CALL TO ORDER

A Special Meeting of the Kenai Peninsula Borough Assembly was held on June 14, 2004, in the Assembly Chambers, Borough Administration Building, Soldotna, Alaska. President Sprague called the meeting to order at 2:00 p.m.

PLEDGE OF ALLEGIANCE

The Pledge of Allegiance was recited.

There were present:

Pete Sprague, Presiding

Dan Chay

Paul Fischer

Betty Glick

Ron Long

Milli Martin

Grace Merkes

Gary Superman comprising a quorum of the assembly.

Absent:

Chris Moss (excused)

Also in attendance were:

Dale Bagley, Borough Mayor

Colette Thompson, Borough Attorney

Linda Murphy, Borough Clerk

Sherry Biggs, Deputy Borough Clerk

APPROVAL OF AGENDA (2:01:00)

MOTION TO APPROVE AGENDA: Martin moved for approval of the agenda.

President Sprague requested that a new Item H - "Assembly Comments" be added to the agenda with "Adjournment" now as Item I.

AGENDA APPROVED AS AMENDED: Without objection.

ITEMS NOT COMPLETED FROM PRIOR AGENDA (2:04:33)

Ordinance 2004-19: Appropriating Funds for the Fiscal Year 2004-2005 (Mayor) (Final Hearing)

[Clerk's Note: There was a motion to enact on the floor from the May 18, 2004 meeting.]

President Sprague called for public comment.

The following people spoke in favor of funding the Kenai Wild Program:

Linda Ralston, PO Box 8121, Nikiski, AK

Elizabeth Chase, PO Box 79, Kasilof, AK

Carl Waggoner, North Road, Nikiski, AK

Leon Marcinkowski, PO Box 7428, Nikiski, AK

Julie Marcinkowski, PO Box 7428, Nikiski, AK

Sylvia Beaudoin, Executive Director of Cook Inlet Salmon Brand, Inc.

Craig Ralston, PO Box 8121, Nikiski, AK

Mike Peek, 53687 Ray Court, Nikiski, AK

The following people spoke in favor of funding the Nikiski Community Center project:

Suzanne Strickland, PO Box 1014, Nikiski, AK

Dale Lloyd, PO Box 7338, Nikiski, AK

Carol Strickland, PO Box 1014, Nikiski, AK

Pat Heath, 47714 Interlake Drive, Nikiski, AK

Ruben Floyd, 47110 Autumn Lane, Nikiski, AK

Patty Floyd, 47110 Autumn Lane, Nikiski, AK

Karen Kester, Director of the North Peninsula Recreation Center

Julie Marcinkowski, PO Box 7428, Nikiski, AK

Mike Peek, 53687 Ray Court, Nikiski, AK

The following person spoke in opposition to funding the Nikiski Community Center project:

James Price, 49185 Island Lake Road, Nikiski, AK

The following people spoke on various topics:

Mark Gregory, Director of the Small Business Development Center (SBDC), asked for continued funding for the SBDC Office.

Jennifer Beckman, Executive Director of the Central Area Rural Transit System Inc. (CARTS), asked for continued financial support for the CARTS program.

Fred Sturman, PO Box 513, Soldotna, AK, spoke of the costly increases to the Public Employees Retirement System (PERS) and workman's compensation insurance programs.

There being no one else who wished to speak, President Sprague closed the public comment period.

(3:36:10)

MOTION: Martin moved to amend Ordinance 2004-19 by

increasing funding to the School District by an additional $786,032 as follows:

Section 1 to read:

"...Transfer to School District for Operations and In-kind Services $33,421,775 [$32,635,743]..."

Section 2 to read:

"...Local Effort $26,465,619 [$25,679,587]

Total Local Contributions per AS 14.17.410

$33,421,775 [$32,635,743]"

Assembly Member Fischer spoke in opposition to the amendment.

Assembly Members Superman and Long spoke in favor of the amendment.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Long, Martin, Merkes, Superman, Sprague

No: Fischer

Absent: Moss

MOTION TO AMEND PASSED: 7 Yes, 1 No, 1 Absent

(3:48:33)

MOTION: Martin moved to amend Ordinance 2004-19 by decreasing funding to the School Revenue Capital Project Fund by $710,000 as follows:

Section 1 to read:

"...Transfer to Capital Projects Funds -School Revenue $1,250,000 [1,960,000]..."

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Fischer, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO AMEND PASSED: 8 Yes, 0 No, 1 Absent

(3:50:32)

MOTION: Martin moved to amend Ordinance 2004-19 by decreasing School Revenue Capital Projects by $310,000 as follows:

Section 9 to read:

"...School Revenue $1,650,000 [$1,960,000]..."

Assembly Member Martin asked about the roof at the Homer Middle School. Maintenance Director Dave Tressler stated the roof repairs for the Homer Middle School could be delayed a year or more.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Fischer, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO AMEND PASSED: 8 Yes, 0 No, 1 Absent

(3:53:02)

MOTION: Martin moved to amend Ordinance 2004-19 by decreasing funding to North Peninsula Recreation Service Area Capital Projects by $815,000 as follows:

Section 9 to read:

"...Service Areas-North Peninsula Recreation $0 [$815,000]..."

Assembly Member Martin asked the mayor if the funding would be available when the service area was ready to begin the community center project. Mayor Bagley stated the service area had approximately $300,000 in their capital projects fund and would be transferring $550,000 from their general fund. This $815,000 would not be appropriated at this time. When the service area was ready to go forward with the project, it would still go before their board and then to the assembly. The money would be in the recreation service area's capital fund, but it would not be appropriated without assembly action.

Assembly Member Superman asked for the total of the North Peninsula Recreation Service Area Capital Projects Fund. Mayor Bagley said it would be approximately $860,000.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Fischer, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO AMEND PASSED: 8 Yes, 0 No, 1 Absent

(3:59:40)

MOTION: Martin moved to amend the narrative for the Road Service Area Regular Wages on Page 161 of the budget document as follows:

"Added: one new Administrative Assistant/Contract Coordinator [CONTRACT COORDINATOR] and one new Road Inspector to relieve existing workloads, and reduce the size of geographical regions."

VOTE ON MOTION TO AMEND:

Yes: Chay, Fischer, Glick, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO AMEND PASSED: 8 Yes, 0 No, 1 Absent

Assembly Member Martin asked the administration to clarify all new positions created under the FY05 budget. Mayor Bagley said it included the new road inspector, a part-time SBDC counselor in Homer, and a 911/Office of Emergency Management employee.

(4:03:11)

The gavel was passed to Vice President Superman, while President Sprague made the following amendments:

MOTION: Sprague moved to amend Ordinance 2004-19 as follows:

Delete the new Road Inspector position with associated wages and benefits of $68,207 as reflected on Pages 160-161 of the budget document.

Assembly Member Long asked about the need for a new position. Roads Director Gary Davis said the new position was needed simply due to the increased work load, RIADs, dust control program, road standard inspection, capital improvement projects and the abandoned vehicle policy.

Assembly Member Martin asked about the $50,000 decrease to Account No. 46910 Road Service Area Maintenance. Roads Director Davis said it was a more accurate figure as he had prior years to compare actual costs.

Vice President Superman passed the gavel to Assembly Member Chay. Mr. Superman noted the roads service area budget had increased dramatically over the last few years and the increased work load was obvious. Mr. Superman said the areas outside the cities relied heavily on the road service area. The gavel was returned to Vice President Superman.

Assembly Member Chay asked why a new position or employee could not originate through the budget process. Mr. Sprague said if a resolution was presented instead, it would provide for better scrutiny by the assembly of any new borough positions.

Assembly Member Martin said another road inspector was greatly needed.

Assembly Member Glick asked for clarification on the new road inspector position. Mr. Davis said there were currently three road inspectors. The four positions listed in the budget document, as road inspectors, included the one new hire.

Assembly Member Long spoke in opposition to the amendment.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Sprague

No: Fischer, Long, Martin, Merkes, Superman

Absent: Moss

MOTION TO AMEND FAILED: 3 Yes, 5 No, 1 Absent

(4:22:50)

MOTION: Sprague moved to amend Ordinance 2004-19 as follows:

Delete the half-time Emergency Telecommunications Specialist ($35,913) and the half-time 911 Communications staff ($35,913) as shown on Pages 53 and 55 of the budget document.

Board Member Long said that funding for the positions appeared to come directly from the General Fund.

VOTE ON MOTION TO AMEND:

Yes: Chay, Fischer, Glick, Long, Martin, Superman, Sprague

No: Merkes

Absent: Moss

MOTION TO AMEND PASSED: 7 Yes, 1 No, 1 Absent

(4:26:40)

MOTION: Sprague moved to amend Ordinance 2004-19 as follows:

Transfer funding in the amount of $81,571 for the Small Business Development Center (SBDC) Administrator position from Community & Economic Development Division (CEDD) on Page 39 to Non Departmental Contractual Services-EDD (#43009) as shown on Page 85 and delete the proposed half-time SBDC position in Homer at $52,318.

Assembly Member Martin said there was a tremendous need in the Homer area for SBDC services.

Assembly Member Merkes asked if the administrator position could be transferred to a nonprofit organization. Mayor Bagley said the SBDC office should be centrally located and agreements would need to be in place with EDD and SBDC/University of Alaska before this could occur.

MOTION: Long moved to divide the question.

(Question #1 = SBDC Administrator)

(Question #2 = SBDC Homer position)

VOTE ON MOTION TO DIVIDE THE QUESTION:

Yes: Chay, Fischer, Glick, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO DIVIDE QUESTION PASSED: 8 Yes, 0 No, 1 Absent

Grants Administrator Bonnie Golden said the amount also included funding for a current receptionist position. Assembly Member Sprague clarified his intent in moving only the SBDC Administrator to EDD. Assembly Member Glick asked about the in-kind contributions provided by the borough. Ms. Golden estimated the borough provided approximately $9,000 of in-kind contributions in office space, conference meeting rooms and a resource library. SBDC paid for telephone charges, copying costs and postage. The actual funding provided by the borough last year was $78,000.

Assembly Member Martin spoke in opposition to the amendment.

(5:08:40)

VOTE ON QUESTION #1 (SBDC Administrator):

Yes: Glick, Long, Martin, Sprague

No: Chay, Fischer, Merkes, Superman

Absent: Moss

MOTION TO AMEND FAILED: 4 Yes, 4 No, 1 Absent

Mark Gregory said office space for the part-time counselor would be provided by the Homer Chamber of Commerce.

Assembly Member Martin spoke in opposition to the amendment.

Assembly Member Chay spoke in favor of the amendment.

(5:12:12)

VOTE ON QUESTION #2 (SBDC-Part-Time/Homer):

Yes: Chay, Fischer, Glick, Merkes, Sprague

No: Long, Martin, Superman

Absent: Moss

MOTION TO AMEND PASSED: 5 Yes, 3 No, 1 Absent

(5:25:04)

MOTION: Sprague moved to amend Ordinance 2004-19 as follows:

Move the Grants Manager Position from CEDD to the Finance Department and move the SBDC Administrator position to another department, subject to negotiation with the administration, and to delete the remaining budget for CEDD.

Mr. Sprague said there appeared to be a redundancy with EDD and CEDD. President Sprague felt the EDD better served the entire borough. Mr. Sprague said the CEDD budget had grown excessively over the past few years.

Mayor Bagley said in prior years, it had been difficult to quantify economic development. Since CEDD was started there have been programs and projects underway, such as the Arctic Winter Games and the Cook Inlet Salmon Branding program.

Assembly Member Glick said the economic development program was originally under the KPB Planning Department, later becoming the nonprofit Economic Development District (EDD). CEDD was established to work on special projects for the mayor.

(5:44:15)

Assembly Member Long was sorry to see this become a contest between EDD and CEDD. Mr. Long said there were several ways to measure success. Credit was recently given to CEDD for the Tyonek Safe Water Project. Mr. Long noted CEDD did not claim the credit, but a third party had stated such. Assembly Member Long said the two entities served different audiences.

(5:47:21)

The gavel was passed to Assembly Member Chay. Vice President Superman said the CEDD program came under the mayor's budget. Mr. Superman spoke of the success of the salmon branding project and its potential. Mr. Superman said it was crucial to have an oil and gas point person working on behalf of the borough. Vice President Superman said the recent Pebble Creek gold mine expansion needed to have a local contact.

Assembly Member Sprague felt the motion needed to be made. Mr. Sprague wanted value out of the money spent by the borough. Mr. Sprague said the borough mayor should be the main contact person for large development projects, not staff members.

Assembly Member Martin agreed that it was a difficult topic. Ms. Martin noted that EDD was able to leverage state and federal dollars from the $50,000 from the borough. The sizeable amount allocated for CEDD had no extra leveraging power, but she valued the work of the oil and gas liaison.

Assembly Member Chay said natural gas development within the borough was going to be critical in the next few years.

(5:58:30)

MOTION: Chay moved to retain the Oil & Gas Liaison position.

Assembly Member Merkes spoke in favor of the amendment.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Long, Martin, Merkes, Superman, Sprague

No: Fischer

Absent: Moss

MOTION TO AMEND PASSED: 7 Yes, 1 No, 1 Absent

(6:04:55)

MOTION: Long moved to also retain the economic analyst position.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Long, Martin, Merkes, Superman

No: Fischer, Sprague

Absent: Moss

MOTION TO AMEND PASSED: 6 Yes, 2 No, 1 Absent

(6:09:16)

Mayor Bagley said there were still numerous line items within the CEDD budget to be addressed.

[Clerk's Note: The assembly recessed for dinner at 6:12 p.m. and reconvened at 6:45 p.m.]

(6:46:40)

Borough Clerk Linda Murphy restated the Sprague amendment as amended, "To eliminate the CEDD budget, with the exception of the following positions: Grants Manager to the Finance Department, SBDC Administrator to the Mayor's Office, Economic Analyst and Oil & Gas Liaison."

Assembly Member Martin still wished to retain support money needed for the staff members listed.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Sprague

No: Fischer, Long, Martin, Merkes, Superman

Absent: Moss

MOTION TO AMEND FAILED: 3 Yes, 5 No, 1 Absent

The gavel was returned to Assembly President Sprague.

(6:49:30)

MOTION: Glick moved to amend Ordinance 2004-19 as follows:

Add $50,000 from the General Fund to Non Departmental Contractual Services-EDD (Account No. 100.94910.43009).

VOTE ON MOTION TO AMEND:

Yes: Glick, Long, Martin, Merkes, Sprague

No: Chay, Fischer, Superman

Absent: Moss

MOTION TO AMEND PASSED: 5 Yes, 3 No, 1 Absent

(6:55:10)

MOTION: Glick moved to amend Ordinance 2004-19 as follows:

Add $35,000 from the General Fund to Non Departmental - Peninsula Promotion (Account No.100.94910.43021) for KPTMC to print and distribute 7,500 additional vacation planners.

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Long, Martin, Superman

No: Fischer, Merkes, Sprague

Absent: Moss

MOTION TO AMEND PASSED: 5 Yes, 3 No,1 Absent

(6:58:36)

MOTION: Martin moved to amend Ordinance 2004-19 as follows:

Increase the half-time planner position to a full time planner in Coastal Zone Management by adding $30,000 to Department 22140 for one year only to accomplish state mandates.

MOTION TO AMEND: Fischer moved to delete the phase "for one year only."

VOTE ON MOTION TO AMEND:

Yes: Fischer, Sprague

No: Chay, Glick, Long, Martin, Merkes,

Absent: Moss

MOTION TO AMEND FAILED: 2 Yes, 6 No, 1 Absent

VOTE ON MARTIN MOTION TO AMEND:

Yes: Chay, Long, Martin

No: Glick, Fischer, Merkes, Superman, Sprague

Absent: Moss

MOTION TO AMEND FAILED: 3 Yes, 5 No, 1 Absent

(7:05:21)

MOTION: Merkes moved to amend Ordinance 2004-19 as follows:

Add a cost of living increase to all Senior Citizen Programs for a total additional allocation of $420,500.

Assembly Member Fischer said he served on a senior center board of directors and asked to be excused. Assembly President Sprague declared a conflict of interest did exist and Mr. Fischer did not participate in the vote.

VOTE ON MOTION TO AMEND:

Yes: Glick, Merkes

No: Chay, Long, Martin, Superman, Sprague

Absent: Moss

Abstain: Fischer

MOTION TO AMEND FAILED: 2 Yes, 5 No, 1 Absent, 1 Abstention

(7:12:01)

Assembly Member Glick asked about the $116,445 advance payment to the Cook Inlet Salmon Branding Project. Ms. Glick asked if it was advanced from the FY05 budget. Ms. Golden said those funds were from the current FY04 budget.

(7:20:29)

Assembly Member Fischer asked if Mayor Bagley intended to employ the same lobbyist. Mayor Bagley replied in the affirmative. Mr. Fischer requested the lobbyist work from the assembly's priority list.

[Clerk's Note: The assembly recessed at 7:25 p.m. while the Finance Department prepared the final version of Ordinance 2004-19. The assembly reconvened at 7:47 p.m.]

(7:48:12)

MOTION: Martin moved to amend Ordinance 2004-19 as follows:

Insert a new fourth whereas clause to read, "WHEREAS, the Alaska Legislature approved HB233 which increased base student funding from $4,169 to $4,576 allowing for additional local support of $786,032. The School Board at their June 7, 2004 board meeting approved the increased funding, increasing local sources to $33,421,775 ($26,465,619 local effort and $6,956,156 in-kind services); and"

Section 1 to read, "That $57,248,980 [$57,212,092] is appropriated in the General Fund...

General Government Operations

$13,492,855 [$13,531,999]

Transfer to School District for Operations

and In-kind Serv

$33,421,775 [$32,635,743]

Transfer to Capital Project Funds-School Revenue:

$1,250,000 [$1,960,000]..."

Section 2 to read, "The following is appropriated to the school fund from local sources for operations purposes and in-kind services:

A. Local Effort $26,465,619 [$25,679,587]

...Total Local Contributions per AS 14.17.410

$33,421,775 [$$32,635,743]"

Section 9 to read, "That appropriations for the Capital Projects Funds for the fiscal year beginning July 1, 2004 and ending June 30, 2005 are as follows:

School Revenue $1,650,000 [$1,960,000]...

North Peninsula Recreation

$-0- [$815,000]..."

VOTE ON MOTION TO AMEND:

Yes: Chay, Fischer, Glick, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO AMENDED PASSED: 8 Yes, 0 No, 1 Absent

VOTE ON MOTION TO ENACT AS AMENDED:

Yes: Chay, Long, Martin, Merkes, Superman, Sprague

No: Fischer, Glick

Absent: Moss

MOTION TO ENACT AS AMENDED PASSED: 6 Yes, 2 No, 1 Absent

(7:55:24)

MOTION: Superman moved to suspend the rules and address Ordinance 2004-13 as the next item of business.

MOTION PASSED: Without objection.

UNFINISHED BUSINESS (Items to Reconsider) (7:56:33)

Ordinance 2004-13: Amending KPB 5.18.430, Sales Tax Computation - Maximum Tax, by Increasing it from $500 to $1,000 (Mayor) (Referred to Policies and Procedures Committee)

[Clerk's Note: Notice of Reconsideration was given by Assembly Member Superman on June 1, 2004.]

MOTION TO RECONSIDER: Superman moved to reconsider Ordinance 2004-13.

Assembly Member Long spoke in favor of reconsidering Ordinance 2004-13.

VOTE ON MOTION TO RECONSIDER:

Yes: Chay, Superman, Martin, Long

No: Fischer, Glick, Merkes, Sprague

Absent: Moss

MOTION TO RECONSIDER FAILED: 4 Yes, 4 No, 1 Absent

(7:58:25)

Resolution 2004-055: Setting the Rate of Levy for Real and Personal Property Taxes for the Kenai Peninsula Borough and for Service Areas Within the Borough for the Tax Year 2004 (Mayor)

MOTION: Superman moved to adopt Resolution 2004-055.

President Sprague called for public comment.

The following person spoke in opposition to Resolution 2004-055:

Fred Sturman, PO Box 513, Soldotna, AK

There being no one else who wished to speak, the public comment period was closed.

MOTION TO AMEND: Fischer moved to amend Resolution 2004-055 as follows:

Section 1 to read, "That the rate of levy of taxes on all real and personal property within the Kenai Peninsula Borough for tax year 2004 is hereby set at 6.50 [6.80] mills on each one dollar of assessed value..."

Assembly Members Superman, Long, Martin, Merkes and Glick spoke in favor of the amendment.

Assembly Member Superman asked the administration to discuss potential revenue to the borough. Mayor Bagley said in the current budget there was approximately $500,000 due in audit fees from Force Oil and a $300,000 increase to the in raw fish tax projections. This year there were tremendous costs associated with health insurance increases. Mayor Bagley did not think the Budget vs Actual figures would show an excess in FY05.

Assembly Member Chay said oil and gas indicators were not good and showed unstable futures.

VOTE ON MOTION TO AMEND:

Yes: Fischer, Glick, Long, Martin, Merkes, Superman, Sprague

No: Chay

Absent: Moss

MOTION TO AMEND PASSED: 7 Yes, 1 No, 1 Absent

(8:21:00)

The gavel was passed to Vice President Superman while Mr. Sprague made the following amendment:

MOTION: Sprague moved to amend Resolution 2004-055 as follows:

Section 5 to read, "That in addition to any other rate or rates of levy applicable for other purposes, the rate of levy on taxes on all real and personal property within the Central Emergency Service Area for said area tax year 2004 is hereby set at 2.6 [2.35] mills on one dollar of assessed value..."

VOTE ON MOTION TO AMEND:

Yes: Chay, Glick, Martin, Sprague

No: Fischer, Superman, Merkes, Long

Absent: Moss

MOTION TO AMEND FAILED: 4 Yes, 4 No, 1 Absent

The gavel was returned to President Sprague.

VOTE ON MOTION TO ADOPT AS AMENDED:

Yes: Chay, Fischer, Glick, Long, Martin, Merkes, Superman, Sprague

No: None

Absent: Moss

MOTION TO ADOPT AS AMENDED PASSED: 8 Yes, 0 No, 1 Absent

PUBLIC COMMENTS - None.

(8:26:00)

ASSEMBLY COMMENTS

Assembly Member Long thanked the public for their support and comments during the budget process.

Assembly President Sprague thanked everyone for their work on the budget.

Mayor Bagley thanked the staff for their assistance.

ADJOURNMENT (8:29:16)

With no further business to come before the assembly, the special meeting was adjourned at 8:29 p.m.

I certify the above represents accurate minutes of the Kenai Peninsula Borough special meeting of June 14, 2004.

Approved by Assembly: