimproved land or that it provided any services to Alaska Riverways or its passengers. The benefit conferred by the State on Alaska Riverways was the exclusive use of state- owned shorelands. The court acknowledged that the State may charge for this benefit. But, the per -passenger lease fee had no relation to this benefit. Whether Alaska Riverways has 100 or 100,000 passengers, the benefit conferred by the State is the same. Thus, the court invalidated the fee structure for the lease. While not directly on point, the court's analysis provides additional support to Mr. Graves's prior conclusion that a differential fee structure should be based upon the benefits conferred on the user and the cost incurred by the City to provide the facilities. It also highlights that other federal laws may restrict the City's authority to discriminate in favor of residents. I discuss this below in more detail. Finally, the Council should appreciate that a court challenge may not arise only from disgruntled non-residents forced to pay a fee higher than residents. The State could also sue the City to compel the City to honor its public trust responsibilities. In fact, one Alaska Assistant Attorney General has even opined that if the City refused to acknowledge its public trust responsibility with respect to certain other tidelands transferred to the City by the State and to administer tidelands accordingly, the State could cancel its patent to the City.5 While I give no opinion on the States authority to do so here, it is helpful to know how seriously the State takes this issue. 4 State, Dept. of Natural Resources v. Alaska Riverways, Inc., 232 P.3d 1203, 1212, 1222 (Alaska 2010). 5 1989 Alaska Op. Atty. Gen. (Inf.) 309. Attorney General opinions are not legally binding; but, courts do occasionally look to them for guidance and as evidence of the State's intent or understanding of statutes and regulations. Memorandum on Ordinance No. 2559-2011 Page 4 of 9 Page 13 of 133 B. Would Adoption of Ordinance No. 2559-2011 put the City in Violation of Conditions of Funding Sources Used by the City to Construct or Maintain the Boat Launch And/Or its Adjacent Parking Area? To date, I have received little information from Administration regarding exactly what public funds and grants were used to construct the boat launch and related parking facility. Thus, I cannot answer this question with respect to all funds used and my responses should be understood accordingly. 1. Grants Mr. Koch provided me with information about one grant used to fund improvements at the boat launch, Grant No. 04 -RR -013. This grant was closed on July 20, 2006, and involved the City's receipt of up to $350,000 in state funds for "Restoring River Banks of the Kenai River." The grant agreement includes a standard non-discrimination clause that requiring that the benefits from the project shall be made available "without regard to race, religion, color, national origin, age, physical handicap, sex, marital status, changes in marital status, pregnancy or parenthood." The grant language does not include any express restrictions prohibiting discrimination based upon residency. 2. Limitation in Deeds/Patents The City received patent A-032678 covering at least some of the property used for the boat launch and city dock facility. The patent was issued "for public docking facilities, maritime commerce, transportation, warehousing, distribution of commerce, fishing, and port and waterfront development purposes only." The patent has a reverter clause prohibiting the City from using the land being for any other purpose without the consent of the Secretary of the Interior The patent does not contain express language prohibiting a preference for residents; however, such a restriction may have been anticipated. In an unsigned letter dated February 21, 1968,6 then City Manager James Harrison wrote to the federal government offering to make a negotiated purchase of the property. That letter included a statement of intended use stating that "[t]he City of Kenai represents that the proposed real property would be used in connection with adjacent lands for comprehensive development of the . .. real property and the adjacent land ... to permit the utmost equitable service for the general public at the location indicated for dock, warehouse and storage facilities." The Receipt of this letter was acknowledged by the federal government in its return letter agreeing to the transaction. Memorandum on Ordinance No. 2559-2011 Page 5 of 9 Page 14 of 133 terms also included a proposed restriction on use preventing discrimination on the basis of "race, creed or national origin." This latter restriction is included in the express language of the deed. Historically, due to this reservation of rights in the federal government, the City has consulted with the Department of the Interior before issuing special use permits and other rights to use the subject land to private parties. If the City were to enforce a new ordinance providing for a resident preference, in light of this historical practice, and in light of the statement made in the 1968 letter,' I advise that the City seek either approval or input from the Secretary of the Interior regarding its stance on the ordinance. This would help the City avoid unnecessary litigation and/or give insight into the basis of any litigation if the Council wanted to pursue the preference for residents only. 3. Federal Law Council Member Moore asked about whether the Federal Aid in Sport Fish Restoration Act, 50 C.F.R. 80.1 et seq., (also sometimes referred to as the Dingell -Johnson Act, the Wallop -Breaux Amendment, or SFR) restricted the City's legal right to enact this ordinance. Dingell -Johnson funds are distributed to the states by the federal government and must be used to primarily benefit the recreational boating and sport fishing publics I have been told by the City Manager that I can assume that Dingell -Johnson funds have been used to improve the boat launch facility. Neither the statutes nor the regulations administering the Dingell -Johnson Act include any provision expressly prohibiting a preference to local residents with respect to facilities constructed or maintained with Dingell -Johnson monies. The program does, however, require that a state, when participating in the program, agree to and certify that it will comply with all applicable Federal laws, regulations, and requirements as they relate to the application, acceptance, and use of Federal funds under the Acts.9 One specific federal funding program that might affect the City is the Boating Infrastructure Grant Program (BJG). The regulations implementing this program require The City is not legally bound by the statement in the letter as any statements made before execution of the deed and the contracts for purchase are merged into the final conveyance document. 8 16 U.S.0 § 777 et seg. 9 50 C.F.R. § 80.21. Memorandum on Ordinance No. 2559-2011 Page 6 of 9 Page 15 of 133 that fees be reasonable and based upon equitable principles. 10 The concept of "equitable principles" suggests that discrimination based upon residency is not permitted.)" Another law, the Rivers and Harbors Appropriation Act (of 1884 and 1919) also would affect the City's ability to enact ordinances favoring residents. 12 The Act of 1919 states: It is hereby declared to be the policy of the Congress that water terminals are essential at all cities and towns located upon harbors or navigable waterways and that at least one public terminal should exist, constructed, owned, and regulated by the municipality, or other public agency of the State and open to the use of all on equal terms. 13 This express language suggests that a preference based solely on residency, without resort to looking at the cost to recapture local investment and the benefits incurred, would violate the terms of this Act. This Act was also discussed in the Alaska Riverways case and imposes a limitation on fees as follows: No taxes, tolls, operating charges, fees, or any other impositions whatever shall be levied upon or collected from any vessel or other water craft, or from its passengers or crew, by any non -Federal interest, if the vessel or water craft is operating on any navigable waters subject to the authority of the United States, or under the right to freedom of navigation on those waters: 14 The law allows a non-federal entity, like the City, to charge some fees. The Act allows for "reasonable fees charged on a fair and equitable basis that (A) are used solely to pay the cost of a service to the vessel or water craft; (B) enhance the safety and efficiency of interstate and foreign commerce; and (C) do not impose more than a small burden on interstate or foreign commerce ...... 15 10 50 C.F.R. § 86.31. 11 I have no specific knowledge whether the City has or has not received any BIG funds. 12 33 U.S.C. § 551. 13 Id. (emphasis added). 14 33 U.S.0 § 5(b). 15 Id. Memorandum on Ordinance No. 2559-2011 Page 7 of 9 Page 16 of 133 Thus, under this law, there is a serious issue presented with respect to this ordinance. A fee structure for boat launching that does not meet this standard would violate this Act and would be overturned by an Alaska court, just as it overturned the lease fee structure in the Alaska Riverways case. The best chance for a fee structure to be upheld would be where the City could show that the fee is based on the cost of the service and where any discount or differential fee reflects a resident's economic support of that service and is a recapture of expenditures already made by the residents of the City. C. What is a "Resident" as That Term is used in Ordinance No. 2559-2011? Council Member Moore also asked for a definition of "resident" as used in the ordinance. The Kenai Municipal Code does not define the term "resident," and there is no definition of the term in this ordinance. Without some other definitions or description, a court would likely apply this same standard to interpret the meaning of the word "resident" in this ordinance. Without a definition, the term "resident" would be given its common understanding, drawn from statute, regulation, and court decisions. So, for example, a court would look at Alaska Statute 1.10.055. That statute describes how a person establishes residency in the state for general purposes. A person demonstrates the required intent to make their home in the State by maintain a principal place of abode here for at least 30 days (or longer if required by another law or regulation) and by providing other proof of that intent as may required by law or regulation.t6 The Alaska Statutes also describe how to determine the residence of a voter for purposes of elections. 17 The residence of a person is that place where the person's habitation is fixed and, whenever absent, they have an intention to return.18 This also reflects a more common understanding of a resident as someone who occupies a dwelling within the State, has a present intent to remain within the State for a period of time, and manifests the genuineness of that intent by establishing an ongoing physical presence ... together with indicia that his presence ... is something other than merely transitory in nature. 19 16 AS 01.10.055(b); AS 15.05.020 (rules determining residence of a voter). 17 AS 15.05.020. Is Id. 19 Black's law Dictionary (5'° Ed.) p. 1177 (1979). Memorandum on Ordinance No. 2559-2011 Page 8 of 9 Page 17 of 133 In sum, the concept of "residence" has a common legal understanding. It means a person has formed an intent to remain in a place indefinitely as their permanent dwelling place. 20 Without further definition within the City's Code a resident of the City of Kenai should be similarly understood. As drafted, there would not be a period of residency required before a person could take advantage of the resident preference proposed. A resident of the City should be considered a person physically present in the City and who has the intent to remain in the City indefinitely and to make the City their home.21 If the Council desired, it could amend the ordinance to impose a reasonable time before one can establish residence (such as 30 days). The Council could also use some other standard to provide a preference, such as "property owner" or "registered voter." My understanding of Council Member Boyle's intention, however, was that the provision of free services for residents be applied broadly to reach as many people as possible. The draft language reflects this intent. It also furthers Council Member Boyle's intent to provide the Administration with leeway as to how best to work out how to process requests for free service based upon residency. CONCLUSION An all-out resident preference like that proposed in Ordinance 2559-2011 clearly violates the public trust doctrine with respect to the boat launch. Whether a resident preference for the parking area violates the public trust doctrine is a tougher question as the land on which the parking area is place is above mean high water. Alaska courts have not spoken directly to this issue. The City would be making new law if it adopted the ordinance and it was challenged. Much would depend upon whether a court found that the parking was required to provide for the public's use and access of the tidelands and whether the supreme court would extend the doctrine to upland areas. As for funding, I have concerns that the resident preference as proposed would violate the Rivers and Harbors Appropriation Act. There is a less substantial question about how the Department of the Interior might view the preference in light of the reverter clause in the patent conveying the land to the City. L:\Council\public.trust.boat.launch.052711 20 Perito v. Perito, 756 P.2d 895 898-99 (Alaska 1988) (interpreting prior statute defining intent to remain permanently to be understood as "indefinitely"). 21 Temporary work sites, post office boxes and private mail services do not create residence. For purposes of this ordinance, residency could be evidenced in a variety of ways to be determined by the Administration (utility bills, voter registration, driver's license physical address). Memorandum on Ordinance No. 2559-2011 Page 9 of Page 18 of 133 Page 19 of 133 on-�s-14 Suggested by: Council Member Mike Boyle CITY OF KENAI ORDINANCE NO. 2559-2011 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, ENDING KENAI MUNICIPAL CODE SECTION 11.05.050, "CONDITION AS TO UAL SERVICES AND RATES," TO REQUIRE THAT THE CITY PROVIDE SIDENTS OF THE CITY OF KENAI WITH FREE SERVICES AT THE CITY -OWN BOAT LAUNCH AND PARKING FACILITY. WHEREAS, the City has put into place certain fees for takin advantage of City - provided services at the City -owned and operated boat lau ch facility; and, WHEREAS, although the City of Kenai Dock launching, mps and floats are facilities that provide access to waterways for the entire public he costs of operating these facilities are supported not only from user fees but b the residents of Kenai who support governmental operations through taxes; , WHEREAS, it is in the best interest of the City t/acknowledge the contributions of the residents of the City of Kenai in payment of taxy�s by offering free City services at the City's boat launch and floats. NOW, THEREFORE, BE IT ORDAINED BY ALASKA, as follows: Section 1. Form: This is a Code COUNCIL OF THE CITY OF KENAI, Section 2. Amendment of Section/f 1.05.050 of the Kenai Municinal Code: The Kenai Municipal Code, Section 11.05.05 Condition as to equal services and rates, is hereby amended as follows: / 11.05.050 Condition as to o4ual services and rates. It shall be a conditi 7 of all permits granted by the City Council that the facilities to be construcle and the services to be supplied in connection with them shall be made available all carriers upon equal terms, at equal rates, and without discrimination of any kid. Notwithstanding, the Citv shall provide services at its launch ramp and adia ent narking facility to residents of the Citv of Kenai at no charge. Section 3. Severa ility: If any part or provision of this ordinance or application thereof to any per on or circumstances is adjudged invalid by any court of competent jurisdiction, sucyi judgment shall be confined in its operation to the part, provision, or application dj ctly involved in all controversy in which this judgment shall have been New Text Under in; tDELETED TEXT BRACKETED] Page 20 of 133 Ordinance No. 2559-2011 Page 2 of 2 rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 4. Effective Date: Pursuant to KMC 1.15.070(f), this ordinance shall take effect one month after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this first day of June, 2011. ATTEST: Carol L. Freas, Ci Text Underlined: IDELF.TED TEXT BRACKETED] Page 21 of 133 2011 2011 2011 "Villaye with a Past, C# with a Future "' 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 b Telephone: 907-283-75351 FAX: 907-283-3014 111117 1992 MEMO: TO: Mayor Pat Porter Council Members Bob Molloy, Joe Moore, Ryan Marquis, Terry Bookey, and Brian Gabriel FROM: Vice Mayor Mike Boyle DATE: May 12, 2011. SUBJECT: Ordinance No. 2559-2011 -- Providing free boat launch and parking services to City of Kenai Residents At the May 4, 2011 Council meeting, I stated that I was working on an ordinance to provide free services to City residents related to the City's boat launch facility. I now propose for introduction Ordinance No. 2559-2011. This ordinance would require the City to provide free boat launch and boat launch parking to City residents. My hope is that the Council would introduce and adopt the Ordinance in time for residents to benefit from free service during the height of summer recreational activities. The Ordinance could go into effect as early as July 1 with the typical public hearing schedule. (The Council could later amend the fee schedule to reflect the "no charge" rule at some point in the future so that the Code and the fee schedule are consistent.) The Council has been involved in discussion of the Public Trust Doctrine in the past. As this issue does not deal with beach access or parking on the beach, I do not feel the Doctrine applies to this ordinance. By focusing on this service and facility constructed by the City with taxpayer funds I believe that, if challenged, the ordinance would be validated. The ordinance is also supported by the otherwise reasonable charges for this service in general and the fact that residents are supporting the facility through their tax dollars. Thus, I feel the City should pursue this matter. Page 22 of 133 Page 23 of 133 MEMORANDUM CITY OF KENAI it cd eapzW 4 4&"a 11 210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611.7794 TELEPHONE 907-283-7535 FAX 907-283-3014 4�mbQ, 1991 TO:n( Linda L. Snow, City Manager FROM: L W Cary R. Graves, City Attorney DATE: September 5, 2003 RE: Beach Parking Fees and the "Public Trust Doctrine" The Council requested a memorandum outlining our options regarding differential beach parking fees, regulation of beach access and the "Public Trust Doctrine." My analysis follows. The Public Trust Doctrine The public trust doctrine, originated in Roman Law, was incorporated into English Common Law and then made part of American Law by the United States Supreme Court in Illinois Central Railroad v. Illinois, 146 U.S. 387, 13 S.Ct. 110, 36 L.Ed. 1018 (1892). In Illinois Central Railroad, the Court held that the states hold tidelands (land in between the mean high water and mean low water mark) "in trust for the people of the state that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing therein freed from the obstruction or interference of private parties." Id. at 452. The doctrine means there is a public use easement on tidelands between the mean high and low water marks. The easement is flexible in that it moves with the changes in the location of the water marks due to erosion, accretion or reliction. 1 1988 Alaska Op. Atty. Gen. (inf) 351. For example, if the mean high water mark moves inland because of erosion, the public use easement moves with it. Some courts have even expanded the doctrine to include the "dry beach" above the ordinary high water mark. For example, Oregon and Texas have expanded the doctrine to include beach use up to the vegetation line. State ex rel Thorton v. Hay, 462 P.2d 671 (Or. 1969); Hirtz v. Texas, 974 F.2d 603 (5`h Cir. 1992). Other courts have expanded the public trust doctrine to include access to publicly owned beaches and recreation. Matthews v. Bay Head Imp. Assn, 471 A.2d 355 Page 24 of 133 Linda L. Snow. City Manager September 5, 2003 Page 2 of 4 (N.J. 1984) cert. denied Bay Head Improvement Assn v. Matthews, 469 U.S. 811, JOSS. C1. 93, 83 L.Ed1d 39 (1984; Van Ness v. Borough of Deal, 393 A.2d 571 (N.J. 1978); Hyland v. Borough ofAllenhurst, 393 A.2d 579 (N.J. 1978). The Alaska Supreme Court recognized the public trust doctrine in CWC Fisheries, Inc. v. Bunker, 755 P.2d 1115 (1988). Lands conveyed by the states to municipalities and private parties are conveyed subject to the public trust doctrine. 1989 Alaska Op. Atty. Gen. (Inf.) 309, 1988 Alaska Op. Atty. Gen. (fry) 351. Thus, the beaches on both the south and north sides of the Kenai River are subject to the public trust doctrine. Fees and Regulation The public trust doctrine does not mean that states and municipalities may not regulate tideland beach use. People v. Deacon, 151 Cal. Rptr. 277, 87 Cal.App.3d Supp. 29 (1978)(state can prohibit motorcycle access to beach). In Lusardi v. Curtis Point Property Owners Assoc.,430 A.2d 881, 888 (NJ 1981), the New Jersey Supreme Court stated that the public trust doctrine: ... does not mean that the township may not, through more precisely drawn zoning or other regulations, achieve its valid objectives of avoiding unnecessarily disruptive behavior, overcrowding, littering, or of protecting environmentally fragile oceanfront property, such as irreplaceable sand dunes, for the benefit of future generations. Municipalities may charge fees to recoup the cost of maintaining the beach and reasonably regulate the number of people on and the manner of access to the beach in order to protect the beach from harm. Neptune City v. Avon -By -The Sea, 294 A.2d 47 (N.J. 1972). However, courts hold that the fees charged for use of the area covered by the public trust doctrine must not discriminate between residents and non-residents. Hyland v. Borough of Allenhurst, 393 A.2d 579 (N.J. 1978); Van Ness v. Borough of Deal, 393 A.2d 571 (N.J. 1978). Seasonal rate discounts, as long as they do not unduly discriminate against non-residents, are allowed. Sea Isle City v. Caterina, 303 A.2d 351 (N.J. Cty. Ct. 1973). Some courts have held that differential fees for residents and non-residents for man-made facilities above the dry beach (mean high tide line) are allowed if alternative ways (not charging differential fees) are available to use or access the beach areas. Hyland v. Borough ofAllenhurst, 393 A.2d 579 (N.J. Sup. Ct. 1978); Zaroogian v. Town ofArarranganseti, 701 F.Supp. 302 (D.RI 1988). The parking lots on the north and south sides are both above the mean high tide. However, an issue with them is whether there is reasonable alternative access to the fishery other than using the parking lots. Therefore, there is a question whether charging differential parking fees for residents and non-residents would be allowed. Fees must be reasonably related to the cost of upkeep and maintenance of the beach and related facilities. City of New Smyrna Beach v. Board of Trustees, 543 So. 2d 824 (Fla. App. 1989). A municipality may not supplement its non -beach -related general fund revenue with fees from uses Page 25 of 133 Linda L. Snow, City Manager September 5, 2003 Page 3 of 4 of beach and beach -related facilities. Slocumb v. Borough of Belman, 569 A.2d 312 (N.J. Super. L. 1989) Alaska Constitution and Beach Access Article VIII, § 14 of the Alaska Constitution states, "Free access to the navigable or public waters of the State, as defined by the legislature, shall not be deni.. d any citizen of the United States or resident of the State, except that the legislature may by general law regulate and limit such access for other beneficial uses or public purposes." This clause has been interpreted to be Alaska's own version of the public trust doctrine incorporated in our state constitution. Alaska's Constitution -A Citizen's Guide, p.163 (Gordon S. Harrison 1992). Restrictions on tideland access must be for a public benefit. In his book, Mr. Harrison gives the following example: The state may keep people away from a lake that supplies drinking water to a town, or impair navigation on a river by building a dam. But it may not prevent the public from fishing in certain streams in order to protect the interest of a nearby private lodge. Supra at 163. There is strong public policy in favor of public access to the tidelands under both state and federal law. However, that does not mean the City may not take reasonable regulatory actions regarding beach access. The intent of Article VIII, § 14 has been incorporated into the Alaska Statutes (AS 38.05.126(c). That section states: Ownership of land bordering navigable or public water does not grant an exclusive right to use of the water and a right of title to the land below the ordinary high water mark is subject to the rights of the people of the state to use and have access to the water for recreational purposes or other public purposes for which the water is used or cable of being used consistent with the public trust. AS 38.05.128(d) states: "Free passage or use of any navigable water includes the right to use land below the ordinary high water mark to the extent reasonably necessary to use the navigable water consistent with the public trust." The word "free" in the above passages regards eliminating access rather than a monetary context. Since Article VIII, §14 was intended as Alaska's version of the public trust doctrine, it is reasonable to interpret it and the statutes implementing it in the same manner as the public trust doctrine has been interpreted. The City may place reasonable conditions on the use of and access to the tidelands, but it cannot completely prevent them unless such use and access would be completely unreasonable. 1985 Alaska Op. Atty Gen. (Inf.) 445. Conclusions Page 26 of 133 Linda L. Snow, City Manager September 5, 2003 Page 4 of 4 1. Because of the case law restricting differential fees for residents and non-residents, it would be better to give a discount for a season pass. 2. The City may restrict vehicular traffic on the tidelands if the vehicles are creating environmental or public harm (overcrowding or safety of people on the beach). As you know, the City has restricted vehicle access on the north side for such reasons for years. But it may not restrict public vehicular access solely for the benefit of private landowners. 3. It may charge access or parking fees for the beach if the fees are reasonably based upon costs the City incurs in maintaining the beach. 4. It may also make regulations to control such things as littering, overcrowding and sanitation. Please let me know if you have any questions. CRG/sp cc: Chuck Kopp, Chief of Police Bob Frates, Parks and Recreation Director t Reliction is the gradual recession of water leaving the land permanently uncovered. Accretion is an increase of land by natural forces. Page 27 of 133 01 � tq "Villa9e with a Past, C# wish a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-75351 Fax: (907) 283-3014 www.ci.kenai.ak.us the cityW MEMORANDUM TO: I Mayor Porter and the Kenai City Council FROM.6W Cary R. Graves, City Attorney DATE: May 11, 2007 RE: Public Trust Doctrine and Differential Fees INTRODUCTION Councilor Molloy requested I update my previous research regarding the Public Trust Doctrine and beach parking fees My previous memoranda on tate doctrine were done in 2002 and 2004. I took this opportunity to take a fresh look at my earlier research. This memorandum is longer than I anticipated but I felt it was necessary to give the Council sufficient background regarding the doctrine. THE PUBLIC TRUST DOCTRINE The Public Trust Doctrine is a legal doctrine which `provides that public trust lands [tidelands3, waters, and living resources in a State are held by the State in trust for the benefit of all the people, and establishes the right of the public to fully enjoy public trust lands, waters and living resources for a wide variety of recognized public uses. , . The doctrine articulates not only the public rights in these land and waters; it also sets limitations on the States, the public and private owners, as well as establishing duties and responsibilities of the State when managing these public trust assets."I The public trust doctrine originated in Roman Civil Law, In 530 A.D., the "Institutes of Justinian" contained a provision stating: 'By the laty of nature these things are common to all mankind; the air, running water, the sea and consequently the shores of the sea."' It was incorporated into English Common Law and made part of American Law by the United States t David Slade, et. at., Putting the Public Trust Doctrine to Work, p. 3, (Second Edition 1997). The Public Trust Doctrine: A Gift From a Roman Emperor, David C. Slade, h:/Iwww.wsn.oralissues/PlOaubsnustdac.html. Metro Page I of 5/1180071111 PM Public Trust Doctrine and Differential Fees DdMy nocumrntsrCnunciRPublic Trust Memo 0507.doe 144 Page 28 of 133 Supreme Courtin Illinois Central Railroad v. Illinois, 146 U.S. 387,13 S.Ct. 110, 36 L.Ed 1018 (1892). The doctrine means that there is a public use easement on tidelands between the mean high and low water marks. The easement is flexible in that it moves with the changes in the location of the water marks due to erosion, accretion or reliction.3 For example, if the mean high water mark moves inland because of erosion, the public use easement moves with it.' The case law on the public trust doctrine deals with two separate areas of the beach. The distinction is important. The "wet beach" is the area between the mean high and low water marks. The "dry beach" is the beach area above the mean high water mark. In this case the city boat launch would be part of the wet beach and the city parking lots would be part of the dry beach. In Illinois Central Railroad the supreme court held that the states hold tidelands (land in between the mean high water and mean low water mark) 'in trust for the people of the state that they may enjoy the navigation of the water, carry on commerce over them, and have liberty of fishing therein freed from the obstruction or Interference of private parties."5 Each individual state has the right to define what lands are included in the doctrine and what rights are protected by it.6 Oregon, for example, considers the tideland area covered by the doctrine to be from the mean low tide mark to the visible line of vegetation, not the mean high tide line.' Initially, the doctrine only required public access for fishing, hunting and navigation for the wet beach. However, since the Illinois Central Railroad decision, most courts have expanded the public trust doctrine to include wet beach access to pvblicly owned beaches for swimming and recreations Beginning in the early 1800s and continuing until twenty-first century courts have struck down municipal attempts to restrict use of the wet beach area to local residents only.9 Courts in Massachusetts and Maine have not included the right to wet sand beach access for swimming and recreation as part of their states' public trust doctrine. Those rulings are based on courts' findings that colonial residents of the area did not use beaches for bathing and hence acquired no such public access right under colonial ordinances. However, residents of those s Reliction is the gradual recession of water leaving the land permanently. Accretion is an increase of land by natural forces. ° 1988 Alaska Op. Atty. Gen (inf.) 351. ° 146 U.S. at 452. " Phillips Petroleum v. Mississippi, 484 U.S. 469,475 (1988); Cavanaugh v. Town afNarragansen, 1997 U. Super. LEXIS 113, (N.J. Super. Ct. 1997). State ex rel Thorion v. Hay, 462 P.2d 671 (Or. 1969). Borough of Neptune City v. Borough of Avon by -the Sea, 294 A.2d 47 (N.1. 1972)(Public trust doctrine includes use for recreation: swimming, bathing and other shore activities), White v. Hughes. 190 So. 446 (Fla. 1939)(Doctrine includes right to use arca for bathing and swimming). s Hqvden v. Noyes, 5 Conn. 391, 397 (1824)(Striking down town law restricting use of local fishery to town residents only); Levdan v. Town of Greenwich, 750 A2d 1122, 1126 (Conn. App. 2000) ed on ocher grounds, 777 A.2d 552 (Conn. 2001). (Restriction of municipal beach use to town residents only was illegal under the Public Trust Doctrine); Gerwitt v. Cio, of Long Beach, 69 Mist.. 2d. 763, 330 N.Y.S. 2id 495 (1972 N.Y. Misc.). Memo Page 2 of 6 5111/2ooi 1298 PM Public Trust Doctrine and Diffe,untial Fees L':lMy DocummislCouneilTublie Trust Mento 0507.doc 145 Page 29 of 133 states do have the right to access the wet beach area for "fishing, fowling, and navigation". � e Interestingly, the public trust doctrine in New Hampshire (whose coastline is located in between that of Maine and Massachusetts) does grant its residents the right to use wet beach area for recreational purposes.I I In California, the public trust doctrine includes, 'the right to use California's water resources for: navigation, fisheries, commerce, environmental preservation and recreation; as ecological units for scientific study; as open space; as environments which provide food and habitats for birds and marine life; and as environments which favorably affect the scenery and climate of the area. 02 The United States Supreme Court has noted that caution should be applied in applying the case law from one state to cases arising in another because, "Each state has dealt with the lands under the tidewaters within its borders according to its own views of justice and policy.n13 Except for Maine and Massachusetts, the modern trend is for states to broadly interpret the public's rights under the doctrine. J4 BEACH ACCESS ARID FACILITIES FEES The Public Trust Doctrine does not mean that municipalities may not regulate the wet beach area. In Lusardi v. Curtis Point Property Owners Assoc. 430 A.2d 881, 888 (N.J. 198 1) the New Jersey Supreme Court stated that the public trust doctrine: [Djoes not mean that the township may not... achieve its valid objectives of avoiding unnecessarily disruptive behavior, overcrowding, Iittering, or of protecting environ- mentally fragile oceanfront property, such as irreplaceable sand dunes, for the benefit of future generations. The problems can be alleviated through reasonable ordinances directed at specific abuses and through the use of the general police power. Municipalities may charge fees for use of the public trust wet beach area.ls The �eneral rules are that the fees must be reasonable, 16 not discriminate against out of town residents, 7 and designed to fund the maintenance and operation of the beach area. 12 In Avon, the New Jersey Supreme Court noted that, "while municipalities my validly charge reasonable fees for the use of their "Opinion of Justices, 437 A.2d 597 (Me. 1981); Bell v. Inhabitants of Wells, 1981, Me. Super. LEXIS 256 (Me. Super. CL Sept. 14 1987); Opinion of Justices, 313 N.E.2d 561 (Mass. 1974). '1 Opinion of Justices, 139 N. H. 82 (1994). 1Q California State Land Commission, California's Rivers, A Public Trust Report -Executive Summary vi (1993). tt Shively v. Bowlby. 152 U.S. 1, 26, (1894). t' Robert George, Comment: The "Public Access Doctrine": Our Constitutional Right To Sun, Surf, and Sand. 11 Ocean & Coastal Law Journal 73, 77 (200512006). 10 State of Wisconsin v. Linn, 556 N. W. 2d 394 (Wisc. App. 1996)(Boat launch fees allowed); City of New Smyrna Beach v Board of Dwrees, 543 So. 2d 824 (Fla. Dist. 1989)(Upholding beach access fee for motor vehicles); 16 Borough of Neptune City v. Borough q/ Avon -by -the Sea, 294 AN 47 (N.1. 1972) t ° Nan Ness v. Borough of Deal, 393 A.2d 571, 572 (N.J. 1978). 'r Slocum v. Borough of Belmar, 569 A.2d 312, 316 (N.J. Super. Ct. 1989)(Public access fee allowed to fund maintenance of beach area). Memo Page 3 of 6 5/11/2007 12;08 FM Public Trust Doctrine and Differentia: Fees U:N4y DocumrnulCouncilTublic Tout Memo 0507.doc 146 Page 30 of 133 beaches, they may not discriminate in any respect between their residents and non-residents.i19 Seasonal rate discounts or discounted ticket booklets are allowed as long as they do not unduly discriminate against non-residents.20 In New Jersey the courts have held that where the dry beach area and facilities are reasonably necessary to utilize the access to the wet beach, municipalities may not discriminate in fees between residents and non-residents.21 In reaching that conclusion, the New Jersey Supreme Court held that use of the dry land facilities can be inseparable from use of the wet beach.22 In Connecticut, an appellate court has indicated that a higher feeFor non-residents might be legal, but only if any non-resident surcharges were minimal. Some states have allowed higher non-resident fees. An Illinois court has held that charging a higher moorage rate to non-residents was legal if the fee was designed to equitably recapture a fair share of the capital and operational costs otherwise born by the taxpayers.24. In Rhode Island, a lower court held that charging a higher non-resident fee was allowed under that state's public trust doctrine, but only as long as out of state non-residents paid the same fee as in state non-residents 25 A federal district court in Rhode Island held that municipalities could discriminate between residents and non-residents regarding use of the beach26 However, that opinion is very questionable because the court did not even mention the Public Trust Doctrine in its legal analysis. PUBLIC TRUST DOCTRINE IN ALASKA Article VIII, §14 of the Alaska Constitution states, "Free access to the navigable or public waters of the State, as defined by the Legislature, shall not be denied any citizen of the United States of resident of the state, except that the Legislature may bry general law regulate and limit such access for other beneficial uses or public purposes." 2 This clause incorporates the Public Trust Doctrine into Alaska's constitution28 AS 38.05.126(a) explains that constitutional right and provides that, "The people of the state have a constitutional right to free access to and use of the navigable water of the state." In Alaska, lands conveyed to municipalities by the state are subiect to the public trust doctrine.29 The Public Trust Doctrine places conditions on the use of city owned beach property that do not "Avon, 294 A.2d at 56. 2° Sea Isle City v. Caterina, 303 A.2d 351 (N.J. Cty. Ct. 19?3). 2i Raleigh Beach Association v. Atlantis Beach Club, Inc., 679 A.2d 112, 120 (N.J. 2005). 2' Lusardi v.Curtis Point Property Owners Assn, 430 A2d. 881 (N,7. 1981). " Brenden v. Town ofGreemvich, 750 A.2d 1122, n. 10 (Conn. App. 2000) ed on other grounds 777 A2d $52 (Conn. 2001). u Broeckl P. Chicago Park District, 544 N.E2d 792 (DI. 1989). 23 Cavanaugh v.Town ofNarrangamen, 1997 R.I. Super, LEXIS 113 (R.I. Super. CL 1997). u Zaroogian v. Narrangansert, 701 F. Supp 302 (D. U. 1988) 2' Article VIII, sections 1,2,3,6,13 of the Alaska Constitution also embody the principles of the public trust doctrine. 's Gordon S. Harrison, Alaska's Constitution -A Citizen's Guide, p. 163 (Third Edition 1992). CWC Fisheries, Inc. v. Bunker, 755 P.2d 1115 (Alaska 1988); 1989 Alaska Op. Any. Gen. (Inf.) 309, 1988 Alaska Op. Atty.Gen. (Irf) 351. Memo Page 4 of 6 5/11/2007 12:08 PM Public Trust Doctrine and Differential Fees U:\My Documents\Councilftblic Trust Memo 0507.doe 147 Page 31 of 133 apply to other property owned by the city?° Alaska's Supreme Court has stated that tidelands in Alaska are subject to a public trust easement 31 The easement is the "right shared by all to navigate on waters covering foreshore [tidelands] at high tide, and, at low tide, to have access across foreshore [tidelands] to waters for fishing, bathing or any other lawful purpose."32 Restrictions on tideland access must be for a public benefit. One scholar notes that, "the state may keep people away from a lake that supplies drinking water to a town, or impair navigation on a river by building a dam. But it may not prevent the public from fishing in certain streams in order to protect the interest of nearby private lodges."33 There is strong public policy in favor of public access to the tidelands under both state and federal law. The Alaska Supreme Court has held, "the provisions of Article VIII were intended to permit the broadest possible access to and use of state waters by the general public.i34 The intent of Article Vlll, § 14 has been incorporated into AS 38.05,126(c). That section states: Ownership of land bordering navigable or public water does not grant an exclusive right to use of the water and a right of title to the land below the ordinary high water mark is subject to the rights of the people of the state to use and have access to the water for recreational purposes or other public purposes for which the water is used or capable of being used consistent with the public trust. AS 38.05.128(d) states: "Free passage or use of any navigable water includes the right to use land below the ordinary high water mark to the extent reasonably necessary to use the navigable water consistent with the public trust." The tern "free passage" in the above section refers to unblocked access rather than a monetary context. The City may place reasonable terms and conditions on the use and access to the tidelands. 35 However, tidelands owners may not exclude the public from use of the tidelands for navigation, fishing, or commerce.36 Individual states are free to establish the parameters of their own public trust doctrine. -17 In Alaska, land held under the public trust doctrine is held for the benefit "of all the people of the state.n39 There are no controlling cases in Alaska clearly establishing whether higher non-resident boat launch and parking fees would be allowed under this state's version of the Public Trust Doctrine. Predicting how courts will rule on issues where there is no clear controlling precedent is a risky 30 William H. Danne, Jr. Annotation, Power of municipality to charge nonresidents higher fees than residents for use of municipalfaclllties. 57 A.L.R. 3d 998. " Owsrchek v. Guide Licensing & Control Board, 763 P.2d 483, 494 (Alaska 1998) The public's legal interest in use the wet beach is sometimes referred to as the Jus pubticum. u See jus publicum,Black's Law Dictionary (5a Ed. 1979). 3s Gordon S. Harrison, Alaska's Constiurtion-A Citizen's Guide, p.163 (Third Edition 1992). • Wernberg v. State, 516 P.2d 1191, 1198-1199 (Alaska 1973). ''s 198S Alaska Op. Any, Gen. (Inf) 445. as 755 P.2d at 1121. 152 U.S. at 26; 755 P.2d at 1121. 18 Gregory F. Cook, The Public Trust Doctrine in Alaska, Vol 8(1) The Journal of Environmental Law and Litigation I (1993)(The author was kind enough to discuss his article with me via telephone from Juneau on May 9, 2007). Memo Page 5 of 6 5/1102007 12:08 PM Public Trust Doctrine and Differential Foes Ut\My Documents\CouncihPubhc Trust Memo 0507.doc 146 Page 32 of 133 business. Such predictions are in reality just educated guesses. With that in mind, the following is my opinion on how Alaska courts would approach this issue. The boat launch is clearly covered by the public trust doctrine. Whether the dry beach parking lots are covered will depend on whether a court feels they are necessary for reasonable access to and use of the wet beach, While reasonable people could certainly disagree, I believe the courts would find them subject to the public trust rules. Whether the court would allow a differential non-resident fee depends (in my opinion) on the following: 1) whether the court felt the fees were an attempt to give Kenai residents preferential access to and use of resources (wet beach, the fishery, and use of the river and ocean) that are held in trust for all state residents; or 2) whether the court felt non-resident fees were a legitimate attempt to fairly recapture capital expenditures already paid for by city residents. If a non-resident fee is established, it should be designed to recapture capital expenditures and must be based on a detailed financial analysis. 39 The "Carlson Litigation" was a class action challenging higher state fees for out-of-state fishing licenses. The litigation was filed in 1984 and has been to the state supreme court three times; most recently in 2003; almost twenty years after it started.40 In that case the state supreme court struck down the original fee and awarded damages and attorney's fees. It held a higher non-resident fee could be used, but set down a detailed methodology for how any higher fee could be calculated to recapture costs. SUMMARY Because public trust property is held for all residents of the state, courts will closely scrutinize any higher non-resident fee. However, a non-resident differential fee is defensible if it is designed to recapture capital expenditures and is based on a detailed financial analysis. as Operational costs are not mentioned because the fees recently provided a surplus over operational costs. atl Carlson v. State, 498 P.2d 1269 (Alaska 1990); Carlson v. Commercial Fisheries Entry Commission, 919 P.2d 133', (Alaska 1996); and Sure v. Carlson, 65 P.3d 851 (Alaska 2003). The United States Supreme Court has declined to hear the appeals on the cases. Carlson v. Alaska Commercial Fisheries DO), Commission, 519 U.S. 1101, 117 S.CL 789, 136 L.Ed. 2d 730 (1997) and Carlson v. Alaska Commercial Fisheries Entry Commission, 540 U.S. 963, 124 S. Ct. 387, 157 L.Ed2d 305 (2003). The Carlson Litigation did not concern the Public Trust Doctrine. It dealt with federal constitutional issues regarding the privileges and immunities and commerce clauses of the United States Constitution. Memo Page 6 of 6 5/1/2007 12:10 PM Public Trusi Doctrine and Differential Fees U:\My Docurnents\CounciN'ublic Trust Memo 0507.duc 149 Page 33 of 133 MEMORANDUM p -,I Aa CIT � OF KENAI 0P,J1S 11 l', d Cale""'.""" 4 41411" it 210 FIDALGO AVE., SUITE 200 KENAI, ALASKA 99611.7794 TELEPHONE 907-283-7535 FAX 907-283-3014 ►u.boy tll��l 1991 TO: Mayor Williams and Councilors FROM: 4 Cary R. Graves, City Attorney DATE: September 9, 2004 RE: Beach Parking Fee Discounts for City Residents Councilor Moore asked me to research the feasibility of giving city residents a discount for beach parking fees during dipnet season. The Public Trust Doctrine The public trust doctrine originated in Roman law. It was incorporated into English Common Law and made part of American Common Law by the United States Supreme Court in Illinois Central Railroad v. Illinois, 146 U.S. 387, 12 S.Ct. 110, 36 L.Ed 1018 (1892). In Illinois Central Railroad, the Court held that states hold tidelands (the land in between the mean high and mean low water marks) "in trust for the people of the state that they may enjoy the navigation of the waters, carry on commerce over them, and have the liberty of fishing therein freed from the obstruction or interference of private parties." Id at 452. The doctrine means that there is a public access easement between the mean high and mean low water marks. The Alaska Supreme Court recognized the public trust doctrine in CWC Fisheries, Inc. v. Bunker, 755 P.2d 1115 (Alaska 1988). Lands conveyed by states to municipalities and private parties are conveyed subject to the public trust doctrine. 1989 Alaska Op. Atty. Gen (Inf.) 309, 1988 Alaska Op. Atty. Gen. (Inf) 351. Thus, the beaches on the north and south sides between the mean high and mean low water marks are subject to the public trust doctrine. It is important to note that the City does not charge beach access fees; we charge parking fees for areas on both the north and south sides. The general rule is that fees charged in an area covered by the public trust doctrine cannot discriminate between city and non -city residents. Hyland v. Borough of Allenhurst, 393 A.2d 579 (N.J. 1978); Van Ness v. Borough of Deal, 393 A. 2d 571 (N.J. Cty Ct. 1973). Some courts have applied that non-discrimination rule to city facilities above the mean high tide line if the facilities are needed to access the beach. Zaroogian v. Town Page 34 of 133 Mayor Williams and Councilo- September 9, 2004 Page 2 of 2 of Narrangansett, 701 F.Supp. 302 (D.RI 1988); Hyland, supra. The Alaska Supreme Court has not ruled on that issue. Seasonal rate discounts, however, are allowed even in areas covered by the public trust doctrine if they do not unduly discriminate against non-residents. Sea Isle City v. Caterina, 303 A.2d 351 (N.J. Cty. Ct. 1973). Because of the uncertainty of the propriety of differential parking rates for residents and non-residents, the council may wish to consider a seasonal rate discount, whereby a person (whether a city resident or not) could purchase a season pass for the parking areas at a discounted fee. Please let me know if you have any questions. CRG/sp Page 35 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 36 of 133 Suggested by; Administration CITY OF KENAI ORDINANCE NO. 2790-2014 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, WAIVING CERTAIN LEASE PROVISIONS IMPOSED BY KENAI MUNICIPAL CODE CHAPTER 21.10 -LEASING OF AIRPORT RESERVE LANDS, AND APPROVING A NON-STANDARD FORM OF LEASE FOR THE LEASE OF LOT 2, BLOCK 1, GENERAL AVIATION APRON, LOCATED WITHIN THE AIRPORT RESERVE, TO LEGACY ELECTRIC. WHEREAS, on July 28, 2014, Legacy Electric applied to lease Lot 2, Block 1, General Aviation Apron (the property) for the proposed use of a heated 10-plex nested T - Hangar complex; and, WHEREAS, Kenai Municipal Code Chapter 21.10- Leasing of Airport Reserve Lands, governs the lease of airport reserve lands and imposes certain mandatory lease terms; and, WHEREAS, administration has been unable to secure new leases of airport reserve lands without deviating from the current code scheme and lease form; and, WHEREAS, A Geotechnical Investigation Report prepared in 2008 by Wince-Corthell- Bryson indicates soil conditions on the property require removal of waste material previously buried on the site; and, WHEREAS, Legacy Electric proposes to remove up to eight feet of silt and other waste material at its cost and prepare the lot for construction; and, WHEREAS, it is in the best interest of the Kenai Municipal Airport to promote development through the application of lease incentives that recent experience has shown require deviation from lease terms imposed by KMC Chapter 21.10 and standard lease form; and, WHEREAS, Legacy Electric desires the contractual right for a lease of fifty-five (55) years consisting of an initial thirty-five (35) year lease term and a twenty (20) year lease renewal at its sole option in order to adequately re -coup its investment in the property, which is initially estimated at $500,000; and, WHEREAS, pursuant to KMC 21.10.090, initial lease terms and renewals are based on the amount of investment of permanent improvements on the property with a maximum initial term of 35 years; and, WHEREAS, KMC 21.20.080 allows for council to approve a contractual right for a lease renewal under terms and conditions in the City's best interest; and, New Tem Underlined; [DELETED TEXT BRACKETED] Page 37 of 133 Ordinance No. *-2014 Page 2 of 2 WHEREAS, the Council of the City of Kenai finds that in this instance waiving the provisions of KMC 21.10.090 is in the best interests of the City of Kenai; and, WHEREAS, pursuant to KMC 21.10.150(b), the City Manager may deviate from the standard lease form adopted under Code, if the Manager believes the action is in the best interest of the City and the form is approved by the City Attorney; and, WHEREAS, the City Manager believes it is in the best interest of the City to deviate from the current lease form to allow for reasonable costs for work performed by Legacy Electric or its contractors for clearing and grubbing, unclassified excavation, classified fill and utility service extensions to be applied as lease credits to the lease for a maximum period of five years; and, WHEREAS, the City Manager further believes it is in the best interest of the City to deviate from the current lease form to provide that the lessee may remove, sell or have the City sell any permanent improvements on the property left after the expiration of the lease term consistent with State of Alaska rural airport leasing procedures; and, WHEREAS, the City attorney has approved the new lease form. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA,: Section 1. Waiver of Ordinance Reauirements: That the Council of the City of Kenai waives the lease provisions of the Kenai Municipal Code as it applies to the lease of Lot 2, Block 1, General Aviation Apron, located within the Airport Reserve, to Legacy Electric for the use of T -Hangars: KMC 21.10.090 with respect to length of lease term. Section 2. Determination of Lease Term: That the Council of the City of Kenai determines that a thirty-five (35) year lease term and the contractual right for a twenty (20) year lease renewal for Lot 2, Block 1, General Aviation Apron, located within the Airport Reserve, to the FAA for the use of to Legacy Electric for the use of T -Hangars is in the best interests of the City. Section 3. Approval of Lease Form: That the Council of the City of Kenai approves the Lease form for Lot 2, Block 1, General Aviation Apron, located within the Airport Reserve, to Legacy Electric for the use of T -Hangars. Section 4. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. New Text Underlined; [DELETED TEXT BRACKETED] Page 38 of 133 Ordinance No. *-2014 Page 2 of 2 Section 4. Effective Date: That pursuant to KMC 1.15.0700, this ordinance shall take effect 30 days after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA this _ day of September , 2014. ATTEST: Sandra Modigh, City Clerk PAT PORTER, MAYOR Introduced: August 20, 2014 Adopted: September 3, 2014 Effective: New Text Underlined; (DELETED TEXT BRACKETED] Page 39 of 133 u MEMO: "Villaye with a Past, C# with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 I FAX: (907) 283-3014 www.ci.kenai.ak.us TO: Kenai City Council FROM: Rick Koch, City Manager DATE: August 14, 2013 SUBJECT: Ordinance No. 2790-2014 — Lease of Airport Reserve Property Lot 2, Block 1, GAA The City received the attached lease application from Derek Leichliter, owner of Legacy Electric, for the referenced Airport property located inside the Airport Reserve, Mr. Leichliter wishes to lease the property for a term of 55 years and proposes to construct two T -hangars on the premises. Prior to development, the removal of existing silt and organic waste material will be required, and this requirement is included in the estimated total cost of proposed development. Mr. Leichliter has submitted the applicable filing fee and is in compliance with the City and Borough. Initial review of the application resulted in a joint recommendation for approval of the application and referral for further review and comment to the Airport Commission at its August 14 meeting and the Planning and Zoning Commission at its August 27 meeting. The Airport Commission held a Work Session on July 10 to discuss Airport Leasing Requirements. The Commission recognized that it was in the best interest of the Kenai Municipal Airport to promote development through the application of lease incentives as well as to address current requirements which have not been met by lease applicants and required deviation from the City's Code. A proposed Lease between the City and Legacy Electric will be negotiated, reviewed by the City Attorney, and submitted at the Public Hearing on the referenced Ordinance at the September 3 Council Meeting. cc: Derek Leichliter, Legacy Electric Attachments Page 40 of 133 ADIENDED 8/7/14: ITEM 13b. CITY OF KENAI 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 (907) 283-7535 Ext. 223 LEASE APPLICATION For Land Inside the Kenai Municipal Airport Reserve 1. Name of Applicant Lei ch 1 t 'i -e. r- 2. 2. Business Name LC ca Ci.{ E1 e-cf-rt c FOR CITY USE ONLY Date 41- le - Signature 3. Business Type (circle one) sole orourietor partnership corporation(L.LC. 4. AK Business License No. y /c 0 5. Mailing Address q/,5 /13 �9c,4-)iF,Y ('nit ri" 6. Telephone 51' t/_3%1 7. Email Address ICA ClCUC/ed-r/C(2,k Crwo11,COM .J c/ �j 8. Kenai Peninsula Borough Sales Tax No. (if applicable) ©b l 21, 40,?14/ 9. Land Requested: If platted, give legal description CI 4.:9 - 11V IS - b 2 If not platted, attach a site plan showing the proposed dimensions and location on the Airport.. 10. Proposed Use of the Property (Be specific) T - 1-46ISG P r- i'nnc% A5S8GIG( J 11. Lease Tenn Desired 55 Years 12. If you plan to base or service aircraft on the property, give a. Make, type, & wingspan of the largest aircraft b. Total number of aircraft you expect to be based or serviced on the property at one time 11-/ 13. If you plan to construct improvements or otherwise develop the property: a. Attach a Development Plan (see attached checklist) 2 6-PLEX UNIT b. Describe the building type, construction materials, size, etc. 1181t1Daku np s le,4 7'-- h4t3,e r he -a" c. Construction beginning date -Sfpi . d. Construction completion date (maximum of two years) re b. e. Estimated total cost of the proposed development & improvements $� QDD 14. If you plan to operate a business on the property, attach a business plan (See application instructions). 15. If you would like the City to consider a ditional information relating to your proposal, please put it in writing and submit it with this application. APPLICANT'S SIGNATURE: ) Date: , 7L-hw 21. 2.01 V Printed name: fl r e. K L e i c h I i C Y' Title: n .) n ,-4- 1.= APPLICANT'S SIGNATURE: Printed name: Page 41 of 133 Title: Date: m m v z z KE"AIRPORTTAXI WAY IF ., KENAI T -HANGER PROJECT ( M, !desi s Y92 .dl SCHEMATIC DESIGN 9 nstudios KENAI, W42 of 133 � - v 11 (1) n r r t A E � 04 ofI/ 3 �h 2 (3) d^^O oR, 0 6 0♦ r MAIN STREET LOOP Lot 2, Block 1 GAA SUBD. N01 3 W+E S t 100' ' 1 inch equals 100 feet The information depicted here on is for graphic representation only of the best available source ^p The City of Kenai assumes no responsibility for errors on this map. Date: F 1014 MEMOS "'Village wdh a Past, C# with a Futktre" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 / FAX: (907) 283-3014 www.d.kenai.ak.us Kenai L-T*x AAAwM+EECM t�1�11 2111 I TO: City Council FROM: Rick Koch, City Manager DATE: August 28, 2014 SUBJECT: Ordinance No. 2790-2014 — Lease of Airport Reserve Property Lot 2, Block 1, GAA The attached proposed Lease between the City of Kenai and Legacy Electric, LLC for the referenced Airport property located inside the Airport Reserve deviates from the City's standard Lease Form to allow for reasonable costs for work performed by the Lessee to be applied as a lease credit for a maximum period of five years. This work will result in a permanent improvement to Airport Land, which is in the best interests of the Kenai Municipal Airport. The attached proposed Lease also allows for a 20 -year extension at the Lessee's sole option as long as Lessee is in compliance with all terms and conditions of the Lease, City ordinances, and is current on all City tax liabilities. The Lease also includes a new section (J) under Article XII, Surrender on Termination, which allows for disposition of improvements upon termination similar to State of Alaska rural airport leasing procedures. The Lessee would be able to elect to remove Lessee - owned permanent improvements from the premises, sell the improvements to a succeeding lessee, or request the City sell the improvements at a public auction. The Airport Commission reviewed the Lease Application at its August 14 meeting and the Planning and Zoning Commission at its August 27 meeting. Both commissions unanimously approved a motion to recommend approval by the City Council. The City Attorney has reviewed the attached proposed Lease and has no objection as to form. Should Council pass Ordinance No. 2790-2014, the attached Lease may be executed by the parties. cc: Derek Leichliter, Legacy Electric Attachment Page 44 of 133 KENAI MUNICIPAL AIRPORT LEASE OF AIRPORT RESERVE LANDS THIS LEASE AGREEMENT entered into this day of , 2014, by and between the CITY OF KENAI, ("City") 210 Fidalgo Avenue, Kenai, Alaska 99611-7794, and LEGACY ELECTRIC, LLC. ("Lessee") whose address is 46113 Sather Court, Soldotna, AK 99669. DEFINITIONS For the purposes of this Lease the following terms are defined as follows: 1. Airport - the Kenai Municipal Airport, including all the runways, taxiways, aprons, water lanes, water taxiways, and all City -owned real estate located within the boundaries of the Airport Reserve as defined in KMC 21.05.010-020. 2. Airport Manager — the official to whom the City Manager of the City has delegated the authority and responsibility of managing and directing the activities of the Airport. "Airport Manager" includes that person's authorized representative. City - the City of Kenai, Alaska, a home rule municipal corporation of Alaska. 4. City Manager - the official to whom the Kenai City Council has delegated the responsibility of managing and directing all activities of the City. 5. Contamination - the unpermitted presence of any released Hazardous Substance. 6. Environmental Law - any applicable federal, state, or local statute, law, regulation, ordinance, code, permit, order, decision, judgment of any governmental entity relating to environmental matters, including littering and dumping. FAA — the abbreviation for the Federal Aviation Administration. 8. Hazardous Substance - any substance that is defined under an Environmental Law as hazardous waste, Hazardous Substance, hazardous material, toxic, pollutant, contaminant, petroleum, petroleum product, or oil. LEASE OF AIRPORT LANDS Page 1 of 33 Page 45 of 133 City: Lessee: 9. KMC — the abbreviation for the Kenai Municipal Code. 10. Permanent Improvement - a fixed addition or change to land that is not temporary or portable, including a building, building addition, gravel fill, paving, retaining wall, storage tank, and well. ARTICLE I PREMISES LEASED A. PREMISES: In consideration of Lessee's payment of the rents and performance of all the covenants of this Lease, the City leases to the Lessee, and the Lessee leases from the City, the following described property ("Premises") in the Kenai Recording District, Third Judicial District, State of Alaska and located on the Airport; to wit: Lot 2, Block 1, General Aviation Apron B. NO WARRANTY: Except as may be provided in this Lease, the City makes no specific warranties, expressed or implied, concerning the condition of the Premises including, survey, soils, wetlands, access, and suitability or profitability for any use including those authorized by this Lease, its environmental condition, or the presence or absence of Hazardous Substances in, on, and under the surface. The Lessee takes the Premises on an "as is" basis and without warranty, subject to any and all of the covenants, terms, and conditions affecting the City's title to the Premises. ARTICLE II RIGHTS AND USES A. AUTHORIZED USES USE OF PREMISES: The City authorizes the Lessee to use the Premises for the following purposes only: T -Hangar Heated Complex 2. CONTINUOUS OPERATIONS: Unless the City approves otherwise in writing, the Lessee will operate its business on the Premises on a continuous basis, uninterrupted by any period of closure over 15 consecutive days or 30 aggregate days within any 12 -month period of the term of this lease. The Lessee will give the City written notice before closing the Lessee's business on the Premises for more than 10 consecutive days. The notice must state the reason for the closure LEASE: OF AIRPORT LANDS Page 2 of 33 Page 46 of 133 City: Lessee: not apply to any period during which the Lessee is unable to operate its business as a result of an act or directive of the City, or as a result of a closure of the Airport or loss of the Lessee's buildings on the Premises due to fire or natural disaster or order of public authority. B. RIGHTS RESERVED TO THE CITY. RIGHT TO GRANT TO OTHERS: The City reserves the right to grant to others any rights and privileges not specifically granted to the Lessee on an exclusive basis. The rights and privileges granted to the Lessee in this Lease are the only rights and privileges granted to the Lessee by this Lease. 2. EASEMENTS: The City reserves the right to make grants to third parties or reserve to the City easements or rights of way through, on, or above the Premises. The City will not grant or reserve any easement or right of way that unreasonably interferes with the Lessee's authorized uses of the Premises. 3. INGRESS, EGRESS AND INSPECTION: The City reserves the right of ingress to and egress from the Premises and the right to enter any part of the Premises, including buildings, for the purpose of inspection or environmental testing at any time. Except in the case of an emergency, all inspections and environmental testing will be coordinated with the Lessee to minimize interference with the Lessee's authorized uses of the Premises. 4. RIGHT OF FLIGHT: There is hereby reserved to the City, its successors and assigns, for the use and benefit of the public, a right of flight for the passage of aircraft in the airspace above the surface of the Premises. This public right of flight will include the right to cause in the airspace any noise inherent in the operation of any aircraft used for navigation or flight through the airspace or landing at, taking off from, or operation on the Airport. C. PROHIBITED USES Unless specifically authorized by this Lease or an amendment to this Lease, the following are prohibited: Any use of the Premises other than those authorized in this Lease. 2. Any use of the Premises that is in violation of a City Ordinance or an Airport regulation. LEASE OF AIRPORT LANDS Page 3 of 33 Page 47 of 133 City: Lessee: 3. The outside storage on the Premises of junk, salvage aircraft or vehicle parts, non- operational support equipment, unused or damaged equipment or material, or solid waste or debris unless allowed pursuant to a conditional use permit under KMC 14.20. 4. The disposal on the Premises or the Airport of waste materials generated by the Lessee, including any Hazardous Substance, slash, overburden, and construction waste. 5. The stripping, wasting, or removing any natural material from the Premises without the prior written approval of the City. 6. Erecting structures or allowing growth of natural objects that would constitute an obstruction to air navigation, or allowing any activity on the Premises that would interfere with or be a hazard to the flight of aircraft, or interfere with air navigation or communication facilities, serving the Airport. Any use or activity that is prohibited by applicable law or regulation. ARTICLE III TERM & HOLDOVER A. TERM: The initial term of this Lease is for thirty-five (35) years, beginning the 1st day of September, 2014 and ending on the 30t" day of August, 2049. As long as Lessee is in compliance with all terms and conditions of this Lease (including any amendments), City ordinances, and is current on all City tax liabilities, Lessee may at Lessee's sole option extend the lease for an additional twenty (20) year term. A. HOLDOVER: If the Lessee holds over and remains in possession of the Premises after the expiration, cancellation or termination of this Lease, the holding over will not operate as an extension of the term of this Lease, but only creates a month-to-month tenancy, regardless of any rent payments accepted by the City. The Lessee's obligations for performance under this Lease will continue during the month-to-month tenancy. The City or Lessee may terminate the Lessee's holdover with ten (10) days' advance written notice. ARTICLE IV RENTS AND FEES A. RENT: The reasonable market value of work approved by Lessor and performed by Lessee with regard to clearing and grubbing, unclassified excavation, placement of classified fill LEASE OF AIRPORT LANDS Page 4 of 33 Page 48 of 133 City: Lessee: and utility service extensions on the Premises, shall be applied as a credit against rent owed for a maximum period of five (5) years from the date clearing and grubbing, unclassified excavation, placement of classified fill and utility service extensions are completed. The rent for the Premises is $11,400.00 per year, as established by the City pursuant KMC 21.10.100 and as subject to adjustment under Article V of this Lease, plus applicable sales tax. The rent shall be payable annually in advance of the first day of each year of the term of this Lease. All payments required by this Lease must be made in U.S. dollars. If the annual rent exceeds $2,400, the Lessee may, upon written notice to the City, choose to pay the rent in equal monthly installments, payable in advance on or before the anniversary date of the term of this Lease and thereafter at monthly intervals. No conversion of the payment schedule from annual to monthly shall result in the City receiving less rent than it would have received had the conversion not taken place. B. RENT PRORATED: Rental for any period less than one (1) year shall be prorated on the basis of the rent payable under this Lease in the last full year previous to the prorating. C. ADDITIONAL RENT: In addition to the rent specified in (A) of this Article, Lessee agrees to pay to the appropriate parties all levies, assessments, and charges as follows: 1. Taxes pertaining to the leasehold interest of the Lessee. 2. Sales tax now enforced or levied in the future, computed upon rent payable in monthly installments whether the Lessee pays rent under this Lease on a monthly or annual basis. 3. All taxes and assessments levied in the future by the City, as if Lessee was the legal owner of record of the Premises. 4. Reimbursement for City constructed improvements under Article XV. D. PAYMENTS: The Lessee shall make checks, bank drafts, or postal money orders payable to the City of Kenai and deliver payments to City of Kenai, Finance Department, 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 or any other address the City may designate in writing to the Lessee. E. INTEREST: Beginning the day after payment is due, all unpaid rents, charges, and fees required under this Lease will accrue interest at the rate of eight percent (8.0%) per annum. Interest on disputed amounts will not be charged to the Lessee if the dispute is resolved in the Lessee's favor. F. LATE PAYMENT PENALTY: hi addition to any interest payable under Provision (E) LEASE OF AIRPORT LANDS City: Page 5 of 33 Lessee: Page 49 of 133 of this Article, each time the Lessee fails to pay any rent or fee by the date required in this Lease, the City will charge, and the Lessee shall pay, an administrative penalty of ten percent (10.0%) of the amount due and unpaid. G. COURTESY BILLINGS: Lessee acknowledges that any billing statement issued by the City is provided only as a courtesy. The Lessee is obligated to pay all rents and fees when due, regardless of whether or not the Lessee receives a billing statement from the City. H. LIEN AGAINST LESSEE: Any rent, charge, fee, or other consideration which is due and unpaid at the expiration, termination, or cancellation of this Lease will be a lien against the Lessee's property, real or personal. I. PAYMENT OF CITY'S COSTS: The Lessee will pay all reasonable actual expenses, costs, and attorney fees City may incur, with or without formal action, to enforce, defend, or protect this Lease or City's rights under this Lease, including any expense incurred with respect to environmental compliance, bankruptcy or any proceeding that involves the Lessee, the Lease, the Premises, or improvements or personal property on the Premises. The Lessee will make payment within 30 days of the date of each notice from City of any amounts payable under this provision. J. PAYMENT FOR SPECIAL SERVICES: Lessee agrees to pay the City a reasonable fee for any special services or facilities the City agrees to perform, which the City is not otherwise obligated by this Lease to provide and which the Lessee requests from the City in writing. ARTICLE V ADJUSTMENT OF RENT AND FEES A. RENT OR FEE ADJUSTMENT: At intervals of approximately five (5) years, the City shall, in its sole discretion, adjust the rent or a fee payable by the Lessee under Article IV or other provision of this lease. The first rent adjustment shall be made in 2015. The amount to which the City increases or decreases any rent or fee shall be established in accordance with KMC 21.10.100 and 21.10.160. Any rent change by the City shall be based on the fair market value of: The Premises in its condition on the term beginning date stated in Article III or in the case of a lease renewal or extension, the beginning date for the original lease; plus 2. Any improvements made by the City subsequent to that date, the cost of which is not reimbursed by the Lessee. LEASE OF AIRPORT LANDS Page 6 of 33 Page 50 of 133 City: Lessee: No rent or fee change shall be effective until 30 days after the date of the City's written notice to the Lessee. If the Lessee believes that any changed rent exceeds the fair market rent for the Premises, the Lessee may appeal the rent change to the City under KMC 21.10.160. B. CITY -CONSTRUCTED IMPROVEMENTS: Improvements constructed by the City on, or in connection with, the Premises shall not be considered a part of the Premises for the purpose of establishing the rent under (a) of this Article, if the Lessee, as a condition of this lease, reimburses the City for the City's construction costs pursuant to KMC 21.10.110. ARTICLE VI ASSIGNMENT & SUBLETTING A. INVALID WITHOUT CITY'S CONSENT: The Lessee may not assign, sublet, or grant a security interest in, by grant or implication, the whole or any part of this Lease, the Premises, or any improvement on the Premises without the written consent of the City. Any proposed assignment, sublease, or security interest must be written and must be submitted to the City bearing the original, notarized signature of all parties. The Lessee may submit unsigned draft documents for the City's conceptual review. However, the City's conceptual approval of a draft document may not be construed as the City's consent to any assignment, sublease, or security interest. All provisions in this Lease extend to and bind the assignees and sublessees of the Lessee. B. NO WAIVER OF CONSENT: The City's consent to one assignment, sublease, or security interest will not waive the requirement for the Lessee to obtain the City's consent to any other assignment, sublease, or security interest. C. ASSIGNEE / LESSEE OBLIGATIONS: An assignment must include a provision stating that the assignee accepts responsibility for all of the assignor's (Lessee's) obligations tinder this Lease, including environmental liability and responsibility. However, unless the City specifically releases the Lessee in writing, the City may hold the Lessee responsible for performing any obligation under this lease which an assignee fails to perform. D. OCCUPANCY BEFORE CITY CONSENT: An assignee or sublessee may not occupy the Premises before the City consents to the assignment or sublease in writing. E. CONFLICT OF PROVISIONS: In the event of a conflict between this Lease and an assignment or a sublease, the terms of this Lease control. F. LESSEE NOT RELIEVED OF OBLIGATIONS: The City's consent to any sublease does not relieve or otherwise alter the Lessee's obligations under this Lease. LEASE OF AIRPORT LANDS Page 7 of 33 Page 51 of 133 City: Lessee: G. SECURITY ASSIGNMENTS AND FINANCING: Subject to the requirements of (A) of this Article VI, the Lessee may assign a security interest in this Lease. The security interest may be in the form of a mortgage, deed of trust, assignment or other appropriate instrument, provided: a. the security interest pertains only to the Lessee's leasehold interest; b. the security interest does not pertain to or create any interest in City's title to the Premises; and C. the documents providing for the security interest are acceptable to the City. 2. If the assignment of a security interest to which the City has consented shall be held by an established lending or financial institution, including a bank, an established insurance company and qualified pension or profit sharing trust, and the lending institution acquires the Lessee's interest in this Lease as a result of a foreclosure action or other remedy of the secured party, or through any transfer in lieu of foreclosure, or through settlement of or arising out of any pending or contemplated foreclosure action, the lending institution may transfer its interest in this Lease to a nominee or a wholly owned subsidiary corporation with the prior written consent of the City, provided, the transferee assumes all of the covenants and conditions required to be performed by the Lessee (including payment of any monies owed by Lessee to the City under the lease). In the event of such a transfer, the lending institution shall be relieved of any further liability under this Lessee. A holder of a security interest in this Lease consented to by the City shall have, and be subrogated to, any and all rights of the Lessee with respect to the curing of any default of this Lease by Lessee. 4. If, before any default has occurred in the Lease, the holder of a security interest in this Lease consented to by the City gives the City a written notice of the holder's post office address, the City shall thereafter a. by regular U.S. mail, send to the holder a copy of each notice of default at the same time as the City gives notice of default to the Lessee; and LEASE OF AIRPORT LANDS Page 8 of 33 Page 52 of 133 City: Lessee: b not accept any surrender or enter into any modification of this Lease without the prior written consent of the holder, which the holder shall not unreasonably delay or withhold.. 5. The City will enter into a new lease of the Premises with the holder of a security interest consented to by the City, if the City terminates this Lease prior to its normal expiration due to a default by the Lessee. The new lease shall be for the remainder of the term of this Lease and shall be effective as of the termination of this Lease. The City's grant of the new lease shall be subject to the following conditions: a. the new lease shall be effective on the date this Lease is terminated; b. the new lease shall be for the same rent, additional rent, and covenants as this Lease; C. By no later than the twentieth (20"i) day following the termination of this Lease, the security holder must submit a written request to the City for the new lease, together with payment of all rent, additional rent and other sums then due to the City under this Lease. d. The security holder shall pay to the City, at the time of the execution and delivery of such new lease any and all sums due thereunder in addition to those which would at the time of the execution and delivery thereof be due under this Lease but for such termination, and in addition thereto, any reasonable expenses, including legal and attorneys' fees, to which the City shall have been subjected by reason of such default. e. The security holder shall, on or before the execution of the new lease, perform all the other obligations of the Lessee under this Lease to the extent the Lessee failed to perform them prior to the termination of this Lease. 6. A holder of a security interest consented to by the City that takes possession of this Lease or enters into a new lease with the City shall not be released from the obligations and liabilities of this Lease or the new lease unless the holder assigns its leasehold estate to an assignee who is financially capable and otherwise qualified to undertake to perform and observe the conditions of this Lease or the new lease and.the City consents to the assignment. The City's consent will not be unreasonably withheld. If the security holder asserts that the City is unreasonably LEASE OF AIRPORT LANDS Page 9 of 33 Page 53 of 133 City: Lessee: withholding its consent to a proposed assignment, the dispute shall be resolved by arbitration. ARTICLE VII MAINTENANCE, SNOW REMOVAL & UTILITIES A. MAINTENANCE At no cost to the City, the Lessee will keep the Premises and all improvements on the Premises clean, neat and presentable, as reasonably determined by the City. 2. At no cost to the City, the Lessee will provide for all maintenance and services at the Premises as may be necessary to facilitate the Lessee's compliance with this Lease and the Lessee's use of the Premises. 3. The Lessee shall comply with all regulations or ordinances of the City that are promulgated for the promotion of sanitation. At no cost to the City, the Lessee shall keep the Premises in a clean and sanitary condition, and control activities on the Premises to prevent the pollution of water. 4. The Lessee agrees to comply with all decisions and directions of the City's Airport Manager regarding maintenance and operation of the Airport, and the use of the Airport by the Lessee. B. SNOW REMOVAL 1. At no cost to the City, the Lessee is responsible for snow removal on the Premises. The Lessee shall dispose of snow in an off -Premises location approved in writing by the City or provide suitable snow storage within the boundaries of the Premises in accordance with all applicable federal and state laws. At the request of the Airport Manager, the Lessee shall submit a snow removal plan for the Premises to the Manager for review. Upon approval of the Lessee's plan by the Airport Manager, the Lessee shall conduct all snow removal operations on the Premises in accordance with the approved plan. 2. Lessee shall not deposit snow on an apron, taxiway, safety area, or other aircraft - maneuvering surface provided for common use by others without the prior written approval of the Airport Manager. LEASE Of AIRPORT LANDS Page 10 of 33 Page 54 of 133 City: Lessee: 3. Lessee agrees to not allow an accumulation of snow on the Premises that would cause interference with adjoining leaseholders or other users of the Airport. C. UTILITIES. Unless specifically provided otherwise in this Lease, the Lessee shall, at no cost to the City, provide for all utilities at the Premises necessary to facilitate the Lessee's use of the Premises. ARTICLE VIII OPERATIONS A. OPERATIONS ON THE AIRPORT: The Lessee will ensure that the Lessee, its employees, guests, contractors, sublessees, and vendors that perform any activity or function authorized under this Lease shall do so in a manner that ensures the safety of people, the protection of public health and the environment, and the safety and integrity of the Airport and the Premises. B. LESSEE'S CONTROL AND RESPONSIBILITY The Lessee will assume full control and sole responsibility as between Lessee and City for the activities of the Lessee, the Lessee's personnel and employees, and anyone else acting by, on behalf of, or under the authority of the Lessee on the Airport, including the Premises. 2. The Lessee will immediately notify the City of any condition, problem, malfunction or other occurrence that threatens the safety of people or the Airport, harm to public health or the environment, or the safety or integrity of the Premises. C. RADIO INTERFERENCE: The Lessee will discontinue the use of any machine or device that interferes with any government -operated transmitter, receiver, or navigation aid until the cause of the interference is eliminated. D. WILDLIFE: The Lessee acknowledges that a concentration of birds or other wildlife on an airport constitutes a significant hazard to aircraft operations. The Lessee agrees to keep the Premises clean of fish slime, fish waste, or any other material that might attract birds or other wildlife. The Lessee accepts full responsibility to maintain the Premises, control operations, and take all reasonable measures to prevent a concentration of birds or other wildlife on the Premises. E. PARKING: The Lessee will provide adequate vehicle, equipment, and aircraft parking space on the Premises for Lessee's business or activities, or confine parking to such other places LEASE OF AIRPORT LANDS Page I I of 33 Page 55 of 133 City: Lessee: on the Airport as may be approved or designated in writing by the Airport Manager. ARTICLE IX ENVIRONMENTAL PROVISIONS A. HAZARDOUS SUBSTANCE The Lessee will conduct it business and/or operation on the Premises in compliance with all environmental laws and permits. If hazardous substances are handled on the Premises, the Lessee agrees to have properly trained personnel and adequate procedures for safely storing, dispensing, and otherwise handling Hazardous Substances in accordance with all applicable federal, state and local laws. 2. Lessee will promptly give the City notice of proceeding to abate or settle matters relating to the presence of a Hazardous Substance on the Premises or from Lessee's operations on the Airport. The Lessee will allow the City to participate in any such proceedings. B. ENVIRONMENTAL INDEMNIFICATION If Contamination of the Premises or other property by a Hazardous Substance occurs from the Lessee's operations on the Premises the Lessee will indemnify, defend, and (told the City harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses, including, but not limited to, sums paid in settlement of claims, attorney's fees, consultant fees, and expert fees, which arise during or after the term of this Lease as a result of such Contamination. This indemnification of the City by Lessee includes, but is not limited to, costs incurred in connection with any investigation of site conditions or any cleanup, remediation, removal, or restorative work required by any federal, state, or local governmental agency because of a Hazardous Substance being present in the soil or groundwater or under the Premises or other properties affected by the Contamination. C. REMEDIATION In the event of a Hazardous Substance spill on the Premises, the Lessee will immediately notify the City and the Alaska Department of Environmental Conversation and act, promptly, at its sole expense, to contain the spill, repair, any damage, absorb and clean up the spill area, and restore the Premises to a condition satisfactory to the City and otherwise comply with the applicable portions of any environmental law. LEASE OF AIRPORT LANDS Page 12 of 33 Page 56 of 133 City: Lessee: 2. In addition to any notices required by this Lease, the Lessee will immediately notify and copy the City in writing of any of the following: A. Any permit, enforcement, clean up, lien, removal or other governmental or regulatory action instituted, completed, or threatened pursuant to an Environmental Law. B. Any claim made or threatened by any person against the Lessee or arising from the Lessee's operations authorized by this Lease, relating to damage, contribution, compensation, loss or injury resulting, from, or claimed to result from any Hazardous Substances in, on, or under the Airport; or C. Any report made by, or on behalf of, the Lessee to any environmental agency arising out of or in connection with any Hazardous Substances in, on, or removed from the Premises, including any complaints, notices, warnings, or asserted violations. 3. Remediation and restoration of the contaminated area must meet all applicable state and federal regulations and must meet the requirements of all governing regulatory authorities. D. ENVIRONMENTAL AUDIT The Lessee will provide the City with all investigative data, test results, reports , and any other information gathered or analyzed as part of or in relation to any Environmental Assessment, characterization or audit on the Premises or the Airport that Lessee performs or causes to be performed after the starting date of this Lease. The Lessee will submit the data, result, report or information to the City within 60 days following the date on which it becomes available to the Lessee. E. RELEASE OF LESSEE The City releases the Lessee from liability to the City for Contamination and the presence of Hazardous Substances that existed prior to the commencement date of this lease unless caused or materially contributed to by the Lessee. F. SURVIVAL OF OBLIGATIONS The obligations and duties of the City and Lessee under Article IX of this lease shall survive the cancellation, termination or expiration of this lease. LEASE OF AIRPORT LANDS Page 13 of 33 Page 57 of 133 Cite: Lessee: ARTICLE X INDEMNIFICATION & INSURANCE A. INDEMNIFICATION The Lessee will indemnify, save harmless, and defend the City, its officers, agents, and employees from and against any and all liabilities, losses, suits, administrative actions, claims, awards, judgments, fines, demands, damages, injunctive relief or penalties of any nature or kind to the full extent of the loss or obligation for property damage, personal injury, death, violation of any regulation or grant agreement, or any other injury or harm resulting from or arising out of any acts or commission of or omission by the Lessee, his agents, employees, customers, invitees or arising out of the Lessee's occupation or use of the premises demised or privileges granted, and to pay all costs connected therewith. This indemnification of the City by the Lessee shall include sums paid in settlement of claims, attorney fees, consultant fees, expert fees, or other costs and expenses, directly or indirectly arising from, connected to or on account of this Lease as it relates to the Lessee, the Lessee's activities at or relating to the Airport, or any act or omission by the Lessee, or by any of its officers, employees, agents, contractors or sublessees. These indemnity obligations are in addition to, and not limited by, the Lessee's obligation to provide insurance, and shall survive the expiration or earlier termination of this Lease. 2. The Lessee shall give the City prompt notice of any suit, claim, action or other matter affecting the City to which Paragraph 1, above, may apply, together with a copy of any letter by an attorney on behalf of a complainant, any complaint filed in court, and any notice or complaint by any regulatory agency. The City shall have the right, at its option, to participate cooperatively in the defense of, and settlement negotiations regarding, any such matter, without relieving the Lessee of any of its obligations under this provision. As to any amount paid to others for personal injury or property damage with respect to which an act or omission of the City is a legal cause, notwithstanding Paragraph 1 of this section, the Lessee and the City shall reimburse each other according to the principles of comparative fault. If liability to a third party is subject to apportionment according to comparative fault under this provision; the Lessee and the City shall seek in good faith to achieve non judicial agreement as to apportiomnent of fault as between themselves. This apportionment of liability between the City and the Lessee shall not be construed to affect the rights of any person who is not a party to this Lease. LEASE OF AIRPORT LANDS Page 14 of 33 Page 58 of 133 City: Lessee: B. INSURANCE: At no expense to the City, the Lessee will obtain and keep in force during the term of this Lease, insurance of the type and limits required by this provision. Where specific limits are set, they will be the minimum acceptable limits. If the Lessee's policy contains higher limits, the City will be entitled to coverage to the extent of the higher limits. At the time insurance is obtained by the Lessee, all insurance shall be by a company/corporation rated "A-" or better by A.M. Best. The following policies of insurance are required with the following minimum amounts: Commercial General Liability, including Premises, all operations, property damage, products and completed operations, and personal injury and death, broad -form contractual, with a per -occurrence limit of not less than $1,000,000 combined single limit. If this lease authorizes the Lessee to engage in the sale or the commercial dispensing or storage of aviation fuel, the policy must not exclude of the Lessee's fuel handling activities. This policy must name the City as an additional insured. 2. Commercial Automobile Coverage with not less than $1,000,000 combined single limit per occurrence. This insurance must cover all owned, hired, and non -owned motor vehicles used by the Lessee. Workers Compensation Insurance. The Lessee will provide and maintain, for all employees, coverage as required under AS 23.30.045, and, where applicable, any other statutory obligations. The policy must waive subrogation against the City. 4. The Lessee will provide the City with proof of insurance coverage in the form of an insurance policy or a certificate of insurance, together with proof that the premiums have been paid, showing the types and monetary limits of coverage secured. All insurance required by this provision must provide that the City be notified at least 30 days prior to any termination, cancellation, or material change in the insurance coverage. If the Lessee's insurance coverage lapses or is cancelled, Lessee will immediately, upon written notice by the City, halt all operations on the Airport, including the Premises. The Lessee will not resume operations until the City receives evidence that the Lessee has obtained current insurance coverage meeting the requirements of this Lease. 6. The City may, at intervals of not less than five years from the beginning date of the tern of this Lease and upon written notice to Lessee, revise the insurance requirements required under this Lease. City's determination to LEASE Of AIRPORT LANDS Page 15 of 33 Page 59 of 133 City: Lessee: revise the insurance requirements will be based on the risks relative to the Lessee's operations, any insurance guidelines adopted by the City, and any change in applicable law. If the Lessee subleases all or any portion of the Premises under the provisions of this Lease, the Lessee will require the sublessee to provide to the insurance coverage required of the Lessee under this Article X. ARTICLE XI LAWS & TAXES A. COMPLIANCE WITH LAW: Lessee shall comply with all applicable laws, ordinances, and regulations of public authorities now or hereafter in any manner affecting the Airport, the Premises or the sidewalks, alleys, streets, and ways adjacent to the Premises, or any buildings, structures, fixtures and improvements or the use thereof, whether or not any such laws, ordinances, and regulations which may be hereafter enacted involve a change of policy on the part of the governmental body enacting the same. Lessee agrees to hold City financially harmless: 1.. From the consequences of any violation of such laws, ordinances, and/or regulations; and 2. From all claims for damages on account of injuries, death, or property damage resulting from such violation. B. UNLAWFUL ACTIVITY: The Lessee shall not permit any unlawful use, occupation, business. or trade to be conducted on the Premises contrary to any law, ordinance, or regulation, including zoning ordinances, rules and regulations. C. LICENSES AND PERMITS: The Lessee will obtain all necessary licenses and permits, pay all taxes and special assessments lawfully imposed upon the Premises, and pay other fees and charges assessed under applicable law. Nothing in this Lease prevents the Lessee from challenging any taxes or special assessments to the appropriate authority. D. LITIGATION: The KMC, including regulations promulgated thereunder, and the laws of the State of Alaska will govern in any dispute between the Lessee and City. If a dispute continues atter exhaustion of administration remedies, any lawsuit must be brought in the courts of the State of Alaska, in Kenai, Alaska. LEASE OF AIRPORT LANDS Page 16 of 33 Page 60 of 133 City: Lessee: E. LESSEE TO PAY TAXES: Lessee shall pay all lawful taxes and assessments which, during the term of this Lease may become a lien upon or which may be levied by the State, Borough, City, or any other tax levying body, upon any taxable possessory right which Lessee may have in or to the Premises or improvements on the Premises by reason of its use or occupancy or the terms of this Lease provided, however, that nothing in this provision shall prevent Lessee from contesting any increase in a tax or assessment under any applicable law, ordinance, or regulation. F. PARTIAL INVALIDITY: If any term, provision, condition, or part of this Lease is declared by a court of competent jurisdiction to be invalid or unconstitutional, the remaining terms, provisions, conditions, or parts shall continue in full force and effect as though the declaration had not been made. ARTICLE XII LEASE TERMINATION A. CANCELLATION: The City may, after 30 days' written notice to the Lessee, cancel this Lease and recover possession of the Premises if any of the following violations occur, unless the violation is cured within the 30 days: 1. The Lessee fails to pay when due the rents, additional rents, charges, or other sums specified in this Lease, including any increases made under this Lease. 2. The Lessee's check for payment of any sum due under this Lease is returned for insufficient funds. 3. The Lessee uses or authorizes the use of the Premises for any purpose not authorized by this Lease. 4. The Lessee fails to fully perform and comply with any provision in this Lease. 5. The court enters a judgment of insolvency against the Lessee. 6. A trustee or receiver is appointed for the Lessee's assets in a proceeding brought by or against the Lessee, or the Lessee files a voluntary petition in bankruptcy. Failure by the Lessee to comply with any land development or permanent improvement construction required by this Lease. B. ENTRY AND RE-ENTRY: In the event that the Lease should be terminated in accordance with this Article XII, or by summary proceedings or otherwise, or upon the Lessee's LEASE OF AIRPORT LANDS Page 17 of 33 Page 61 of 133 City: Lessee: abandonment of the Premises or a portion of the Premises, the City or its agents, servants, or representatives may, immediately or any time thereafter, re-enter, and resume possession of the Premises or portion thereof, and remove all persons and property therefrom, without being liable for any damages therefore. No re-entry by the City shall be deemed an acceptance of a surrender of the Lease. C. CONTINUING OBLIGATIONS UNTIL PREMISES VACATED: The Lessee will continue to pay City rent after the expiration, termination, or cancellation of this lease and to abide by the lease obligations, including providing proof of insurance coverage, through the date Lessee relinquishes possession of and completely vacates the Premises. City will consider the Premises completely vacated if the Lessee has; Remediated any environmental contamination for which the Lessee is responsible; and 2. Restored the Premises to a neat and clean physical condition acceptable to the City. D. REASONABLE CURE In the case of a violation that cannot be reasonably cured within 30 days, a notice of cancellation issued by the City to the Lessee under this Article is stayed if, within the 30 -day notice period, the Lessee begins and continues expeditious action to cure the violation. The City will determine if a violation cannot be reasonably cured within 30 days and what constitutes expeditious action. 2. In the case where, in City's sole determination, Lessee's violation is considered an imminent threat to the airport, public health or safety, or the environment, City will direct the Lessee to stop the activity immediately and may reduce the period to cure the violation, or the City may correct the violation pursuant to (E) of this Article. E. RIGHT OF CITY TO PERFORM: If, after 30 days following notice the Lessee fails or refuses to perform any action required by this Lease, the City will have the right, but not the obligation, to perform any or all such actions required by this Lease at the sole expense of the Lessee. The City will not take action if the Lessee begins and continues expeditious action to perform any action required by this Lease that cannot be reasonably completed within 30 days. The City will, at its sole discretion, determine what constitutes expeditious action and if an action cannot be LEASE OF AIRPORT LANDS Page IS of 33 Page 62 of 133 City: Lessee: reasonably performed in 30 days. The City will submit to the Lessee an invoice for the expenses incurred by the City in the performance by the City of any required action. The Lessee will pay the amount of each invoice within 30 days from issuance. 2. If Lessee fails or refuses to perform any action that has been deemed an imminent threat the City will have the right, but not the obligation, to perform any or all such actions required to expeditiously correct the imminent threat. Lessee shall reimburse the City for any cost, including legal fees and administrative costs reasonably incurred by the City in acting to correct the imminent threat violation. F. WAIVER: A waiver by the City of any default by the Lessee of any provision of this Lease will not operate as a waiver of any subsequent default. If the City waives a default, the City is not required to provide notice to the Lessee to restore or revive any term or condition under this Lease. The waiver by the City of any provision in this Lease cannot be enforced or relied upon unless the waiver is in writing and signed on behalf of the City. The City's failure to insist upon the strict performance by the Lessee of any provision in this Lease is not a waiver or relinquishment for the future, and the provision will continue in full force. G. AIRPORT CLOSURE: If the City closes the airport to aircraft operations for sixty (60) days or less, this Lease will remain in full force and effect without adjustment 2. If the City closes the Airport to aircraft operations for more than sixty (60) days, but not permanently, and this Lease is for aviation or direct aviation support uses, the Lessee may, upon written notice to the City, either terminate the Lease or retain the Lease and receive a fifty (50%) percent rent reduction or credit for that portion of the closure that exceeds 60 days. 3. if the City permanently closes the Airport to aircraft operations and (a) this Lease is for aviation or direct aviation support uses, the Lessee may terminate this agreement by written notice to the City; or (b) this Lease is for non -aviation uses, the Lessee may request in writing to have the Lease terminated. The City will consider the Lessee's request in light of the City's best interest and either terminate the Lease, or deny the Lessee's request in writing. LEASE OF AIRPORT LANDS Page 19 of 33 t Page 63 of 133 City: Lessee: H. DISASTERS The Lessee or City may cancel this lease upon written notice to the other party if; the Premises becomes unusable through no fault of either party and performance under this lease becomes impossible; or 2. the Airport becomes unusable through no fault of either party and the performance under this lease becomes impossible. If the Lessee elects in writing that it will continue to operate after notice from City to Lessee that the Airport has become unusable, the Lessee's obligations under the Lease will continue, but City shall be under no obligation to continue to perform. Causes for termination of the lease under this provision (H) include acts of God, the public enemy, and the United States. I. NATIONAL EMERGENCY: if the federal government declares a national emergency, neither party may hold the other liable for any inability to perform any part of this Lease as a result of the national emergency. J. SURRENDER ON TERMINATION: Except as provided otherwise in this Article X11, Lessee shall, on the last day of the term of this Lease (including any extension or renewal thereof) or upon any earlier termination of this Lease, surrender and deliver up the premises into the possession and use of City without fraud or delay in good order, condition, and repair, except for reasonable wear and tear since the last necessary repair, replacement, restoration or renewal, free and clear of all lettings and occupancies unless expressly permitted by the City in writing, and free and clear of all liens and encumbrances other than those created by and for loans to City. K. Disposition of Improvements Upon Termination. (a) Permanent improvements constructed by Lessee, excluding site development materials and utility lines and connection are the Lessee's property, subject to the terms and provisions of this Lease, as long as Lease remains in effect. (b) Upon, expiration, cancellation or termination of this lease the Lesssee may elect to do one or more of the following: (1) Remove Lessee owned permanent improvements from the premises, remediate any damage, and restore the premises to a clean and neat physical condition acceptable to City within 60 days of termination of the lease. (2) Sell Lessee owned improvements to succeeding lessee, if any, and remediate any damage, and restore the premises to a clean and neat physical condition acceptable to LEASE OF AIRPORT LANDS Page 20 of 33 Page 64 of 133 City: Lessee: City within 60 days of termination of the lease. (3) Request the City sell Lessee -owned permanent improvements at a public auction and remediate any damage, and restore the premises to a clean and neat physical condition acceptable to City within sixty (60) days of termination of the lease. The City will not unreasonably deny such a request and will pay the Lessee any proceeds of the sale less the administrative costs of the public auction and any financial obligation the Lessee owes the City under the Lease. If all or a portion of the lessee owned permanent improvements do not sell at public auction, the Lessee shall, within sixty (60) days of the public auction, remove those permanent improvements days and remediate any damage, and restore the premises to a clean and neat physical condition acceptable to City. ARTICLE XIII GENERAL COVENANTS A. USE OF THE AIRPORT: Except as provided herein, any regular use of Airport lands or facilities without the written consent of the City is prohibited. This prohibition shall not apply to use of areas designated by the City for specified public uses, such as passenger terminals, automobile parking areas, and streets. B. COSTS AND EXPENSES: Costs and expenses incident to this lease, including but not limited to recording costs, shall be paid by Lessee. C. CARE OF THE PREMISES: The Lessee shall keep the Premises clean and in good order at the Lessee's own expense, allowing no damage, waste, nor destruction thereof, nor removing any material therefrom, without written permission of the City. At the expiration of the term fixed, or any earlier termination of the Lease, the Lessee will peaceably and quietly quit and surrender the premises to the City. D. CONSTRUCTION APPROVAL AND STANDARDS: Any building construction on the Premises by the Lessee must be compatible with its surroundings and consistent with the uses authorized under this Lease, as determined by the City. The Lessee must obtain the City's written approval before placing fill material, beginning any land development, or constructing or demolishing any improvements on the Premises, and before beginning any alterations, modifications, or renovation of existing structures on the Premises. The Lessee must submit to the City detailed drawings of the proposed development, alteration, modification, or renovation, together with specifications or any other information the City reasonably requires. Further, the Lessee will submit to City evidence of the Lessee's compliance with Federal Aviation Administration regulation 14 CFR Part 77. LEASE OF AIRPORT LANDS Page 21 of 33 Page 65 of 133 City: Lessee: E. LEASE SUBORDINATE TO AIRPORT FINANCING REQUIREMENTS: Lessee agrees that City may modify this Lease to meet revised requirements for Federal or State grants, or to conform to the requirements of any revenue bond covenant. However, the modification shall not act to reduce the rights or privileges granted the Lessee by this Lease, nor act to cause the Lessee financial loss. F. RIGHT TO ENJOYMENT AND PEACEABLE POSSESSION: City hereby agrees and covenants that the Lessee, upon paying rent and performing other covenants, terms, and conditions of this Lease, shall have the right to quietly and peacefully hold, use, occupy, and enjoy the Premises, except that the following shall not construed as a denial of the right of quiet or peaceable possession: Any inconvenience caused by public works projects in or about the Premises; and 2. Any other entries by the City on the Premises reserved or authorized under other provisions of this Lease. G. NO PARTNERSHIP OR JOINT VENTURE CREATED: It is expressly understood that the City shall not be construed or held to be a partner or joint venture of Lessee in the conduct of the Lessee's activities or business on the Premises. The relationship between the City and the Lessee is, and shall at all times remain, strictly that of landlord and tenant, respectively. H. DISCRIMINATION: The Lessee will not discriminate on the grounds of race, color, religion, national origin, ancestry, age, or sex against any patron, employee, applicant for employment, or other person or group of persons in any manner prohibited by federal or state law. The Lessee recognizes the right of the City to take any action necessary to enforce this provision, including actions required pursuant to any federal or state law. I. AFFIRMATIVE ACTION: If required by 14 CFR Part 152, subpart E, the Lessee will undertake an affirmative action program to insure that no person will be excluded from participating in any employment activities offered by the Lessee on the grounds of race, creed, color, national origin, or sex. No person may be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by subpart E. The Lessee further agrees that it will require its suborganization(s) provide assurance to the City to the same effect that they wilt also undertake affirmative action programs and require assurances from their suborganization(s) as required by 14 CFR, Part 152, subpart E. Tenant shall use the premises in compliance with all other requirements imposed by or pursuant to title 49, code of Federal Regulations, DOT, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally -Assisted programs of the Department of Transportation - Effectuation of Title VI of the Civil Rights Act of 1964, and as the Regulation may be amended. LEASE OF AIRPORT LANDS Page 22 of 33 Page 66 of 133 City: Lessee: J. INTEGRATION, MERGER, AND MODIFICATION: This Lease sets out all the terms, conditions, and agreements of the parties and supersedes any previous understandings or agreements regarding the Premises whether oral or written. No modification or amendment of this Lease is effective unless in writing and signed on behalf of the City and the Lessee. K. RIGHT TO ADOPT RULES: City reserves the right to adopt, amend, and enforce reasonable rules and regulations governing the Airport, including the Premises. The City shall not be liable to Lessee for any diminution or deprivation of possession, or of Lessee's rights under this Lease, on account of the exercise of the City's authority reserved under this provision. Furthermore, the Lessee shall not be entitled to terminate the whole or any portion of the leasehold estate created under this Lease, by reason of the exercise of the City's authority reserved under this provision, unless the exercise thereof so interferes with Lessee's use and occupancy of the Premises as to constitute a termination, in whole or in part, of this Lease by operation of law under the laws of the State of Alaska and of the United States made applicable to the states. L. LESSEE'S OBLIGATION TO PREVENT AND REMOVE LIENS: Lessee will not permit any liens including, but not limited to, mechanics', laborers', or materialmen's liens obtainable or available under the then existing laws, to stand against the Premises or improvements on the Premises for any labor or material furnished to Lessee or claimed to have been furnished to Lessee or to the Lessee's agents, contractors, or sublessees, in connection with work of any character performed or claimed to have been performed on the Premises or improvements by or at the direction or sufferance of Lessee. Provided, however, the Lessee shall have the right to provide a bond as contemplated by Alaska law and contest the validity or amount of any such lien or claimed lien. Upon a final determination of the lien or claim for lien, the Lessee will immediately pay any judgment rendered with all proper costs and charges and shall have such lien released or judgment satisfied at Lessee's own expense. M. CONDEMNATION: In the event the Premises or any part thereof shall be condemned and taken for a public or a quasi -public use, then upon payment of any award or compensation arising from the condemnation or taking, the City and the Lessee shall make a good faith effort to agree upon 1. the division of the proceeds; 2. the abatement in rent payable during the term or any extension of the term of this Lease; and 3. other adjustments as the parties may agree upon as being just and equitable under all the circumstances. LEASE OF AIRPORT LANDS Page 23 of 33 Page 67 of 133 City: Lessee: If, within thirty (30) days after the award has been paid into Court, the City and Lessee are unable to agree upon what division, abatement in rent, and other adjustments as are just and equitable, the dispute shall be determined by arbitration. N. SUCCESSORS IN INTEREST: This Lease shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto, subject to such specific limitations on assignment as are provided for in this Lease. O. NOTICES: I. Any notices required by this Lease must be in writing and must be delivered personally or mailed by certified or registered mail in a prepaid envelope. A mailed notice a. must be addressed to the respective party at the address written on the first page of this Lease or to the latest address designated in accordance with (2) of this Provision (0); and b. shall be deemed delivered on the date it is deposited in a U.S. general or branch post office. 2. The City or the Lessee may, from time to time, designate a new address at which they will receive notices by providing the other party with written notice at least 15 days prior to the effective date of the change. An address change notice must be delivered according to the procedure set out in (1) of this Provision (0). P. RETENTION OF RENTAL: In the event the City terminates this Lease because of any breach by the Lessee, the City shall retain any unused balance of the rental payment last made by the Lessee City as partial or total liquidated damages for the breach. Q. FIRE PROTECTION: The Lessee will take all reasonable precautions to prevent, and take all necessary action to suppress destructive or uncontrolled fires and comply with all laws, regulations, and rules promulgated and enforced by the City for fire protection on the Airport. R. PERSONAL USE OF MATERIALS: No interest in coal, oil, gas or any other mineral, or in any deposit of stone or gravel valuable for extraction or utilization is included in the Premises or in the rights granted by this lease.. The Lessee shall not sell or remove from the Premises for use elsewhere any timber, stone, gravel, peat moss, topsoil or any other material valuable for building or commercial purposes. LEASE OF AIRPORT LANDS Page 24 of 33 Page 68 of 133 City: Lessee: S. APPROVAL OF OTHER AUTHORITIES: The granting of this lease by the City does not relieve the Lessee of the responsibility to obtain any license or permit as may be required by federal, state, or local law. T. EXECUTION BY THE PARTIES: This Lease is of no effect unless signed by the Lessee, or a duly authorized representative of Lessee, and an authorized representative of the City. U. CAPTIONS: The captions of the provisions of this Lease are for convenience only and do not necessarily define, limit, describe, or construe the contents of any provision. V. RIGHTS OF CONSTRUCTION: This Lease is intended to make public property available for private use, while at all times protecting the public interest to the greatest extent possible. Following the rule that transfers of interest in public property are to be strictly construed in favor of the public property landlord, all rights granted to the Lessee under this Lease will be strictly construed, and all rights of the City and the protections of the public interest will be liberally construed. W. LESSEE ACKNOWLEDGEMENT: The Lessee acknowledges that the Lessee has read this Lease and fully understands its terms, that the Lessee has been fully advised or has had the opportunity of advice by separate legal counsel, and voluntarily executes this Lease. Lessee also acknowledges and agrees that the rule of interpretation under which a document is construed against the drafter will not apply to this Lease. X. APPROVAL BY LESSOR: Any approval required of the Lessor by this Lease will not be unreasonably withheld. The Lessor's approval does not waive the Lessee's legal responsibility or liability to comply with all applicable federal and state laws and regulations. ARTICLE XIV SURVEY, IMPROVEMENTS AND PERFORMANCE BOND A. SURVEY: The Lessee is solely responsible, at its sole expense, to confine or establish the physical location of the boundaries of the Premises prior to beginning any construction thereon, including clearing grubbing, back -filling and environmental sampling. Any survey of the Premises shall be performed by a Land Surveyor registered in the State of Alaska. The Lessee shall furnish the City with a copy of the plat of any survey performed on the Premises by, or on behalf of, tate Lessee. B. IMPROVEMENTS. LEASE OF AIRPORT LANDS Page 25 of 33 Page 69 of 133 City: Lessee: REQUIRED IMPROVEMENTS: At no cost to the City, Lessee agrees to complete land development and construction of Permanent Improvements including removal of waste material previously buried on the site and construct two 2 6-plex unit t -hangar heated complex, by no later than September 1, 2016 with an appraised value of at least $500,000.00. In addition to the as -built drawings required by this Lease, the Lessee must submit to the City written evidence that the Lessee has completed the land development and constructed improvements on the Premises with an aggregate cost or investment of not less than $500,000.00. The evidence of cost must be submitted to the City within sixty (60) days of the completion of the development and improvements, but by no later than September 1, 2016. a. Costs considered toward the aggregate cost of permanent improvements include building construction, design, labor, materials, materials shipping, permits, equipment, soil testing, environmental baseline report, and environmental assessment directly related to the construction; premises and as -built surveys; site preparation, including excavation, geotextile fabric, filling, grading, fill material, gravel, and pavement, remediation of environmental contamination (unless Lessee caused or materially contributed to the contamination); and utility connection costs. b. The cost of Permanent Improvements excludes (i) work performed by the City and not reimbursed by the Lessee; and (ii) work performed by the Lessee and reimbursed by the City. 2. FAILURE TO COMPLETE IMPROVEMENTS: If the Lessee fails to complete the required construction within the time allowed under (13)(1) of this Article, including any extensions granted, the City will execute against and the Lessee will forfeit, any bond or other guarantee given by the Lessee and, as applicable, City will a. initiate cancellation of the lease; or b. reduce the term of the lease to a period that is consistent with the portion of the required construction timely completed. LEASE OF AIRPORT LANDS Page 26 of 33 Page 70 of 133 City: Lessee: APPEARANCE: When completed, all improvements on the Premises must be neat, presentable, and compatible with the authorized use of the Premises under this Lease, as determined by the City. 4. CITY APPROVAL REQUIRED: The Lessee must first obtain the City's written approval before beginning any land development, construction or demolition of any improvements on the Premises, or before beginning any alterations, modifications, or renovation of existing structures on the Premises. The Lessee must submit to the City detailed drawings of the proposed development, alteration, modification, or renovation. Further, the Lessee will submit to City evidence of the Lessee's compliance with the FAA regulation 14 CFR Part 77. 5. CITY APPROVAL WITHHELD: The City's approval of any construction, alteration, modification, or renovation will not be withheld unless: a. the Lessee fails to demonstrate adequate financial resources to complete the project; b. the project plans, specifications, and agency approvals are incomplete; C. the proposed project would result in a violation of an applicable ordinance, regulation, or law; d. the proposed project would interfere with or is incompatible with the safety, security, maintenance, or operation of the airport; e. the proposed project is inconsistent with the Airport Master Plan; f. the proposed project is inconsistent with the terms of the lease, zoning ordinances, or the City's Comprehensive Plan; g the project plans do not make sufficient provision for drainage, aircraft, vehicle, and equipment parking, or for snow storage; or h. the proposed project does not conform to generally recognized engineering principles or applicable fire or building codes. 6. DEMOLITION: Prior to any demolition of any structure(s) on the Premises, Lessee will deliver to City a written scope of work that, at a minimum, lists the structure(s) that are to be demolished and the timeframe for demolition and removal of the debris from the Airport. City will review Lessee's scope for demolition and issue Lessee written approval for the work to be done. BUILDING SETBACK: No building or other permanent structure may be constructed or placed within twenty (20) feet of any lot line of the Premises ,.without City's prior written approval. In addition, no building or other permanent structure may be constructed or placed within N/A feet of any boundary line of the Premises which fronts on a landing strip, taxiway, or apron. LEASE OF AIRPORT LANDS Page 27 of 33 Page 71 of 133 City: Lessee: 8. AS -BUILT DRAWINGS: Within sixty (60) days after completion of construction or placement of improvements upon the Premises, the Lessee will deliver to the City a copy of an as -built drawing, acceptable to the City, showing the location and dimensions of the improvements, giving distances to all Premises' botmdaries. If the Lessee constructs underground improvements, the Lessee will appropriately mark the surface of the land with adequate surface markers. The type, quantity, and distance between such markers will be subject to approval of the City. 9. AIRPORT SECURITY FENCING: If any construction by the Lessee requires a realignment or alteration of an existing security fence on the Premises or boundary of the Premises, the Lessee agrees to realign or alter the fence in a manner approved in writing by the Airport Manager. Anytime the fence must be breached to allow the Lessee to complete improvement construction or fence modifications, the Lessee shall, at the Lessee's sole expense place temporary barriers to maintain the security of the Airport, as determined by the Airport Manager. If damage occurs to a security fence on the Premises or boundary of the Premises in connection with the Lessee's use or occupation of the Premises, the Lessee shall promptly repair the fence to the satisfaction of the Airport Manager. 10. DAMAGE TO IMPROVEMENTS: If Lessee's improvements on the Premises are damaged or destroyed, Lessee will cause the improvements to be repaired or rebuilt, and restored to normal function within two (2) years following the damage or destruction. If the Lessee fails to timely rebuild or restore the improvements, the City may, at its sole discretion, either reduce the term of this Lease commensurate with the estimated value of the Lessee's remaining, fully functional improvements on the Premises, or cancel this Lease. 11. DAMAGE NEAR EXPIRATION: If Lessee's improvements are damaged to the extent that more than 50% of the space is unusable and the damage occurs within five years of the expiration of the term of this Lease, Lessee may remove the damaged improvements, restore the Premises and terminate this Lease. C. PERFORMANCE BOND : Prior to beginning the construction of permanent improvements required under (13)(1) of this Article, the Lessee shall submit to the City a performance bond, deposit, or other security in the amount of $N/A. The form of the bond or other security shall be subject to the City's approval. LEASE OF AIRPORT LANDS Page 28 of 33 Page 72 of 133 City: Lessee: D. SURRENDER ON TERMINATION: Lessee shall, on the last day of the term of this Lease or upon any earlier termination of this Lease, surrender and deliver upon the premises into the possession and use of City without fraud or delay in good order, condition, and repair, except for reasonable wear and tear since the last necessary repair, replacement, restoration or renewal, free and clear of all lettings and occupancies unless expressly permitted by the City in writing, and free and clear of all liens and encumbrances other than those created by and for loans to City. Upon the end of the term of this Lease, including any extension or renewal, or any earlier termination thereof, title to the buildings, improvements and building equipment shall automatically vest in City without requirement of any deed, conveyance, or bill of sale thereon. However, if City should require any such document in confirmation hereof, Lessee shall execute, acknowledge, and deliver the same and shall pay any charge, tax, and fee asserted or imposed by any and all governmental units in connection herewith. E. NOTICE OF CONSTRUCTION: The Lessee agrees to notify the City in writing three days prior to commencing any construction project valued in excess of $1,000.00 on the Premises. The Lessee agrees to assist in the posting of a notice of non -responsibility and maintenance of the notice on the Premises during construction. Lessee agrees that in the event the Lessee fails to notify the City as required by this Provision (f), the Lessee shall indemnify the City against any materialmen's liens as defined in AS 34.35.050 which arise as a result of construction on the premises. ARTICLE XV SPECIAL PROVISIONS A. CITY CONSTRUCTED IMPROVEMENTS. L. ALTERNATIVE ONE — The City commits to construct improvements after the lease is signed. (a) As part of the exchange of consideration of this lease, the City will, at the City's expense, cause the following improvements to be constructed on or in connection with the Premises: (i) N/A; (ii) N/A; (iii) N/A. (b) The City's total cost of the improvement construction shall not exceed $N/A without the Lessee's written concurrence. LEASE OF AIRPORT LANDS Page 29 of 33 Page 73 of 133 City: Lessee: (c) The Lessee shall reimburse the City for the City's cost of constructing the improvements. The reimbursement shall be made in ten (10) equal annual payments, plus interest at eight percent (8%) per year on the unpaid balance. The Lessee may pay the entire remaining balance to the City earlier than due. (d) After completing the improvements, the City will give the Lessee written notice of the City's total cost of constructing the improvements and the date on which the Lessee's reimbursement payments shall begin, which date shall be no earlier than 60 days after the date of the City's notice. The Lessee's annual reimbursement payment for each succeeding year shall be made to the City by no later than the anniversary of date on which the first payment was due. (e) Failure by the Lessee to timely reimburse the City as required under (b) through (d) of this provision shall be grounds for termination of this lease by the City. 2. ALTERNATIVE TWO — The City builds improvements before the lease is signed. (a) The Lessee acknowledges that prior to the execution of this lease, the City constructed the following improvements on or in connection with the Premises: (i) N/A; (ii) N/A; (iii) N/A. (b) The City's total cost to construct the improvements was $N/A. (c) As part of the consideration of this lease, the Lessee shall reimburse the City for the City's cost of constructing the improvements. The reimbursement shall be made in ten (10) equal annual payments, plus interest at eight percent (8%) per year on the unpaid balance. The Lessee may pay the entire remaining balance to the City earlier than due. (d) The Lessee shal I make the first reimbursement payment to the City by no later than the first anniversary of the lease term beginning date given in Article III of this Lease. The Lessee's annual reimbursement payment for LEASE OF AIRPORT LANDS Page 30 of 33 Page 74 of 133 City: Lessee: each succeeding year shall be made to the City by no later than the anniversary of date on which the first payment was due. (e) Failure by the Lessee to timely reimburse the City as required under (c) and (d) of this provision shall be grounds for termination of this Lease by the City. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, the day and year stated in the individual acknowledgments below. (If Lessee is a Corporation) ATTEST: Name LEASE OF AIRPORT LANDS Page 31 of 33 CITY OF KENAI By: Rick R. Koch City Manager LESSEE: LEGACY ELECTRIC, LLC By: Name & Title Page 75 of 133 City: Lessee: STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this —day of , 2014, Name: , Title: of LEGACY ELECTRIC, LLC, being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said corporation. Notary Public for Alaska My Commission Expires: STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this —day of , 2014, RICK R. KOCH, City Manager of the City of Kenai, Alaska, being personally known to me or having produced satisfactory evidence of identification, appeared before me and acknowledged the voluntary and authorized execution of the foregoing instrument on behalf of said City. LEASE OF AIRPORT LANDS Page 32 of 33 Notary Public for Alaska My Commission Expires: Page 76 of 133 City: Lessec: Approved as to lease form by City Attorney: -� Approved by Finance Director: Airport Commission recommended approval on Planning & Zoning Commission recommended approval on Sandra Modigh, City Clerk LEASE OF AIRPORT LANDS Page 33 of 33 Page 77 of 133 Cita: Lessee: [PAGE LEFT BLANK INTENTIONALLY] Page 78 of 133 Suggested by: Administration CITY OF KENAI ORDINANCE NO. 2791-2014 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, DECLARING THAT T 5N R 11W SEC 5 SEWARD MERIDIAN KN 0003025 EAST ADDN TOWNSITE OF KENAI - US SURVEY 3025 A & B LOTS 12, 13, 14, 15 AND 16, BLOCK 3, KENAI, ALASKA, ALSO KNOWN AS 600, 602, 604, 606 AND 608 PENINSULA AVENUE, KENAI, ALASKA, WHOSE LAST RECORD OWNER UNDER BOROUGH ASSESSMENT RECORDS WAS THE FIRST BAPTIST CHURCH, 5432 E. NORTHERN LIGHTS BOULEVARD, #416, ANCHORAGE, ALASKA, SHALL BE RETAINED BY THE CITY OF KENAI FOR A PUBLIC PURPOSE. WHEREAS, the City has identified five (5) parcels of property foreclosed upon by the Kenai Peninsula Borough for unpaid real property taxes that will serve a public purpose to the City; and, WHEREAS, the five parcels are Lots 12 through 16, Block 3, East Addition, Townsite of Kenai, also known as 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska; and, WHEREAS, on the City paid the outstanding balance for property taxes in the amount of $ _ of which $ relates to Kenai Peninsula Borough taxes and interest and the remaining $ relates to City of Kenai taxes and interest; and, WHEREAS, on the Borough conveyed Lots 12 through 16, Block 3, East Addition, Townsite of Kenai to the City by quitclaim deeds dated; and, WHEREAS, the City of Kenai desires to retain the above -referenced tax -foreclosed property for public purposes, including as a staging area to support of bluff erosion control measures and, later, for parks and recreational purposes; and, WHEREAS, AS 29.45.460 requires that the City determine by ordinance whether a tax -foreclosed property shall be retained for a public purpose and shall provide the former record owner, by certified mail, notice of the public hearing on that ordinance; and, WHEREAS, the last record owner of the property as the name appears on the Kenai Peninsula Borough's assessment roll is the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska. WHEREAS, on the Clerk sent a copy of the publicized notice of the hearing on this ordinance to the last record even of the property as the name appears on the Borough assessment rolls by certified mail; and, New Test Underlined; [DELETED TEXT BRACKETED] Page 79 of 133 Ordinance No. 2791-2014 Page 2 of 2 WHEREAS, after passage of an ordinance declaring the City's retention of tax - foreclosed property for a public purpose, the right of the former record owner to repurchase the property ceases. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. Form: That this is a non -code ordinance. Section 2. That T 5N R 11W SEC 5 SEWARD MERIDIAN KN 0003025 EAST ADDN TOWNSITE OF KENAI - US SURVEY 3025 A & B LOTS 12, 13, 14, 15 and 16, BLOCK 3, Kenai, Alaska, also known AS 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, whose last record owner as listed in the Kenai Peninsula Borough's assessment rolls was the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska, are hereby retained by the City of Kenai for a public purpose. Section 3. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 4. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect 30 days after adoption. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this * day of *, 2014 PAT PORTER, MAYOR ATTEST: Sandra Modigh, City Cleric Introduced: *, 2014 Adopted: *, 2014 Effective: *, 2014 New Text Underlined; IDELETED TEXT BRACKETED Page 80 of 133 ""Villaye wA a Past, C# wA a Mature" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: (907) 283-7535 / FAX: (907) 283-3014 www.ci.kenai.ak.us ftic - y of KENAI, ALASKA Ke11i1i Ccs tlllll 1011 MEMO: TO: Kenai City Council FROM: Rick Koch, City Manager DATE: August 14, 2014 SUBJECT: Ordinance 2791-2014 Lots 12 through 16, Block 3, East Addition, Townsite of Kenai The City has identified the referenced parcels as properties the City wishes to retain for the public purpose of a staging area to support bluff erosion control measures and, later, for parks and recreational purposes. The Kenai City Council previously adopted Ordinance 2441-2009, which declared these same parcels be retained for the same a public purpose after obtaining clerks deed from the Borough, at its October 7, 2009 Council Meeting. However, the last record owner of the property repurchased the property pursuant to AS 29.45.460. The policies and procedures of the Kenai Peninsula Borough require that when unredeemed property is retained for a public purpose, the city must pay the full balance of outstanding property taxes. Once the payment is received, the borough will then quitclaim deed the property over to the City. Once an ordinance is adopted providing for the retention of tax -foreclosed property for a public purpose, the right of the former record owner to repurchase the property ceases. Page 81 of 133 Lots 12-16, ; ock 3 East Addition, - )wnsite of Kenai b 8 (2) Cf) - 9 10 11 12 13 14 15 16 O 602 600 J _ MARINE AVE subject 613 6 609 47 3 605 2 1 �. �F— rcels 5 O �d J \ O `� O LL LL 14 15 16 9 10 11 2 13 J co 608 606 1604 602 600 612 PENINSULA AVE 609 7 607 6 605 8 5 DEED 284@754 603 601 2 C 11 DEED 231 @604 Page 82 of 133 513 1-A REMAINDE GOVT. Lq Suggested by: Administration CITY OF KENAI ORDINANCE NO. 2792-2014 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, ACCEPTING AND APPROPRIATING A GRANT FROM STATE OF ALASKA DIVISION OF HEALTH AND SOCIAL SERVICES EMS DIVISION PASSSED THROUGH KENAI PENINSULA EMERGENCY MEDICAL SERVICES, INC. FOR TRAVEL AND TRAINING. WHEREAS, the Kenai Fire Department has received a grant in the amount of $1,750.00 from KPEMS for training funds used to send department personnel to an EMT Instructor course held in Anchorage, Alaska in May 2014; and . WHEREAS, it is in the best interest of the City of Kenai to accept and appropriate funds that provided training of Fire Department personnel to the level of Instructor; and, WHEREAS, personnel trained to the instructor level will allow the department to provide training to other department personnel using an in-house instructor and greatly reducing training costs. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA that estimated revenues and appropriations be increased as follows: Section 1. Form. That this is a non -code ordinance Section 2. That the City Manager is authorized to accept a grant from State of Alaska Health and Social Services EMS Division passed through Kenai Peninsula Emergency Medical Services, Inc. in the amount of $1,750 for training and is authorized to execute a grant agreement and to expend the grant funds to fulfill the purpose and intent of this ordinance. Section 3. That estimated revenues and appropriations be increased as follows: General Fund Increase Estimated Revenues: State Grants - Fire Increase Appropriations: Fire - Travel & Transportation $1,750 $1,750 Nein Text Underlined; [DELETED TEXT BRACKETED] Page 83 of 133 Ordinance No. 2792-2014 Page 2 of 2 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 3rd day of September, 2014. ATTEST: Sandra Modigh, City Clerk // Approved by Finance: —/. /. /�'�--- PAT PORTER, MAYOR Introduced: August 20, 2014 Adopted: September 3, 2014 Effective: September 3, 2014 New Text Underlined; [DELETED TEXT BRACKETED) Page 84 of 133 u "Villaye with a Past, C# with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 11111 1992 MEMO: f�10: CM Rick Koch / FROM: Battalion Chief Prior DATE: 8/13/14 SUBJECT: Funds from KPEMS for instructor course Rick, Every year Kenai Peninsula Emergency Medical Services, Inc receives funding for training to be split amongst departments on the peninsula for various medical training. As our department is in good standings with KPEMS, we are allowed to request funds for training of our staff personnel. At the end of their fiscal year 2014 (June 301h) they had training funds that had not been spent and were still available to us. We submitted a request to fund the training and travel expenses for Pete Coots to attend an EMS MOI Instructor course that was attended by Pete in May 2014. This specific course was not originally budgeted, but due to the availability of the course and the potential to save both time and money, we had Pete attend this course. We will now have and in-house instructor that will be able to conduct mandatory state required EMS training to our EMT level personnel. Pete Coots has recently finished his Paramedic program and is energetic and eager to pass along his knowledge to our staff. We have relied on outside agencies to conduct this training in the past and we'll be able to save both time and money by having an in-house instructor. I am respectfully requesting that we accept the funds in the total amount of $1,750.00 from KPEMS for Pete Coots training to the level of EMT Instructor. Sincerely, Anthony Prior Battalion Chief Kenai Fire Department Page 85 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 86 of 133 Suggested by: Administration CITY OF KENAI RESOLUTION NO. 2014-61 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING A BUDGET TRANSFER WITHIN THE PERSONAL USE FISHERY FUND - PARKS, RECREATION, AND BEAUTIFICATION DEPARTMENT FOR 2014 FISHERY RENTALS IN EXCESS OF BUDGETED AMOUNTS. WHEREAS, the Personal Use Fishery Fund - Parks, Recreation & Beautification Department incurred costs exceeding budgeted amounts due to additional portable restroom services required to meet use throughout the 2014 Personal Use Fishery; and, WHEREAS, extra portable restrooms were dispatched on July 17th to accommodate higher than budgeted use at both the Kenai Avenue and Dunes Road locations; and, WHEREAS, services in excess of budgeted amounts were needed during peak periods and generally after normal business hours due to demand; and, WHEREAS, funds originally designated for dock float replacement are available to cover the unanticipated shortfall. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, the following budget transfer be made: Personal Use Fishery Fund From: Boating Facility - Improvements Other Than Buildings $jj.7 0 To: Parks, Recreation & Beautification - Rentals $11.700 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 3rd day of September, 2014. PAT PORTER, MAYOR ATTEST: Sandra Modigh, City Clerk Approved by Finance:�_ Page 87 of 133 "Villaye with a Past, C# with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-8261 / FAX: 907-283-3693 1IIII 1992 MEMO* Pl/�TO: Rick Koch, City Manager f FROM: Robert J. Frates, Parks & Recreation Director DATE: August 28, 2014 SUBJECT: Resolution No. 2014-61 Purpose of this memorandum is to request a budget transfer in the amount of $11,700.00 to pay for additional rental expenses in excess of budgeted amounts incurred during the 2014 Personal Use Fishery. Due to extra portable restroom services required to facilitate the Personal Use Fishery, the City incurred costs exceeding available funds in the Parks Department (Personal Use Fishery Fund) Rentals account. Additional costs were a result of meeting service demands, generally after normal business hours during the weekends and throughout the third week of the fishery. Extra portable units were also requested by the department and dispatched on July 17`h to meet needs at the end of Kenai Avenue and the public parking lot at Dunes Road. Funds have been identified within the Boating Facility (Personal Use Fishery Fund) and are available to cover the unanticipated shortfall. Page 88 of 133 Sponsored by: Administration CITY OF KENAI RESOLUTION NO. 2014-62 A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, REQUESTING THE ALASKA BOARD OF FISHERIES HOLD ITS 2017 UPPER COOK INLET FINFISH MEETING ON THE KENAI PENINSULA AND APPROVING JOINT RESOLUTION 2014- 01. WHEREAS, Upper Cook Inlet finfish are a vital and long-standing component of the City of Kenai economy and community; and, WHEREAS, all City of Kenai residents are impacted by Upper Cook Inlet finfish fisheries either directly or indirectly; and, WHEREAS, the Alaska Board of Fisheries Upper Cook Inlet Finfish regular meeting has not been held on the Kenai Peninsula since 1999; and, WHEREAS, City of Kenai residents and businesses benefit from informed science based fisheries management, strategies and practices; and, WHEREAS, sound management, strategies and practices are developed by transparent processes, accessible public meetings and user participation, knowledge and representation; and, WHEREAS, conducting the Alaska Board of Fisheries regular meetings concerning Upper Cook Inlet finfish exclusively in Anchorage instead of rotating locations between Anchorage and the Kenai Peninsula greatly hampers public participation by City of Kenai residents due to the substantial expense and burden of attending multi -day meetings in Anchorage; and, WHEREAS, all users of public resources are entitled to reasonable access to public meetings and processes concerning matters affecting their economy, livelihood and lifestyle; and, WHEREAS, holding the 2017 Alaska Board of Fisheries Upper Cook Inlet Finfish meeting on the Kenai Peninsula would improve the amount of testimony about local traditional knowledge to the board, which is a great resource for the Board of Fisheries; and, WHEREAS, it is in the best interest of the residents and visitors to both the Kenai Peninsula and the Anchorage area to maintain healthy well-managed Page 89 of 133 Resolution No. 2014-62 Page 2 of 2 salmon stocks and provide opportunities and access for diverse user groups; and, WHEREAS, Joint Resolution No. 2014-01; A Joint Resolution of the Assembly of the Kenai Peninsula Borough, and Councils of the City of Homer, City of Kenai, City of Seldovia, City of Seward and City of Soldotna, Requesting the Alaska Board of Fisheries Hold its 2017 Upper Cook Inlet Finfish Meeting on the Kenai Peninsula is proposed to be sent to the Alaska Fisheries Board and other interested officials for consideration. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the Alaska Board of Fisheries is respectfully and strongly urged to schedule its full Upper Cook Inlet Finfish Meeting of 2017 and future such meetings on the Kenai Peninsula on a semi -regular basis. Section 2. That Mayor Pat Porter is authorized to sign Joint Resolution 2014- 01 on behalf of the City of Kenai. Section 3. That this resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 3rd day of September, 2014. ATTEST: Sandra Modigh, City Clerk PAT PORTER, MAYOR Page 90 of 133 KENAI PENINSULA BOROUGH CITY OF HOMER CITY OF KENAI CITY OF SELDOVIA CITY OF SEWARD CITY OF SOLDOTNA JOINT RESOLUTION NO. 2014 - 01 A JOINT RESOLUTION OF THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH, COUNCILS OF THE CITY OF HOMER, CITY OF KENAI, CITY OF SELDOVIA, CITY OF SEWARD AND CITY OF SOLDOTNA, REQUESTING THE ALASKA BOARD OF FISHERIES HOLD ITS 2017 UPPER COOK INLET FINFISH MEETING ON THE KENAI PENINSULA. WHEREAS, Upper Cook Inlet Finfish issues are vitally important to, and directly impact residents, municipal governments and communities on the Kenai Peninsula; and WHEREAS, many local residents and businesses of the Kenai Peninsula depend on, participate in, and are otherwise affected by decisions made by the Board of Fisheries with regard to subsistence fisheries, sport fisheries, commercial fisheries, personal use fisheries and conservation measures in Upper Cook Inlet; and WHEREAS, when making informed decisions regarding finfish issues in Upper Cook Inlet, the Board of Fisheries should consider the comments and interests from residents of the Kenai Peninsula; and WHEREAS, the costs and travel time to attend meetings outside the Kenai Peninsula pose a significant burden to local residents, limiting participation and the Board of Fisheries' ability to benefit from local knowledge; and WHEREAS, the Alaska Board of Fisheries has not held its full Upper Cook Inlet Finfish meeting on the Peninsula since 1999 despite numerous requests that it do so; and WHEREAS, holding the meeting on the Kenai Peninsula would show local residents, businesses and communities that the Board of Fisheries listens, cares about and understands the local impacts of its decisions; and WHEREAS, there are local quality venues of sufficient size with advanced technologic capabilities to host public meetings, as well as exceptional lodging and dining opportunities on the Kenai Peninsula; NOW, THEREFORE, BE IT RESOLVED BY THE KENAI PENINSULA BOROUGH ASSEMBLY, AND THE COUNCILS FOR THE CITY OF HOMER, CITY OF KENAI, CITY OF SELDOVIA, CITY OF SEWARD AND CITY OF SOLDOTNA: Section 1. That the Alaska Board of Fisheries is respectfully and strongly urged by the Kenai Peninsula municipal governments representing their constituents to hold the full 2017 Upper Cook Inlet Finfish meeting on the Kenai Peninsula. Page 91 of 133 Kenai Peninsula Joint Resolution Page 2 of 3 Section 2. That this Joint Resolution be forwarded to Governor Sean Parnell, Senator Peter Micciche, Senator Gary Stevens, Speaker Mike Chenault, Representative Kurt Olson, Representative Paul Seaton, Governor's Chief of Staff Mike Nizich, Department of Fish & Game Commissioner Cora Campbell, Alaska Board of Fisheries Members - Karl Johnstone, Orville Huntington, Susan Jeffrey, John Jensen, Fritz Johnson, Thomas Kluberton, Reed Moriskey, Alaska Board of Fisheries Executive Director Glenn Haight Section 3. That this resolution takes effect immediately upon approval by the participating city councils. APPROVED BY THE ASSEMBLY OF THE KENAI PENINSULA BOROUGH THIS * DAY OF *, 2014. HAL SMALLEY, ASSEMBLY PRESIDENT ATTEST: Johni Blankenship, Borough Clerk APPROVED BY THE COUNCIL OF THE CITY OF HOMER this * day of *, 2014. MARY E. WYTHE, HOMER MAYOR ATTEST: Jo Johnson, City Clerk APPROVED BY THE COUNCIL OF THE CITY OF KENAI this * day of *, 2014. PAT PORTER, MAYOR ATTEST: Sandra Modigh, City Clerk APPROVED BY THE COUNCIL OF THE CITY OF SELDOVIA THIS * DAY OF *, 2014. Page 92 of 133 Kenai Peninsula Joint Resolution Page 3 of 3 KEITH GAIN, SELDOVIA MAYOR ATTEST: Mary Klinger, City Clerk APPROVED BY THE COUNCIL OF THE CITY OF SEWARD, THIS * DAY OF *, 2014. JEAN BARDARSON, SEWARD MAYOR ATTEST: Johanna Kinney, City Clerk APPROVED BY THE COUNCIL OF THE CITY OF SOLDOTNA, this * day of *, 2014. ATTEST: Michelle M. Saner, City Clerk NELS ANDERSON, SOLDOTNA MAYOR Page 93 of 133 M ""Villaye with a Past, C# with a Future' 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 �IIIII 1997 MEMO: TO: City Council FROM: Rick Koch, City Manager DATE: August 28, 2014 SUBJECT: Resolution 2014-62, Alaska Board of Fisheries 2017 Upper Cook Inlet Finfish Meeting The purpose of this correspondence is to recommend that the City Council adopt the above referenced resolution. The effect of this resolution is to authorize the Mayor to sign Joint Resolution Number One from the Kenai Peninsula Borough, and Cities of Seldovia, Seward, Homer, Soldotna, and Kenai, requesting that the Alaska Board of Fisheries (BOF) hold their 2017 Upper Cook Inlet Finfish Meeting (UCI) on the Kenai Peninsula. The BOF is scheduled to hold a work session in Juneau from October 15-17 and one of the ite=ms on the draft agenda is to consider the location for this meeting. As all of you may be aware the BOF has not held their UCI meeting on the Peninsula since 1999, even though roughly 80% of the items considered directly impact the residents and businesses on the Peninsula. It is my intent to attend the October 15-17 meeting in Juneau and provide additional information to the BOF regarding specific locations where the meeting could be held, and support facilities and businesses located on the Peninsula. Thank you for your attention in this matter. e� Page 94 of 133 KENAI CITY COUNCIL — REGULAR MEETING AUGUST 20, 2014 — 7:00 P.M. KENAI CITY COUNCIL CHAMBERS 210 FIDALGO AVE., KENAI, AK 99611 MAYOR PAT PORTER, PRESIDING MINUTES A. CALL TO ORDER A Regular Meeting of the Kenai City Council was held on August 20, 2014, in City Hall Council Chambers, Kenai, AK. Mayor Porter called the meeting to order at 7:00 p.m. 1. Pledge of Allegiance Mayor Porter led those assembled in the Pledge of Allegiance. 2. Roll Call There were present: Mayor Pat Porter Robert Molloy Mike Boyle A quorum was present. Also in attendance were Rich Koch, City Manager Scott Bloom, City Attorney Sandra Modigh, City Clerk 3. Agenda Approval Ryan Marquis Terry Bookey (telephonic) Tim Navarre Mayor Porter requested executive session item L-2, regarding retention of properties for a public purpose be addressed as D-8 and that G-7, approval of a sublease between the Peninsula Art Guild and the Kenai Potters Guild be addressed as D-1. MOTION: Council Member Molloy MOVED to approve the agenda with the requested amendments proposed by the Mayor and requested UNANIMOUS CONSENT. Vice Mayor Marquis SECONDED the motion. VOTE: There being no objections, SO ORDERED. 4. Consent Agenda Page 95 of 133 MOTION: Council Member Molloy MOVED to approve the consent agenda and requested UNANIMOUS CONSENT. Council Member Gabriel SECONDED the motion. Mayor Porter opened the floor for public comment on consent agenda items, there being no one wishing to speak, public comment was closed. VOTE: There being no objections, SO ORDERED. *All items listed with an asterisk (*) are considered to be routine and non- controversial by the council and will be approved by one motion. There will be no separate discussion of these items unless a council member so requests, in which case the item will be removed from the consent agenda and considered in its normal sequence on the agenda as part of the General Orders. B. SCHEDULED PUBLIC COMMENTS — None. C. UNSCHEDULED PUBLIC COMMENTS Fred Braun, spoke in opposition to the City not purchasing vehicles from local vendors and requested the current purchase policy be reviewed. D. PUBLIC HEARINGS 1. Action/Approval - Consent to Sublease between Peninsula Art Guild, Inc. and the Kenai Potters Guild for a Portion of Lot 3, Block 17, Original Townsite of Kenai and the Building known as the Fine Arts Center. Mayor Porter ruled a conflict of interest for Council Member Molloy due to his firm representing the Art Guild on the transaction. Council Member Molloy was to abstain from voting. MOTION: Vice Mayor Marquis MOVED to approve the sublease and Council Member Gabriel SECONDED the motion. VOTE: YAY: Porter, Navarre, Marquis, Bookey, Gabriel, Boyle NAY: ABSTAIN: Molloy MOTION PASSED. 2. Ordinance No. 2748-2014 — Amending Kenai Municipal Code 1.90.020 - Duties, to Provide that Boards, Commissions, and Committees Act in an Advisory Capacity to Council. (Clerk's Note: At its May 201' meeting, Council Page 96 of 133 postponed this ordinance to the August 20'h meeting. Motion to enact is on the floor.] Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. Council discussed the committees/commissions being advisory to Council versus the City Manager and an option to being advisory to both including department heads. A work session was discussed to further review the proposed amendments and draft work product provided by the City Manager, Attorney, and Clerk. MOTION TO AMEND: Council Member Molloy MOVED to amend 1.90.020 (a), second sentence to read as follows, 'They shall act in an advisory capacity to Council, the City Manager, and department heads within the City Administration if there are such departments in the City organization that directly relate to the commission or committee." Vice Mayor Marquis SECONDED the motion. VOTE: YAY: Molloy, Marquis, Gabriel NAY: Porter, Navarre, Bookey, Boyle MOTION FAILED. MOTION TO POSTPONE: Council Member Bookey MOVED to postpone the ordinance to the September 171" meeting to schedule a work session. Vice Mayor Marquis SECONDED the motion. VOTE: YAY: Molloy, Marquis, Porter, Bookey NAY: Navarre, Gabriel, Boyle MOTION PASSED. MOTION TO RECONSIDER: Council Member Molloy MOVED to reconsider the vote to postpone. Council Member Gabriel SECONDED the motion. VOTE: YAY: Molloy, Porter, Navarre, Gabriel, Boyle NAY: Marquis, Bookey MOTION PASSED. Page 97 of 133 VOTE ON POSTPONEMENT: YAY: Marquis, Bookey NAY: Molloy, Porter, Navarre, Gabriel, Boyle MOTION FAILED. VOTE ON MAIN MOTION: YAY: Marquis, Bookey, Molloy, Boyle NAY: Porter, Navarre, Gabriel MOTION PASSED. 3. Ordinance No. 2761-2014 — Amending the Kenai Municipal Code, Title 23, "Personnel Regulations," Chapters 23.05 General Provisions, 23.10 Categories of Service, 23.15 Administration, 23.25 Compensation, 23.30 Personnel Policies and Procedures, 23.35 General Conduct, Discipline, Termination, and Appeal, and 23.40 Benefits to Update Personnel Regulations with State and Federal Law, and Make Technical Changes, and Corrections. [Clerk's Note: At its July 2nd meeting, Council postponed this ordinance to the August 20th meeting. Motion to enact is on the floor.] Council Member Bookey noted for the record, the amendments including the term "sexual orientation" in certain sections was not reflected in the packet. MOTION TO AMEND: Council Member Bookey MOVED to amend 23.40.030 (B)(2) to read, "Fire 7(k) Work Period", (c)(e) by inserting the words "working a 7(k) Work Period." at the end of the last sentence, and (g) by inserting the words "working a 7(k) Work Period." at the end of the last sentence. Council Member Molloy SECONDED the motion. VOTE ON AMENDMENT: YAY: Marquis, Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: MOTION PASSED UNANIMOUSLY. VOTE ON MAIN AS AMENDED: YAY: Marquis, Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: MOTION PASSED UNANIMOUSLY. 4. Ordinance No. 2786-2014 — Enacting KMC 23.40.035 - Bona Fide Employer -Sponsored Medical Leave Sharing Arrangement. Page 98 of 133 Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Council Member Boyle MOVED to enact Ordinance No. 2786-2014 and Council Member Molloy SECONDED the motion. MOTION TO AMEND: Council Member Gabriel MOVED to amend 23.40.035 (a)(2) to reflect a minimum of 80 hour versus 40 hours. Council Member Navarre SECONDED the motion. VOTE ON AMENDMENT: YAY: Marquis, Bookey, Molloy, Boyle NAY: Porter, Navarre, Gabriel MOTION FAILED. Council debated donated leave time equaling an hour for hour or each hour having a monetary value. VOTE ON MAIN MOTION: YAY: Marquis, Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: MOTION PASSED UNANIMOUSLY. 5. Ordinance No. 2787-2014 — Repealing KMC 7.15.110 - Offset Against Delinquent Taxes, and Re -Enacting the Code Section as KMC 7.15.110 - Tax Compliance, to Require Individuals and Businesses Contracting with the City to be in Compliance with City Tax Ordinances. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Council Member Molloy MOVED to enact Ordinance No. 2787-2014 and Vice Mayor Marquis SECONDED the motion. It was clarified that bidders would not be rejected if they were not tax compliance, however would be provided 10 days for compliance. VOTE: YAY: Marquis, Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: Page 99 of 133 MOTION PASSED UNANIMOUSLY. 6. Ordinance No. 2788-2014 — Increasing Estimated Revenues and Appropriations in the Airport and Airport Equipment Capital Project Funds for the Purchase of Snow Removal Equipment (SRE) — Plow Truck with Attachments. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Council Member Gabriel MOVED to enact Ordinance No. 2788-2014 and Vice Mayor Marquis SECONDED the motion. VOTE: YAY: Marquis, Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: MOTION PASSED UNANIMOUSLY. 7. Ordinance No. 2789-2014 — Amending Kenai Municipal Code Section 11.05.050, "Condition as to Equal Services and Rates," to Require that the City Provide Residents of the City of Kenai with Free Services at the City - Owned Boat Launch and Parking Facility. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Council Member Boyle MOVED to enact Ordinance No. 2789-2014 and Council Member Molloy SECONDED the motion. Council agreed with the idea of the ordinance, however members had concerns regarding the legality of the ordinance based on legal opinions of the current and former City Attorney's. City Attorney Bloom advised the current funding structure was of concern and offered additional options, a low cost seasonal pass, or free use of the dock facility to all users after the dip net season. It was also noted that this could be incorporated into the City's fee schedule. MOTION TO POSTPONE: Council Member Boyle MOVED to postpone the ordinance to the September 3rd meeting. Council Member Molloy SECONDED the motion. Page 100 of 133 VOTE: YAY: Molloy, Bookey, Gabriel, Boyle NAY: Porter, Navarre, Marquis MOTION PASSED. 8. Resolution No. 2014-56 — Authorizing the Purchase of Airport Snow Removal Equipment for the Total Amount of $543,706 Utilizing the National Joint Powers Alliance Purchasing Program. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Vice Mayor Marquis MOVED to adopt Resolution No. 2014-56 and requested UNANIMOUS CONSENT. Council Member Gabriel SECONDED the motion. VOTE: There being no objections, SO ORDERED. 9. Resolution No. 2014-57 — Designating the State of Alaska, Department of Environmental Conservation (ADEC) Grant Funds for the Project Entitled Wastewater Treatment Plant Upgrades -Phase II as the Number One Local State Funding Priority for Fiscal Year 2016. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Council Member Molloy MOVED to adopt Resolution No. 2014-57 and requested UNANIMOUS CONSENT. Council Member Gabriel SECONDED the motion. VOTE: There being no objections, SO ORDERED. 10. Executive Session — Consultation with Attorney and City Manager to Discuss the Retention of Properties 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, by the City of Kenai for a Public Purpose, Matters which by Law, Municipal Charter, or Ordinance are Required to be Confidential — Attorney Client Privilege [AS 44.62.310 (c)(3)]. MOTION: Vice Mayor Marquis MOVED to enter into executive session for Consultation with Attorney and City Manager to Discuss the Retention of Properties 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, by the City of Kenai for a Public Purpose, Matters which by Law, Municipal Charter, or Ordinance are Required to be Confidential — Attorney Client Privilege [AS 44.62.310 (c)(3)] and requested the attendance of the Page 101 of 133 City Attorney, City Manager, and the City Clerk. Council Member Boyle SECONDED the motion. VOTE: YAY: Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: Marquis MOTION PASSED. Upon reconventioning in open session, Vice Mayor Marquis advised the Council met in executive session and consulted with the City Attorney and City Manager on retention of Properties 600, 602, 604, 606 and 608 Peninsula Avenue, not action was taken or direction provided. 10. Resolution No. 2014-58 — Authorizing a Budget Transfer within the General Fund for the Payment of Back Property Taxes to the Kenai Peninsula Borough on Land to be Retained for a Public Purpose. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Council Member Navarre MOVED to adopt Resolution No. 2014-58 and Council Member Gabriel SECONDED the motion. VOTE: YAY: Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: Marquis MOTION PASSED. 11. Resolution No. 2014-59 — Declaring Equipment, Supplies, and Materials Surplus or Obsolete, and to be Sold as Allowed in Kenai Municipal Code 7.15.060 and 7.15.070. Mayor Porter opened the public hearing, there being no one wishing to speak the public hearing was closed. MOTION: Vice Mayor Marquis MOVED to adopt Resolution No. 2014-59 and requested UNANIMOUS CONSENT. Council Member Molloy SECONDED the motion. VOTE: There being no objections, SO ORDERED. E. MINUTES 1. 'Regular Meeting of August 6, 2014 Page 102 of 133 Minutes were approved by the consent agenda. F. UNFINISHED BUSINESS 1. Reconsideration of Ordinance No. 2780-2014 — Amending KMC 12.40.010 — Definitions, to Include and Regulate the Use of Electronic Cigarettes and the Smoking of Non -Tobacco Plant Based Materials the Same as the City Currently Regulates Smoking Tobacco. [Clerk's Note: At its August 6' meeting, this ordinance failed and notice for reconsideration was given.] MOTION: Council Member Bookey MOVED to reconsider the vote on Ordinance 2780-2014 at the August 6t" meeting and Council Member Navarre SECONDED the motion. VOTE: YAY: Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: Marquis MOTION PASSED. Mayor Porter passed the gavel to Vice Mayor Marquis. MOTION TO AMEND: Mayor Porter MOVED to amend by removing the 81h whereas, "Whereas, Alaskan voters will have the opportunity to vote on the Ballot Measure 2 on November 2, 2014, An Act to Tax and Regulate the Production, Sale and Use of Marijuana, which may increase the use of marijuana in public; and," in its entirety. Council Member Navarre SECONDED the motion. VOTE: YAY: Bookey, Molloy, Boyle, Porter, Navarre, Gabriel, Marquis NAY: MOTION PASSED UNANIMOUSLY. Mayor Porter resumed as presiding officer. MOTION TO AMEND: Council Member Molloy MOVED to amend 12.40.010, definition of "smoking" by inserting the words, "inhaling or exhaling of after the words "of a tobacco or". Council Member Boyle SECONDED the motion. VOTE: YAY: Bookey, Molloy, Boyle, Porter, Navarre, Gabriel, Marquis NAY: Page 103 of 133 MOTION PASSED UNANIMOUSLY. MOTION TO AMEND: Council Member Navarre MOVED to amend 12.40.010, definition of "smoking" by inserting the words, 'that is intended to be inhaled" after the words "or other combustible substance'. Council Member Bookey SECONDED the motion and requested UNANIMOUS CONSENT. VOTE: There being no objections, SO ORDERED. VOTE ON MAIN AS AMENDED: YAY: Bookey, Molloy, Boyle, Porter, Navarre, Gabriel NAY: Marquis MOTION PASSED. G. NEW BUSINESS 1. *Action/Approval — Bills to be Ratified. Approved by the consent agenda. 2. *Action/Approval — Purchase Orders Exceeding $15,000. Approved by the consent agenda. 3. *Ordinance No. 2790-2014 — Waiving Certain Lease Provisions Imposed by Kenai Municipal Code Chapter 21.10 -Leasing of Airport Reserve Lands, and Approving a Non -Standard Lease Form for the Lease of Lot 2, Block 1, General Aviation Apron, Located within the Airport Reserve, to Legacy Electric. Introduced by the consent agenda and public hearing set for September 17th 4. *Ordinance No. 2791-2014 — Declaring that T 5N R 11W Sec 5 Seward Meridian KN 0003025 East Addn Townsite of Kenai — US Survey 3025 A & B Lots 12, 13, 14, 15 and 16, Block 3, Kenai, Alaska, also Known as 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, whose Last Record Owner Under Borough Assessment Records was the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska, Shall be Retained by the City of Kenai for a Public Purpose. Introduced by the consent agenda and public hearing set for September 17th 5. *Ordinance No. 2792-2014 — Accepting and Appropriating a Grant from State of Alaska Division of Health and Social Services EMS Division Passed Page 104 of 133 Through Kenai Peninsula Emergency Medical Services, Inc. for Travel and Training. Introduced by the consent agenda and public hearing set for September 17th. 6. Action/Discussion — Schedule Work Session to Discuss Ordinance No. 2782-2014 & Ordinance No. 2783-2014 Amending the Land Use Table and a Policy on Gifting. Council concurred to wait until a new City Planner was hired to schedule a work session. 7. Discussion — Improvements to Upstairs City Hall. Council concurred to have the improvements addressed as an upcoming project. Council Member Boyle exited the meeting at 9:56 p.m. H. COMMISSION/COMMITTEE REPORTS 1. Council on Aging — August meeting was cancelled. 2. Airport Commission — Council Member Gabriel reviewed the action taken at the August meeting. 3. Harbor Commission — August meeting was cancelled. 4. Library Commission — No report. 5. Parks and Recreation Commission — No quorum at the last meeting. 6. Planning and Zoning Commission — Council Member Navarre reviewed the meeting minutes in the packet. 7. Beautification Committee— No report. 8. Mini -Grant Steering Committee — No report. 1. REPORT OF THE MAYOR Mayor Porter reported on the following: • 501 Anniversary for Peninsula • 41h Avenue Park improvements • Jack Blackwell regarding a resolution prohibiting access wetlands J. ADMINISTRATION REPORTS 1. City Manager reported on the following: • Capital Projects deadline -- September 5th • Work session 9/29-10/7 on Capital Projects Page 105 of 133 Council concurred to schedule a work session on October 61" at 6 p.m. to discuss Capital Projects. • Peninsula supported resolution to the Board of Fish requesting their next meeting be held on the peninsula Mayor Porter commended the Finance Department staff as pointed out in the Directors report for their hard work and dedication during the City's health care transition. Mayor Porter requested the Director of the Senior Center, in monthly reports, split out the meal counts. 2. City Attorney — no report. 3. City Clerk advised of the recruitment for a part-time administrative assistant Il. K. ADDITIONAL PUBLIC COMMENT 1. Citizens Comments (Public comment limited to five (5) minutes per speaker) — None 2. Council Comments Council Member Gabriel thanked all staff for their work on the dip net fishery. Council Member Navarre invited all to attend Industry Appreciation Day on August 231. Vice Mayor Marquis congratulated the Senior Center Director for her grants and Council Member Molloy for legalizing birthday candles. Council Member Boyle reported on his recent trip to Nome attending the AML Summer Legislative meeting and he agreed with Council Member Bookey's previous comments on the location on the airport mural. L. EXECUTIVE SESSION 1. Consultation with Attorney and City Manager to Discuss an Offer To Purchase Lot 2, Block 1, Gusty Subdivision, a Matter which the Immediate Knowledge would Clearly have an Adverse Effect Upon the Finances of the City [AS 44.62.310(c)(1)]. MOTION: Council Member Molloy MOVED to enter into executive session for Consultation with Attorney and City Manager to Discuss an Offer To Purchase Lot 2, Block 1, Gusty Subdivision, a Matter which the Immediate Knowledge would Clearly have an Adverse Effect Upon the Finances of the City [AS 44.62.310(c)(1)] and requested the attendance Page 106 of 133 of the City Attorney, City Manager, and the City Clerk. Vice Mayor Marquis SECONDED the motion. VOTE: YAY: Marquis, Molloy, Boyle, Porter, Navarre, Gabriel NAY: MOTION PASSED UNANIMOUSLY. Upon reconvening in open session, Vice Mayor Marquis advised Council me in executive session to consult with the City Manager and Attorney on an offer to purchase property and provided direction to the Administration. N. ADJOURNMENT There being no further business before the Council, the meeting was adjourned at 9:58p.m. Minutes prepared and submitted by: Sandra Modigh, CMC City Clerk Page 107 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 108 of 133 PAYMENTS OVER $15,000.00 WHICH NEED COUNCIL RATIFICATION COUNCIL MEETING OF: SEPTEMBER 3, 2014 VENDOR DESCRIPTION DEPARTMENT PERS PERS VARIOUS ACCOUNT LIABILITY AMOUNT 88,020.39 INVESTMENTS VENDOR DESCRIPTION MATURITY DATE AMOUNT Effect. Int. [PAGE LEFT BLANK INTENTIONALLY] Page 110 of 133 PURCHASE ORDERS OVER $15,000.00 WHICH NEED COUNCIL APPROVAL COUNCIL MEETING OF: SEPTEMBER 3, 2014 VENDOR DESCRIPTION DEPT. ACCOUNT CONVENTION CENTER FEASIBILITY MCDOWELL GROUP STUDY MUNICIPAL PARK IMPS PROFESSIONAL SERVICES i•. d CD CD O INCREASE OF EXISTING PURCHASE ORDER W VENDOR DESCRIPTION P.O. # - DEPT, W DIP NET PORTABLE RESTROOMS & PENINSULA PUMPING DUMPSTER RENTAL & SERVICE 105330 - PUF- REC Contingent upon passage of Resolution 2014-61 MCDOWELL GROUP PROF. CONSULTING SERVICES 105156 - MANAGER REASON ADDITIONAL SERVICES ADDITIONAL SERVICES AMOUNT 35,ODO.00 AMOUNT TOTAL PO AMT 75,000.00 88,584.55 25,000.00 "Village with a Past, Ci� with a Future" 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 it m Telephone: 907-283-7535 / FAX: 907-283-3014 1997 MEMO: TO: City Council FROM: Rick Koch, City Manager DATE: August 28, 2014 SUBJECT: Purchase Orders Over $15,000 — McDowell Group The purpose of this correspondence is to recommend Council approval of purchase orders in the amounts of $35,000 and an increase in an existing purchase order from $19,000 to $25,000 to the Mcdowell Group. The work to be performed are professional consulting services to determine the feasibility, size, location, and other aspects of a proposed Convention Center within the Kenai Municipal boundary and to conduct a "City of Kenai Business Gap Assessment" to identify what business sectors may be under -represented in Kenai. Attached are both proposals from the McDowell Group. These contain a brief description of the work which will expanded and further defined in the Professional Services Agreement. Thank you for your attention in this matter. Page 112 of 133 Suggested by: Administration CITY OF KENAI ORDINANCE NO. 2793-2014 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, REAPPROPRIATING STATE GRANT FUNDS IN THE MUNICIPAL ROADWAY IMPROVEMENTS CAPITAL PROJECT FUND TO THE SENIOR CENTER IMPROVEMENT CAPITAL PROJECT FUND. WHEREAS, SB160 granted the City $4,000,000 for Citywide road and infrastructure improvements; and, WHEREAS, SB160 was signed by Governor Parnell on May 14, 2012 and became effective July 1, 2012; and, WHEREAS, these grant funds were originally appropriated by Ordinance 2646-2012 to projects identified during the August 1, 2012 work session; and, WHEREAS, the acquisition of a new trackless snow blower was accomplished under budget allowing excess funds to be redirected to other projects; and, WHEREAS, and $2,302 is needed to complete the boiler replacement and heated sidewalk project at the Kenai Senior Center. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1: Form: That this is a non -code ordinance. Section 2: That estimated revenues and appropriations be decreased as follows: Municipal Roadwav Imorovements Fund Decrease Estimated Revenues: State Grants $ZaL2=OQ Decrease Appropriations: Construction $2_.302.00 New Text Underlined; [DELETED TEXT BRACKETED] Page 113 of 133 Ordinance No. 2793-2014 Page 2 of 2 Section 3: That estimated revenues and appropriations be increased as follows: Senior Center Improvements Capital Project Fund Increase Estimated Revenues: State Grants Increase Appropriations: Construction $2,302.00 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 17th day of September 2014. ATTEST: Sandra Modigh, City Clerk Approved by Finance: PAT PORTER, MAYOR Introduced: September 3, 2014 Adopted: September 17, 2014 Effective: September 17, 2014 New Text Underlined: ]DELETED TEXT BRACKETED] Page 114 of 133 / lVillaye with a Past, C# with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 t4rsa] v Telephone: (907) 283-7535, Ext. 236 / FAX: (907) 283-3014 1III�i 1992 KE t{2LAIL SKA MEMORANDUM KENAA� SKA TO: Rick Koch, City Manager FROM: Sean Wedemeyer, Public Works Director jf�IW DATE: August 27, 2014 SUBJECT: Ordinance 2793-2014 funding the Senior Center Boiler Replacement and Heated Sidewalk Project to complete work in Change Order One Rick, The purpose of this memo is to recommend passage of the accompanying Ordinance. This ordinance will provide supplemental funding to the Senior Center Boiler Replacement and Heated Sidewalk Project to complete work to be authorized by Change Order One. Ordinance 2752-2014 appropriated funds to award all of the work in the bid package and a very small contingency. That contingency amounted to approximately 1 percent of the overall project expenses. The average construction project contingency is between 7 and 12 percent, depending on the size and type of project. This additional funding will result in a final expended project contingency of approximately 2.1 percent. Change Order 1 will be included in the September 17" council packet and is contingent on passage of this Ordinance. The change order includes improvements to the concrete ramp with snowmelt at the senior center dining room emergency exit and electrical design oversights by the engineers. 20% of the electrical oversight expenses have been recouped from the engineering firm. Thank you for your attention to this matter. Page 115 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 116 of 133 Suggested by: Administration CITY OF KENAI ORDINANCE NO. 2794-2014 AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, ACCEPTING AND APPROPRIATIONS FEDERAL/STATE EMERGENCY MANAGEMENT GRANTS FOR THE RECOVERY FROM THE 2013 OCTOBER KENAI PENINSULA BOROUGH FLOOD. WHEREAS, flooding occurred within the City of Kenai during the 2013 October Kenai Peninsula Borough Floods; and, WHEREAS, the City of Kenai will perform permanent repairs to South Spruce Street due to a culvert wash-out during the event; and, WHEREAS, the event has been declared a national disaster making Federal and State Emergency Management Funds to reimburse the City for its efforts; and, WHEREAS, the City's response to protect and repair the infrastructure is in the best interest of the City and its residents. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1: Form: That this is a non -code ordinance. Section 2: That the City Manager is authorized to accept the grants in the amount of $36,806.73 and to expend the funds to fulfill the purpose and intent of the grants and this ordinance. Section 3: That estimated revenues and appropriations be increased as follows: Municipal Roadway Improvements Capital Project Fund Increase Estimated Revenues: Federal Grants State Grants Increase Appropriations: Construction New Text Underlined; ]DELETED TEXT BRACKETED] Page 117 of 133 27,605.04 9.201.69 Ordinance No. 2794-2014 Page 2 of 2 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 17th day of September, 2014. ATTEST: Sandra Modigh, City Clerk Approved by Finance: 7 �. PAT PORTER, MAYOR Introduced: September 3, 2014 Adopted: September 17, 2014 Effective: September 17, 2014 New Text Underlined; [DELETED TEXT BRACKETED Page 118 of 133 / "'Villaye with a Past, C# with a Future fl 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 krARd Telephone: (907) 283-7535, Ext. 236 / FAX: (907) 283-3014 1997 vruwsEtiARMnvw MEMORANDUM wu NO: Rick Koch, City Manager FROM: Sean Wedemeyer, Public Works Director 5/0.) DATE: August 27, 2014 SUBJECT: Ordinance 2794-2014 accepting and appropriating federal/state emergency management grants for the response and recovery from the 2013 October Kenai Peninsula Borough flood Rick, Flooding occurred within the City of Kenai during the 2013 October Kenai Peninsula Borough Floods. The City of Kenai expended funds during response to the flooding and will perform permanent repairs to infrastructure damaged during the event. The event has been declared a national disaster making Federal and State Emergency Management Funds to reimburse the City for its efforts. I have been coordinating with State and Federal personnel to ensure the emergency response and repairs, design of permanent repair, construction, mitigation, and management of the S. Spruce washout, Third Ave. sediment control facility washout, and the Inlet Woods subdivision street flooding is and will be reimbursable with Federal and State Emergency Management Funds. This ordinance authorizes the City Manager to accept the grant and expend the funds to complete the permanent repair of S. Spruce Street. Thank you for your attention to this matter. Page 119 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 120 of 133 CITY OF KENAI PLANNING & ZONING COMMISSION CITY COUNCIL CHAMBERS AUGUST 27, 2014 - 7:00 P.M. CHAIR JEFF TWAIT, PRESIDING MINUTES 1. CALL TO ORDER Commissioner Knackstedt called the meeting to order at 7:00 p.m. a. Pledge of Allegiance Knackstedt led those assembled in the Pledge of Allegiance. b. Roll Call Roll was confirmed as follows: Commissioners present: D. Fikes, G. Pettey, H. Knackstedt, K. Peterson, N. Kiel, J. Twait Staff/Council Liaison present: Acting City Planner R. Koch, City Clerk S. Modigh, Planning Assistant W. Anderson. A quorum was present. c. Agenda Approval MOTION: Commissioner Peterson MOVED to approve the agenda and Commissioner Fikes SECONDED the motion. There were no objections. SO ORDERED. d. Consent Agenda MOTION: Commissioner Peterson MOVED to approve the consent agenda and Commissioner Kiel SECONDED the motion. There were no objections. SO ORDERED. e. *Excused Absences — Bryson *All items listed with an asterisk (*) are considered to be routine and non -controversial by the Commission and will be approved by one motion. There will be no separate discussion of these items unless a Commission Member so requests, in which case the item will be removed from the Consent Agenda and considered in its normal sequence on the agenda as part of the General Orders. 2. *APPROVAL OF MINUTES —August 13, 2014 Approved by the consent agenda. Page 121 of 133 3. SCHEDULED PUBLIC COMMENT: (10 Minutes) — None. 4. PERSONS PRESENT NOT SCHEDULED: (3 Minutes) — None. 5. CONSIDERATION OF PLATS: None 6. PUBLIC HEARINGS: a. PZ14-19 — Preliminary Original Shoreline Heights 2014 Addition, Submitted by Integrity Surveys, 820 Set Net Drive., Kenai, AK 99611 Acting City Planner Koch reviewed the staff report included in the packet recommending approval with the following conditions: • The lots on the preliminary plat must be reconfigured so,that lot 47 meets the minimum lot size of 20,000 square feet. • If lots are sold prior to construction of all required improve ents, an installation agreement will be required pursuant to KMC 14.10.080(b). • It is the intent of the owner to develop this project in phases. The City of Kenai and the developer will enter into an installation agreement for each phase and the developer will provide the City of Kenai with a bond guaranteeing completion of the improvements for each phase of development. The Raving of the streets will not be required until the final phase of development of the subdivision. • When streets are constructed, they must meet the minimum requirements as set forth in KMC 14.10.080. • The access easements for the cul-de-sacs located at the north and south end of "New Street Drive' should be executed and recorded concurrently with the recorded plat. • Road design must be stamped by an engineer licensed in the State of Alaska. • Surveyor and property owner must work with the City of Kenai and the Kenai Peninsula Borough when designating street names to ensure names meet with City and Borough regulations. • A note should be added to the preliminary plat, as follows: "Lots 1 through 21, inclusive, are subject to bluff erosion. • When water mains are extended into the subdivision, the plans must be approved by the Alaska Department of Environmental Conservation. • The septic systems must meet the regulatory requirements of the Kenai Peninsula Borough and be approved by the Alaska Department of Conservation. • An engineering plan is required to show fire hydrant locations and line sizes for flow rates per the Kenai (MOA) standard. • Installation of signs including, but not limited to, stop signs, speed limit signs and street signs. Page 122 of 133 MOTION: Commissioner Fikes MOVED to approve Resolution No. PZ14-19 with the Staff recommendations and Commissioner Peterson SECONDED the motion. Chairman Knackstedt opened the public hearing. With no one wishing to speak the public hearing was closed. Commissioner Twait entered the meeting at 7:14 p.m. and proceeded as presiding Chairman. VOTE: YEA: Kiel, Pettey, Peterson Fikes, Knackstedt, Twait NAY: MOTION PASSED UNANIMOUSLY. b. PZ14-14 — Preliminary Original VIP Country Estates Part 5, 2014 Replat, Submitted by Penner Construction, Inc., P.O. Box 408, Sterling, AK 99672 Acting City Planner Koch reviewed the staff report included in the packet recommending approval conditioned upon the following: • Further development of the property shall conform to all Federal, State and local regulations. • The owner as shown on the plat should be changed to read Penner Construction, Inc., P.O. Box 408, Sterling, AK 99672. MOTION: Commissioner Knackstedt MOVED to approve Resolution No. PZ14-14 and Commissioner Peterson SECONDED the motion. Chairman Twait opened the public hearing. With no one wishing to speak the public hearing was closed. VOTE: YEA: Kiel, Pettey, Peterson Fikes, Knackstedt, Twait NAY: Page 123 of 133 MOTION PASSED UNANIMOUSLY. 7. UNFINISHED BUSINESS: None 8. NEW BUSINESS: a. Lease Application between the City of Kenai and Derek Leichliter, Lot 2, Block 1, GAA Subd. No. 1 for a term of 55 years — Discussion/Recommendation Based on Planning staff findings, the proposed lease was consistent with adopted plans and regulations, therefore it was recommended Council approve the lease. Koch and the Commission discussed the details of the lease and it was noted that the Airport Commission recommended approval of the lease at their last meeting. 9. PENDING ITEMS: None 10. REPORTS: a. City Council — No report. b. Borough Planning — No report. c. Administration — Koch thanked the City Clerk and the Planning Assistant for their attendance at the meeting. 11. INFORMATIONAL ITEMS:, 12. NEXT MEETING ATTENDANCE NOTIFICATION: September 10, 2014 13. COMMISSION COMMENTS & QUESTIONS Commissioner Peterson thanked Koch for filling in as Acting City Planner. Koch advised that the housing joint work session with Council would be conducted after the upcoming election and after a new Planner had been hired. 14. ADJOURNMENT: There being no further business before the Commission, the meeting was adjourned at 7:39 p.m. Page 124 of 133 Minutes prepared and submitted by: Sandra Modigh, CMC City Clerk Page 125 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 126 of 133 M "Villaye with a Past, Cit with a Future 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 Telephone: 907-283-7535 / FAX: 907-283-3014 MEMORANDUM TO: Mayor Porter and Council rh FROM: Scott Bloom, City Attorney DATE: August 29, 2014 SUBJECT: Local Preference At the Council meeting on August 20, 2014, Council Member Gabriel asked for additional information on the City's ability to provide a preference to local bidders on City purchases. Generally, the law allows municipalities to provide a local preference to local businesses. Revenue sources however, can restrict the City's options. In analyzing local preference laws, courts often require that law to be rationally related to a legitimate city interest. Local preference laws are generally justified because local economies improve when local businesses perform work. A limited review of case law indicates that when local preference laws are found to violate the law, it is often because they are too vague or define "local" in such a way that does not meet the purpose of the preference itself. I do not have legal concerns regarding the City's current local preference ordinance which provides: 7.15.045 Local preferences. (a) In awarding competitive bid purchases or construction contracts under KMC 7.15.040, preference may be given to an otherwise qualified "local bidder" unless such preference is prohibited by the funding source. (b) For purpose of this section, a "local bidder" is a person who: (1) Holds a current state business license, and in addition for construction contracts, holds a current, appropriate state contractor's registration certificate; (2) Submits a bid for a competitive purchase or construction contract under the name as appearing on the person's license and, where applicable, a certificate; (3) Has continuously maintained a physical place of business within the Kenai Peninsula Borough staffed by the bidder or an employee of the bidder for a period of one hundred eighty (180) days immediately preceding the date of the bid opening. Bidder must prove compliance with Page 127 of 133 Page 2 of 5 this requirement to the City's satisfaction. Mere maintenance of a mail box or telephone answering service, for example, is not sufficient to comply with this provision; and (4) If a joint venture, is composed entirely of venturers that qualify under this section. (c) An award shall be made to the lowest responsible bidder pursuant to KMC 7.15.040(f) of this chapter as applicable, except that a bid may be awarded to a local bidder if the local bidder's bid is not more than five percent (5%) higher than the lowest responsible non -local bidder's bid; provided, however, such preference shall never exceed twenty-five thousand dollars ($25,000.00), and further provided that the other provisions of KMC 7.15.0400 of this chapter as applicable, have been met and the City chooses to award the bid. This preference will not be granted where the City uses non-competitive purchasing as provided in KMC 7.15.050 of this chapter. A related concern raised by Council was the City's purchase of supplies, equipment, materials and services through contracts administered by other government agencies. KMC 7.15.050 provides that when the City utilizes contracts of other govermnental agencies it does not need to provide its own competitive bid process and KMC 7.15.045 disallows application of local preference in these types of transactions. Utilizing other government contracts for purchasing generally results in significant cost and time savings. The City Manager and Finance Director can provide more information on the benefits and disadvantages of these types of purchases. Below is a summary of other Alaska municipalities' approaches to local preference and utilizing government contracts. MUNICIPALITY LOCAL PREFERENCE DEFINITION City of Fairbanks Regular dealer who owns, operates or maintains a store warehouse or other establishment where the required items can be bought, or are stocked or sold in usual course of business. Must have been in business 6 months. FNSB Person who has place of business in borough and location is staffed by permanent staff year round. Page 128 of 133 LOCAL PREFERENCE APPLICATION Lesser of 5% or $50,000 for construction contract, lesser of 5% or $5,000 for any other contract. Lesser of 5% or $40k from bidders elsewhere in Alaska,lesser UTILIZATION OF GOV. CONTRACTS Yes, without competitive bidding. Page 3 of 5 Page 129 of 133 of 10% or $80k from non Alaska bidders. Juneau Registered to do business in 5% Yes, without Juneau. For 6 months has a competitive staffed place of business in bidding Juneau, provides goods and services in normal course of business and adds value to goods and service by manufacturing, assembling, creating, performing, controlling, managing or supervising goods or services. KPB Maintain and operate business When Yes, without within boundaries of the determined to competitive Borough be in best bidding when in interest of Borough's best Borough by interest. Mayor KGB Has Alaska business license $0-5mil/ 5 % Yes, without and maintained a place of >$5mi1/ 2.5% competitive business in borough for 6 bidding months. City of Ketchikan Has Alaska business license Only applies to Yes, without and maintained a place of contracts under competitive business in borough for 6 $200k, 10% up bidding months. to $100k, 7% from $100k to $200 Soldotna Has Alaska business license Only up to ? and maintained a place of $5,000 business in borough for 6 difference in months. bid. Wasilla Alaska, Wasilla and MATSU 2.5% Yes, without business license and had a competitive place of business in City bidding staffed by the vendor or employee for at least 6 months. Homer Has Alaska Business license, Up to $.5 mil/ Yes, without maintained and staffed place 5%, over $.5 competitive of business in City for mil/ 2.5% bidding Page 129 of 133 Page 4 of 5 Seward MATSU Borough preceding 6 months, is registered to collect sales tax, provides products and services locally. Maintain and operate a Lesser of 5% or ? business within Seward $5,000. Electrical Utility Service Area. Maintain and operate a business within Borough. Anchorage State business license, has municipal business or contractor's license if applicable, has maintained and staffed a place of business in municipality for past 6 months. Lesser of $2k or Yes, without 5% competitive 5% or $5k for contracts not exceeding $166,667,3% or $1 Ok up to $500k and 2% or $20k on contracts in excess of $500 k. YACity Council\Memorandums\2014 0829 Local Preference Memo to Council.docx Page 130 of 133 bidding Yes, without competitive bidding (unless "piggybacking") Page 5 of 5 Page 131 of 133 [PAGE LEFT BLANK INTENTIONALLY] Page 132 of 133 PURCHASE ORDERS BETWEEN $2,500.00 AND $15,000.00 FOR COUNCIL REVIEW COUNCIL MEETING OF: SEPTEMBER 3, 2014 VENDOR DESCRIPTION DEPT. ACCOUNT AMOUNT OCLC ANNUAL GROUP SERVICES CONTRACT LIBRARY REPAIR & MAINTENANCE 7,072.00 GOVERNMENT COMPUTER SALES COMPUTER ORDER (16) VARIOUS SMALL TOOLS 13,472.00 ALASKA MAP COMPANY GIS SUPPORT SERVICES PLANNING & ZONING PROFESSIONAL SERVICES 5,000.00 FOUR D CARPET ONE REPLACE FLOORING AT BEACON AIRPORT REPAIR & MAINTENANCE 3,377.61 AK STATE FIREFIGHTERS ASSOC FIRE CONFERENCE SPONSORSHIP LEGISLATIVE GRANTS TO AGENCIES 5,000.00 PAYMENT OF DELINQUENT PROPERTY KENAI PENINSULA BOROUGH TAXES FOR A PUBLIC PURPOSE LAND LAND 8,176.25 co WINCE, CORTHELL, BRYSON DECOMMISSION 5 WELLS AIRPORT REPAIR & MAINTENANCE 5,680.00 m w INGRAM LIBRARY SERVICES BOOKS LIBRARY BOOKS 4,000.00 w 0 1 w w NOTICE OF PUBLIC HEARING SEPTEMBER 3, 2014 CITY OF KENAI COUNCIL MEETING NOTICE IS HEREBY GIVEN the City of Kenai will conduct a public hearing on the following Ordinance(s) and/or Resolution(s) on the above -noted meeting date. 1. Resolution No. 2014-60 — Amending its Comprehensive Schedule of Rates, Charges, and Fees to Remove Certain Fees for the Use of the City Boat Launch Ramp and Dock Parking Before and After the Personal Use Dip Net Fishery Season. 2. Ordinance No. 2789-2014 — Amending Kenai Municipal Code Section 11.05.050, "Condition as to Equal Services and Rates," to Require that the City Provide Residents of the City of Kenai with Free Services at the City -Owned Boat Launch and Parking Facility. 3. Ordinance No. 2790-2014 — Waiving Certain Lease Provisions Imposed by Kenai Municipal Code Chapter 21.10 -Leasing of Airport Reserve Lands, and Approving a Non -Standard Lease Form for the Lease of Lot 2, Block 1, General Aviation Apron, Located within the Airport Reserve, to Legacy Electric. 4. Ordinance No. 2791-2014 — Declaring that T 5N R 11 W Sec 5 Seward Meridian KN 0003025 East Addn Townsite of Kenai — US Survey 3025 A & B Lots 12, 13, 14, 15 and 16, Block 3, Kenai, Alaska, also Known as 600, 602, 604, 606 and 608 Peninsula Avenue, Kenai, Alaska, whose Last Record Owner Under Borough Assessment Records was the First Baptist Church, 5432 E. Northern Lights Boulevard, #416, Anchorage, Alaska, Shall be Retained by the City of Kenai for a Public Purpose. 5. Ordinance No. 2792-2014 — Accepting and Appropriating a Grant from State of Alaska Division of Health and Social Services EMS Division Passed Through Kenai Peninsula Emergency Medical Services, Inc. for Travel and Training. Resolution No. 2014-61 — Authorizing a Budget Transfer within the Personal Use Fishery Fund — Parks, Recreation, and Beautification Department for 2014 Fishery Rentals in Excess of Budgeted Amounts. Resolution No. 2014-62 — Requesting the Alaska Board of Fisheries Hold its 2017 Upper Cook Inlet Finfish Meeting on the Kenai Peninsula and Approving Joint Resolution 2014-01. The public hearing will commence at 7:00 p.m., or as soon thereafter as business permits, in the Kenai City Council Chambers, 210 Fidalgo Avenue, Kenai, Alaska, 99611. All interested persons are invited to attend the meeting and participate in the public discussion. Written comments may be sent to the Kenai City Council, c/o Kenai City Clerk, 210 Fidalgo Avenue, Kenai, AK, 99611. Copies of the ordinances and/or resolutions are available in the Office of the Kenai City Clerk and will be available at the meeting for public review. Please be advised, subject to legal limitations, ordinances and/or resolutions may be amended by the Council prior to adoption' hpl er public notice. Sandra Mo9i9n, CMC, lrity Clerk Posted: August 29, 2014 Sandra Modigh From: Mayor Porter Sent: Thursday, August 21, 2014 5:59 PM To: Sandra Modigh; Scott Bloom; Rick Koch; Ryan Marquis Subject: September 3 Telephonic Participation Sandra, Please consider this notice of my intent to participate telephonically at the September 3rd meeting. I will be in Chantilly, Virginia using my cell phone. Thank you, Pat Sent from my iPhone 1 Sandra Modigh From: Sandra Modigh Sent: Friday, August 22, 2014 2:01 PM To: Brian Gabriel (bgabriel@ci.kenai.ak.us); Mayor Porter; 'Mike Boyle'; Robert Molloy; 'Ryan Marquis'; 'Terry Bookey'; Tim Navarre Cc: Rick Koch; Scott Bloom Subject: 9/3 Telephonic Participation - Porter This will serve as your notice pursuant to KMC, that Mayor Porter will be participating telephonically at the September Yd council meeting. Thanks, Sandra