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HomeMy WebLinkAbout03282023 City Council Minutes City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 263 CALL TO ORDER The March 28,2023 regular meeting of the Seward City Council was called to order at 7:00 p.m. by Mayor Sue McClure. OPENING CEREMONY Police Chief Alan Nickell led the Pledge of Allegiance to the flag. ROLL CALL There were present: Sue McClure,presiding, and John Osenga Liz DeMess Mike Calhoon Randy Wells Kevin Finch Robert Barnwell comprising a quorum of the Council; and Janette Bower, City Manager Brenda Ballou, City Clerk Brooks Chandler, City Attorney Excused—DeMoss Absent—None CITIZEN COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED FOR PUBLIC HEARING Bruce Jaffa,outside the city,was concerned about the stability of the leadership of the city; the city was about to lose its clerk and manager,there was no finance director,and there were many other vacant positions that were important to carry out the mission of the city. He respected the talents and effort of council members,and he thought council would have to step up even more into leadership roles to carry forth.The city needed to be united like never before;there was$500 million worth of projects coming and the city could not have revolving chairs for these important positions. There were excellent department heads who were doing a great job. Mary Tougas, inside the city, wanted to talk about the library. There was a staff shortage, including for maintenance staff;library staff had to clean the building at night,and often during the day when they were serving patrons. Tougas volunteered to clean the elevator the other day just to help out. The library staff should not be tasked with cleaning duties unless that was actually their job. Everyday maintenance was not being maintained adequately. Michael Brittain, inside the city, had submitted a letter of interest for the Prince William Sound Regional Citizens' Advisory Council(PWSRCAC). He was interested in serving and cared deeply about Seward and Alaska. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 264 Tim McDonald,inside the city,said 20 years ago net metering became a common industry practice,but it appeared Seward did not embrace it.He appreciated that HEA would be paying eight cents per kilowatt hour for excess power. He was concerned that the upcoming cruise ship season would be starting soon because cruise ships were an environmental hazard. Kyler Dow,outside the city,wanted to speak about the sale of the electric utility.He didn't think he was educated enough to have an opinion yet.He thought the community was privileged to have this council. Darryl Schaefermeyer, inside the city, asked council to convene a town hall meeting to allow the public to hear from HEA and ask questions.He was concerned that the sales agreement in the packet was only released a few days ago and was 240 pages long. He still hadn't seen or heard from council why they had chosen HEA. He had concerns over the finances of the deal being proposed. He had so many questions, too many to ask tonight in three minutes. He wanted to be convinced that this was the best deal for the community. Phil Kaluza, inside the city,had previously provided a rate comparison between HEA and Chugach Electric. In which he determined HEA rates to be higher than Chugach. Last year Hilcorp announced they were running out of natural gas from Cook Inlet and indicated that other sources would have to be considered.He was concerned that HEA's contract with Hilcorp would expire next year;he wondered what they would be doing.He believed HEA's generators were less efficient than Chugach's. Becky Dunn, inside the city, wondered why the meeting packet had to be so large. She couldn't keep up with everything. She supported the idea of having a public meeting for HEA. She was sorry that the city manager was leaving. Regarding net metering, she knew of one person who had received a check from the city for their excess energy. She was concerned that there were only cameras on the south side of city hall. Ristine Casagranda,inside the city,wondered why HEA had been selected. She had been partially involved in early discussions, but still had questions. She thought a 238 pages sales agreement was too huge. She didn't understand the purchase price, what went into it, and what impact on potential liability the city would have. She asked council to furnish the public with straight numbers and asked for more consumer education. APPROVAL OF AGENDA AND CONSENT AGENDA Motion (Wells/Osenga) Approval of Agenda and Consent Agenda McClure added a Borough Assembly Report to Special Orders, Presentations and Reports. Motion Passed Unanimous The clerk read the following approved consent agenda items: City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 265 Approval of the March 13,2023 City Council Special Meeting Minutes. Approval of the March 13, 2023 City Council Regular Meeting Minutes. Introduction of Ordinance 2023-007,Adopting Seward City Code Chapter 5.60 To Establish A Trust Fund From The Sale Of Seward Electric Services.This ordinance was introduced tonight and will come for public hearing and enactment on April 10, 2023. Introduction of Ordinance 2023-008,Repealing And Re-Enacting Seward City Code Title 7— Public Property For The City Of Seward Recodification Project.This ordinance was introduced tonight and will come for public hearing and enactment on April 10, 2023. Introduction of Ordinance 2023-009, Amending Seward City Code 15.25 Floodplain Management, Adopting Recommended Language And Regulations From The Federal Emergency Management Agency(FEMA).This ordinance was introduced tonight and will come for public hearing and enactment on April 10, 2023. Resolution 2023-032, Authorizing The City Manager To Purchase Electric Distribution Materials From Anixter Power Solutions To Ensure Adequate Inventory For The 2023 Construction Season For $286,123, Plus A 10 Percent Contingency, For A Not-To-Exceed Amount Of$314,735. Resolution 2023-033, Authorizing The City Manager To Purchase From G&W Electric Company Seven Dielectric Reclosers For Installation In The Fort Raymond Substation In A Not-To-Exceed Amount Of$203,413. Resolution 2023-034,Authorizing The Kenai Peninsula Borough School District To Operate Campgrounds On The Seward School Properties In Order To Accommodate The Need For Overflow Camping On The 4th Of July Holiday Weekend. Resolution 2023-035, Authorizing The City Manager To Execute R&M Engineering Task Order No. 2734.25.03, Completing The 35% Design Of A New Public Works Facility, And Appropriating Funds. Resolution 2023-036, Authorizing the City Manager to Reimburse Chugachmiut Regional Health Center for a Portion of a Sewer Line Realignment in the amount of$56,975, and Appropriating Funds. Resolution 2023-037,Approving The Lawful Action To Bring Suit Against A Non-Compliant Short-Term Rental At 2410 Maple And Appropriating Funds In An Amount Not To Exceed $10,000. Resolution 2023-038,Accepting The Resignation Of City Clerk Brenda Ballou And Setting The Terms For Her Departure From City Employment. Action Memorandum 2023-004,Accepting The City Manager's Resignation,Effective May 10, City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 266 2023. Non-objection to the renewal of liquor license#822—Beverage Dispensary for Seasalt,Alaskan Bar& Grill. Non-objection to the renewal of liquor license#4915—Restaurant/Eating Place—Seasonal for Gulf of Alaska Food Court. SPECIAL ORDERS,PRESENTATIONS AND REPORTS Proclamations and Awards—None City Manager Report. City Manager Janette Bower said, in addition to her report in the packet, she had been having discussions with the library director about maintenance needs; she was researching how to address repairs. Regarding Congressionally Designated Spending(CDS), she had been in contact with US Senator Lisa Murkowski's office and learned that the public works facility would qualify for USDA funding;there was no guarantee,but the project would qualify at least. In addition,there was one more funding opportunity relating to having a US Coast Guard Fast Response Cutter(FRC) in Seward. McClure asked for an update on the animal shelter. Police Chief Alan Nickell said the transition from the old shelter to the new shelter was complete.There were some items that were still in transition,but great progress had been made in the last couple of weeks.The shelter was open for surrenders and adoptions;please make an appointment by calling ahead.Within the next couple of weeks,the new shelter should be open to the public fully.There would be an open house scheduled, possibly in June. City Clerk Report. City Clerk Brenda Ballou drew attention to the schedule of key dates in the report for the upcoming special election. She reminded everyone that the voter registration deadline was this week, and absentee voting would begin April 17, 2023. City Attorney Report—None Other Reports and Announcements Borough Assembly Report. Borough Assembly Representative Cindy Ecklund reported the borough clerk would be adding new ADA-compliant election equipment. The Seward Bear Creek Flood Service Area manager position was upgraded from three-quarter time to full-time;Stephanie Presley had been the manager for many years but would be leaving soon. The assembly was addressing the disposal of abandoned vehicles within a ten-day period. The assembly had passed a resolution to request the City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 267 state increase the base student allocation for public schools. At the next assembly meeting, there would be a contract awarded to reconstruct and upgrade the Seward High School track. McClure wondered if there had been any discussion about resuming traveling assembly meetings. Ecklund said there had been some recent discussions,but nothing had been decided yet. Presentations Presentation by State Senator Gary Stevens and State Representative Louise Stutes. Lowell Canyon Diversion Tunnel Presentation by Jathan Garrett from the US Army Corps of Engineers (USACE). Council recessed the meeting at 8:17 p.m. Council resumed the meeting at 8:23 p.m. PUBLIC HEARINGS Ordinances for Enactment Ordinance 2023-006,Amending Seward City Code Title 2,Article 2—Seward Planning And Zoning Commission.This ordinance was introduced on March 13, 2023 and is coming tonight for public hearing and enactment. Motion (Osenga/Wells) Enact Ordinance 2023-006 Community Development Director Jason Bickling said this ordinance would include a requirement for commissioners to live in Seward year-round,and to have lived in Seward for at least one year before applying.In addition,there were some training requirements outlined and definitions for excused and unexcused absences. Notice of the public hearing being posted and published as required by law was noted and the public hearing was opened. Darryl Schaefermeyer,inside the city,thought some of the language in the ordinance was confusing,particularly relating to residency. He didn't understand why the residency for one year wasn't simply to have lived inside the city for at least one year. He didn't believe there should be a higher standard for P&Z commissioners than for council members. No one else appeared and the public hearing was closed. Bickling said at the time of applying, a commissioner would have to be residing within the city limits,and must also have lived in the Seward area for at least one year. He added that a person could have lived in Seward or the surrounding area for at least one year in the past,moved away,and then could apply immediately when they returned if they resided inside city limits. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 268 Motion Passed Unanimous Resolutions Requiring Public Hearing Resolution 2023-029,Determining It To Be In The Public Interest And Necessary To Proceed With The Proposed Improvement District For And Benefiting Lots 17,18,19,20,21,CR,CQ1, CQ2,CD,CF1,CF2,CG2,CP2,CG1,CP1,CO,CH,AX,AY,AZ,BA,BC1,BC2,BD1,BD2, BE1, And BE2 Of Forest Acres Subdivision For An Amount Not To Exceed Three Million, Nine Hundred Thousand, Six Hundred And Eleven Dollars ($3,900,611). Motion (Osenga/Wells) Approve Resolution 2023-029 Bower said an improvement district can be initiated by citizens,which was the case with this resolution. Sowell said he wanted to outline the project:there were 27 lots included in this district; the petition was submitted in December 2022; and, R&M had been requested to provide a survey and report. If council approved the resolution tonight, the next steps would include hiring a contractor to install the infrastructure. There were two plats that covered the scope of this project, one from 2006 and one from 1953. At this moment, 59%of the property owners had filed written protests against this proposal. Morgan Welch from R&M Consulting said R&M had prepared a feasibility study to outline the scope of the infrastructure development required.There would be 4,100 linear feet of water lines and 4,200 linear feet of sewer lines required,which added up to almost$3 million in cost to install. The remaining infrastructure of roadways and electric brought the project total up to $3.9 million. These figures were the engineer's estimate and not an actual bid.Welch said R&M had created four options for apportionment. Sowell said his recommendation would be to use method 2,which was based on a parcel square footage assessment which he believed was the fairest way to approach the assessment. Notice of the public hearing being posted and published as required by law was noted and the public hearing was opened. Jaz Ohdner, inside the city, was one of the property owners; he owned two parcels. He stated that at the time he purchased the properties,he believed the seller should have been required to have the infrastructure installed,and suggested the property sales were not completely legal.This oversight appeared to have slipped through the cracks,and now all the property owners were stuck with paying for the infrastructure. He thought the city should have stopped the sale of these properties. Molly Ledford,inside the city,was a property owner;she owned one parcel.She signed the citizen petition in December,2022 and appreciated the thorough report provided in tonight's packet. The estimated cost was simply too high,especially on top of the cost of building construction costs. She, too, believed the land sale had been unlawful to begin with. She wondered, if the property owners could form a homeowner's association, if they could then apply for the developer reimbursement program; or, perhaps the congressionally designated spending could include this infrastructure improvement. She would appreciate it if the city would provide some subsidization. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 269 Cindy Ecklund, inside the city, recalled building a cabin in Woodland Hills in 1979 in which the city provided the electricity installation and allowed property owners to pay it back over time.She suggested council fail this resolution and then have another discussion about how to make this infrastructure feasible. Jenny Grischuck, outside the city, was a property owner; she owned one parcel. She requested council fail this resolution so that more creative solutions could be explored. Tim McDonald,inside the city,thought most of the property owners would be paying more for the infrastructure than they paid to purchase the lots. Bruce Jaffa, outside the city, said property and development were his favorite topics. He thought these property owners were speaking to current issues; it didn't seem fair that individual property owners couldn't get the same kind of benefit as a developer would have.There were some communities that allowed property owners to pay for the utility when they tied into it rather than up front. No one else appeared and the public hearing was closed. Bower said this project was currently on the city's legislative priorities. The CDS was currently closed,but this project could be added in the fall when it reopened. Sowell said he had expressed his concerns about the ineffectiveness of the infrastructure bill and said there was currently no money in the developer reimbursement program budget. McClure wished to find a solution to help the property owners. Motion Failed Unanimous UNFINISHED BUSINESS Action Memoranda Action Memorandum 2023-003,Appoint a citizen to serve as the city's representative on the Prince William Sound Regional Citizens Advisory Council with a term to expire May,2025. This item was postponed from March 13, 2023 and council extended the deadline for submitting letters of interest to 5:00 p.m.Friday,March 24, 2023. There was one letter of interest received from the city's current PWSRCAC representative Patrick Domitrovich on March 3rd and a second letter received from Mike Brittain on March 1 5`h; both letters are included in the packet. There were no additional letters received by the city clerk McClure verbally queried council for their preferences. By unanimous consent, council selected Mike Brittain to serve as the city's representative on PWSRCAC. NEW BUSINESS City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 270 Resolutions Resolution 2023-039,Approving An Asset Purchase Agreement Between The City Of Seward And Homer Electric Association For The Sale Of The City Of Seward Electrical System, Subject To Voter Approval. Motion(Osenga/Wells) Approve Resolution 2023-039 City Attorney Brooks Chandler introduced Cody George as the newest attorney with his firm.Chandler was not taking a stance on this topic,but wished to provide educational information. The purchase price would be$25,250,000,with some adjustments.If the voters approved the sale in May, then the state commission would have to approve it before the sale would close, and that could take up to a year to happen. There were two bonds that would have to be paid off at closing, as well as some other liabilities;the total obligation was just over$19 million.However,there was a premium above book value that the city would receive of$1.1 million per year for ten years. In addition,HEA wished to lease office space from the city for$45,000 for up to 20 years.The net proceeds from the sale would be deposited into a trust fund, if approved by council, and then would become a budget line item. Electric Utility Manager Rob Montgomery said,in 2021,the electric department put$2.1 million into the general fund.If this sale did not go through,he projected that future deposits into the general fund would be diminished because the revenues would have to be used for infrastructure improvements. Chandler said the city would have to conduct a rate study; it was highly likely that utility customers would experience a rate increase whether the sale went through or not. Montgomery estimated between 12.5-13%rate increase;by 2027,the base rate increase from today could be as much as 25%. Chandler said there was a new opportunity for the city to lease property at Fort Raymond for HEA to use as a yard,immediately adjacent to the electric warehouse,in exchange for revenue from cruise ship. If the sale was approved by the voters,the state's Regulatory Commission Authority(RCA) would have to review and approve the rates;this process could take 12-18 months.Following RCA approval, the bonds would have to be paid off within 60 days. Montgomery said he had a third-party valuation of the Seward electric and had discovered that the HEA offer was in keeping with the valuation results. In response to Finch, Montgomery said in the 4th quarter of 2023 or in the beginning of January 2024,the city would have to implement a base rate increase of 12.5-13%.Montgomery said in addition, there would be another 13-14%increase that would come after that. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 271 Calhoon asked for clarification on where the $3.2 million depreciation figure came from. Interim Finance Director MC Pehle said this was based on 2023/2024 assets being depreciated. Calhoon asked for clarification on the office space lease.Chandler confirmed the lease would be ten years with two five-year options to extend. In response to Calhoon,Montgomery said HEA opted not to purchase the pole yard at Mile 4 due to contamination issues. Motion to Amend (Calhoon/Finch) Amend Resolution 2023-039 by removing the yard lease and right of first refusal of Fort Raymond from the sales agreement. Calhoon didn't believe it was prudent to include a yard lease based on the potential for revenue from a revenue source that didn't yet exist. Wells said the city didn't know if there would ever be revenue from shore power to cruise ships,and the property in question could potentially be used for other purposes.He wondered if the remaining acreage at Fort Raymond would be enough to do something with.Bower said there could be enough space,but not for every idea; it wouldn't be enough space for a recreation center. 111 McClure asked if the sales agreement would be finalized tonight or if it would come back to council again. Chandler said this resolution would be the final expression of the city's sales agreement and it would go back to HEA for consideration. Barnwell believed there was potential for greater shore power revenue than these projections suggested. He suggested that Motion to Amend Passed Unanimous Barnwell wondered what specific upgrades the electric infrastructure needed. Montgomery said the upgrades included the pole replacements along Nash Road,rebuilding and refurbishing all substations,and upgrading transmission lines from 69kV to 115kV. The$10 million revenue bond would go towards paying for Nash Road and two substations,but there would be a gap of$4 million that would have to come from the electric enterprise fund. Eventually the city would have to obtain another bond for approximately $8 million to finish the rest of the work, and even then, the city would still not have addressed cybersecurity concerns.If the sale did not get approved by the voters, Montgomery said he would have to completely restructure the electric utility, add staff, and reorganize the department. Main Motion Passed Unanimous Council recessed the meeting at 10:16 p.m. Council resumed the meeting at 10:22 p.m. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 272 Other New Business Non-objection to the renewal of marijuana license #17758 — Retail Marijuana Store for The Tufted Puffm,LLC. Council Member Wells declared a potential conflict of interest because he owned The Tufted Puffin.Mayor McClure ruled that a conflict existed with no objection from council.Wells left the dais. Motion (Calhoon/Osenga) Non-objection to the renewal of marijuana license#17758—Retail Marijuana Store for The Tufted Puffm,LLC. Motion Passed Unanimous Wells returned to the dais. Discuss and formulate responses to the City of Obihiro's email regarding Sister City Anniversaries. McClure obtained a consensus from council that they wished to host a visiting delegation from Obihiro in August, 2023 and also wished to send a delegation from Seward to Obihiro in October,2023. McClure would not be able to travel to Obihiro,but Wells and Barnwell wanted to go. Wells offered to block out his lodging business for the Japanese delegation to stay; the accommodations slept six people. Council was undecided about whether they wished to organize an anniversary celebration. City Council discussion and direction concerning the appointment of an Interim City Manager and the City Manager hiring process. M otion (Wells/Finch) Direct the Human Resources manager to hire GovHR to search for a new city manager. Motion Passed Unanimous Motion (Wells/Calhoon) Postpone the discussion about hiring an Interim City Manager until April 10,2023. Motion Passed Unanimous Council requested the Human Resources manager reach out to the Alaska Municipal League(AML) to research if there were any interim city manager candidates available. Discuss and determine the city clerk hiring process. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 273 Motion (McClure/Wells) Advertise the city clerk position vacancy in- house for five days with a deadline of April 4,2023. Motion Passed Unanimous Motion (McClure/Wells) Schedule a special meeting on April 6,2023 at 12:00 p.m. to review the applications from internal candidates. Motion Passed Unanimous INFORMATIONAL ITEMS AND REPORTS Boards and Commissions Minutes Planning&Zoning Commission—None Port&Commerce Advisory Board—January 4, 2023; February 1, 2023; and February 15, 2023 Historic Preservation Commission—None CITIZEN COMMENTS Bruce Jaffa, outside the city,was pleased with council's work tonight;he thought council showed leadership tonight and made some tough decisions.The information provided tonight about the HEA sale was helpful,but there was a lot of work still to do for the public to understand.He was invited to attend and speak at career day at the Seward High School and had enjoyed his participation. Motion (McClure/Osenga) Extend the council meeting to midnight. Motion Passed Yes: Barnwell, Calhoon, Osenga, Wells, McClure No: Finch Tim McDonald, inside the city, thought council needed to focus on the big stuff and stop focusing on the minutiae.If the war in Europe kept going,he thought it could impact Seward's port. He wished there was a limit on the number of cruise ships allowed, and suggested maximum of 60 ships per year. He was concerned about the environmental impact of cruise ships. Megs Testramata,inside the city,was very confused about the electric sale; she thought it was rushed. She didn't understand the comparison between HEA and Chugach;she suggested a task force be created to help citizens understand the options.She wasn't convinced that selling the utility was a solution to overcome deferred maintenance. She had experience working in the renewable energy field and wanted to have more information before she voted. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42,Page 274 Darryl Schaefermeyer,inside the city,thought the general fund contribution information in tonight's presentation needed more explanation. He said council had a duty to understand and explain what the impact was going to be on the people.He said the city would be having to conduct a rate study, and then HEA would freeze those rates for three years; the rates, according to the electric manager,were expected to rise between 12-15%in the first year. He wished the city would freeze the current electric rates; that would be beneficial to the citizens. On a separate note, Schaefermeyer encouraged council to look seriously at geothermal heating for the new public works facility;the city could be talking with the borough about putting geothermal in at Fort.Raymond so that the borough school district would be able to tap into the same set up to heat and cool all three schools plus the pool. Ristine Casagranda,inside the city,was also confused about many aspects of the HEA sale, including how the general fund contribution was outlined. Seward was the only community on the Railbelt where the small businesses paid more than residents; as a small business owner she was happy to learn that the residential and small business rates would be adjusted.She hoped there would be more opportunities for citizens to receive more education about this sale. David Squires,inside the city,recalled the last exchange of a delegation from Obihiro and he had thoroughly enjoyed it. COUNCIL AND ADMINISTRATION COMMENTS & RESPONSE TO CITIZEN COMMENTS Bower said now that council had made the decision to approve the HEA sales agreement,the city could release more information to the public. Finch thanked R&M and USACE for their presentations.He commiserated with the Forest Acres property owners and looked forward to finding a solution. Barnwell thought the Lowell Canyon Diversion Tunnel presentation was fascinating,as was the HEA presentation.He reminded people that HEA was hosting a lot of community meetings.He had enjoyed working with the city manager and the city clerk and was sad to see them resign,but wished them well. Calhoon thought all the presentations tonight were great. He was pleased to see the animal shelter up and running. Regarding the sales agreement with HEA, he knew it wouldn't make everyone happy,but he felt strongly that this was the right decision. He said HEA was planning to host some big town hall meetings;he encouraged citizens to pose all their questions to HEA because they would answer them. Wells was excited about the animal shelter.He reminded everyone to file for their Permanent Fund Dividend. He was excited about the high school track project. He had been doing some research on the hydro project and on the Lowell Point Sewer Lagoon; he was happy to take email questions from citizens about either item. City of Seward,Alaska City Council Meeting Minutes March 28, 2023 Volume 42, Page 275 Osenga thanked Senator Stevens and Representative Stutes.He was a member of the Seward Community Band and there would be a free concert on April 4,2023. He wished everyone a Happy Easter. McClure appreciated the public participation tonight. She was confident in her understanding of the HEA sale and sales agreement. EXECUTIVE SESSION—None ADJOURNMENT The meeting was adjourned at 11:25 p.m. Brenda Ballou, C Sue McClure City Clerk Mayor (City Sei`,�.i OF gF,i,*, •iffiro.goil:ry la I MI tSEAL 70 —._ • !- _ • • 1, 191.E ,• � •,QFALPS::,,.