HomeMy WebLinkAbout08142023 City Council Packet Seward City Council
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Photo by Kris Peck
Monday, August 14 2023
City Council Chambers Beginning at 7:00 p.m.
1963 1965 2005 The City of Seward,Alaska
CITY COUNCIL MEETING AGENDA
City Council Chambers, 410 Adams Street
Please silence all cell phones and devices during the meeting
Mayor Sue McClure Council Member Randy Wells Acting City Manager Norm Regis
Vice Mayor John Osenga Council Member Kevin Finch City Clerk Kris Peck
Council Member Liz DeMoss Council Member Robert Barnwell City Attorney Brooks Chandler
Council Member Mike Calhoon
Monday,August 14, 2023 at 7:00 p.m.
1. CALL TO ORDER
2. PLEDGE OF ALLEGIANCE
3. ROLL CALL
4. CITIZEN COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULE FOR
PUBLIC HEARING (Those who have signed in will be given the first opportunity to speak. Time is limited
to 3 minutes per speaker and 36 minutes total time for this agenda item)
5. APPROVAL OF AGENDA AND CONSENT AGENDA (Approval of ConsentAgenda passes all
routine items listed under Item 7. ConsentAgenda items are not considered separately unless a council member
requests.In the event of such a request, the item is returned to the Regular Agenda)
6. SPECIAL ORDERS, PRESENTATIONS,AND REPORTS
A. Proclamations and Awards
1) Founders Day Proclamation..........................................................Pg. 5
B. City Manager Report.......................................................................Pg. 6
C. City Clerk Report...........................................................................Pg. 110
D. City Attorney Report.......................................................................Pg. 111
E. Other Reports and Announcements
1) Small Business Development Center(SBDC) Quarterly Report............ .....Pg. 113
2) HYPER Financials.....................................................................Pg. 114
3) Seward Electric Utility Ad Hoc Committee Meeting Minutes July 31, 2023
.............................................................................................Pg. 116
4) Providence Audited Financials for FY21 and FY22................................Pg. 123
F. Presentations (Presentations are limited to ten minutes each, excluding Q&A, and are limited to two per
meeting unless increased by council.)
1) Presentation By R&M -Public Safety Building Needs Assessment .............Pg. 151
City Council Meeting Agenda 8-14-2023 11 P a g e
7. CONSENT AGENDA(also marked with asterisk*)
A. Minutes of Preceding Meeting
1) *Approval of the July 24, 2023 City Council Regular Meeting Minutes......Pg. 164
B. Introduction of Ordinances-None
lzj*Iatr-adtietia of O-.a;,,anee-2023 020-Amen'lm'-rrrgCSow.,r City Code Ti Title 12
Clerk's Note: This item was not ready by the packet deadline
C. Resolutions on Consent Agenda
1)*Resolution 2023-090: Accepting The Return of $56,310.58 In Funds From
Kenai Peninsula Borough That Was Intended For The Japanese Creek
Feasibility Study Project,And Appropriating Funds........................Pg. 176
2)* Resolution 2023-091: Approving An Employment Agreement Between The
City Of Seward And Kathleen Sorensen For City Manager Services......Pg. 186
3)*Resolution 2023-092: Authorizing The City Manager To Enter Into A Loan
Agreement With The Alaska Department Of Environmental
Conservation.....................................................................Pg. 196
4)*Resolution 2023-093: Authorizing The City Manager To Enter Into A
Management And Operating Agreement With Providence Health & Services
Washington d/b/a Providence Health& Services Alaska...................Pg. 211
5)*Resolution 2023-095: Authorizing the City Manager To Enter An Independent
Contractor Agreement With Selena Soto for GIS Technical Services and
Appropriating Funds............................................................Pg. 233
D. Other Items on Consent Agenda-None
8. PUBLIC HEARINGS -None
9. UNFINISHED BUSINESS -None
10. NEW BUSINESS
A. Resolutions
1) Resolution 2023-094: Repealing Resolution 2023-058: Personnel Policy 2023-01:
Phone Use and Recording Policy..................................................Pg. 259
B. Action Memoranda
City Council Meeting Agenda 8-14-2023 2 1 P a g e
1) Action Memorandum 2023-011: Determining It Is In The Best Interest Of The Seward
Community To Sell The Electric Utility And Specifying The Primary
Reasons.....................................................................................Pg. 277
2) Action Memorandum 2023-012: Clarifying the Reasons Homer Electric Association is
the Preferred Electric Utility to Purchase Seward Electric...........................Pg. 287
C. Other New Business
1) Seward City Tours Request to Purchase Property.................................Pg. 294
11. INFORMATIONAL ITEMS AND REPORTS
A. Boards and Commissions Minutes
1) Planning& Zoning Commission
a. June 6, 2023 Planning& Zoning Minutes.........................................Pg. 337
12. CITIZEN COMMENTS (There is no sign in for this commentperiod. Time is limited to five (5) minutes
per speaker.)
13. COUNCIL AND ADMINISTRATION COMMENTS AND RESPONSES TO CITIZEN
COMMENTS
14. ADJOURNMENT
City Council Meeting Agenda 8-14-2023 3 1 P a g e
PROCLAMATION
WHEREAS, ON AUGUST 28, 1 903, 83 MEN, WOMEN, AND CHILDREN, ARRIVED AT
RESURRECTION BAY ON THE STEAMER, THE SANTA ANA; AND
WHEREAS, ABOARD THIS STEAMER WERE TWO BROTHERS, JOHN AND FRANK
BALLAINE, WHO ARRIVED ON THE LOWELL HOMESTEAD; AND
WHEREAS, THE BALLAINE BROTHERS ENVISIONED A RAILROAD TO THE INTERIOR
OF ALASKA WITH A COASTAL HEADQUARTERS; AND
WHEREAS, THE SETTLERS CLEARED THE TOWNSITE, ERECTED BUILDINGS, AND
BEGAN THE CONSTRUCTION OF THE ALASKA CENTRAL RAILROAD, LATER TO BECOME THE
ALASKA RAILROAD; AND
WHEREAS, JOHN BALLAINE BESTOWED UPON THE NEW TOWN THE NAME
SEWARD, IN HONOR OF WILLIAM H. SEWARD; PRESIDENT LINCOLN'S SECRETARY OF
STATE WHO NEGOTIATED THE PURCHASE OF ALASKA FROM RUSSIA IN 1867, AND WAS
LATER PRESIDENT ANDREW JOHNSON'S SECRETARY OF STATE; AND
WHEREAS, THE LANDING DATE OF AUGUST 28, 1903 IS REMEMBERED AS
SEWARD Ts FOUNDER'S DAY.
NOW THEREFORE I, SUE MCCLURE, MAYOR OF THE CITY OF SEWARD, ALASKA,
DO HEREBY PROCLAIM SATURDAY, AUGUST 28, 2023 AS:
FOUNDER'S DAY
DATED THIS 1 4TH DAY OF AUGUST, 2023 THE CITY OF SEWARD, ALASKA
SUE MCCLURE, MAYOR
5
City of Seward Acting City
Manager's Report August
14, 2023
Mayor McClure and Council Members,
Mr. Brumley from the USCG was here August 3rd and 4t" to look at the new coast guard site at SMIC
and finalize and signed the Real property exchange agreement, which will come before you at this
meeting.
The Salmon Derby is here August 12 to the 20t"; they are still looking for volunteers for the derby
booth.
Met with Elaina Sprague from Senator Sullivan's office along with six marines that are looking for an
area to store emergency airport equipment and were interested in some railroad property for this
endeavor, and are interested in the states airport project.
The city has met with our Federal lobbyist on 8-7 to discuss possible future legislation and funding
opportunities.
The Central Treasury report to the CMR, the acting finance director will be available for any questions.
If you have any questions please feel free to reach out to me, you have my number.
Board and Commission Attendance
Attached is the Board and Commission attendance record.
Purchase Orders
As required by the Seward Municipal Code 6.05.010, the following purchase orders between
$5,000 and $30,000 have been approved by the City Manager since the last council meeting.
Department Vendor Description Amount
WATER CORE AND `r9 L N LF SoJe Sou roe for replacement parts for Water Department.Valve 5,016.90
box,key box,mainline paving boxes and stainless steel repair
band for S"AC
ELECTRIC ADIVIN ALASKA TEXTILES INC FR Raingear CJathing for Linemen Crew %070.00
Vis PROVAL TECHNOLOGIES INC VSAcansultationservices. Ensu re system patch ing an d 11,250.00
monitoring is in place and properly configured.
Thank you,
Norm Regis
Page 3 of 3
6
City of Seward - Human Resources Manager Report
Staffing Information
# of
Department Job Title Positions Filled
Administration City Manager 1 1
Assistant City Manager 1 1
Human Resources Manager 1 1
Executive Assistant 1 1
TOTAL: 4 4
Finance Director - unfunded for 2023 1 0
Deputy Finance Director 1 1
Senior Accountant 1 1
Accounting Technician III 1 1
Accounting Technician II 1 1
Accounting Technician - Utilities 2 1
Accounting Tech Payroll 1 1
Accounting Tech Accounts Payable 1 0
TOTAL: 9 6
Public Works Director 1 1
Street Foreman 1 1
Maintenance Mechanic 3 3
Public Works Technician 1 1
Shop Foreman 1 1
Water and Wastewater Foreman 1 1
Water and Wastewater Operator 3 3
Building Maintenance Technician 2 1
TOTAL: 13 12
Community Development Director 1 1
Planner 1 1
GIS Technician 1 1
TOTAL: 3 3
Electric Director 1 0
Operations Supervisor 1 0
Field Engineer 1 1
Executive Assistant 1 1
Lineman 4 4
Plant Operator 2 2
TOTAL: 10 8
Fire Department Chief 1 1
Deputy Chief 1 1
Executive Assistant 1 1
Building Official 1 1
Building Fire Inspector 1 1
Firefighter/EMT 1 1
Seasonal - Summer Laborer 1 1
7
# of
Department Job Title Positions Filled
TOTAL: 7 7
Harbor Harbor Master 1 1
Deputy Harbor Master 1 1
Office Manager 1 1
Executive Assistant 2 2
Harbor Worker II 6 6
Harbor Worker III 1 1
Seasonal - Summer Laborer Part-Time 1 1
Seasonal - Summer Laborer Full-Time 1 0
TOTAL: 14 13
IT Director 1 1
Senior IT Tech 1 1
IT Technician 1 1
TOTAL: 3 3
Library Director 1 1
Assitant Library Director 1 1
Library Technician 1 1
Curator 1 1
Library Aide 1 1
Seasonal - Aides 2 2
TOTAL: 7 7
Police Chief 1 1
Deputy Chief 1 1
Sergeant 1 1
Patrol Officer 7 4
Patrol Officer not funded 1 0
Executive Assistant 1 1
Corrections Sergeant 1 1
Corrections Officer 4 3
Corrections Officer not funded 1 0
Dispatch Supervisor 1 1
Dispatcher 5 5
Animal Control Officer 1 1
Animal Control Officer Assistant 1 1
DMV Clerk 1 1
TOTAL: 27 21
Parks &Recreation Director 1 1
Deputy Director 1 1
Executive Assistant 1 1
Campground Coordinator 1 1
Program Coordinator 1 1
Recreational Assistant 1 1
Maintenance Technician 1 1
Seasonal - Summer 15 10
Seasonal - Winter 2 0
TOTAL: 24 17
8
# of
Department Job Title Positions Filled
City Clerk's Office City Clerk 1 1
Deputy City Clerk 1 1
Executive Assistant 1 1
TOTAL: 3 3
Total number of authorized positions: 124
Total number of filled positions: 104
9
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Dear Mr. Regis,
Thank you for your interest and participation in the FY24 federal appropriations process. I'm reaching out
to you regarding your, City of Seward for Public Water Utility Upgrades, Congressionally Directed
Spending request. Unfortunately, although Senator Murkowski submitted your request for committee
consideration, it was not included in the Senate bill,which passed out of committee today. I understand
how disappointing this is,but please be assured that Senator Murkowski did all that she could to advocate
for your project's inclusion.
As you may know,many committees received funding allocations that were more limited than prior
years. For this bill, funding allocated for CDS requests was substantially lower than last year, and only a
few of Senator Murkowski's requests were funded.
We appreciate the time and effort you put into this important project. Although it was not included in the
bill,we would like to keep in touch and stay updated on how we can assist and support you.
If your organization would like a letter of support for competitive grant opportunities, or would like to be
updated about our upcoming grants symposium where you can learn about other federal funding
opportunities,please reach out to me at dana herndonkmurkowski.senate. og_v.
Thank you,
Tanya Lautaret
Tanya Lautaret
Regional Special Assistant I Kenai Peninsula&Kodiak
Office of U.S. Senator Lisa Murkowski
Phone: 907.262.4220 Mobile: 907.341.9718
44539 Sterling Highway, Suite 203 Soldotna,AK 99669
www.murkowski.senate.gov
11
CRW Technical Memorandum
ENGINEERING GROUP,LLC
Date: July 27, 2023
To: Doug Schoessler, DPW Director, City of Seward
Thru: Don Porter, PE, R&M Consulting, Inc.
From: Tracy McKeon, PE—CRW Engineering Group, Inc.
Project: City of Seward Community Library and Museum HVAC Assessment
Project: (CRW#77101.06)
Subject: Final Report
EXECUTIVE SUMMARY
CRW Engineering Group was contracted to provide a survey of the Heating, Ventilating and Air
Conditioning (HVAC) systems for the Seward Community Library and Museum. This report
includes a summary of the findings regarding the condition of the existing building HVAC system
and recommendations for upgrades.
The survey was performed utilizing review of as-built record drawings, site observations,
discussions with the City of Seward and Library staff and an engineering analysis of the building.
The purpose of the survey is to aid the City of Seward in creating a plan for mechanical upgrades
to complete repairs and upgrade the building HVAC systems to deal with ongoing maintenance
and operational concerns.
The original building code analysis was complete in accordance with the 2006 International
Building Code and the HVAC system design was in accordance with ASHRAE 62.1-2010. Since the
original construction of the building, there have been ongoing leaks and need repetitive repairs
that have led to concerns with the quality of the installation, potential design deficiencies, and the
cost of increased operation, maintenance and repairs. Several of the areas in the building have
been designed for natural ventilation and have reported significant occupant thermal comfort
issues. Consideration for upgrading the HVAC systems to support improved occupant comfort and
improved efficiency of the building was also reviewed.
The following is the list of upgrades/repairs recommended for the building:
1. Reconfigure terminal unit piping to eliminate flex connections at baseboard and radiant
zones.
2. Improve ventilation for Young Adult and Children rooms to provide ventilation in
accordance with ASHRAE 62.1-2019.
3. Install drip pans under all piping in Secure Storage and Exhibit Work Rooms.
4. Provide drip pan, route condensate from AHU-4 to indirect drain to a new hub drain in
loading dock.
5. Repair leak at heating coil, HC001.
6. Seal air leak at condensate piping penetration near humidifier manifold in duct at AHU-1.
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
1
12
r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
EXISTING HVAC SYSTEMS DESCRIPTION
General
The building was originally constructed in 2014. The total building area is approximately 24,323
square feet and includes two occupied floors with a basement. The general layout of the building
includes the Lobby, Museum/Exhibit, Community Room, Kitchen, Storage, Loading Dock, Secure
Storage, Server Room, and Exhibit Workroom on the first floor. The second floor includes the
Library Stacks, Reading Area, Young Adult, Children, Meeting Room, Work Area, Research Area,
Director Office, and Circulation Desk. Both floors have a men and women restrooms, elevator
access, custodian closets and stair access.The basement includes the mechanical room, fan room,
and collection storage area.
The building heating systems is comprised primarily of two fuel fired boilers and an electric boiler,
radiant floors and perimeter hydronic finned tube, and duct reheat coils. While the ventilation
system includes both constant volume and variable volume air handlers, a relief air fan, two heat
recovery ventilators, and several small cabinet supply ventilation fans, The HVAC systems are
from the original construction of the building.
It was reported that since shortly after construction they have had ongoing issues with leaks in the
hydronic heating system and indoor air quality issues in several areas of the building. The hydronic
leaks have been primarily addressed as they have occurred, by the HVAC service contractor Long
Building Technologies, but are ongoing. Also, it is noted that some leaks have been reoccurring in
the same locations in some cases, most recently ones in the community room closet and the
basement.
In preparation for the site investigation on May 1. 2023, we spoke with Ryan Skiff at Long Building
Technologies regarding recent and past work orders in the building and ongoing concerns with the
HVAC system.The initial discussion with the City of Seward had led to some questions of potential
water quality concerns, electrolysis, galvanic corrosion, and/or a defective batch of fittings
installed. Ryan indicated that they had sampled the water and it was within acceptable ranges and
okay. However, he did confirm that they had multiple areas where there were numerous flex lines
installed including the secure storage area where he would estimate there were 60 connections
that had been replaced. He noted that the original flex connectors installed before they started
replacing them were "Home Depot" style flex connectors with garden style hose end threaded
connections. These are prone to leaks and have been replace with a welded style. A few other
items brought up at the time of concern included:
1. Balance valves are installed on both the supply and return of terminal units .
2. The boilers had been recently re-piped as primary/secondary with the electric
boiler as backup. Several bad fuses had recently been replaced. Noted the boilers
operate on an outside air reset schedule and have been operating well unless they
run out of fuel since.
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
2
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r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
3. Four actuators for radiant floor zones had failed and been replaced.This should
correct the hot and cold places in the building. We will review space temperatures
during our site investigation.
4. They have had a few controllers fail due to brown outs over the years and have
installed UPS to prevent further issues.
5. The heat recovery ventilator (HRV) serving Director's office was found not to have
a wall controller. One is not available from the manufacturer.
6. The humidifier is maintained twice a year, but due to water quality it should be
done four times a year.
7. The contractor has performed spot flushing of the system when making repairs.
8. Contractor confirmed that controls are a Niagra N4 front end with Schneider field
devices.
Additionally,we reviewed the existing HVAC control drawings made available to gain an
understanding of the operation of the build and maintenance.
Site Observations:
On May 1, 2023,Tracy McKeon performed a visual inspection of the facility. An existing conditions
survey was performed on the HVAC systems.This report describes the existing conditions and
recommendations of the systems found.
Ventilation
Upon review of the original building construction documents, it was found the ventilation systems
in the building were designed in accordance with ASHRAE standard 62.2010 with a mixture of
mechanical ventilation and natural ventilation assuming a normal building occupancy of 140
people. Upon review of the design documents, we found all outside air and ventilation standards
appeared to meet the design standard of reference. Additional descriptions and findings based on
our site investigations for each of the individual ventilation systems I noted below.
AHU-1 is the centralized air handling system for Museum ventilation. The air handler is located in
a dedicated fan room in the basement in a dedicated fan room. It serves Exhibit 119, Exhibit
Workroom 116, Secure Storage 117, and Office 110. This is a constant volume unit with heating,
cooling, and humidification.The supply air utilizes low pressure ductwork and reheat coils through
the system to maintain zone temperature setpoints.
Return fan for this unit operates to maintain a slightly positive general building pressure. Air
returns back to the unit of it can be directed to a relief louver high on the building. No unusual
building pressures were noted in the spaces.
During the site inspection we documented the following temperatures in the spaces:
Exhibit Work Room 680F
Secure Storage 630F
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
3
14
r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
The following concerns were noted:
1. A minor leak was noted at the heating coil, HC001.
2. Air was found to be leaking at condensate piping penetration near humidifier manifold in
duct at AHU-1.
AHU-2 is a variable volume air handler unit that serves the Community room. This unit is located
in Storage Room 104. The unit operates at low speed during times of low demand and has an
AHU-2 bypass switch on the wall.
Through gravity return air returns back to the unit or to a relief louver high on the wall. No
unusual building pressures were noted in the space relative to the rest of the building. Radiant
floor and hydronic finned tube are used to provide additional thermal comfort in the Community
Room.
During the site inspection we documented the following temperatures in the spaces:
Community Room 690F
Storage 104 680F
The following concerns were noted:
1. Outside air intake for AHU-2 was found to be located adjacent to a parking area. No signs
were noted to be installed to turn off cars do to outside air intake in the area. While no
fumes were noted in the building the building was closed during the site investigation and
no cars were present.
2. Signs of past leaks at the heating coil to this unit. This appear to have been repaired and
was not actively leaking at the time of the inspection.
AHU-3 is a constant volume heat recovery unit that is located in Loading Area 109. It provides
general building exhaust, EF-3, for the restroom and supply air, SF-3, for the Lobby 101, Kitchen
103, Loading Dock 109, and Server Room 115. The supply air utilizes low pressure ductwork and
reheat coils throughout the system to maintain zone temperature setpoints.Three reheat coils on
this system serve the loading zone, lobby and Kitchen, and the server room, respectively.
During the site inspection we documented the following temperatures in the spaces:
Lobby 101 680F
Vestibule 100 630F
Women (1st Floor) 670F
Loading Dock 109 660F
Women (2nd Floor) 680F
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
4
15
r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
The following concerns were noted:
1. There are four holes in the bottom of the AHU-3 noted. We were advised that Condensate
runs out of this unit onto the floor through the holes and regularly floods the floor in
Loading Dock 109 that does not have a drain in it. This drips onto the cabinet unit heater
located below AHU-3. Upon review of the Operations and Maintenance manual we did
not find a drip pan in the unit.
2. We also noted concerns with the installation of the flex connections and supports to the
reheat coil in the loading dock.These are further discussed in the heating section.
AHU-4 is a constant volume heat recovery ventilator installed above ceiling in Research 212. It
serves Research 212 and the Director's Office 211. The supply air utilizes low pressure ductwork
and radiant floor is provided in the spaces for additional comfort.
During the site inspection we documented the following temperatures in the spaces:
Research 212 720F
The following concerns were noted:
1. It was notably noise in the 122 square foot room Research 212 room when AHU-4 was
operating at 48 dB in space while seated in relation to the Library Stacks which was 28 dB.
We found supply diffusers ducted directly off the main without the industry and
manufacturer recommend downstream installed duct lengths between the AHU-4
discharge and the first branch take off.
2. The factory controller was noted as missing and the controls were directly wired to the
terminal strip at AHU-4. As a result, DDC cannot enable, disable, or otherwise control the
unit or damper operation.
3. While not noted during the inspection, it was brought to our attention that in the past a
gas/exhaust fume odor has been noticed in the Director's Office when AHU-4 is in
operation. Upon investigation we found the unit is ducted such that the outside air intake
is downwind of the exhaust.
Natural Ventilation Areas
During our investigation we found no mechanical ventilation or cooling serving the Library Stacks,
Juniors, Reading Areas, Upper Lobby, Circulation Desk, Work Area, Meeting/Study, Young Adults,
or Children Rooms. Currently the ventilation requirements are met in these spaces by natural
ventilation with additional airflow circulation assistance by a high volume low speed fan (HVLS)
mounted in the center of the Library Stacks. The HVLS helps to provided improved indoor air
quality by continuously mixing incoming fresh air when windows are open in the space, provides
heat destratification in the space, and helps to reduce condensation build up on roof and beams
and floor, and keeps space and humidity temperatures more uniform in the space. Radiant floor
and perimeter baseboard is provided in spaces for additional comfort.
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
5
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r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
The HVLS fan was installed in the Library Stacks and serves this space, as well as the Circulation
Desk and Reading Areas, Juniors, Upper Lobby originally it served the Work Area based on the
original construction documents. However, the Young Adults, Children, and Meeting are all
physically separated from the Library Stacks area and these spaces do not see any of the airflow
circulation benefit of the HVLS fan. Additionally, with the Work Area having recently been walled
off from the circulation desk this has result in a lack of circulation of air to this space. Leading to
some of the discomfort experienced by the occupants.
Natural ventilation is most effective in winter due to buoyancy driven air flow. For natural
ventilation to be effective in any space windows, need to be open for a minimum of 10-15
minutes every hour and there needs to be a temperature differential. Without this we see higher
levels of CO2 in spaces, inadequate transfer of air, and thermal comfort issues. With colder
temperatures in the winter, occupants tend not to open windows and summer air temperatures
don't create the need differentials to make natural ventilation effective in most instances.
Additionally, when the outdoor temperature equals the indoor temperature, as it often does
during a typical Seward summer day, there is no natural draft pressure. This means that wind is
required to create good air movement or a mechanical means such as the HVLS fan. In addition,
high ceilings are required for effective buoyancy driven air flow.
It was brought to our attention that the Young Adults, Children, and Meeting/Study Areas can be
stuffy and do not seem well ventilated.This was not unexpected based on the separation from the
HVLS fan and lower ceilings in the spaces. We found eggcrate exhaust grilles installed in the drop
ceiling in the Childrens room, but these just opened to the above ceiling no duct or mechanical
system is attached.
During the site inspection we documented the following temperatures in the spaces:
Library Stacks/Reading Area 670F
Children 690F
Young Adults 680F
Meeting/Study 690F
The following concerns were noted:
1. The closing of windows in the staff Work Area prevents circulation of air and increases
staff discomfort.
2. Young Adults/Children/Meeting/Study have low ceilings, are physically isolated for HVLS
fan, and only served by natural ventilation. In summer with the limited temperature
differential resulting in minimal airflow through spaces thermal discomfort is a concern.
Windows must be open to provide required outside air in the space and there is no good
means to provide an even distribution of airflow and temperatures throughout these
spaces.
3. It is recommended that the Young Adults and Children Rooms at a minimum be
supplemented with mechanical ventilation.
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
6
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r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
Heating
The heating system for the building consists of one fuel fired Burnham Model V9A Series, oil fired,
cast iron boiler with Power Flame burner rated for 4.1 GPH and one Lattner Space Saver electric
boiler The boilers are approximately 10 years old and are in good condition. The boilers are
located in a boiler room on the basement level, adjacent to the fan room. The boilers are piped
primary/secondary and appeared to be sized for 70 to 75% of the building heading loads. Each
boiler has a pump on the primary loop. The building heat system is circulated by the two inline
variable drive circulating pumps out to control valve at terminal units, coils, and reheat coils. A set
of zone pumps circulate heating water to the radiant floor zones off the return from the central
heat system.The building is primarily heated with radiant floor and reheat coils with supplemental
perimeter hydronic finned tube radiation, unit heaters, and cabinet unit heaters. The building
heating system is 75 percent radiant floor with some baseboard perimeter heating and heating
coils supplementing the remainder of the system. Concerns of the reoccurring issues and
description of leaks were noted at specific fittings, connections with dissimilar metals, and
numerous pipe flex connectors. Due to the reoccurring leaks in the facility, we used an ammeter
to test for any stray electrical current at the water service and verify the service was grounded. No
electrical current was noted.
During our inspection we found numerous flex connections installed on the hydronic heating
supply and return connections to all terminal units including air handling heating reheat coils,
finned tube terminal unit connections, cabinet unit heaters, unit heaters, and radiant zone
connections.
Flex connectors are typically installed for one of several reasons; to compensate for misalignment
in piping and reduce stress, control vibration such that normal equipment vibrations are reduced
at the connector, to reduce noise in areas of high pipe vibration, and to compensate for thermal
expansion. The original design has hard piped expansion loops included in the design and
therefore, flex expansion compensators should only be installed at areas of high pipe vibration or
to control vibration from normal equipment operation. We would not anticipate flex connectors
to have been installed in new construction of misalignment of piping. The design documents
support this finding see the snapshots below of details from the construction documents.
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r(—,R Technical Memorandum
ENGINEERING GROUP,LLC
JL
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The original installing contractor provided flex connectors on all hydronic finned tube terminal
unit, reheat coil, air handling coils, cabinet unit heaters, unit heaters, and radiant zone supply and
return piping connections even though they were not required by the design. Moreover, we found
flex connectors of various material types, lengths, including both sweat and threaded ends as well.
Connector ends should have been constructed of similar material to pipe connections and
sweated not threaded for a more secure leak resistant construction. We would have expected
most flex connectors to be 10" in length for the branch connections under 1-1/4" in size and to be
installed only at units associated with excessive vibration.
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r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
We had been instructed prior to the inspection the balance valves were installed on both the
heating supply and return lines to each of the terminal units. Upon investigation we found that
the system included cartridge style automatic flow limiting valves with strainers and isolation
valve with
Specific findings are noted below:
Mech Room 001:
1. Unit heater, UH-1, Flex connectors installed were stainless and not well supported.
2. Water service is located in this space.
Fan Room 005:
1. Small leak noted at heating coil, HC-001.
2. Flex connectors are installed on the small unit heater in this space.
Storage 006:
1. Multiple flex connectors, at heating coil, HC-5, not properly supported and stressing
connection. Potential for leaks. Dissimilar metals were noted at connections.
2. Flex connections at all fin tube, heating coil, radiant floor zone, unit heater, and cabinet
unit heater branch lines. Only required at heating coil and unit heaters per original design
drawings.
Storage Room 104:
1. Past leaks were visible at the flex connectors serving the heating coil for this unit, and the
high point vent on the heating supply/return lines in the space.
2. Hoffman automatic air reliefs had been noted as leaking in this space and others.
Loading Dock 109:
1. Flex connectors to the cabinet unit heater were not properly supported and showing
evident signs of sagging. Susceptible to leaks.
2. Noticeable previous leaks had been repaired.
Exhibit Room 119/Secured Storage 117:
1. Noticeable previous leaks had been repaired.
2. Flex connections were installed at all fin tube, heating coils, radiant floor zone, and
cabinet unit heater branch lines. Only required at heating coils per original design
drawings.
Library Stacks/Reading Areas/Juniors/Young Adults/Childrens/Meeting Study:
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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20
r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
1. These areas were served by radiant floor and limited perimeter finned tube heat for
comfort. It was noted that finned tube heating was not provided under all operable
windows in these spaces.
2. Director noted that heating in the winter was not consistent through the spaces in the
Young adults and Children spaces.
Research 212:
1. Radiant manifold access panels were in this space as well as AHU-4 located above. It was
noted this was to be a quiet space for research and studying.
RECOMMENDATIONS
The following are recommendations to address issues with the existing HVAC systems:
1. Replacement of AHU-4 Heat Recovery Ventilator and Improvements for Young Adult Room
Ventilation/Work Room:
After review with Long Building Technologies and the Vendor the cost of providing a new
controller for the existing unit would exceed the cost of replacement of the unit.Additionally,
we recommend relocation and modifying the location of the exhaust and outside air intake.
This unit could be increased in capacity to allow additional outside air to be provided to
supplement natural ventilation for Young Adults and the Work Area as well.
1. Providing a new unit with a new factory controller will allow DDC to provide control of
the unit and dampers for better comfort control and code required outside air to the
various spaces. As originally intended, the design for the space. This will also increase
energy efficiency for the building.
2. The unit needs to be insulated, to minimize sound and larger ducts to reduce noise
Branch lines and diffusers need to be relocated to reduce noise and vibration in
Research 212. However limited space however limited space above ceiling may
require this unit to be relocated or ceiling to be dropped additionally to
accommodate.
3. Finally, Unit capacity should be increased to include supplemental outside air for
Young Adults Room and Work Area Which are adjacent to the unit and existing spaces
served. This is not required outside air but to improve comfort control so could be
limited to 150 to 200 cfm supply and exhaust in Young Adults and 85 to 100 cfm in
Work Area.
2. Improve ventilation for Childrens Room and Meeting Room to provide ventilation in
accordance with ASHRAE 62.1-2019:
The existing ventilation zones were designed to provide ventilation to via natural ventilation
but the low ceiling space and obstructions in the space make it difficult to provide adequate
airflow and maintain uniform temperature distribution in the space. Recommend a new heat
recovery ventilator or be installed to provide supplemental mechanical ventilation to these
spaces to provide better thermal comfort to the occupants. Ceiling may have to be modified
to accommodate unit and consideration given to acoustical linings to prevent excess noise in
City of Seward —Seward Community Library & Museum Mechanical Survey Report
10
21
r(-,R Technical Memorandum
ENGINEERING GROUP,LLC
the space. Ensure all branch lines installed are a minimum of 5 duct diameters from the main
and a minimum 3 foot straight run of duct is provided on the intake and exhaust from the
unit.
3. Repair Leaks at AHU-1:
Repair leak at heating coil HC-001 and seal air leak where condensate piping penetrates
humidifier manifold at duct.
4. Removing Flex Connections from Hydronic Finned Tube, Cabinet Unit Heater, and Radiant
Zone Terminal Connections:
The heating system does not require flex connectors on the heating supply and return piping
at the finned tube, cabinet unit heaters, and radiant zone terminal units. Flex connectors are
not required to compensate to control vibration or for thermal expansion.These connectors
were not required by the original heating design and the current design has not changed .
They can be deleted and will reduce the potential for leaks to develop at these locations.
S. Removing Flex Connections from Unit Heater Terminal Connections:
The heating system does not require flex connectors on the heating supply and return piping
to the smaller hydronic horizontal unit heaters. Flex connectors are not required to
compensate to control vibration or for thermal expansion. For unit heaters that are less than
20 lbs. and 1/60 HP. We would recommend flex connections be removed and hard piped,
Units experience minimal vibration.
6. Install drip pans under piping in Secure Storage 117 and Exhibit Workroom119:
In addition to removing unnecessary flex connectors, it is recommended that to protect
exhibits and valuable artifacts stored in these areas it is recommend that drip pans be
installed under all piping in this space and leak detection sensors be installed in the drip pans
that are monitored by DDC to alarm when moisture is detected.
7. Install Drip pan AHU-3/ Route Condensate to hub drain in Loading Dock
Install a drip pan in AHU-3 and install a condensate drain pipe to slope to drain to indirect
drain to a hub drain that can connect to the existing 2-inch waste piping in wall in loading dock
area.
8. Mechanical systems re-balance:
Following upgrades,the heating and ventilation system should be rebalanced to ensure that
the system is adjusted for design operation. Balancing the air and water systems will improve
system operating efficiency as systems will be adjusted to operate at design settings.
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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22
r(—,R Technical Memorandum
ENGINEERING GROUP,LLC
SITE PHOTOGRAPHS
�M1
;Y
Figure 1: Existing Boilers
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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23
CRW Technical Memorandum
ENGINEERING GROUP LLC
1
Figure 2: AHU-1 Heating Coil Flex
Connection and Leak
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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24
CRW Technical Memorandum
ENGINEERING GROUP LLC
i
s
I
Figure 3: HC-5 Flex Connections
HOT 1/4
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Figure 4: Flex Connections Installed at Radiant Zone
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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25
r(—,R Technical Memorandum
ENGINEERING GROUP,LLC
Figure 5: AHU-4 Above Research 212
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Figure 6: Terminal Strip in AHU-4
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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26
CRW Technical Memorandum
ENGINEERING GROUP LLC
Figure 7: Childrens Room with Return Grilles in Ceiling
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
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27
CRW Technical Memorandum
ENGINEERING GROUP LLC
3
..4 411
s•
Figure 8: Young Adults with Perimeter Finned
Tube and Operable Windows
`~ City of Seward —Seward Community Library & Museum Mechanical Survey Report
17
28
From: Ahlbera,Brenda
To: 'Robert Dumouchel"; "Mark Robl"; "Mark Kirko"; "Jennifer Carroll"; 'Bryan Hawkins";Stephen Sowell; Doug
Schoessler; "karlCabstormchasersmarine.com"; "onormanvc(abhotmail.com"; "Francis Norman"; "Mark Ball";
"Crystal Collier"; "Heidi Geagel";'Rachel Friedlander"; "Kachemak City Clerk";Cicciarella.Bob;Schultz,Eric;
Marsh,Jon; Mathis,Robert;Clinton Crites; "nanwalek(&yahoo.com";"Gwen Kvasnikoff";
"vivian(aboortaraham.ora";"LowellPt";"micaCalstormchasersmarine.com"; "Anchor Kings"; "Anchor Point Senior
Center"; "Anchor Point Chamber"; "Anchor Point Library"; "Chris Crum-Anchor Pt APC"; "Chris Platter-Anchor
Pt APC"; Dawson Slaughter;dewhite55Calamail.com;ikmarshCalvmail.com; "Shafer. Broke-Anchor Pt APC";
thedrakesCabhorizonsatellite.com; "mark.robertOcbalaska.aov";Aviva Braun-NOAA Federal
Cc: Mayor Peter Micciche
Subject: KPB Siren Project Update 07.20.2023
Date: Thursday,July 20,2023 5:07:34 PM
Attachments: imaae001.ona
External Email:This email originated from outside of the organization. Do not click links or open attachments unless
you recognize the sender and know the content is safe.
Siren Project Update July 20, 2023
The siren installation schedule has been updated (below). The contractor will
be conducting a live audio test on each new siren as they are installed. We'll
be adding a new siren in Homer off of Kachemak Drive and one in Anchor
Point located at the solid waste transfer site (see notes below). Also, we will
be rolling out a public outreach campaign through the end of August,
reminding folks of the installs in their area. Thanks to our agency partners for
helping with coordinated messaging to ensure that the public is aware of the
tests per each location. Have a wonderful evening all, B
Installation Schedule:
July 24-25: Homer Harbormaster
July 26-27: Homer Ice Rink
July 28-29: Homer Mariner Park
July 31-August 1 : Nanwalek
August 2-3: Port Graham
August 4-5: Seldovia
August 7-8: Homer Fish & Game
August 8-9: Homer Bishops Beach
August 9-10: Homer Northern Enterprises Boat Yard *NEW*
August 10-1 1 : Anchor Point *NEW* Mailer sent to all property owners and flyers to be
posted throughout the community
August 14-15: Seward Nash Rd *temporary road closure*
August 16-17: Seward Marine Industrial
August 17-18: Seward High School
August 18-19: Seward Harbormaster
August 21-22: Seward Fire Station
August 22-23: Lowell Point
Brenda Ahlberg
Emergency Manager
Community & Fiscal Projects
bahlbergCkpb.us
29
907-262-2098 direct
907-231-6505 mobile
907-714-2415 duty officer 24/7
00 8816 3153 0508 sat phone
907-714-2395 fax
Kenai Peninsula Borough
Emergency Response Center
253 Wilson Lane
Soldotna, AK 99669
bahlbera@kpb.us
www.kpb.us- Information by department
info.kpb.us- Updates from agencies responding to area-wide emergencies (new URL)
@KPBAlerts- Facebook Page
KENAk PENINSULA BOROUGH
144 Forth Binkley Street �.
Soldotna, Alaska 94669 *.
C.,
30
CHUGACH-
POWERING ALASKA'S FUTURE
July 20, 2023
Rob Montgomery
Electric Utility General Manager
City of Seward
P.O. Box 167
Seward, Alaska 99664
Subject: Allocation of 2022 Margins—Chugach Electric Association,Inc.
Dear Rob:
Chugach Electric Association, Inc. (Chugach) has completed its allocation of margins based on
calendar-year 2022 operating results. Consistent with prior years,Chugach's margins are allocated
to each class under the Revenue Adjusted / Allocated Margins methodology on the basis of
revenue, revenue requirements, and ratemaking margin levels as approved by the Regulatory
Commission of Alaska (Commission). The allocations are scheduled to be provided to the
Chugach Board of Directors for approval at the July 26, 2023 Board meeting.
The North and South District allocations reflect the Commission approved revenue requirement
and cost of service study for rates effective during calendar year 2022. Table 1 below summarizes
the 2022 allocations for all functional classes on the Chugach system:
Table 1: Allocation of 2022 Margins
South District North District Total Percentage
Retail - G&T $2,387,368 $2,875,861 $5,263,229 64.8%
Retail - Distribution $2,021,584 $786,235 $2,807,819 34.6%
Retail Subtotal $4,408,952 $3,662,096 $8,071,048 99.4%
Wholesale- Seward $52,689 --- $52,689 0.6%
Total Retail and Wholesale $4,461,641 $3 662,096 $8,123,737 100.0%
Seward's total allocation of 2022 margins is $52,689. As of December 31, 2022, Seward's
patronage capital totaled $220,148. After approval of the 2022 allocations, Seward's total
patronage capital will increase to $272,837.
The attached Exhibit 1 provides the supporting calculations for the allocation of 2022 margins.
Chugach's 2022 Audited Financial Statements are also attached.
Chugach Electric Association, Inc.
530'1 Elechz ri Drive.P,O Box I96300 ArcYirra fie, ,413ska 99519-6300. (907) 563 494 Paz(907) 562-0027. j30017P-749
:vvv..chugachelec,tric com• mfc,rJrhu�a�chelectnc corn
31
Rob Montgomery July 20, 2023
Allocation of 2022 Mar ins Page 2
Please contact me anytime if you have any questions or would like additional information.
Sincerely,
CHUGACH ELECTRIC ASSOCIATION, INC.
*/
Arthur W. Miller
Chief Executive Officer
P.O. Box 19630
Anchorage, Alaska 99519-6300
Telephone: (907) 762-4758
Arthur—Miller@chugachelectric.com
Attachments
32
Chugach Electric Association,Inc.
Anchorage,Alaska
Capital Credit Allocation to G&T and Distribution by District and Class
Margins for Calendar Year:2022
(A) (B) (C) (D) (E)
Revenue Revenue Requirement Revenue°/u RR
Description Jan-Dec Total Jan-Dec
South District
Retail-G&T $132,262,731 $132,262,731 $134,008,513 98.70%
Retail-Distribution --- --- --- 98.70%
Wholesale-Seward $2,396,412 $2,396,412 $2,321,209 103.24%
Total $134,659,143 $134,659,143 $136,329,722 ----
North District
Retail-G&T $97,878,157 $97,878,157 $113,200,938 86.46%
Retail-Distribution --- --- --- 86.46%
JBER Contract $11,883,036 $11,883,036 $13,755,423 86.39%
Total $109,761,193 $109,761,193 $126,956,361 ----
Combined Total $244,420,336 $244,420,336 $263,286,083
(F) (G) (11) m (J)
RR Assigned Margins Adjusted Revenue Requirement Margins Utility Margins
Description Jan-Dec Jan-Dec(E*G) Post Audit'
South District
Retail-G&T $5,622,021 $5,548,781 52.26%
Retail-Distribution $5,007,059 $4,941,830 46.54%
Wholesale-Seward $123,055 $127,042 1.20%
Total $10,752,136 $10,617,653 100.00%
North District
Retail-G&T $6,545,627 $5,659,616 66.44%
Retail-Distribution $2,161,151 $1,868,619 21.94%
JBER Contract $1,146,595 $990,521 11.63%
Total $9,853,373 $8,518,757 100.00%
Combined Total $20,605,509 $19,136,410 ---- $7,584,845
(K) (E) (M) (N) (C) (P)
Allocation of Utility Margins Allocation of G&T Assignments
Description Jan-Dec Total(Jan-Dec) Percent Jan-Dec Weighted Avg.
South District
Retail-G&T $2,183,807 $2,183,807 52.26% 97.76% 97.76%
Retail-Distribution $1,944,932 $1,944,932 46.54% --- ---
Wholesale-Seward $49,999 $49,999 1.20% 2.24% 2.24%
Total $4,178,739 $4,178,739 100.00% 100.00% 100.00%
North District
Retail-G&T $2,262,919 $2,262,919 66.44% 85.11% 85.11%
Retail-Distribution $747,141 $747,141 21.94% --- ---
JBER Contract $396,046 $396,046 11.63% 14.89% 14.89%
Total $3,406,106 $3,406,106 100.00% 100.00% 100.00%
Combined Total $7,584,845 $7,584,845 ---- ---- ----
2022-Capital Credit Allocation Exhibit 1 -Allocation Summary
7/20/2023 33 Page I of 2
Chugach Electric Association,Inc.
Anchorage,Alaska
Capital Credit Allocation to G&T and Distribution by District and Class
Margins for Calendar Year:2022
(Q) (R) (S) (T) (U) (V)
Margin Adjustments Final Margin
Description G&T and Distribution AWWU Microwave Allocation Percent
South District
Retail-G&T --- $117,496 $86,065 $2,387,368 53.51%
Retail-Distribution --- --- $76,651 $2,021,584 45.31%
Wholesale-Seward --- $2,690 --- $52,689 1.18%
Total $0 $120,186 $162,717 $4,461,641 100.00%
North District
Retail-G&T --- $121,752 $89,183 $2,473,854 67.55%
Retail-Distribution --- --- $29,445 $776,587 21.21%
JBER Contract --- --- $15,608 $411,655 11.24%
Total $0 $121,752 $134,237 $3,662,096 100.00%
Combined Districts
Retail-G&T --- $239,248 $175,249 $4,861,222 59.84%
Retail-Distribution --- --- $106,097 $2,798,171 34.44%
Wholesale-Seward --- --- --- $52,689 0.65%
JBER Contract --- $2,690 $15,608 $411,655 5.07%
Total $0 $241,938 $296,954 $8,123,737 100.00%
1 The total post-audit utility margin,$7,584,845,reflects Chugach's 2022 margins totaling$8,123,737,reduced by the gains associated with Chugach's
microwave business($296,954)and sales to AWWU($241,938).
2022-Capital Credit Allocation Exhibit 1 -Allocation Summary
7/20/2023 34 Page 2 of 2
'ddhe +
CHUGACH
POWERING ALASKA 5 FUTURE
CHUGACH ELECTRIC ASSOCIATION, INC.
Financial Statements
December 31, 2022 and 2021
(With Report of Independent Registered Accounting Firm Thereon)
35
"�4
KPMG LLP
Suite 600
701 West Eighth Avenue
Anchorage,AK 99501
Independent Auditors' Report
The Board of Directors
Chugach Electric Association, Inc.:
Opinion
We have audited the consolidated financial statements of Chugach Electric Association, Inc. and its subsidiary
(the Company), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, and the
related consolidated statements of operations, changes in equities and margins, and cash flows for each of the
years in the three-year period ended December 31, 2022, and the related notes to the consolidated financial
statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31, 2022 in accordance with U.S.
generally accepted accounting principles.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS). Our responsibilities under those standards are further described in the Auditors'
Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are required to
be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with U.S. generally accepted accounting principles, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to
continue as a going concern for one year after the date that the consolidated financial statements are available
to be issued.
Auditors'Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that
includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if there is a
KPMG LLP,a Delaware limited liability partnership and a member firm of
the KPMG global organization of independent member firms affiliated with
KPMG International Limited,a private English company limited by guarantee.
36
substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a
reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
consolidated financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Company's ability to continue as a going concern for a reasonable
period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control related matters that
we identified during the audit.
K'PNi(C, LLP
Anchorage, Alaska
April 5, 2023
2
37
Chugach Electric Association, Inc.
Consolidated Balance Sheets
As of December 31, 2022 and 2021
Assets December 31, 2022 December 31, 2021
Utility plant:
Electric plant in service $ 2,109,990,748 $ 2,085,567,712
Construction work in progress 52,721,736 34,253,304
Total utility plant 2,162,712,484 2,119,821,016
Less accumulated depreciation (702,820,630) (640,729,478)
Net utility plant 1,459,891,854 1,479,091,538
Other property and investments, at cost:
Nonutility property 76,889 76,889
Operating lease right-of-use assets 3,831,720 4,109,694
Financing lease right-of-use assets 217,069 17,273
Investments in associated organizations 6,993,487 7,280,936
Special funds 26,275,805 43,016,636
Restricted cash equivalents 30,000 64,310
Long-term prepayments 305,854 291,846
Total other property and investments 37,730,824 54,857,584
Current assets:
Cash and cash equivalents 3,178,673 12,489,780
Special deposits 58,300 58,300
Restricted cash equivalents 12,676,066 25,100,943
Fuel cost/other under-recovery 1,579,375 0
BRU capital surcharge under-recovery 18,845,238 0
Accounts receivable, less provision for doubtful accounts of
$983,450 in 2022 and $1,269,080 in 2021 50,243,472 47,186,182
Materials and supplies 49,979,660 45,283,376
Fuel stock 18,220,114 14,087,849
Prepayments 6,239,353 4,917,095
Other current assets 379,412 942,497
Total current assets 161,399,663 150,066,022
Other non-current assets:
Deferred charges, net 108,557,249 112,348,138
Total other non-current assets 108,557,249 112,348,138
Total assets $ 1,767,579,590 $ 1,796,363,282
(Continued)
3
38
Chugach Electric Association, Inc.
Consolidated Balance Sheets (continued)
As of December 31, 2022 and 2021
Liabilities, Equities and Margins December 31, 2022 December 31, 2021
Equities and margins:
Memberships $ 1,986,171 $ 1,949,262
Patronage capital 194,755,133 188,573,753
Other 15,594,172 15,477,923
Total equities and margins 212,335,476 206,000,938
Long-term obligations, excluding current installments:
Bonds payable 1,128,549,996 1,173,366,663
Notes payable 18,924,000 23,028,000
Less unamortized debt issuance costs (5,960,113) (6,072,373)
Operating lease liabilities 3,583,801 3,835,282
Financing lease liabilities 203,786 13,667
Total long-term obligations 1,145,301,470 1,194,171,239
Current liabilities:
Current installments of long-term obligations 49,178,851 42,473,838
Commercial paper 45,000,000 22,000,000
Accounts payable 26,356,140 14,878,065
Consumer deposits 4,874,798 5,663,067
Fuel cost over-recovery 0 1,281,307
Accrued interest 8,454,148 8,752,021
Salaries, wages, and benefits 12,103,644 13,030,034
Fuel 6,933,243 6,259,917
Undergrounding ordinance liability 11,894,343 9,477,892
Settlement obligation 12,181,556 12,003,853
Other current liabilities 1,705,080 1,431,478
Total current liabilities 178,681,803 137,251,472
Other non-current liabilities:
Deferred compensation 1,387,476 2,115,229
Other liabilities, non-current 658,627 741,387
Deferred liabilities 9,639,703 12,724,119
Settlement obligation 0 12,000,000
BRU regulatory liability 96,612,203 107,364,906
Cost of removal obligation/asset retirement obligation 122,962,832 123,993,992
Total other non-current liabilities 231,260,841 258,939,633
Total liabilities, equities, and margins $ 1,767,579,590 $ 1,796,363,282
See accompanying notes to consolidated financial statements.
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Chugach Electric Association, Inc.
Consolidated Statements of Operations
Years Ended December 31, 2022, 2021, and 2020
2022 2021 2020
Operating revenues $ 354,418,746 $ 354,458,456 $ 237,428,680
Operating expenses:
Fuel 83,474,943 86,561,826 60,122,978
Production 37,961,076 36,640,560 24,556,922
Purchased power 23,268,040 23,129,060 22,380,419
Transmission 9,690,024 9,313,578 7,323,776
Distribution 26,319,170 26,798,579 18,914,383
Consumer accounts 10,298,655 10,554,469 8,199,828
Administrative, general, and other 52,203,530 51,871,897 29,398,871
Depreciation and amortization 64,660,942 60,465,653 36,874,892
Total operating expenses $ 307,876,380 $ 305,335,622 $ 207,772,069
Interest expense:
Long-term debt and other 41,607,914 42,625,653 25,546,831
Charged to construction (2,521,899) (2,641,159) (373,098)
Interest expense, net $ 39,086,015 $ 39,984,494 $ 25,173,733
Net operating margins $ 7,456,351 $ 9,138,340 $ 4,482,878
Nonoperating margins:
Interest income 639,406 294,670 369,386
Allowance for funds used during construction 96,433 112,157 147,223
Capital credits, patronage dividends and other (68,453) 33,312 (2,606)
Total nonoperating margins $ 667,386 $ 440,139 $ 514,003
Assignable margins $ 8,123,737 $ 9,578,479 $ 4,996,881
See accompanying notes to consolidated financial statements.
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Chugach Electric Association, Inc.
Consolidated Statements of Changes in Equities and Margins
Years Ended December 31, 2022, 2021, and 2020
2022 2021 2020
Memberships:
Balance at beginning of period $ 1,949,262 $ 1,908,432 $ 1,776,592
Memberships and donations received 36,909 40,830 131,840
Balance at end of period $ 1,986,171 $ 1,949,262 $ 1,908,432
Other equities and margins:
Balance at beginning of period 15,477,923 15,376,562 15,309,357
Unclaimed capital credits retired (19,685) (25,706) (42,164)
Memberships and donations received 135,934 127,067 109,369
Balance at end of period $ 15,594,172 $ 15,477,923 $ 15,376,562
Patronage capital:
Balance at beginning of period 188,573,753 181,564,419 177,380,964
Assignable margins 8,123,737 9,578,479 4,996,881
Retirement/net transfer of capital credits (1,942,357) (2,569,145) (813,426)
Balance at end of period $ 194,755,133 $ 188,573,753 $ 181,564,419
Total equities and margins $ 212,335,476 $ 206,000,938 $ 198,849,413
See accompanying notes to consolidated financial statements.
6
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Chugach Electric Association, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 2022, 2021, and 2020
2022 2021 2020
Cash flows from operating activities:
Assignable margins $ 8,123,737 $ 9,578,479 $ 4,996,881
Adjustments to reconcile assignable margins to net cash provided by operating
activities:
Depreciation and amortization 64,660,942 60,465,653 36,874,892
Amortization and depreciation cleared to operating expenses 12,657,577 13,232,954 7,973,036
Allowance for funds used during construction (96,433) (112,157) (147,223)
Write off of inventory,deferred charges and projects 1,599,280 246,258 567,040
Other (48,315) 304,438 651,355
(Increase) decrease in assets:
Accounts receivable,net (3,138,384) 6,728,760 (17,048,090)
Fuel cost under-recovery (1,579,375) 0 1,445,753
Materials and supplies (5,155,732) 708,802 81,372
Fuel stock (4,132,265) 2,311,843 (3,110,337)
Prepayments (1,342,531) (113,048) (713,087)
Other assets (28,625) 487,473 (10,018)
Deferred charges (6,607,593) (12,455,252) (23,524,240)
Increase(decrease) in liabilities:
Accounts payable 8,070 (5,332,594) 4,051,713
Consumer deposits (788,269) 413,795 (363,107)
Fuel cost over-recovery (1,281,307) 231,685 392,249
Accrued interest (297,873) (396,669) 3,430,931
Salaries,wages and benefits (937,893) (1,393,218) 4,003,779
Fuel 673,326 697,961 (1,203,925)
Other current liabilities (115,126) 749,134 (1,600,576)
Deferred liabilities (18,333,080) (10,578,181) 846,475
Net cash provided by operating activities 43,840,131 65,776,116 17,594,873
Cash flows from investing activities:
Return of capital from investment in associated organizations 288,329 316,274 557,852
Investment in special funds (1,411,673) (22,860,509) (1,080,198)
Investment in marketable securities and investments-other 0 0 (6,600)
Investment in ML&P acquisition 0 0 (699,527,862)
Proceeds from the sale of marketable securities 0 0 205,408
Proceeds from special funds 0 0 1,173,591
Proceeds from capital grants 238,604 2,773,224 0
Proceeds from sale of property and equipment (390,946) 51,885 0
Extension and replacement of plant (56,854,713) (43,929,316) (27,107,529)
Net cash used in investing activities (58,130,399) (63,648,442) (725,785,338)
Cash flows from financing activities:
Payments for debt issue costs 0 (136,354) (3,761,491)
Net increase(decrease) in short-term obligations 23,000,000 12,000,000 (14,000,000)
Proceeds from long-term obligations 0 0 800,000,000
Repayments of long-term obligations (42,192,667) (41,964,667) (26,837,667)
Memberships and donations received 153,158 142,191 199,045
Retirement of patronage capital and estate payments (1,859,857) (2,569,145) (813,426)
Proceeds from consumer advances for construction 13,419,340 7,598,916 5,235,447
Net cash(used in) provided by financing activities (7,480,026) (24,929,059) 760,022,908
Net change in cash,cash equivalents,and restricted cash equivalents (21,770,294) (22,801,385) 51,832,443
Cash,cash equivalents,and restricted cash equivalents at beginning of period $ 37,655,033 $ 60,456,418 $ 8,623,975
Cash,cash equivalents,and restricted cash equivalents at end of period $ 15,884,739 $ 37,655,033 $ 60,456,418
Supplemental disclosure of non-cash investing and financing activities:
Cost of removal obligation/ARO $ (1,031,160) $ 6,885,808 $ 4,278,545
Extension and replacement of plant included in accounts payable $ 13,545,751 $ 2,172,436 $ 1,132,270
Patronage capital retired/net transferred and included in other current liabilities $ 82,500 $ 0 $ 0
Supplemental disclosure of cash flow information-interest expense paid,net of
amounts capitalized $ 38,235,264 $ 39,104,950 $ 20,669,620
See accompanying notes to consolidated financial statements.
7
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
(1) Description of Business and Presentation of Financial Information
Description o Business
Chugach Electric Association, Inc. ("Chugach") is the largest electric utility in Alaska engaged in
the generation, transmission, and distribution of electricity in Anchorage and the upper Kenai
Peninsula area. Chugach is on an interconnected regional electrical system referred to as the Alaska
Railbelt, a 400-mile-long area stretching from the coastline of the southern Kenai Peninsula to the
interior of the state, including Alaska's largest cities, Anchorage and Fairbanks.
Chugach's retail and wholesale members are the consumers of the electricity sold. Chugach supplies
much of the power requirements to the City of Seward ("Seward"), as a wholesale customer.
Occasionally, Chugach sells available generation, in excess of its own needs, to Matanuska Electric
Association, Inc. ("MEA"), Homer Electric Association, Inc. ("HEA"), Golden Valley Electric
Association, Inc. ("GVEA"), and prior to October 30, 2020, Anchorage Municipal Light & Power
("ML&P"). Power pool sales to MEA began in April 2021.
Chugach was organized as an Alaska electric cooperative in 1948 and operates on a not-for-profit
basis and, accordingly, seeks only to generate revenues sufficient to pay operating and
maintenance costs, the cost of purchased power, capital expenditures, depreciation, and principal
and interest on all indebtedness and to provide for reserves. Chugach is subject to the authority of
the Regulatory Commission of Alaska ("RCA").
On October 30, 2020, Chugach acquired substantially all of the assets of ML&P from the Municipality
of Anchorage, Alaska ("MOA").
The consolidated financial statements include the activity of Chugach and the activity of the Beluga
River Unit ("BRU"). Chugach accounts for its share of BRU activity using proportional
consolidation (see Note 15 — "Beluga River Unit"). Intracompany activity has been eliminated for
presentation of the consolidated financial statements.
Presentation of Financial Information
On October 30, 2020, Chugach recorded the ML&P acquisition in accordance with Accounting
Standards Codification ("ASC") 805, "Business Combinations," with identifiable assets acquired
and liabilities assumed recorded at their estimated fair values on the acquisition date. The purchase
price was allocated to the assets acquired and the liabilities assumed based on their fair value. The
allocation of the purchase price included the fair value of BRU reserves, which was recorded net
of a regulatory offset equal to the value of the reserves and was received and recorded in June
2021.
(2) Significant Accounting Policies
a. Manggement Estimates
In preparing the financial statements in conformity with United States generally accepted
accounting principles ("GAAP"), the management of Chugach is required to make estimates and
assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets
8
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
and liabilities as of the date of the balance sheet and revenues and expenses for the reporting period.
Estimates include the fair value of assets acquired and liabilities assumed, allowance for doubtful
accounts, workers' compensation liability, deferred charges and liabilities, unbilled revenue,
estimated useful life of utility plant, cost of removal and asset retirement obligation ("ARO"), and
remaining proved BRU reserves. Actual results could differ from those estimates.
b. Regulation
The accounting records of Chugach conform to the Uniform System of Accounts as prescribed by
the Federal Energy Regulatory Commission ("FERC"). Chugach meets the criteria, and
accordingly,follows the accounting and reporting requirements of Financial Accounting Standards
Board ("FASB") ASC 980, "Topic 980 - Regulated Operations." FASB ASC 980 provides for the
recognition of regulatory assets and liabilities as allowed by regulators for costs or credits that are
reflected in current rates or are considered probable of being included in future rates. Our regulated
rates are established to recover all our specific costs of providing electric service. In each rate
filing, rates are set at levels to recover all our specific allowable costs and those rates are then
collected from our retail and wholesale customers. The regulatory assets or liabilities are then
reduced as the cost or credit is reflected in earnings and our rates, see Note (2n) "Deferred
Charges and Liabilities. "
c. Utility Plant and Depreciation
Additions to electric plant in service are recorded at original cost of contracted services, direct
labor and materials, indirect overhead charges, and capitalized interest less contributions in aid of
construction ("CIAC"). As an electric utility, Chugach follows the FERC system of accounts
which recommends that CIAC be recorded as a reduction to utility property plant and equipment.
FASB ASC 210-10-S99, "Section S99 — SEC Materials," requires the utility plant of a public
utility company to present the cost and adjustments thereto as required by the system of accounts
prescribed by the applicable regulatory authorities.
For property replaced or retired, the book value of the property, removal cost, less salvage, is
charged to accumulated depreciation. Renewals and betterments are capitalized, while
maintenance and repairs are normally charged to expense as incurred.
In accordance with FASB ASC 360, "Topic 360 — Property, Plant, and Equipment," certain asset
groups are reviewed for impairment whenever events or changes in circumstances indicate the
carrying amount of an asset group may not be recoverable in rates. Recoverability of asset groups
to be held and used is measured by a comparison of the carrying amount of an asset group to
estimated undiscounted future cash flows expected to be generated by the asset group. If the
carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge
is recognized by the amount by which the carrying amount of the asset group exceeds the fair value
of the asset.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Depreciation and amortization rates have been applied on a straight-line basis and at December
31, 2022 are as follows:
Annual Depreciation Rate Ranges
Legacy Chugach Legacy ML&P
Steam production plant 3.03% - 3.26% 2.70% - 11.97%
Hydroelectric production plant 0.88% - 2.71% 2.09% - 2.79%
Other production plant 2.18% - 3.46% 2.90% - 4.52%
Transmission plant 1.01% - 10.50% 1.68% - 2.45%
Distribution plant 1.40% - 10.00% 1.61% - 5.09%
General plant 1.95% - 33.33% 1.66% - 14.87%
Other 2.75% - 2.75% 3.33% 18.54%
On March 23, 2017, the RCA approved revised depreciation rates effective July 1, 2017 in Docket
U-16-081(2) for the legacy Chugach assets. The legacy ML&P assets are those acquired in the
ML&P acquisition and are depreciated at rates effective at acquisition. Chugach's depreciation
rates include a provision for cost of removal. Chugach records a separate liability for the estimated
obligation related to the cost of removal.
Chugach records Depreciation, Depletion and Amortization ("DD&A") expense on the BRU
assets based on units of production using the following formula: 67% of the total production from
the BRU as provided by the operator divided by 67% of the estimated remaining proved reserves
(in thousand cubic feet (Mcf)) in the field multiplied by Chugach's total assets in the BRU. Prior
to the ML&P acquisition, Chugach's formula used Chugach's 10%ownership interest in the BRU.
Effective October 30, 2020,the formula was adjusted to reflect Chugach's 67%ownership interest.
d. Full Cost Method
Chugach has elected the Full Cost method to account for exploration and development costs of gas
reserves.
e. Asset Retirement ObliKation
Chugach calculates and records Asset Retirement Obligations ("ARO") associated with the BRU.
Prior to October 2022 Chugach used certain financing rates as its credit adjusted risk free rate and
the expected cash flow approach to calculate the fair value of the ARO liability. After the
completion of the ARO study, the expiration of the ARO changed from 2037 to 2034. The ARO
asset is depreciated using the DD&A formula previously discussed. The ARO liability is accreted
using the interest method of allocation. The depreciation expense and accretion expense related to
the ARO are reclassified from the income statement to the ARO surcharge deferred account,where
the costs are recovered on a levelized dollar-per-Mcf basis calculated by using the remaining
volumes of BRU production until field abandonment.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
f Investments in Associated Organizations
The loan agreement with National Rural Utilities Cooperative Finance Corporation ("NRUCFC")
requires as a condition of the extension of credit, that an equity ownership position be established
by all borrowers. Chugach's equity ownership in this organization is less than one percent.
Chugach also has an equity ownership in CoBank, ACB ("CoBank") acquired in connection with
prior loan agreements, which have since been repaid. Although we no longer have a patronage
earning loan with CoBank, there remains an existing equity investment balance in this
organization.
These equity investments do not have readily determinable fair values and are accounted for at
cost minus impairment, if any, plus or minus changes resulting from observable price changes in
orderly transactions for the identical or a similar investment of the same issuer. No impairment or
observable price changes were recorded during 2022, 2021, or 2020. Investments in associated
organizations was $7.0 million and $7.3 million at December 31, 2022 and 2021, respectively.
g. Special Funds
Special funds include deposits associated with the deferred compensation plan and investments
associated with the BRU. Once the BRU becomes no longer economically feasible to produce
hydrocarbons, the BRU owners will cease operations and remove facilities and abandon the field
based on estimates prepared by an engineering team. Chugach collects and restricts funds for this
liability. The BRU ARO investment fund was established pursuant to an agreement with the State
of Alaska.
The BRU ARO investment fund is a separately managed investment portfolio specifically for the
purpose of dismantling the field. These funds are not expected to be used until approximately 2034
when the BRU owners retire the BRU gas field. Therefore, the portfolio of funds benefit from
being in a separate investment portfolio with separate, distinct, and broad investment criteria that
is consistent with the timing of when the funds are expected to be utilized.The investment portfolio
is managed to maximize capital appreciation with a long-term rate of return. The portfolio has
specific investment guidelines approved by the Board of Directors ("Board") to accomplish the
purpose of the ARO fund.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
The investment allocations are detailed below:
Investment Allocations
Investment Type Target Min Max At December 31, 2022
Equity 47% 46%
U.S. Large-Cap Equity 22% 12% 32% 22%
U.S. Mid-Cap Equity 10% 5% 15% 10%
U.S. Small-Cap Equity 5% 0% 10% 5%
International Developed Equity 6% 0% 12% 6%
Emerging Markets Equity 4% 0% 8% 3%
Alternatives 21% 22%
Real Estate 3% 0% 6% 2%
Alternative Beta 10% 0% 15% 12%
Infrastructure 5% 0% 10% 5%
Commodities 3% 0% 6% 3%
Fixed Income 32% 33%
U.S. Fixed Income 18% 8% 28% 18%
U.S. High Yield Fixed Income 5% 0% 10% 5%
TIPS 2% 0% 10% 2%
International Fixed Income 5% 0% 10% 4%
Cash 2% 0% 10% 4%
As part of the ML&P acquisition, we acquired ML&P's BRU ARO funds, in-kind, of
approximately $17.3 million. The combined BRU ARO was $20.1 million and $21.4 million as of
December 31, 2022 and December 31, 2021, respectively.
Additional funds associated with the BRU for which the RCA has specified the use were $4.8
million and $19.5 million at December 31, 2022 and December 31, 2021, respectively. Currently,
its use is for fuel price volatility in future periods. On May 16, 2022, Chugach received approval
to adopt a forward-funding recovery structure for BRU capital expenditures through a BRU Capital
Reserve Surcharge on an interim, non-refundable basis, and received final approval on December
23, 2022. This account is being used to fund current and future years BRU capital requirements.
The BRU Capital Reserve Surcharge provides for the exact recovery of BRU capital requirements
through a balancing account.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
h. Cash, Cash Equivalents, and Restricted Cash Equivalents
The following table provides a reconciliation of cash, cash equivalents, and restricted cash
equivalents reported within the Consolidated Balance Sheet that sum to the total of the same such
amounts shown in the Consolidated Statements of Cash Flows.
December 31, 2022 December 31, 2021
Cash and cash equivalents $ 3,178,673 $ 12,489,780
Restricted cash equivalents 12,676,066 25,100,943
Restricted cash equivalents included in other property and
investments 30,000 64,310
Total cash, cash equivalents and restricted cash equivalents
shown in the consolidated statements of cash flows $ 15,884,739 $ 37,655,033
Restricted cash equivalents include funds on deposit for future workers' compensation claims and
funds from the MOA to be used for a rate reduction refund to the North District members as ordered
by the RCA, which was $12.2 million at December 31, 2022. Restricted assets, including cash
equivalents, are recognized on Chugach's Consolidated Balance Sheet when they are restricted as
to withdrawal or usage.
i. Marketable Securities
Marketable securities consist of bond mutual funds, corporate bonds, and certificates of deposit
with a maturity less than 12 months, classified as trading securities, reported at fair value with
interest and dividend income and gains and losses in earnings. There were no realized gains or
losses on marketable securities for the twelve months ended December 31, 2022 and 2021.
j. Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount. The allowance for doubtful
accounts is management's best estimate of the amount of probable credit losses in existing
accounts receivable. Chugach determines the allowance based on its historical write-off experience
and current economic conditions. Chugach reviews its allowance for doubtful accounts monthly.
Past due balances over 90 days in a specified amount are reviewed individually for collectability.
All other balances are reviewed in aggregate. Account balances are charged off against the
allowance after all means of collection have been exhausted and the potential for recovery is
considered remote. Chugach does not have any off—balance-sheet credit exposure related to its
customers.
k. Materials and Su
Rplies
Materials and supplies are stated at average cost.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
1. Fuel Stock
Fuel Stock is the weighted average cost of fuel injected into Cook Inlet Natural Gas Storage Alaska
("CINGSA"). Chugach's fuel balance in storage for the years ended December 31, 2022 and 2021
amounted to $18.2 million and $14.1 million, respectively.
m. Fuel and Purchased Power Cost Recovery
Expenses associated with electric services include fuel purchased from others and produced from
Chugach's interest in the BRU, both of which are used to generate electricity, as well as power
purchased from others. Chugach is authorized by the RCA to recover fuel and purchased power
costs, excluding costs associated with the Eklutna Purchased Power Agreement ("PPA"), through
the fuel and purchased power adjustment process, which is adjusted quarterly to reflect increases
and decreases of such costs. We recognize differences between projected recoverable fuel and
purchased power costs and amounts recovered through rates. The fuel cost under/over recovery on
our balance sheet represents the net accumulation of any under- or over-collection of fuel and
purchased power costs. Fuel cost under-recovery will appear as an asset on our balance sheet and
will be collected from our members in subsequent periods. Conversely, fuel cost over-recovery
will appear as a liability on our balance sheet and will be refunded to our members in subsequent
periods.
n. Deferred Charges and Liabilities
Included in deferred charges and liabilities on Chugach's financial statements are regulatory assets
and liabilities recorded in accordance with FASB ASC 980. See Note 8 Deferred Charges and
Liabilities. Continued accounting under FASB ASC 980 requires that certain criteria be met. We
capitalize all or part of costs that would otherwise be charged to expense if it is probable that future
revenue in an amount at least equal to the capitalized cost will result from inclusion of that cost in
allowable costs for ratemaking purposes and future revenue will be provided to permit recovery of
the previously incurred cost. Management believes Chugach's operations currently satisfy these
criteria.
Chugach's regulatory asset recoveries are embedded in base rates approved by the RCA. Specific
costs incurred and recorded as regulatory assets, including the amortization period for recovery,
are approved by the RCA either in standard Simplified Rate Filings ("SRF"), general rate case
filings, or specified independent requests or filings. The rates approved related to the regulatory
assets are matched to the amortization of actual expenses recognized. The regulatory assets are
amortized and collected through rates over differing periods depending upon the period of benefit
as established by the RCA. Deferred liabilities include refundable CIAC, which are credited to the
associated cost of construction of property units. Refundable CIAC are held in deferred liabilities
pending their return or other disposition. If events or circumstances should change so the criteria
are not met, the write off of regulatory assets and liabilities could have a material effect on
Chugach's financial position, results of operations or cash flows.
14
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
o. Patronage Capital
Revenues in excess of current period costs (net operating margins and nonoperating margins) in
any year are designated on Chugach's statement of operations as assignable margins. These excess
amounts (i.e. assignable margins) are considered capital furnished by the members, and are
credited to their accounts and held by Chugach until such future time as they are retired and
returned without interest at the discretion of the Board. Retained assignable margins are designated
on Chugach's balance sheet as patronage capital. This patronage capital constitutes the principal
equity of Chugach. The Board may also approve the return of capital to former members and
estates who request early retirements at discounted rates under a discounted capital credits
retirement plan was authorized by the Board in September of 2002.
p. Consumer Deposits
Consumer deposits include amounts certain customers are required to deposit to receive electric
service. Consumer deposits at December 31, 2022 and 2021, totaled$2.0 million and $2.3 million,
respectively. Consumer deposits also represent customer credit balances from prepaid accounts.
Credit balances at December 31, 2022 and 2021, totaled $2.9 million and $3.4 million,
respectively.
q. Fair Value ofFinancial Instruments
FASB ASC 825, "Topic 825 — Financial Instruments," requires disclosure of the fair value of
certain on and off-balance sheet financial instruments for which it is practicable to estimate that
value. The following methods are used to estimate the fair value of financial instruments:
Cash, cash equivalents, and restricted cash equivalents — the carrying amount approximates fair
value because of the short maturity of those instruments.
Marketable securities—the carrying amount approximates fair value as changes in the market value
are recorded monthly and gains or losses are reported in earnings (see Note 2i).
Long-term obligations — the fair value estimate is based on the quoted market price for same or
similar issues (see Note 11).
Consumer deposits — the carrying amount approximates fair value because of the short refunding
term.
The fair value of accounts receivable and payable, and other short-term monetary assets and
liabilities approximate carrying value due to their short-term nature.
r. Operating Revenues
Revenues are recognized upon delivery of electricity and services. Energy sales revenues are
Chugach's primary source of revenue and are recognized upon delivery of electricity. Wheeling
revenue is recognized when energy is wheeled across Chugach's transmission lines. Other
miscellaneous services are billed monthly as provided. Operating revenues are based on billing
rates authorized by the RCA,which are applied to customers' usage of electricity. Chugach's rates
15
50
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
are established, in part, on test period sales levels that reflect actual operating results. Chugach's
tariffs include provisions for the recovery of gas costs according to gas supply contracts, as well
as certain purchased power costs. For more information, see "Note 17 Revenue From Contracts
with Customers."
s. Capitalized Interest
Allowance for funds used during construction ("AFUDC") and interest charged to
construction - credit ("IDC") are the estimated costs of the funds used during the period of
construction from both equity and borrowed funds. AFUDC and IDC are applied to specific
projects during construction. AFUDC and IDC calculations use the net cost of borrowed funds
when used and is recovered through RCA approved rates as utility plant is depreciated. For all
projects Chugach capitalized such funds at the weighted average rate of 3.3%, 4.2%, and 4.2%
during 2022, 2021, and 2020, respectively.
t. Environmental Remediation Costs
Chugach accrues for losses and establishes a liability associated with environmental remediation
obligations when such losses are probable and can be reasonably estimated. Such accruals are
adjusted as further information develops or circumstances change. Estimates of future costs for
environmental remediation obligations are not discounted to their present value. However, various
remediation costs may be recoverable through rates and accounted for as a regulatory asset.
u. Income Taxes
Chugach is exempt from federal income taxes under the provisions of Section 501(c)(12) of the
Internal Revenue Code and for the years ended December 31, 2022, 2021, and 2020 was in
compliance with that provision. In addition, as described in Note 19 "Commitments and
Contingencies, " Chugach collects sales tax and is assessed gross revenue and excise taxes which
are presented on a net basis in accordance with FASB ASC 606-10-65, "Topic 606 - Revenue from
Contracts with Customers."
Chugach applies a more-likely-than-not recognition threshold for all tax uncertainties. FASB ASC
740, "Topic 740 — Income Taxes," only allows the recognition of those tax benefits that have a
greater than fifty percent likelihood of being sustained upon examination by the taxing authorities.
Chugach's management reviewed Chugach's tax positions and determined there were no
outstanding or retroactive tax positions that were not highly certain of being sustained upon
examination by the taxing authorities.
Management has concluded that there are no significant tax positions requiring recognition in its
financial statements for all periods presented. Chugach's evaluation was performed for the tax
periods ended December 31, 2020 through December 31, 2022 for United States Federal Income
Tax, the tax years which remain subject to examination by major tax jurisdictions as of December
31, 2022.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
(3) Accounting Pronouncements
Issued, and adopted:
ASC Update 2018-14 "Compensation Retirement Benefits Defined Benefit Plans General
(Subtopic 715-20):Disclosure Framework Changes to the Disclosure Requirements for Defined
Benefit Plans"
In August 2018, the FASB issued ASU 2018-14, "Compensation—Retirement Benefits—Defined
Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure
Requirements for Defined Benefit Plans." ASU 2018-14 modifies ASC 715-20 to improve
disclosure requirements for employers that sponsor defined benefit pension or other postretirement
plans. The ASU is effective for fiscal years ending after December 15, 2020, for public companies.
Early adoption is permitted. Chugach began application of ASU 2018-14 on January 1, 2021.
Adoption did not have a material effect on our results of operations, financial position, and cash
flows.
ASC Update 2021-05 "Leases (Topic 842) Lessors - Certain Leases with Variable Lease
Payments"
In July 2021, the FASB issued ASU 2021-05 "Leases (Topic 842) —Lessors — Certain Leases with
Variable Lease Payments". ASU 2021-05 requires a lessor to classify a lease with variable lease
payments that do not depend on an index or rate (hereafter referred to as "variable payments") as
an operating lease on the commencement date of the lease if specified criteria are met.
The amendments in ASU 2021-05 should be applied by using either of the following approaches:
1.Retrospective application to leases that commence or are modified on or after the adoption of
ASC 842.
2.Prospective application to leases that commence or are modified on or after the date on which a
lessor first applies the amendments in ASU 2021-05.
Lessors that have adopted ASC 842 as of July 2021, should apply the transition requirements for
fiscal years beginning after December 15, 2021. Chugach began application of ASC 842 on
January 1, 2019. See "Note 18 —LEASES." Early adoption of ASU 2021-05 is permitted. Chugach
began application of ASU 2021-05 on January 1, 2022. Adoption did not have a material effect on
our results of operations, financial position, and cash flows.
ASC Update 2021-09 "Leases (Topic 842) Discount Rate for Lessees That Are Not Public
Business Entities"
In November 2021, the FASB issued ASU 2021-09 "Leases (Topic 842)—Discount Rate for
Lessees That Are Not Public Business Entities". ASU 2021-09 allows lessee's that are not a public
business entity to use a risk-free rate as its discount rate by class of underlying asset rather than an
entity-wide level. The amendments in this update also require that when the rate implicit in the
lease is readily determinable for any individual lease, the lessee would use that rate (rather than a
risk-free rate or an incremental borrowing rate), regardless of whether it has made the risk-free
rate election.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
The amendments in this update are effective for fiscal years beginning after December 15, 2021.
Chugach began application of ASU 2021-09 on January 1, 2022. Adoption did not have a material
effect on our results of operations, financial position, and cash flows.
ASC Update 2021-10 "Government Assistance (Topic 832) Disclosures by Business Entities
about Government Assistance"
The amendments in this update require disclosures about transactions with a government that have
been accounted for by analogizing to a grant or contribution accounting model to increase
transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the
effect of the transactions on an entity's financial statements.
The amendments in this update are effective for all entities within their scope for financial
statements issued for annual periods beginning after December 15, 2021. Early application of the
amendments is permitted. Chugach began application of ASU 2021-10 on January 1, 2022.
Adoption did not have a material effect on our disclosures.
(4) Fair Value of Assets and Liabilities
Fair Value Hierarchy
In accordance with FASB ASC 820, Chugach groups its financial assets and liabilities measured
at fair value in three levels, based on the markets in which the assets and liabilities are traded and
the reliability of the assumptions used to determine fair value. These levels are:
Level 1 —Valuation is based upon quoted prices for identical instruments traded in active exchange
markets, such as the New York Stock Exchange. Valuations are obtained from readily available
pricing sources for market transactions involving identical assets or liabilities.
Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted
prices for identical or similar instruments in markets that are not active, and model-based valuation
techniques for which all significant assumptions are observable in the market.
Level 3 — Valuation is generated from model-based techniques that use significant assumptions
not observable in the market. These unobservable assumptions reflect Chugach's estimates of
assumptions that market participants would use in pricing the asset or liability. Valuation
techniques include use of option pricing models, discounted cash flow models and similar
techniques.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
The tables below present the balances of Chugach's investment accounts associated with the BRU
ARO and other obligations,which are comprised of bond and equity securities. Chugach had no other
assets or liabilities measured at fair value on a recurring basis at December 31, 2022, or December
31, 2021.
December 31, 2022 Total Level 1 Level 2 Level 3
BRU ARO Fund $ 20,114,870 $ 18,004,464 $ 2,110,406 $ 0
RRR Fund $ 12,174,066 $ 12,174,066 $ 0 $ 0
Future Natural Gas
Purchases Fund $ 4,773,459 $ 4,773,459 $ 0 $ 0
December 31, 2021 Total Level 1 Level 2 Level 3
BRU ARO Fund $ 21,441,165 $ 19,154,277 $ 2,286,888 $ 0
RRR Fund $ 24,000,943 $ 24,000,943 $ 0 $ 0
Future Natural Gas 0
Purchases Fund $ 19,437,450 $ 19,437,450 $ 0 $
Fair Value of Financial Instruments
Fair value estimates are dependent upon subjective assumptions and involve significant uncertainties
resulting in variability in estimates with changes in assumptions. The fair value of cash, cash
equivalents, restricted cash equivalents, accounts receivable and payable, and other short-term
monetary assets and liabilities approximate carrying value due to their short-term nature.
The estimated fair values of long-term obligations included in the financial statements at December
31, 2022, are as follows (dollars in thousands):
Carrying Value Fair Value Level 2
Long-term obligations (including current installments) $ 1,196,395 $ 977,132
(5) Re ug latory Matters
Gas Dispatch Agreement
In 2016, Chugach and MEA entered into an agreement entitled, "Gas Dispatch Agreement" in
which Chugach provides gas scheduling and dispatch services to MEA. On January 24, 2022,
MEA provided notice that it was terminating the Gas Dispatch Agreement, effective August 1,
2022. Termination of the agreement reduced annual revenues by approximately $0.2 million.
Simplified Rate Filing
Prior to the acquisition of the MOA d/b/a ML&P on October 30, 2020, Chugach participated in
the SRF process for adjustments to base demand and energy rates for Chugach retail customers
and wholesale customer, Seward. SRF is an expedited base rate adjustment process available to
electric cooperatives in the State of Alaska, with filings made either on a quarterly or semi-annual
basis. Chugach participated on a quarterly filing schedule basis. While there is no limitation on
base rate decreases, increases under SRF are limited to 8% in a 12-month period and 20% in a 36-
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
month period. Chugach is also permitted to cease participation under the SRF process and adjust
rates through general rate case filings, which do not have limitations on rate adjustments.
As a result of the acquisition, Chugach submitted a request to the RCA to temporarily suspend its
participation in the SRF process pending the completion of a general rate case following its
acquisition of ML&P, which will be filed no later than August 15, 2023. The RCA granted
Chugach's request. Chugach will request RCA approval to re-enter the SRF process after
completion of its rate case.
Operation and Regulation of the Alaska Railbelt Electric and Transmission System
In 2020 the Alaska Legislature enacted Senate Bill ("SB") 123, requiring an electric reliability
organization ("ERO") to be formed for the Railbelt electric grid. The ERO's primary tasks are to
develop and enforce reliability standards, develop transmission and interconnection standards, and
conduct integrated resource planning for the Railbelt. The Railbelt utilities worked with other
stakeholders to form the Railbelt Reliability Council ("RRC") with the intent that the RRC would
ultimately submit an application to the RCA to become the ERO. On March 25, 2022, the RRC
formally submitted its application for certification as the ERO. The RRC is structured as a
combination independent and balanced stakeholder board, which means that consumers, providers,
and non-consumer/provider interests are all represented on the RRC board.The RCA opened a docket
to investigate the RRC's application,received testimony, and held a hearing on the matter. Comments
related to the RRC's application were primarily focused on potential measures for reducing costs
while still allowing the RRC to complete its mission as the ERO. Following the hearing, the RCA
issued an order indicating that certain modifications to the RRC's application were required as a
condition of certification. The RRC reviewed and accepted the RCA's required changes and
submitted its compliance filing demonstrating as much on September 14, 2022. On September 23,
2022, the RCA issued its order approving the RRC's application to be certificated as the ERO. The
RRC has submitted its proposed budget and operating tariff to the RCA for approval. Both matters
have been suspended for further investigation.
Railbelt Reliability Standards
In March 2018, the Alaska Intertie Management Committee completed the development of the
Railbelt Reliability Standards and submitted them to the RCA on April 5, 2018. These reliability
standards are based on North American Electric Reliability Corporation ("NERC") standards,
modified to meet the unique circumstances of the relatively small and islanded Railbelt grid. The
standards govern the secure operation of the Railbelt electric grid and will be adopted for the
further development, administration, and enforcement of the ERO.
In June 2016, in response to RCA Docket I-16-002, Railbelt Utility Information Technology and
Operations Technology leadership began meeting to discuss Railbelt cybersecurity. The Railbelt
Utilities Managers ("RUM") group designated the Cybersecurity Working Group to review industry
standards and provide a statement of work to develop Railbelt cybersecurity standards. On June 21,
2018, Chugach posted a Request for Proposal to hire a consultant to draft the standards. The final
draft was presented to the RUM on February 15, 2019. On July 10, 2019,a status update was provided
to the RCA by the RUM announcing the completion of Alaska Critical Infrastructure Protection
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Cybersecurity Standards ("AKCIP") and a collective agreement for adoption effective January 1,
2020. Implementation schedules are contained in the specific standards.
ML&P Acquisition
The transaction to acquire ML&P closed on October 30, 2020. For more information, see "Note
16 -ML&P Acquisition."
Potential Margin Shortfalls Due to Lower Sales
On July 1, 2021, Chugach submitted a petition to the RCA requesting approval to modify the
Stipulation Resolving All Issues (as approved in Order No. U-18-102(44)/U-19-020(39)/U-19-
021(39)),in response to reductions in sales due,in part,to the COVID-19 pandemic. In the petition,
Chugach requested approval to modify the amortization amounts for the Secondary Regulatory
Asset and the Eklutna PPA payments, as and if needed, that would allow Chugach to achieve a
Margins for Interest ("MFI/I") of 1.20 for 2021, 2022 and 2023. On July 30, 2021, the RCA issued
Order No. U-19-020(47)/U-19-021(47) partially denying the petition and opening Docket U-21-
059 for investigation of Chugach's projected margin shortfall. On August 10, 2021, Chugach
requested expedited consideration requesting that a decision be issued by the RCA by November
12, 2021. A hearing was held on September 23, 2021, to address Chugach's request to modify the
Stipulation.
On November 9, 2021, the RCA issued an order authorizing Chugach to modify the amortization
of its Secondary Regulatory asset and defer the Eklutna PPA payments, if needed, to achieve a
MFI/I of not more than 1.20 for 2021. Additionally, the RCA required Chugach to submit a filing
to propose an alternative solution for years 2022 and 2023. Chugach submitted the proposed
alternative solution; however, in response to issues raised by its members, withdrew this filing on
January 20, 2022. On February 28, 2022, Chugach submitted a petition to the RCA requesting
approval to defer up to $8.8 million of the Secondary Regulatory asset and Eklutna PPA payments
that were approved for deferral in 2021 by the RCA in Order No. U-19-020(47)/U-19-021(47).
Since Chugach did not defer any amounts in 2021, the petition requested RCA approval to defer
up to the $8.8 million as previously authorized for 2021 in calendar-years 2022 and 2023, if
needed.
On October 27, 2022, the RCA issued an order authorizing the deferral of the amortization of the
Secondary Regulatory asset if needed to achieve a MFI/I of not more than 1.20 for 2022; however,
the petition for deferral in 2023 was denied.
Depreciation Study
On June 29, 2022, Chugach filed a petition to approve depreciation rates recommended in a
depreciation study based on Chugach's 2021 plant balances. The RCA opened a docket to
investigate Chugach's filing. The Attorney General, Department of Regulatory Affairs and Public
Advocacy ("RAPA") intervened in the proceeding. Chugach and RAPA negotiated a stipulation.
The stipulation was filed with the RCA and approved on December 29, 2022, with depreciation
rates effective January 1, 2023. The annual impact of the new depreciation rates is a decrease of
approximately $2.4 to $3.6 million.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Beluga River Unit
The BRU is located on the western side of Cook Inlet, approximately 35 miles from Anchorage,
and is an established natural gas field that was originally discovered in 1962. Effective October
30, 2020, Chugach acquired ML&P's 57% ownership share of the BRU, increasing Chugach's
ownership share of the BRU to 66.7%. Hilcorp owns the remaining 33.3%. Hilcorp drilled two
wells in 2021, four wells in 2022, and plans to drill five wells in 2023.
Chugach records depreciation, depletion, and amortization on BRU assets based on units of
production. During 2022, Chugach lifted 7.9 Bcf resulting in a cumulative lift since purchase of
19.9 Bcf of the approximate 56.4 Bcf in Chugach's proven developed reserved. Chugach and the
other owner, Hilcorp, are operating under an existing Joint Operating Agreement. Hilcorp is the
operator for BRU. In addition to the operator fees to Hilcorp, other BRU expenses include royalty
expense and interest on long-term debt. All expenses other than depreciation, depletion and
amortization and interest on long-term debt are included as fuel expense on Chugach's
Consolidated Statement of Operations. Chugach has applied and qualified for a small producer tax
credit, provided by the State of Alaska, resulting in an estimate of no liability for production taxes
for a period of ten years, through 2026. The revenue in excess of expenses less the allowed times
interest earned ratio ("TIER") from BRU operations is adjusted through Chugach's fuel and
purchased power adjustment process.
On May 16, 2022, Chugach received approval to adopt a forward-funding recovery structure for
BRU capital expenditures through a BRU Capital Reserve Surcharge on an interim, non-
refundable basis. Revenues received from the surcharge are deposited into the BRU Reserve
account to meet BRU capital expenditure requirements over the remaining life of the gas field.
Under this structure, all future capital expenditures are recovered through the BRU Capital Reserve
Surcharge. The BRU Capital Reserve Surcharge is a component of Chugach's BRU gas transfer
price. All BRU costs are recovered through Chugach's fuel and purchased power adjustment
process as a direct pass-through.
Seward
On August 23, 2021, Chugach filed a 2022 Wholesale Power Contract ("2022 Agreement")
between Chugach and Seward with the RCA. On September 30, 2021, the RCA approved the 2022
Agreement. The 2022 Agreement provides for an initial three-year term, with two subsequent
three-year automatic extensions unless terminated by either party with a one-year's advance notice.
The 2022 Agreement also provides for the continuation of generation interruptibility if power
supplies are not available from the Chugach system in addition to no generation reserve
assignment. It also provides significant opportunity for mutual benefit in key areas of operations,
including employee training, electric vehicle charging infrastructure, renewable generation,
dispatch and engineering services, cyber security, and Advanced Metering Infrastructure ("AMI q).
The 2022 Agreement is expected to provide approximately$2.3 million annually in base rate fixed-
cost contribution to the Chugach system. In addition to simplifying fuel and purchased power cost
recovery, it also provides for the optionality of Seward to purchase natural gas to meet all or
portions of the energy requirements and to meet a portion of its power supply needs through
economy energy purchases subject to Chugach approval based on operational or economic
conditions.
22
57
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
In 2022, the City of Seward announced that it intends to sell the assets of its electric utility to HEA.
The sale must be approved by an affirmative vote of Seward residents. That vote is currently
scheduled to take place in May 2023. If approved, the 2022 Agreement would likely not be
renewed beyond its initial three-year term.
Furie Operating Alaska LLC Gas Sales and Purchase A reg ement
Chugach entered into a new Gas Sales and Purchase Agreement ("Furie Agreement") with Furie
Operating Alaska, LLC (Furie) for firm and non-firm natural gas purchases. The previous
agreement was terminated because Furie informed Chugach that they could not produce sufficient
gas volumes to meet the firm supply commitment of 5,000 Mcf per day in contract years 7 through
16 (4/l/2023 — 3/31/2033). To replace these firm gas volumes, Chugach exercised an additional
purchase option under its firm contract with Hilcorp Alaska, LLC ("Hilcorp Agreement"). The
Hilcorp Agreement, including the additional purchase option, provides firm gas supply through
March 31, 2028.
Under the Furie Agreement, quantities of gas are subject to availability and prices are subject to
negotiation. The agreement provides Chugach the option to purchase supplemental gas to meet
firm load requirements, if economically advantageous and if operational conditions warrant such
purchases. Additionally, this agreement provides Chugach with an additional gas supply option
for generation of energy for economy sales, which reduces the underlying cost to provide electric
service to members. The RCA approved the Furie Agreement effective November 1, 2021.
Power Pooling and Joint Dispatch
The RCA approved the Amended and Restated Operations Agreement for Power Pooling and Joint
Dispatch (Pooling Agreement) on November 2, 2020. Pursuant to the Pooling Agreement, Chugach
and MEA spent the next 18 months working to implement the Pooling Agreement. On December
29, 2021, MEA filed its first quarter 2022 cost of power adjustment wherein it alleged that beginning
in January 2022 MEA would no longer be purchasing energy from Chugach at the price proposed
by Chugach. On March 3, 2022, the RCA opened a docket to investigate the tight power pool energy
exchange and settlement practices of Chugach. A hearing was held on the matter on in May of 2022.
The RCA issued its final order on March 3, 2023, requiring Chugach to issue corrected invoices
based on a previously agreed upon settlement process required by the Power Pool Agreement and
pay any refunds due to MEA. Credit invoices were issued on April 3, 2023 totaling $625,058.49
and a compliance filing will be made to the RCA by April 10, 2023.
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58
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
(6) Utility Plant
Major classes of utility plant, net of contributions in aid of construction, as of December 31 are as
follows:
Electric plant in service: 2022 2021
Steam production plant $ 294,852,984 $ 308,652,600
Hydroelectric production plant 30,851,393 34,422,805
Other production plant 515,208,052 494,269,738
Transmission plant 349,197,248 346,398,832
Distribution plant 515,386,050 496,019,140
General plant 84,395,785 78,873,995
Unclassified electric plant in service' 128,778,261 128,891,974
Intangible plant' 8,806,840 9,306,358
Beluga River Natural Gas Field (BRU Asset &ARO Asset) 181,030,877 186,903,860
Other' 1,483,258 1,828,410
Total electric plant in service 2,109,990,748 2,085,567,712
Construction work in progress 52,721,736 34,253,304
Total electric plant in service and construction work in progress $ 2,162,712,484 $ 2,119,821,016
' Unclassified electric plant in service consists of complete unclassified general plant,generation plant,transmission
plant and distribution plant. Depreciation of unclassified electric plant in service has been included in functional
plant depreciation accounts in accordance with the anticipated eventual classification of the plant investment.
Intangible plant represents Chugach's share of a Bradley Lake transmission line financed internally.Other represents
Electric Plant Held for Future Use.
(7) Investments in Associated Organizations
Investments in associated organizations include the following at December 31:
2022 2021
NRUCFC Capital Term Certificates $ 5,902,230 $ 5,902,230
CoBank 1,042,588 1,327,159
Other 48,669 51,547
Total investments in associated organizations $ 6,993,487 $ 7,280,936
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
(8) Deferred Charges and Liabilities
Deferred Charges
Regulatory assets and deferred charges, net of amortization, consisted of the following at
December 31:
2022 2021
Regulatory assets and deferred charges:
Short-term debt issuance and reacquisition costs $ 185,959 $ 310,867
Refurbishment of transmission equipment 49,383 58,642
Feasibility studies 360,376 1,483,976
Cooper Lake relicensing/projects 4,499,389 4,629,492
Fuel supply 1,311,972 1,450,138
Other regulatory deferred charges 3,391,818 717,806
Bond interest -market risk management 2,856,448 3,214,814
Environmental matters 752,066 797,417
Beluga parts and materials 4,300,423 5,529,115
NRECA pension plan prepayment 3,602,295 4,322,754
ML&P acquisition, integration, & consolidation 46,644,515 42,530,884
ML&P regulatory assets acquired 1,604,902 2,676,661
ML&P acquisition price premium 27,434,770 26,727,306
ML&P acquisition secondary regulatory asset 5,277,778 11,611,111
Incremental COVID-19 costs 6,285,155 6,287,155
Total regulatory assets and deferred charges $ 108,557,249 $ 112,348,138
Regulatory assets and deferred charges, not currently being recovered in rates charged to
consumers, consisted of the following at December 31:
2022 2021
Regulatory assets and deferred charges
Regulatory studies and other $ 3,420,091 $ 1,842,144
ML&P acquisition, integration, and consolidation 46,644,515 42,530,882
ML&P acquisition price premium 27,434,770 26,727,661
Incremental COVID-19 costs 6,285,155 6,287,155
Total regulatory assets and deferred charges $ 83,784,531 $ 77,387,842
We believe all regulatory assets and deferred charges not currently being recovered in rates
charged to consumers are probable of recovery in the future based upon prior recovery of similar
costs allowed by our regulator or rate orders currently approved by the RCA. The recovery of
regulatory assets and deferred charges is approved by the RCA either in standard SRFs, general
rate case filings or specified independent requests or filings. In most cases, deferred charges are
recovered over the life of the underlying asset.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Deferred Liabilities
Deferred liabilities, at December 31 consisted of the following:
2022 2021
Refundable consumer advances for construction $ 1,070,739 $ 359,497
Post-retirement benefit obligation 414,037 448,372
Regulatory liability—gas sales 22,833 22,791
Future gas purchases 7,715,186 7,809,040
ARO surcharge deferred liability 416,908 4,093,502
Eklutna clearing 0 (9,083)
Total deferred liabilities $ 9,639,703 $ 12,724,119
Future gas purchases represent funds that ML&P received for BRU underlift for which the RCA
has specified the use.
(9) Patronage Capital
Chugach has a Board approved capital credit retirement policy. It establishes, in general, a plan to
return the capital credits of wholesale and retail customers based on the members' proportionate
contribution to Chugach's assignable margins. At December 31, 2022, Chugach had$194,755,133
of patronage capital (net of capital credits retired), which included $186,631,396 of patronage
capital that had been assigned and $8,123,737 of patronage capital to be assigned to its members.
At December 31, 2021, Chugach had $188,573,753 of patronage capital (net of capital credits
retired in 2021), which included $178,995,274 of patronage capital that had been assigned and
$9,578,479 of patronage capital to be assigned to its members. Approval of actual capital credit
retirements is at the discretion of the Board. Chugach records a liability when the retirements are
approved by the Board.
The Second Amended and Restated Indenture of Trust ("Indenture") and the CoBank Second
Amended and Restated Master Loan Agreement, as amended, prohibit Chugach from making any
distribution of patronage capital to Chugach's customers if an event of default under the Indenture
or debt agreements exists. Otherwise, Chugach may make distributions to Chugach's members in
each year equal to the lesser of 5% of Chugach's patronage capital or 50% of assignable margins
for the prior fiscal year. This restriction does not apply if, after the distribution, Chugach's
aggregate equities and margins as of the end of the immediately preceding fiscal quarter are equal
to at least 30% of Chugach's total long-term debt and equities and margins. In November 2022,
the Board authorized payments to MEA and Seward of approximately $1.5 million and $90.0
thousand, respectively. In November 2021, the Board authorized payments to MEA and Seward
of approximately $2.1 million and $110.2 thousand, respectively.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
(10) Other Equities
A summary of other equities at December 31 follows:
2022 2021
Nonoperating margins, prior to 1967 $ 23,625 $ 23,625
Donated capital 3,152,636 3,016,702
Unclaimed capital credit retirement' 12,417,911 12,437,596
Total other equities $ 15,594,172 $ 15,477,923
'Represents unclaimed capital credits that have met all requirements of Alaska Statute section 34.45.200 regarding
Alaska's unclaimed property law and have therefore reverted to Chugach.
(11) Debt
Long-term obligations at December 31 are as follows: 2022 2021
2011 Series A Bond of 4.20%, maturing in 2031, with interest
payable semi-annually March 15 and September 15 and principal
due annually beginning in 2012 40,500,000 45,000,000
2011 Series A Bond of 4.75%, maturing in 2041, with interest
payable semi-annually March 15 and September 15 and principal
due annually beginning in 2012 117,166,663 123,333,330
2012 Series A Bond of 4.01%, maturing in 2032, with interest
payable semi-annually March 15 and September 15 and principal
due annually beginning in 2013 37,500,000 41,250,000
2012 Series A Bond of 4.41%, maturing in 2042, with interest
payable semi-annually March 15 and September 15 and principal
due annually between 2013 and 2020 and between 2032 and 2042 67,000,000 67,000,000
2012 Series A Bond of 4.78%, maturing in 2042, with interest
payable semi-annually March 15 and September 15 and principal
due annually beginning in 2023 50,000,000 50,000,000
2017 Series A Bond of 3.43%, maturing in 2037, with interest
payable semi-annually March 15 and September 15 and principal
due annually beginning in 2018 30,000,000 32,000,000
2019 Series A Bond of 3.86%, maturing in 2049, with interest
payable semi-annually May 15 and November 15 and principal due
annually beginning in 2021 67,200,000 71,100,000
2020 Series A Bond of 2.38%, maturing in 2039, with interest
payable semi-annually April 30 and October 30 and principal
payments beginning in 2025 275,000,000 275,000,000
2020 Series A Bond of 2.91%, maturing in 2050, with interest
payable semi-annually April 30 and October 30 and principal
payments beginning in 2021 489,000,000 507,000,000
2016 CoBank Note, 2.58% fixed rate note maturing in 2031, with
interest and principal due quarterly beginning in 2016 23,028,000 26,904,000
Total long-term obligations $ 1,196,394,663 $ 1,238,587,330
Less current installments 48,920,667 42,192,667
Less unamortized debt issuance costs 5,960,113 6,072,373
Long-term debt, excluding current installments $ 1,141,513,883 $ 1,190,322,290
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Covenants
Chugach is required to comply with all covenants set forth in the Second Amended and Restated
Indenture of trust that secures the 2011, 2012, 2017, 2019 and 2020 Series A Bonds, and the 2016
CoBank Note. The CoBank Note is governed by the Second Amended and Restated Master Loan
Agreement, as amended, which is secured by the Indenture dated January 20, 2011.
Chugach is also required to comply with the 2016 Credit Agreement, as amended between
Chugach and NRUCFC, KeyBank National Association, Bank of America, N.A., Wells Fargo
Bank N.A., and CoBank, ACB dated July 30, 2019, governing loans and extensions of credit
associated with Chugach's commercial paper program, in an aggregate principal amount not
exceeding $300.0 million at any one time outstanding.
Chugach is also required to comply with other covenants set forth in the Revolving Line of Credit
Agreement with NRUCFC.
Securi
The Indenture, which became effective on January 20, 2011, imposes a lien on substantially all of
Chugach's assets to secure Chugach's long-term debt obligations. On October 30, 2020, a lien was
granted on certain ML&P acquired assets to secure the debt associated with the acquisition. Assets
that are generally not subject to the lien of the Indenture include cash (other than cash deposited with
the indenture trustee); instruments and securities; patents, trademarks, licenses and other intellectual
property; vehicles and other movable equipment; inventory and consumable materials and supplies;
office furniture, equipment and supplies; computer equipment and software; office leases; other
leasehold interests for an original term of less than five years; contracts (other than power sales
agreements with members having an original term exceeding three years,certain contracts specifically
identified in the indenture, and other contracts relating to the ownership, operation or maintenance of
generation,transmission or distribution facilities);non-assignable permits,licenses and other contract
rights; timber and minerals separated from land; electricity, gas, steam, water and other products
generated, produced or purchased; other property in which a security interest cannot legally be
perfected by the filing of a Uniform Commercial Code financing statement, and certain parcels of real
property specifically excepted from the lien of the Indenture. The lien of the Indenture may be subject
to various permitted encumbrances that include matters existing on the date of the Indenture or the
date on which property is later acquired; reservations in United States patents; non-delinquent or
contested taxes, assessments and contractors' liens; and various leases, rights-of-way, easements,
covenants, conditions, restrictions, reservations, licenses and permits that do not materially impair
Chugach's use of the mortgaged property in the conduct of Chugach's business.
Rates
The Indenture also requires Chugach, subject to any necessary regulatory approval, to establish
and collect rates reasonably expected to yield margins for interest equal to at least 1.10 times total
interest expense. If any material change occurs in the circumstances contemplated at the time rates
were most recently reviewed, the Indenture requires Chugach to seek appropriate adjustment to
those rates so that they would generate revenues reasonably expected to yield margins for interest
equal to at least 1.10 times interest charges, provided, however, upon review of rates based on a
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
material change in circumstances, rates are required to be revised in order to comply and there are
less than six calendar months remaining in the current fiscal year, Chugach can revise its rates so
as to reasonably expect to meet the covenant for the next succeeding 12-month period after the
date of any such revision.
The Second Amended and Restated Master Loan Agreement with CoBank, which became
effective on June 30, 2016, as amended November 26, 2019, also requires Chugach to establish
and collect rates reasonably expected to yield margins for interest equal to at least 1.10 times
interest expense.
The 2016 Credit Agreement governing the unsecured facility providing liquidity for Chugach's
commercial paper program requires Chugach to maintain minimum margins for interest of at least
1.10 times interest charges for each fiscal year.Margins for interest generally consist of Chugach's
assignable margins plus total interest expense, excluding amounts capitalized. Additionally,
Chugach must maintain a minimum Consolidated Margins and Equities balance of$150.0 million,
excluding any unrealized gain or loss on any Hedging Agreement, for each fiscal quarter and fiscal
year-end.
Distributions to Members
Under the Indenture and debt agreements, Chugach is prohibited from making any distribution of
patronage capital to Chugach's customers if an event of default under the Indenture or debt
agreements exists. Otherwise, Chugach may make distributions to Chugach's members in each
year equal to the lesser of 5% of Chugach's patronage capital or 50% of assignable margins for
the prior fiscal year. This restriction does not apply if, after the distribution, Chugach's aggregate
equities and margins as of the end of the immediately preceding fiscal quarter are equal to at least
30% of Chugach's total long-term debt and equities and margins.
Maturities ofLoy&term Obligations
Long-term obligations at December 31, 2022, mature as follows (dollars in thousands):
Year 2011 Series 2012 Series 2016 2017 Series 2019 Series 2020 Series
ending A Bonds A Bonds CoBank A Bonds A Bonds A Bonds Total
2023 10,667 6,250 4,104 2,000 3,900 22,000 48,921
2024 10,667 6,250 4,104 2,000 3,900 22,000 48,921
2025 10,667 6,250 3,876 2,000 3,900 22,000 48,693
2026 10,667 6,250 3,192 2,000 3,900 28,000 54,009
2027 10,667 6,250 2,508 2,000 3,900 28,000 53,325
Thereafter 104,332 123,250 5,244 20,000 47,700 642,000 942,526
$ 157,667 $ 154,500 $ 23,028 $ 30,000 $ 67,200 $ 764,000 $ 1,196,395
Lines ofcredit
Chugach maintains a$50.0 million line of credit with NRUCFC. There was no outstanding balance
on this line of credit at December 31, 2022. On March 16, 2020, Chugach drew $41.0 million on
this line of credit to pay the balance of commercial paper. The balance on this line of credit was
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
subsequently paid using the senior unsecured credit facility backstopping our commercial paper
program; therefore, there was no outstanding balance on this line of credit at December 31, 2020.
The borrowing rate is calculated using the total rate per annum and may be fixed by NRUCFC.
The borrowing rate was 6.25% and 2.45% at December 31, 2022 and 2021, respectively.
The NRUCFC Revolving Line of Credit Agreement requires that Chugach, for each 12-month
period, for a period of at least five consecutive days, pay down the entire outstanding principal
balance. The NRUCFC line of credit was renewed December 15, 2021 and expires December 21,
2026. This line of credit is immediately available for unconditional borrowing.
Commercial Paper
Chugach maintains a $300.0 million senior unsecured credit facility, as amended June 2019,
("Credit Agreement"), which is used to back Chugach's commercial paper program. The pricing
includes an all-in drawn spread of one-month LIBOR plus 90.0 basis points, along with a 10.0
basis points facility fee (based on an A/A2/A unsecured debt rating), as well as provisions for
calculating the interest on loans in ways other than the LIBOR. Therefore, any transition away
from using LIBOR is not expected to have a material impact on Chugach. The Credit Agreement
expires on July 30, 2024. The participating banks include NRUCFC, Bank of America, N.A.,
KeyBank National Association, Wells Fargo Bank N.A., and CoBank, ACB.
Our commercial paper can be repriced between one day and 397 days. Chugach is expected to
continue to issue commercial paper in 2023, as needed.
On March 16, 2020, Chugach attempted to reprice its outstanding commercial paper. Due to
volatility in the markets caused by the pandemic, the demand for cash pushed treasuries into the
negative,seizing up the commercial paper market.The lack of overall liquidity resulted in Chugach
having to utilize other pre-existing credit facilities. The balance of commercial paper was initially
paid using the NRUCFC line of credit,which was subsequently rolled over to the senior unsecured
credit facility used to back the commercial paper program. The balance outstanding on our senior
unsecured credit facility was $41.0 million bearing interest at 1.85% when it was paid using
commercial paper on April 27, 2020.
Chugach had $45.0 million and $22.0 million of commercial paper outstanding at December 31,
2022 and 2021, respectively.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
The following table provides information regarding 2022 monthly average commercial paper
balances outstanding (dollars in millions), as well as corresponding weighted average interest
rates:
Average Weighted Average Average Weighted Average
Month Balance Interest Rate Month Balance Interest Rate
January $ 18.5 0.25% July $ 23.1 2.08%
February $ 9.4 0.26% August $ 26.0 2.66%
March $ 15.4 0.80% September $ 30.5 2.96%
April $ 11.1 0.84% October $ 36.9 3.62%
May $ 20.0 1.11% November $ 46.1 4.22%
June $ 20.0 1.57% December $ 45.0 4.53%
Financing
In January 2011, Chugach issued $275.0 million of First Mortgage Bonds, 2011 Series A, in two
tranches,Tranche A and Tranche B,for the purpose of refinancing the 2001 and 2002 Series A Bonds
in 2011 and 2012, and for general corporate purposes. Interest is paid semi-annually on March 15 and
September 15 commencing on September 15, 2011. Principal on the 2011 Series A Bonds is paid in
equal annual installments beginning March 15, 2012.
In January 2012, Chugach issued $250.0 million of First Mortgage Bonds, 2012 Series A, in three
tranches, Tranche A, Tranche B and Tranche C, for the purpose of repaying outstanding
commercial paper used to finance Southcentral Power Project ("SPP") construction and for general
corporate purposes. Interest is paid semi-annually March 15 and September 15 commencing on
September 15, 2012. The 2012 Series A Bonds, Tranche A and Tranche C, pay principal in equal
installments on an annual basis beginning March 15, 2013, and 2023,respectively.The 2012 Series
A Bonds, Tranche B, pay principal beginning March 15, 2013, through 2020, and on March 15,
2032, through 2042.
In June 2016, Chugach entered into a term loan facility with CoBank, evidenced by the 2016 CoBank
Note,issued in the amount of$45.6 million,which is governed by the Second Amended and Restated
Master Loan Agreement dated June 30, 2016, amended November 26, 2019, and secured by the
Indenture.
In March 2017, Chugach issued $40.0 million of First Mortgage Bonds, 2017 Series A for general
corporate purposes. Interest is paid semi-annually on March 15 and September 15, commencing on
September 15, 2017. The 2017 Series A Bonds pay principal in equal installments on an annual basis
beginning March 15, 2018.
In May 2019, Chugach issued $75.0 million of First Mortgage Bonds, 2019 Series A, for the
purpose of repaying outstanding commercial paper used to finance Chugach's capital improvement
program and for general corporate purposes. Interest is paid semi-annually on May 15 and
November 15, commencing on November 15, 2019. The 2019 Series A Bonds pay principal in
equal installments on an annual basis beginning on May 15, 2021.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
On October 26, 2020, Chugach issued $800.0 million of First Mortgage Bonds, 2020 Series A, in
two tranches,Tranche A and Tranche B, for the purpose of funding the acquisition of certain assets
of ML&P and related transaction costs. Interest is paid semi-annually April 30 and October 30
commencing April 30, 2021. The 2020 Series A Bonds, Tranche A, pay principal semi-annually
beginning April 30, 2025. The 2020 Series A Bonds, Tranche B pay principal beginning April 30,
2021.
The bonds and all other long-term debt obligations are secured by a lien on substantially all of
Chugach's assets, pursuant to the Indenture, which became effective on January 20, 2011, as
previously amended and supplemented. On October 30, 2020, a lien was granted on certain ML&P
acquired assets to secure the debt associated with the acquisition.
The following table provides additional information regarding the bonds and the CoBank note at
December 31, 2022 (dollars in thousands):
Average Interest Issue Carrying
Maturing Life (Years) Rate Amount Value
2011 Series A, Tranche A 2031 4.2 4.20 % $ 90,000 $ 40,500
2011 Series A, Tranche B 2041 9.2 4.75 % 185,000 117,167
2012 Series A, Tranche A 2032 4.7 4.01 % 75,000 37,500
2012 Series A, Tranche B 2042 14.3 4.41 % 125,000 67,000
2012 Series A, Tranche C 2042 9.7 4.78 % 50,000 50,000
2017 Series A, Tranche A 2037 7.2 3.43 % 40,000 30,000
2019 Series A, Tranche A 2049 9.5 3.86 % 75,000 67,200
2020 Series A, Tranche A 2039 8.5 2.38 % 275,000 275,000
2020 Series A, Tranche B 2050 18.0 2.91 % 525,000 489,000
2016 CoBank Note 2031 3.1 2.58 % 45,600 23,028
Total $ 1,485,600 $ 1,196,395
(12) Employee Benefit Plans
Pension Playas
Pension benefits for substantially all of Chugach's union employees are provided through the
Alaska Electrical Pension Trust Fund and the UNITE HERE National Retirement Fund,
multiemployer plans. Chugach pays an hourly amount per eligible union employee pursuant to the
collective bargaining unit agreements. In these master, multiemployer plans, the accumulated
benefits, and plan assets are not determined or allocated separately to the individual employer.
Pension benefits for non-union employees are provided by the National Rural Electric Cooperative
Association ("NRECA") Retirement and Security Plan ("RS Plan"). The RS Plan is a defined
benefit pension plan qualified under Section 401 and tax-exempt under Section 501(a) of the
Internal Revenue Code. Under ASC 960, "Topic 960-Plan Accounting-Defined Benefit Pension
Plans," the RS Plan is a multiemployer plan, in which the accumulated benefits and plan assets are
not determined or allocated separately to individual employers. Chugach makes annual
contributions to the RS Plan equal to the amounts accrued for pension expense.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Chugach made contributions to all significant pension plans for the years ended December 31,
2022, 2021, and 2020 of $11.0 million, $11.8 million, and $8.0 million, respectively. As part of
the ML&P acquisition, we acquired 201 employees, however, the rates in all significant pension
plans did not materially change for the years ended December 31, 2022, 2021, or 2020.
In December 2012, a committee of the NRECA Board of Directors approved an option to allow
participating cooperatives in the RS Plan to make a prepayment and reduce future required
contributions. The prepayment amount is a cooperative's share, as of January 1, 2013, of future
contributions required to fund the RS Plan's unfunded value of benefits earned to date using Plan
actuarial valuation assumptions. The prepayment amount will typically equal approximately 2.5
times a cooperative's annual RS Plan required contribution as of January 1, 2013. After making
the prepayment, for most cooperatives the billing rate is reduced by approximately 25%,
retroactive to January 1 of the year in which the amount is paid to the RS Plan.The 25%differential
in billing rates is expected to continue for approximately 15 years from January 1, 2013. However
unexpected changes in interest rates, asset returns and other plan experience, plan assumption
changes, and other factors may have an impact on the differential in billing rates and the 15-year
period.
On December 29, 2016, Chugach made a prepayment of $7.9 million to the NRECA RS Plan,
which is included in deferred charges. Chugach recorded the long-term repayment in deferred
charges and is amortizing the deferred charge to administrative, general, and other expense, over
11 years, which represents the difference between the normal retirement age of 62 and the average
age of Chugach's employees in the RS Plan. The balance of the prepayment in deferred charges at
December 31, 2022 and 2021 was $3.6 million and $4.3 million, respectively.
The following table provides information regarding pension plans which Chugach considers
individually significant:
Alaska Electrical Pension NRECA Retirement
Plana Security Plana
Employer Identification Number 92-6005171 53-0116145
Plan Number 001 333
Year-end Date December 31 December 31
Expiration Date of CBA's June 30, 2025 N/AZ
Subject to Funding Improvement Plan No N04
Surcharge Paid N/A N/A4
2022 2021 2020 2022 2021 2020
Zone Status Green Green Green N/A1 N/A1 N/A1
Required minimum contributions None None None N/A N/A N/A
Contributions (in millions) $6.9 $7.1 $4.4 $4.1 $4.7 $3.6
Contributions > 5% of total plan contributions Yes Yes Yes No No No
1 A"zone status"determination is not required,and therefore not determined under the Pension Protection Act(PPA) of 2006.
2 The CEO is the only participant in the NRECA RS Plan who is subject to employment agreements.The CEO's employment
agreement is effective through May 1,2026.
3 The Alaska Electrical Pension Plan financial statements are publicly available.The NRECA RS Plan financial statements are
available on Chugach's website at www.chugachelectric.com.
4 The provisions of the PPA do not apply to the RS Plan,therefore,funding improvement plans and surcharges are not
applicable.Future contribution requirements are determined each year as part of the actuarial valuation of the RS Plan and may
change as a result of plan experience.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Health and Welfare Plans
Health and welfare benefits for union employees are provided through the Alaska Electrical Health
and Welfare Trust and the Alaska Hotel, Restaurant and Camp Employees Health and Welfare and
Pension Trust Fund. Chugach participates in multiemployer plans that provide substantially all
union workers with health care and other welfare benefits during their employment with Chugach.
Chugach pays a defined amount per union employee pursuant to collective bargaining unit
agreements. Amounts charged to benefit costs and contributed to the health and welfare plans for
these benefits for the years ending December 31, 2022, 2021, and 2020 were $9.0 million, $9.3
million, and $6.4 million, respectively.
Chugach participates in a multi-employer plan through the Group Benefits Program of NRECA
for non-union employees. Amounts charged to benefit cost and contributed to this plan for those
benefits for the years ended December 31, 2022, 2021, and 2020 totaled $3.5 million, $3.7 million,
and $2.9 million, respectively.
Money Purchase Pension Plan
Chugach participates in a multiemployer defined contribution money purchase pension plan
covering some employees who are covered by a collective bargaining agreement. Contributions to
this plan are made based on a percentage of each employee's compensation. Contributions to the
money purchase pension plan for the years ending December 31, 2022, 2021, and 2020 were
$269.9 thousand, $295.9 thousand, and $196.5 thousand, respectively.
401(k)Plan
Chugach has a defined contribution 401(k) retirement plan which covers substantially all
employees who, effective January 1, 2008, can participate immediately. Employees who elect to
participate may contribute up to the Internal Revenue Service's maximum of $20,500 in 2022,
$19,500 in 2021, $19,500 in 2020, and allowed catch-up contributions for those over 50 years of
age of$6,500 in 2022, 2021, and 2020. Chugach does not make contributions to the plan.
Deferred Compensation
Effective January 1, 2011, Chugach participates in Vanguard's unfunded Deferred Compensation
Program to allow highly compensated employees who elect to participate in the Program to defer
a portion of their current compensation and avoid paying tax on the deferrals until received. The
program is a non-qualified plan under Internal Revenue Code 457(b).
Deferred compensation accounts are established for the individual employees; however, they are
considered to be owned by Chugach until a distribution is made. The amounts credited to the
deferred compensation account, including gains or losses, are retained by Chugach until the entire
amount credited to the account has been distributed to the participant or to the participant's
beneficiary. The balance of the Program at December 31, 2022, and 2021 was $1.4 million and
$2.1 million, respectively.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Potential Termination Payments
Pursuant to a Chugach Operating Policy, non-represented employees, including the executive
officers except the Chief Executive Officer, who is terminated by Chugach for reasons unrelated
to employee performance are entitled to severance pay for each year or partial year of service as
follows: two weeks for each year of service to a maximum of 26 weeks for 13 years or more of
service. If the CEO is terminated by Chugach without cause, they will receive a lump sum payment
equal to 100% of their annual base salary payable and the full cost of health and welfare coverage
for a period not in excess of twelve months.
(13) Bradley Lake Hydroelectric Project
Chugach is a participant in the Bradley Lake Hydroelectric Project ("Bradley Lake"). Bradley
Lake was built and financed by the Alaska Energy Authority ("AEA") through State of Alaska
grants and $166.0 million of revenue bonds. Chugach and other participating utilities have entered
into take-or-pay power sales agreements under which shares of the project capacity have been
purchased and the participants have agreed to pay a like percentage of annual costs of the project
(including ownership, operation and maintenance costs, debt service costs and amounts required
to maintain established reserves). Under these take-or-pay power sales agreements,the participants
have agreed to pay all project costs from the date of commercial operation even if no energy is
produced. Chugach had a 30.4%share, or 27.4 megawatts (MW). Effective October 30, 2020,with
the ML&P acquisition our share increased to 56.3%, or an additional 23.3 MW, as currently
operated, of the project's capacity. The original revenue bonds were paid in full July 1, 2021.
The Battle Creek Diversion Project("Project")was a project to increase water available for generation
by constructing a diversion on the West Fork of Upper Battle Creek to divert flows to Bradley Lake,
increasing annual energy output by an estimated 37,000 MWh. The project was financed in 2017 and
completed in 2020. All Bradley Lake participants are now participating in the project. The share of
Battle Creek indebtedness for which we are responsible is 30.4%, or approximately $12.1 million as
of June 30, 2022, the most recent information available.
In December 2020, AEA purchased the Sterling to Quartz section (SSQ) of the I I5kV transmission
line from HEA. The transmission line connects the Bradley Lake Project to the customers that are
located north of the Kenai Peninsula. The section is approximately 39 miles long. AEA closed on the
purchase by issuing bonds in the amount of$17.0 million. After an accelerated payment on this debt
in June of 2022, the share of the SSQ line indebtedness for which we are responsible is now
approximately $3.4 million as of June 30, 2022, the most recent information available.
On November 30, 2022, AEA closed on a$166.0 million bond financing to pay for transmission line
upgrades and battery energy storage systems. Each of the Railbelt utilities share the responsibility for
the repayment of the debt. Chugach is responsible for 56.3% of this debt, equal to our share of the
Bradley Lake project.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
The following represents information with respect to Bradley Lake at June 30, 2022 (the most
recent date for which information is available):
(In thousands) Total Proportionate Share
Plant in service $ 188,297 $ 106,011
Long-term debt 45,924 16,455
Interest expense 1,568 883
Chugach's share of expenses was $8.8 million in 2022, $8.7 million in 2021, and $6.9 million in
2020, and is included in purchased power in the accompanying financial statements. Chugach's
share of a Bradley Lake transmission line financed internally is included in Intangible Electric
Plant.
(14) Eklutna Hydroelectric Project
Along with two other utilities, Chugach purchased the Eklutna Hydroelectric Project from the
Federal Government in 1997. Ownership was transferred from the United States Department of
Energy's Alaska Power Administration jointly to Chugach (30%), MEA (17%), and MOA (53%).
As of October 30, 2020, the Eklutna PPA became effective. The Eklutna PPA provides for the
purchase of a portion of MOA's share of generation from the Eklutna Project.
Plant in service at December 31, 2022, included $5.6 million, net of accumulated depreciation of
$4.1 million,which represents Chugach's share of the Eklutna Hydroelectric Project. At December
31, 2021, plant in service included $6.3 million, net of accumulated depreciation of$3.6 million.
Each participant contributes their proportionate share for operation, maintenance, and capital
improvement costs to the plant, as well as to the transmission line between Anchorage and the
plant. Chugach's share of expenses was $4.0 million, $3.4 million, and $0.8 million in 2022, 2021,
and 2020, respectively, and is included in purchased power, power production and depreciation
expense in the accompanying financial statements. Chugach performs the major maintenance,
daily operation, and maintenance of the power plant, providing personnel who perform daily plant
inspections, meter reading, monthly report preparation, and other activities as required.
(15) Beluga River Unit
In April 2016, Chugach and ML&P acquired ConocoPhillips, Inc.'s ("CPAI") working interest in the
BRU. Chugach acquired 30% and ML&P acquired 70%. Chugach invested in the BRU to reduce the
cost of electric service to its retail and wholesale members by securing an additional long-term supply
of natural gas to meet on-going generation requirements. The acquisition complemented existing gas
supplies and provided greater fuel diversity.
The ownership shares include the attendant rights and privileges of all gas and oil resources,including
15,500 lease acres (8,200 in Unit/ Participating Area and 7,300 held by Unit), Sterling and Beluga
producing zones, and CPAI's 67%working interest in deep oil resources.
The BRU is located on the western side of Cook Inlet, approximately 35 miles from Anchorage, and
is an established natural gas field that was originally discovered in 1962. BRU was jointly owned
(one-third) by CPAI, Hilcorp, and ML&P.Following the acquisition,ML&P's ownership of the BRU
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
increased to approximately 56.7%, Hilcorp's ownership remained unchanged at 33.3%, and
Chugach's ownership was 10.0%.
Chugach obtained RCA approval to record BRU acquisition costs as deferred charges on our balance
sheet and to amortize these costs based on units of BRU production and recognize as depreciation
and amortization on Chugach's statement of operations. Chugach was also permitted to recover the
deferred costs in the gas transfer price.
Effective October 30, 2020, Chugach acquired ML&P's 56.7% ownership share of the BRU,
increasing Chugach's ownership share of the BRU to 66.7%. Each of the BRU participants has a right
to take their interest of the gas produced. Parties that take less than their interest of the field's output
may either accept a cash settlement for their underlift or take their underlifted gas in future years.
Chugach was in an underlift position of 39 Mcf at December 31, 2022 and an underlift position of 22
Mcf at December 31, 2021. Chugach has opted to take any cumulative underlift in gas in the future
and will record the gas as fuel expense on the statement of operations when received.
Chugach records depreciation, depletion, and amortization on BRU assets based on units of
production. During 2022, Chugach lifted 7.8 Bcf resulting in a cumulative lift since purchase of 19.8
Bcf. Chugach's 2022 BRU Gas Reserve Study results estimated that there are 69.0 Bcf in proven
developed and undeveloped reserves, net of 2022 gas production, there is approximately 61.2 Bcf
remaining gas reserves to be produced. Chugach, and the other owner, Hilcorp, are operating under
an existing Joint Operating Agreement. Hilcorp is the operator for BRU. In addition to the operator
fees to Hilcorp, other BRU expenses include royalty expense and interest on long-term debt. All
expenses other than depreciation, depletion and amortization, and interest on long-term debt are
included as fuel expense on Chugach's statement of operations. Chugach has applied and qualified
for a small producer tax credit,provided by the State of Alaska, resulting in an estimate of no liability
for production taxes for a period of ten years, through 2026. The revenue in excess of expenses less
the allowed TIER from BRU operations is adjusted through Chugach's fuel and purchased power
adjustment process.
(16) ML&P Acquisition
On October 30, 2020, Chugach acquired substantially all of the assets of ML&P from the MOA.
Chugach accounted for the ML&P acquisition in accordance with ASC 805, "Business
Combinations," with identifiable assets acquired and liabilities assumed recorded at their estimated
fair values on the acquisition date. The purchase price was allocated to the assets acquired and the
liabilities assumed based on their fair value. The approval of ML&P's rates and Chugach's rates by
the RCA, our regulator, which is intended to allow us to collect from customers total revenues equal
to the costs of providing service, including a reasonable return on invested capital, is considered a
fundamental input in measuring the fair value of ML&P's assets and liabilities, and as such, Chugach
concluded that the historical net book values of all assets and liabilities recoverable through rates are
representative of their fair values. The allocation of the purchase price includes the fair value of BRU
reserves. Due to the application of regulatory accounting, the asset associated with the fair value of
BRU reserves is offset by a BRU regulatory liability.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
The acquisition premium (goodwill) has been approved for recovery by the RCA and is recorded as
part of our regulatory assets.The acquisition premium is split between two regulatory assets.Per RCA
order, Chugach recorded a $19.0 million Secondary Regulatory Asset, which was approved for
recovery and amortizes over a three-year period and is recognized in administrative, general, and
other expense on Chugach's Consolidated Statement of Operations. The balance of the acquisition
premium was also approved for recovery and will be included in Chugach's general rate case to be
filed with the RCA, which will determine the period recovery.
Acquisition and integration costs are recorded as deferred charges on Chugach's Consolidated
Balance Sheet, which Chugach believes is probable of being recovered in electric rates. These
deferred charges, exclusive of the acquisition premium, totaled $46.6 million at December 31, 2022
and $42.5 million at December 31, 2021.
(17) Revenue From Contracts With Customers
a. Nature of goods and services
The following is a description of the contracts and customer classes from which Chugach generates
revenue.
i. Energy Sales
Energy sales revenues are Chugach's primary source of revenue, representing approximately
97.9%, 98.5% and 98.0% of total operating revenue during the years ended December 31, 2022,
2021, and 2020, respectively. Energy sales revenues are recognized upon delivery of electricity,
based on billing rates authorized by the RCA, which are applied to customers' usage of electricity.
Chugach's rates are established, in part, on test period sales levels that reflect actual operating
results. Chugach's tariffs include provisions for the recovery of gas costs according to gas supply
contracts and costs associated with the BRU operations, as well as purchased power costs.
Expenses associated with electric services include fuel purchased from others and produced from
Chugach's interest in the BRU, both of which are used to generate electricity, as well as power
purchased from others. Chugach is authorized by the RCA to recover fuel and purchased power
costs through the fuel and purchased power adjustment process, which is adjusted quarterly to
reflect increases and decreases of such certain costs. The amount of fuel and purchased power
revenue recognized is equal to actual fuel and purchased power costs. We recognize differences
between projected recoverable fuel and purchased power costs and amounts recovered through
rates. The fuel cost under/over recovery on our balance sheet represents the net accumulation of
any under- or over-collection of fuel and purchased power costs. Fuel cost under-recovery will
appear as an asset on our balance sheet and will be collected from our members in subsequent
periods. Conversely, fuel cost over-recovery will appear as a liability on our balance sheet and will
be refunded to our members in subsequent periods. Payment on energy sales invoices to all
customer classes below are due within 15 to 30 days.
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Nature, timing of satisfaction of performance obligations, and significant payment
Customer Class terms
Retail Retail energy customers can have up to four components of monthly billing included
in revenue — energy, fuel and purchased power, demand, and customer charge. The
energy rate and fuel and purchased power surcharge are applied by kilowatt hour
(kWh) usage. The demand charge is applied by kilowatt (kW). The customer charge
is a monthly amount applied by meter.
Wholesale Classified as firm energy sales. Four components of monthly billing are included in
revenue — energy, fuel and purchased power, demand, and customer charge. The
energy rate and fuel and purchased power surcharge are applied by kWh usage. The
demand charge is applied by kW. The customer charge is a monthly amount applied
by meter.
Economy Classified as non-firm energy sales.Three components of monthly billing are included
in revenue — fuel, operations and maintenance, and margin. The actual fuel costs are
billed per thousand cubic feet(Mcf) used.The operations and maintenance and margin
rates are applied by megawatt hour (MWh) usage.
Power Pool Power pool transactions are generally firm energy sales that are subject to changes in
generation unit availability. The two components of monthly billings included in
revenue are fuel and operations and maintenance. Power pool transactions are settled
using a split-the-savings principle.
Chugach calculates unbilled revenue, for residential and commercial customers, at the end of each
month to ensure the recognition of a full month of revenue. Chugach accrued $13.5 million and
$13.1 million of unbilled retail revenue at December 31, 2022, and2021, respectively, which is
included in accounts receivable on the balance sheet. Revenue derived from wholesale and
economy customers is recorded from metered locations on a calendar month basis,so no estimation
is required.
Power Pool sales began in April of 2021. Power pool revenues are recognized upon delivery of
electricity and the transaction is then settled using a split-the-savings principle.
The collectability of our energy sales is very high with typically 0.1% written off as bad debt
expense, adjusted annually.
ii. Wheeling
Wheeling represented 1.1%, 0.5%, and 1.3% of our revenue during the years ended December 31,
2022, 2021, and 2020, respectively. Wheeling was recorded through the wheeling of energy across
Chugach's transmission lines at rates set by utility tariff and approved by the RCA. The rates are
applied to MWh of energy wheeled. The collectability of wheeling is very high,with no adjustment
required.
iii. Other Miscellaneous Services
Other miscellaneous services consist of various agreements including dispatch service and gas
transfer agreements, pole rentals, and microwave bandwidth. Revenue from these agreements is
billed monthly and represented 1.0%, 1.0%, and 0.7% of our total operating revenue during the
years ended December 31, 2022, 2021, and 2020,respectively. The revenue recognized from these
39
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
agreements is recorded as the service is provided over a period of time. The collectability of these
agreements is very high, with no adjustment required.
b. Disaggregation ofRevenue
The table below details the revenue recognized by customer class and disaggregates base revenue
from fuel and purchased power revenue recognized in the Consolidated Statement of Operations
for the year ended December 31, 2022 and 2021 (in millions).
Base Rate Sales Fuel and Purchased Power Total Revenue
2022 2021 %Variance 2022 2021 %Variance 2022 2021 %Variance
Retail $ 242.0 $ 242.5 (0.2916) $ 80.1 $ 95.5 (16.1%) $ 322.1 $ 338.0 (4.7%)
Wholesale 2.4 2.4 0.0% 2.7 2.8 (3.6%) 5.1 5.2 (1.9%)
Economy 1.9 0.6 216.7% 15.6 4.5 246.7% 17.5 5.1 243.1%
Power Pool 1.1 0.5 120.0% 1.2 0.3 300.0% 2.3 0.8 187.5%
Total Energy
Sales $ 247.4 $ 246.0 0.6% $ 99.6 $ 103.1 (3.4%) $ 347.0 $ 349.1 (0.6%)
Wheeling 0.0 0.0 0.0% 3.5 1.8 94.4% 3.5 1.8 94.4%
Other 2.8 3.2 (12.5%) 1.1 0.4 175.0% 3.9 3.6 8.3%
Total
Miscellaneous $ 2.8 $ 3.2 (12.5%) $ 4.6 $ 2.2 109.1% $ 7.4 $ 5.4 37.0%
Total
Revenue $ 250.2 $ 249.2 0.4% $ 104.2 $ 105.3 (1.0%) $ 354.4 $ 354.5 (0.0%)
The table below details the revenue recognized by customer class and disaggregates base revenue
from fuel and purchased power revenue recognized in the Consolidated Statement of Operations
for the year ended December 31, 2021 and 2020 (in millions).
Base Rate Sales Fuel and Purchased Power Total Revenue
2021 2020 %Variance 2021 2020 %Variance 2021 2020 %Variance
Retail $ 242.5 $ 152.4 59.1% $ 95.5 $ 74.1 28.9% $ 338.0 $ 226.5 49.2%
Wholesale 2.4 2.3 4.3% 2.8 3.3 (15.2%) 5.2 5.6 (7.1%)
Economy 0.6 0.1 500.0% 4.5 0.4 1025.0% 5.1 0.5 920%
Power Pool 0.5 0.0 100.0% 0.3 0.0 100.0% 0.8 0.0 100.0%
Total Energy
Sales $ 246.0 $ 154.8 58.9% $ 103.1 $ 77.8 32.5% $ 349.1 $ 232.6 50.1%
Wheeling 0.0 0.0 0.0% 1.8 3.1 (41.9%) 1.8 3.1 (41.9%)
Other 3.2 1.7 88.2% 0.4 0.1 300.0% 3.6 1.8 100.0%
Total
Miscellaneous $ 3.2 $ 1.7 88.2% $ 2.2 $ 3.2 (31.3%) $ 5.4 $ 4.9 10.2%
Total
Revenue $ 249.2 $ 156.5 59.2% $ 105.3 $ 81.0 30.0% $ 354.5 $ 237.5 49.3%
c. Contract Balances
The table below provides information about contract receivables, contract assets and contract
liabilities.
December 31, 2022 December 31, 2021
Contract receivables, included in accounts receivable $ 45,827,873 $ 43,490,663
Contract liabilities 2,836,240 4,662,550
Contract receivables represent amounts receivable from retail,wholesale, economy, and wheeling.
Contract liabilities consist of credit balances. Credit balances are reported as consumer deposits
and represent the prepaid accounts of retail customers and are recognized in revenue as the
customer uses electric service.
40
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Significant changes in the contract liabilities balances are as follows:
December 31, 2022 December 31, 2021
Contract liabilities at beginning of period $ 4,622,550 $ 3,656,662
Cash received, excluding amounts recognized as
revenue during the period 2,658,131 4,509,902
Revenue recognized and transferred from contract
liabilities at the beginning of the period (4,444,441) (3,544,014)
Contract liabilities at end of period $ 2,836,240 $ 4,622,550
d. Transaction Price Allocated to Remaining Performance Obligations
The table below includes estimated revenue to be recognized in 2023 related to performance
obligations that are unsatisfied (or partially unsatisfied) at December 31, 2022.
2022
Credit balances $ 2,836,240
Credit balances are primarily associated with Chugach's LevelPay program. The program
calculates the monthly amount to be collected from customers annually. It is anticipated the
balance will be recognized in revenue within the following year as customers consume electricity.
(18) Leases
Chugach had three financing leases and several operating leases, most of which were various land
easements. Chugach's eight operating leases, recognized as right-of-use assets, consisted of a
building, heavy equipment, office trailer, and five land leases, with remaining lease terms of less
than one to 50 years and a weighted average lease term of 42 years. Four of the land leases were
acquired with the ML&P acquisition. Chugach's operating and financing lease assets are presented
as operating or financing right-of-use assets on our Consolidated Balance Sheet. The current
portion of lease liabilities is included in current installments of long-term obligations and the long-
term portion is presented as operating or financing lease liabilities on our Consolidated Balance
Sheet. A weighted discount rate of 3.29%was used in calculating the right-to-use assets and lease
liabilities. Chugach's discount rate was calculated using our incremental borrowing rate based on
the average borrowing rate of our long-term debt.
Recognition of the right-of-use asset and operating lease liability represents a non-cash investing
and financing activity. Chugach entered into a Power Purchase Agreement with Fire Island Wind,
LLC, ("FIW") on June 21, 2011. The Fire Island Wind contract contains a lease because the
agreement identifies an asset and Chugach controls the use of the asset. The wind farm is explicitly
specified in the agreement and FIW does not have substantive substitution rights. Additionally,
Chugach takes 100% of the output and, to the extent there is wind, can control how and when the
wind farm produces power directly through its supervisory control and data acquisition
("SCADA") system. However, due to the exclusively variable nature of the payments related to
Fire Island Wind, no new assets or liabilities have been added to the Consolidated Balance Sheet,
no changes were made to the Consolidated Statements of Cash Flow, and the variable payments
41
76
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
are still classified as purchased power expense on the Consolidated Statements of Operations.
These variable payments, included in purchased power, are reflected in the following table.
Supplemental statement of operations information associated with leases for the twelve months
ended December 31:
2022 2021
Finance lease cost
Amortization of right-of-use assets $ 4,292 $ 3,183
Interest on lease liabilities 621 553
Operating lease cost 377,773 419,175
Variable lease cost 5,232,117 4,439,509
Total lease cost $ 5,614,803 $ 4,862,420
Supplemental cash flow information associated with leases for the twelve months ended
December 31:
2022 2021
Cash paid for amounts included in the measurement of liabilities:
Operating cash flows from operating leases $ 377,773 $ 418,732
Right-of-use assets obtained in exchange for lease obligations:
Operating leases 0 4,109,694
Financing leases 214,486 17,273
Supplemental balance sheet information associated with leases at December 31 were:
2022 2021
Operating lease right-of-use assets $ 3,831,720 $ 4,109,694
Financing lease right-of-use assets 217,069 17,273
Total right-of-use assets $ 4,048,789 $ 4,126,967
Operating lease liabilities 3,583,801 3,835,282
Financing lease liabilities 203,786 13,667
Current installments of lease liabilities 258,184 281,171
Total operating lease liabilities $ 4,045,771 $ 4,130,120
Maturities associated with lease liabilities at December 31, 2022:
2023 $ 385,345
2024 169,345
2025 167,523
2026 166,313
2027 164,504
Thereafter 6,392,755
Total lease payments 7,445,785
Less imputed interest 3,400,013
Present value of lease liabilities $ 4,045,771
42
77
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
(19) Commitments and Contingencies
Contingencies
Chugach is a participant in various legal actions, rate disputes, personnel matters and claims both
for and against Chugach's interests. Management believes the outcome of any such matters will
not materially impact Chugach's financial condition, results of operations or liquidity. Chugach
establishes reserves when a particular contingency is probable and calculable. Chugach has not
accrued for any contingency at December 31, 2022, as it does not consider any contingency to be
probable nor calculable. Chugach faces contingencies that are reasonably possible to occur;
however, they cannot currently be estimated.
Concentrations
Approximately 73% of our employees are members of the International Brotherhood of Electrical
Workers ("IBEW"). Chugach has three Collective Bargaining Unit Agreements ("CBA") with the
IBEW. On October 30, 2020, with the closing of the ML&P acquisition, all three IBEW CBAs
were extended through June 30, 2025. We also have a CBA with the Hotel Employees and
Restaurant Employees ("HERE"), which is effective through June 30, 2025.
Fuel Supply Contracts
Chugach entered into a gas contract with Hilcorp effective January 1, 2015, to provide gas through
March 31, 2018. The first amendment to this agreement extended the term through March 31,
2019. The second amendment to this agreement revised payment procedures and updated notice
provisions. The third amendment extended the term of this agreement, thus filling up to 100% of
Chugach's needs through March 31, 2023. On December 31, 2019, Chugach entered into a fourth
amendment to this agreement thus extending the term through March 31, 2028. The total amount
of gas supplied under this contract is estimated to be 79.4 Bcf. All of the gas production is expected
to come from Cook Inlet, Alaska. The terms of the Hilcorp Agreement require Chugach to manage
the natural gas transportation over the connecting pipeline systems. Chugach has gas transportation
agreements with ENSTAR Natural Gas Company ("ENSTAR") and Harvest Alaska.
The three minor Chugach gas supply agreements; also has a new agreement with Furie which
provides Chugach the option to purchase supplemental gas to meet firm load requirements, if
economically advantageous and if operational conditions warrant such purchases. Additionally,
the agreement provides Chugach with an additional gas supply option for generation of energy for
economy sales, which reduces the underlying cost to provide electric service to members.
Chugach has two active gas storage contracts with CINGSA that conclude on March 31, 2032. The
firm storage agreement provides for up to 2.1 Bcf of capacity. The interruptible storage agreement
provides for up to 1.0 Bcf of capacity.
In 2022, 85.3% of our electric energy was generated from gas, which includes energy purchased
from others. Of this, 55.2% of the gas-based power was generated at SPP and 42.3% at Sullivan
power plants, and the remaining 2.5% being generated at the Beluga, Nikkels, and Eklutna power
plants. In 2021, 82.6% of our power was generated from gas, with 56.4% at SPP, 41.6% at
43
78
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Sullivan, and the remaining 2.0% being generated at the Beluga, Nikkels, and Eklutna power
plants.
The following represents the cost of fuel purchased, stored, and or transported from various
vendors as a percentage of total fuel costs for the years ended December 31,:
2022 2021 2020
Hilcorp 74.8% 78.9% 85.8%
Furie 8.1% 5.1% 0.5%
CINGSA (Storage) 6.3% 6.1% 6.0%
ENSTAR Pipeline 8.0% 7.3% 4.7%
Harvest (Hilcorp) Pipeline 2.8% 2.6% 3.0%
Miscellaneous 0.0% 0.0% 0.0%
BRU Operations
At this time, Chugach and Hilcorp, the other owner, have chosen to continue operating under an
existing Joint Operating Agreement. Hilcorp is the operator for BRU.
Regulatory Cost Charge
In 1992, the State of Alaska Legislature passed legislation authorizing the Department of Revenue
to collect a Regulatory Cost Charge from utilities to fund the governing regulatory commission,
which is currently the RCA. The tax is assessed on all retail consumers and is based on kilowatt-
hour (kWh) consumption. The tax is collected monthly and remitted to the State of Alaska
quarterly.
Sales Tax
Chugach collect sales tax on retail electricity sold to consumers in Whittier, seasonally (April
through September), and in the Kenai Peninsula Borough, monthly. This tax is remitted to the City
of Whittier monthly and to the Kenai Peninsula Borough quarterly. These taxes are a direct pass-
through to consumer bills and therefore do not impact our margins.
Gross Revenue Tax
Chugach pays to the State of Alaska a gross revenue tax in lieu of state and local ad valorem,
income and excise taxes on electricity sold in the retail market. The tax is collected monthly and
remitted annually.
Underground Compliance Charge
In 2005, the Anchorage Municipal Assembly adopted an ordinance to require utilities to convert
overhead distribution lines to underground. To comply with the ordinance, Chugach must expend
two percent of a three-year average of gross retail revenue within the Municipality of Anchorage
annually in moving existing distribution overhead lines underground. Consistent with Alaska
Statutes regarding undergrounding programs, Chugach is permitted to amend its rates by adding a
two percent charge to its retail members' bills to recover the actual costs of the program. The rate
44
79
Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
amendments are not subject to RCA review or approval. Chugach's liability was $11.9 million and
$9.5 million for this charge at December 31, 2022 and 2021, respectively, and is included in other
current liabilities. These funds are used to offset the costs of the undergrounding program.
Environmental Matters
Chugach includes costs associated with environmental compliance in both our operating and capital
budgets. We accrue for costs associated with environmental remediation obligations when those
costs are probable and reasonably estimated. Chugach is subject to numerous environmental
statutes including the Clean Air Act,the Clean Water Act,the Emergency Planning and Community
Right-to-Know Act, the Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Endangered Species Act, and the Comprehensive Environmental Response, Compensation
and Liability Act and to the regulations implementing these statutes. Chugach does not believe that
compliance with these statutes and regulations to date has had a material impact on its financial
condition, results of operation or cash flows. However, the implementation of any additional new
law or regulation, or the limitations thereof, or changes in or new interpretations of laws or
regulations could result in significant additional capital or operating expenses. Chugach monitors
proposed new regulations and existing regulation changes through industry associations and
professional organizations.
The Clean Air Act and Environmental Protection Agency ("EPA") regulations under the Clean Air
Act establish ambient air quality standards and limit the emission of many air pollutants. In 2022,
The Alaska Department of Environmental Conservation ("ADEC") increased all fees associated
with Title I and Title V air emissions. These increased fees affect Beluga, Southcentral, Sullivan,
and Nikkels power plants on a yearly basis. Chugach has obtained or applied for all Clean Air Act
permits currently required for the operation of generating facilities.
Chugach replaced two Underground Storage Tanks ("USTs") in 2022. These tanks were
approximately thirty years old. Upon excavation, contamination was discovered under the location
of the original fuel dispensing units. Chugach is working diligently with ADEC to determine the
best path forward for remediation of the contaminated site. Dependent on the outcome of site
investigation, Chugach may be required to complete annual site sampling, but this would not have
any material impact on operating expenses.
The utility owners of the Eklutna Hydro Project (Chugach, MOA, and MEA) are obligated by a
1991 Fish & Wildlife Agreement (Agreement) to develop and implement measures to protect,
mitigate, and enhance (PME) the fish and wildlife impacted by the project (PME program). The
program is to be approved by the Governor of Alaska by October 2024 with completion of the
approved program no later than October of 2032, 35 years after the Eklutna Hydro Project purchase.
The utility owners initiated a required consultation process with key government agencies and
interested parties in March 2019, study planning development in 2020, field data collection in 2021
and 2022, and study reporting and program development in 2023 and 2024. The Agreement
requires equal consideration of; 1) efficient and economical power production, 2) energy
conservation, 3) protection, mitigation of damage to, and enhancement of fish and wildlife, 4)
protection of recreation opportunities, 5) municipal water supplies, 6) preservation of other aspects
of environmental quality, 7) other beneficial public uses, and 8) requirements of state law when
determining the PME alternatives to be included in the program. The Eklutna Hydro Project and
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Chugach Electric Association, Inc.
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
municipal water system currently utilize 100% of the Eklutna reservoir water inflows. This project
is a multi-year study with final completion expected in late 2024. The program will have additional
capital costs not included in the Program development and approval.
While Chugach cannot predict the implementation of any additional new law or regulation, or the
limitations thereof, it is possible that new laws or regulations could increase capital and operating
costs. Chugach does not anticipate that environmental related expenditures will have a material
effect on our results of operations or financial condition. We cannot, however, predict the nature,
extent or cost of new laws or regulations relating to environmental matters.
46
81
Assistant City Manager
Stephen Sowell
➢ Public Works Shop Project: Work continues on the 65% design. Based upon the direction
from City Council at the July 24th meeting, we will await placing the GO bond on the
ballot until the design process is completed. In the meantime, we will work towards
100% design completion and include this on the 2024 Legislative Priorities. External
funding opportunities will be explored.
➢ Kenai Peninsula Borough Emergency Manager Brenda Ahlberg provided the City of
Seward an update on the KPB Siren Project on July 20. A copy of that update is attached.
➢ Public Safety Needs Assessment: Work continues on this project in collaboration with the
design team and the goal is to provide City Council and the public a project update
presentation at tonight's meeting. The project is on track to be completed by December
2023.
➢ The Board and Commission Attendance Tracker is included in this report.
➢ Heat Loop Project: The final submission to DOE was completed on August 1st. The
Project is in the running for a Phase 1 grant from the Department of Energy. The Heat
Loop Project team has completed the follow up meetings with the Department of Energy
and is awaiting a grant award announcement. If funded, Phase 1 of the project will
continue the engineering/design and stakeholder engagement elements.
82
ClV U
Finance Department Sully Jusino
Deputy Finance Director
Mission Statement: Valuable Objectives:
To provide the highest level of services responsive to our We built trust with all stakeholders through responsible
community's expectations and to enhance the quality of stewardship of public resources with integrity,
life and economic vitality. accountability,and respect.
Utility Department:
The finance department and the Carmen Jackson team continue to work on utility billing
issues and resolve old problems identified through internal audits of the City. Working with
Utility Assist. on implementing and mapping the City process of billing, the plan is to go
live with Util-Assist for the next billing cycle (August). The outsourcing process is moving
smoothly.
Utility Assist will work with Cornerstone on the collection program to collect old
outstanding balances.
Utility Assist. is working on the Net Meter billing implementation.
The finance department is assisting with information and analysis of the ongoing
water/sewer rate study and the electric rate study.
Annual Audit:
The Finance department and Altman, Rogers & Co are revising the first draft of the financial
report to complete the process as quickly as possible with the goal of receiving the GFOA
Certificate of Achievement again for the December 31, 2022 ACFR.
Staffing:
The finance department continues to struggle with retaining staff but does expect some relief
with the outsourcing of the utility billing position.
83
CMR
Finance Department Sully Jusino
Deputy Finance Director
City Code and Fiscal Manual updates:
A Fiscal Manual has been created for the City using best practices, the current municipal code,
the city charter, and state regulations. The City Manager, Finance Director, and CJCPA are
currently reviewing the draft. Of the drafted ten (10) sections, seven (7)have been reviewed and
approved by the city currently working with Title 14 with other departments' heads for review
and analysis.
Carmen Jackson Update:
The Carmen Jackson team continues to work closely with the finance department to assist with
the Util-Assist transition as well as directly assisting with the billing process until the
outsourcing is complete. Additionally, CJCPA continues to provide ongoing accounting services
on a daily basis and continues to assist with high level finance department operations. The
Carmen Jackson team along with the finance department and administration continues to review
the fiscal manual and portions of the City code with financial implications as part of the overall
updates to policies and procedures.
Central Treasury Report:
The attached Central Treasury Report provides the unrestricted cash available by funds as of July
31, 2023. These amounts fluctuate on a daily basis and are reconciled every month. The
amounts reports on the agenda statement items for the council represent the available fund
balance/net assets for the impacted funds. This is a longer term perspective that takes into
account the assets and liabilities of the fund, which results in different numbers than the Central
Treasury Report. Any funds with negative cash on the Central Treasury Report are either
waiting for funding for expenses already paid or are in the process of being closed out, negative
cash for a fund does not represent a problem with operations.
Attached with the Central Treasury Report is financial information for the funds that would be
utilized for the upcoming resolutions.
We have seen an increase in cash due to the FEMA reimbursement paid to the City in July 2023.
84
� r
City of Seward,Alaska.
' Central Treasury Report
7.31.23 -
The attached Central Treasury Report provides the unrestricted cash available by fund as of July
31, 2023. The intent of this report is to provide transparent financial information to the public.
These amounts fluctuate on a daily basis and are reconciled every month; however, these
numbers are not audited. The amounts reports on the agenda statement items for the council
represent the available fund balance/net assets for the impacted funds. This is a longer-term
perspective that takes into account the assets and liabilities of the fund, which results in different
numbers than the Central Treasury Report. Any funds with negative cash on the Central Treasury
Report are either waiting for funding for expenses already paid or are in the process of being
closed out, where the City is required to expend the funds prior to requesting reimbursement for
expenditures; negative cash for a fund does not represent a problem with operations. For
example, when the City conducts repairs following a major disaster declaration, it can take
multiple years before the City receives reimbursement from FEMA for its costs.
Funds in Negative balance:
• Fund 11113 Harbor CPVKPB —Res.2023-066 Funding for Seward City Tours Services.
The City will receive funds from CPV KPB
• Fund 11422 NE Harbor Launch Project City Funding—Res.2022-072 City spends
$1,573,162.80.
• Fund 11433 NE Harbor Launch Proj ect State Funding—Funds received per agreement
$2,899,553.25 Fund is closed.
• Fund 11431 G, K& L Floats State Funding—Res.2021-113. The City will be reimbursed
from the State Grant.
For these funds, we see an increase in cash.
• Fund 70061 FEMA 2022 Lowell PT Rd Land Slide (Cat A)—FEMA disaster declaration,
the City received funds of$ 1,013,819.97 on 7.28.23.
• Fund 70062 FEMA 2022 Lowell PT Rd Land Slide (Cat B)—FEMA disaster declaration,
the City received funds of$ 126,904.27 on 7.03.23.
Attached with this report is the fund balance report for funds that would be utilized for upcoming
resolutions.
If you have questions or require additional information, please feel free to contact acting finance
director Sully Jusino at(907)224-4059, or by e-mail at sjusino@cityofseward.net.
85
Central Treasury Report,July 31,2023
Cash and Investments 2022 2023
Wells Fargo Checking 9,893,165.98 7,835,237.63
Clearing Account 0.00 0.00
Undeposited Funds(Cash in Transit) 97,672.58 104,481.11
Investments 43,012,432.28 43,485,835.00
53,003,270.84 51,425,553.74
By Fund:
Fund Name Fund Number
General Fund 01000 7,580,600.24 8,748,167.62
Teen Council Agency Fund 02000 6,093.64 6,112.65
Motor Pool Internal Service Fund 03000 2,408,252.16 2,113,081.71
Compensated Absences Fund 03100 465,144.79 500,180.86
Harbor Enterprise Fund 11000 1,534,610.14 690,126.62
Harbor MRRF Fund 11001 740,682.56 839,907.56
Harbor Passenger Fee Fund 11002 795,860.65 544,809.65
Harbor CPV State 11103 1,604,354.49 1,745,002.84
Harbor CPV KPB 11113 216,741.98 (902,239.02)
NE Harbor Launch Ramp Renovation Project-City 11422 624,690.33 (2,083.33)
NE Harbor Launch Ramp Renovation Project-State 11423 (1,382,004.38) 0.00
G,K&L Floats City 11430 (1,159,073.15) 701,223.90
G,K&L Floats State 11431 73,783.99 (38,681.12)
Cathodic Protection Project 11440 13,679.80 13,679.80
SMIC Enterprise Fund 12000 277,756.95 431,686.47
Parking Enterprise Fund 13000 465,024.77 601,492.87
Electric Enterprise Fund 15000 7,856,332.11 4,269,358.57
Electric MRRF Fund 15001 957,301.76 957,301.76
Transmission Line-City Funding 15310 0.00 0.00
Electric Critical Infrastructure Fund 15340 2,849,356.90 331,643.55
Electric Nash Road Infrastructure Project 15351 4,797,093.46 3,156,599.97
Water Enterprise Fund 17000 1,810,826.01 2,437,714.58
Water MRRF Fund 17001 852,572.15 852,572.15
Water ARPA Fund 17100 577,195.00 479,345.32
Lowell Canyon Water Storage Tank 17330 222,914.29 222,914.29
Wastewater Enterprise Fund 18000 2,367,474.63 2,762,796.08
Wastewater MRRF Fund 18001 742,025.05 742,025.05
Wastewater ARPA Fund 18100 577,195.00 537,422.18
Hospital Enterprise Fund 19100 316,328.49 1,042,288.36
Healthcare Facilities 19102 927,284.17 927,284.17
Seward Mountain Haven Enterprise Fund 19200 9,472,307.57 11,327,471.16
Seward Historical Tour 30016 349.00 349.00
SCHC-City Funding 30040 0.81 0.81
Bus Transportation-CPV Funds 30051 85,507.50 931,524.18
Erosion Fund 30070 2,150.00 2,150.00
FEMA 2022 Lowell PT Rd Land Slide(Cat A) 70061 0.00 0.00
FEMA 2022 Lowell PT Rd Land Slide(Cat B) 70062 0.00 0.00
Capital Acquisition Fund-City Funding 80010 645,673.44 566,423.44
Animal Shelter 80015 641,106.99 68,252.10
Streets&Sidewalks-City Funding 80020 74,554.09 74,554.09
Energy Efficiency-CityFunding 80040 101,211.69 93,784.69
Developer Reimbursement Program 80071 1,013,895.50 1,842,678.54
ARPA-LGLRR 80084 1,806,416.27 1,748,320.04
1LH-City Funding 80090 40,000.00 0.00
Japanese Creek Flod Mitigation-City Funding 80117 0.00 58,310.58
Total Pooled Cash and Investments by Fund 53,003,270.84 51,425,553.74
Note:
*The above is the pooled cash balance of each fund,which simply represents the amount of available cash held by each fund.This differs from the fund balance in that the
fund balance also considers the fund's current assets and liabilities.
Preparinance
80010 -Capital Acquisition Fund -City
J u ly 31, 2023
7/31/2023 Resolutions Amounts
Res.2022-089 GF to CAF 746,000.00
Assets Res.2022-089 Sidewalks Project (350,000.00)
Cash to date 7/31/23 566,423.44 Res.2022-116 Hilltop DRP (1,425,000.00)
Total Assets 566,423.44 Res.2019-048 Lowell Point Stabiltation (63,750.00)
Res.2023-084 Scheffler Creek (15,424.00)
Liabilities
Encumbrance to date 7/31/23 350,000.00
Res.2023-084 Scheffler Creek 15,424.00
Total Encumbered 365,424.00
Fund Balance/Net Assets
Unassigned Fund Balance to date 7/31/23 1,309,173.44
Transfers-In 746,000.00
Transfers-Out (1,425,000.00)
Total Fund Balance/Net Assets 630,173.44
Expenditures/Expenses
Expenses to date 7/31/23 63,750.00
Total Expenses 63,750.00
Estimated Total Fund Balance/Net Position* 200,999.44
* Unaudited
The month of July has not been closed.
Prepare&7Finance
17000 -Water Enterprise Fund
J u ly 31, 2023
7/31/2023
Assets
Cash to date 7/31/23 2,338,010.56
Assets and Receivables to date 7/31/23 8,305,818.32
Total Assets 10,643,828.88
Liabilities
Liabilities to date 7/31/23 1,373,866.67
Total Liabilities 1,373,866.67
Fund Balance/Net Assets
Unassigned Fund Balance to date 7/31/23 9,444,015.46
Transfers-In 0.00
Transfers-Out (203,577.99)
Total Fund Balance/Net Assets 9,240,437.47
Revenues
Revenue to date 7/31/23 1,001,329.26
Total Revenues 1,001,329.26
Expenditures/Expenses
Expenses to date 7/31/23 971,804.52
Total Expenses 971,804.52
Estimated Total Fund Balance/Net Position* 9,269,962.21
* Unaudited
The month of July has not been closed.
Prepare8gFinance
4K11,
19100 -Hospital Enterprise Fund
July 31, 2023
7/31/2023
Assets
Cash to date 7/31/23 1,129,986.89
Assets to date 7/31/23 3,989,806.84
Total Assets 5,119,793.73
Liabilities
Liabilities to date 7/31/23 401,396.92
Total Liabilities 401,396.92
Fund Balance/Net Assets
Unassigned Fund Balance to date 7/31/23 2,552,949.11
Transfers-In 2,033,368.08
Transfers-Out 0.00
Total Fund Balance/Net Assets 4,586,317.19
Revenues
Revenue to date 7/31/23 169,350.10
Total Revenues 169,350.10
Expenditures/Expenses
Expenses to date 7/31/23 37,270.48
Total Expenses 37,270.48
Estimated Total Fund Balance/Net Position* 4,718,396.81
* Unaudited
The month of July has not been closed.
PrepareNjc Finance
Electric System
Director Rob Montgomery
• Ad Hoc Committee — Participated in the July 315t and August 7t" meetings of the
electric utility ad hoc committee to provide background on the utility and its operations
and answer questions from committee members. Created a notebook of information for
the committee and spent time gathering additional information/materials upon their
request. Will continue to attend future ad hoc committee meetings to serve as a
resource.
• Infrastructure Projects (Ongoing) — Infrastructure construction contractor,
Sturgeon Electric, has completed the build out of Nash Road Phase I and Fort Raymond
sections of the transmission infrastructure project. Additional work completed outside of
bid contract included: 1) removing non-vital distribution powerlines and poles paralleling
the Fort Raymond Substation access road and, 2) replacing a triple dead-end arm—a
crossarm that allows crews to temporarily spread conductors/lines--and a related guy
wire with a more permanent solution.
Sturgeon Electric performed final clean-up work and remediation the week of July 31.
Crews will return in the spring to begin work on Nash Road Phase II.
Also, work on the Fort Raymond Substation is ongoing as electric department personnel
continue to work with construction contractor Electric Power Constructors. The first
substation transformer was delivered on August 8. The arrival of the second transformer
has been delayed until early September due to minor damage that occurred early in the
shipping process. The transformer was sent back to the factory for repairs and testing.
This delay is not expected to have a significant impact on the overall project schedule.
Department Overtime —Total overtime hours for the 4-man line crew, 2 plant
operators and field engineer: Infrastructure 176.5 hours; Other 69.5.
2023 Rate Study (Ongoing) —The rate study being conducted by The Financial
Engineering Company continues. The rate study remains on track for a presentation to
City Council in September. Any increase in rates will go into effect in the fall.
• Customer Job Orders—Between July 16 and August 1, the department completed 11
job orders with another six in processing. Six additional jobs are in the queue ready for
the crew with six more waiting for customers to complete work on their side of the
meter. Crews also completed 36 underground locates while the field engineer assisted
the billing department by completing meter reading on July 15.
The utility GM and staff also worked to resolve three customer complaints related to
billing.
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Fire & Building Department
Fire Chief Clinton Crites
2023 TYD Statistical Information:
Fire & Life Safety Inspections: 236 with 161 violations
noted.
We NEED volunteers, if you or Emergency Calls: 254
someone you know is interested
in serving your community, please New Building Permits Issued 2023: 39
give us acall at 224-3445 or stop with a total construction valuation of$24,616,552.00.
by at one of our trainings on
Wednesday evenings at 6:OOpm.
• Great on-going training! Come by and see what we are all about!
• Continual maintenance on the station and apparatus.
• Emergency calls have been steady and several days 2-3 within the same hour, this is taxing on
volunteers, but they are stepping up as best as possible.
• We visited with the Obihiro exchange students
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The popularity of electric bikes and electric scooters(e-bikes and e-scooters)has taken off over the past
few years,Lithium-ion batteries are usually the source of power for both,and if not used correctly,or if
damaged,those batteries can catch on fire or explode.Whether you use a-bikes or e-scooters as your
main way of getting around,or just for fun,there are important safety tips to keep in mind when charging
or storing these devices.
The Problem * Store e-bikes,e-scooters,and batteries
Damaged or defective batteries can over- away from exit doors and anything that can
heat,catch fire, ❑r explode. get hot or catch fire.
Lithium-ion battery fires give off toxic Only have device repairs performed by a
gases and they burn extremely hot. qunlifled professional.
• Do not put lithium-ion batteries in the trash.
Safety Tips Recycling is always the best option.Take
* Only purchase and use devices, batteries, the batteries to a battery recycling location
and charging equipment that are listed by or contact your local waste department for
a nationally recognized testing lab and disposal instructions.
labeled accordingly. Signs of a Problem
• Always fol low the instructions from the =
manufacturer. ` Stop using the e-bike or e-scooter if you notice
Only use the battery and the charger that any of these problems with the battery: unusual
were designed for,and came with,the device. odor,change in color,too much heat,change in
Do not keep charging the device or device shape, leaking,smoking,or not keeping a charge.
battery after it is fully charged.
Only charge one device or device battery at € LEARN
a time to prevent overloading the circuit. If you see a fire ... MORE
Keep batteries at room temperature when
possible. Do not charge at tom- Leave building Visit nfpa.arglebikes
pe rat ures below 32T(0T)or above 1D5°F immediately.
(40T),
(I Don't try to f ight 510 0 Do not stare batteries in direct sunlight or the fire.
inside hat vehicles,and keep them away
from children and liquids. Call 911.
AD,
NATIONAL FIRE
PROTECTION ASSOCIATION
NFPA The leading information and%nawk-A%resource
on fire.electncal and related hazards 92
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Become a Volunteer Firefighter or EI T a F .
Stop by the Seward Fire Department
for more information
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VETERAN TO VOLUNTEER
Veterans make great volunteer firefighters
Harbor
Harbormaster Norm Regis
➢ We have been working on cleanup on both sides of the bay.
➢ The 50-ton and 330-ton Travelift are starting to pick up for winter storage; the SMIC yard is
starting to fill up.
➢ We are continuing to train several new harborworkers on the maintaining and operating the
Travelifts.
➢ We are working on the SMIC yard drainage to keep water flowing into the ditches.
We have finally received our DEC permit for the water system on G, K and L-float, the
project is complete and under budget for both construction and engineering.
➢ Some people like that we are still working with some COVID protocol in mind while
continuing to do boat lifts and public contact in the Seward Harbor office.
➢ W we will continue the cleanup at the old Raibow dump area, just a few more items to deal
with and we can lease the property out again.
➢ The harbor office is open seven days a week starting May 7.
➢ The harbor is fully staffed.
➢ We are continuing to work with the Director from the Pacific Northwest &Alaska Maritime
Administration U.S.DOT on finding a suitable grant for the washdown pad project.
➢ We are waiting on funding for the 5-ton crane on I-Dock, Corp Permit has been approved
➢ We have received the Coast Guard Purchase and sale agreement it will be presented to you
at this meeting.
➢ Mr. Brumley from the USCG who is in charge of the purchase and sale agreement for the
coast guard building/land was in Seward on August 3rd and 4t" to look at the site and finish
last minute details.
➢ The harbor is full moving vessels around trying to adjust to the always-changing dynamics
of the harbor.
We have painted several fire lanes, people are starting to park in them for long periods of
time.
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Seward Community Library & Museum
Bailey Sayler
MUSEUM WINDOW DISPLAY
Early Alaska Railroad
The summer Windows of History display features a history of the early Alaska Railroad. Learn
about the railroads beginning as the Alaska Central Railroad in 1903, through its ups and downs
until it was purchased by the federal government in 1915, and its official start as the Alaska
Railroad Company in 1923 when President Harding came to Alaska to drive the golden spike at
Nenana. On view are an assortment of early railroad photos from the Resurrection Bay
Historical Society.
Thank you Museum Volunteers
We would like to thank our amazing museum volunteers, from the Resurrection Bay Historical
Society and the Seward Community Library Association, for all the hours they put into caring for
the museum and its collection. In 2022, both organizations combined contributed over 660
hours to volunteering, with RBHS having 624 of those hours. We would also like to thank local
Boy Scout Troop 568 for volunteering 56 additional hours with RBHS to complete other large
museum tasks.
Play n Chat
Every Tuesday and Thursday, Bloom brings arts n crafts, story time, and play time for our
younger crowd.
Upcoming Events
*August is National Dog Month. The library will have all programs focusing on mans best
friend.
,After school tutoring Tuesday— Friday. Math, Spanish, and Language Arts help.
,August 17—Stuffed Animal Campout at the library. Bring your favorite animal to campout at
the library while you take home a smores. You can pick up your stuffed animal Saturday during
business hours.
,Every Friday starting August 14th we will have a Movie Matinee starting at 3.
,September 23-Annual Nerf War- library closes early at 3 pm and Nerf War starts at 6 pm.
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OSeptember 30th- 15t Solar Program will have solar eclipse fun and crafts. More details to
come!
4 October 7th—2n6 Solar program at the library with crafts. More details to come. You can pick
up your Free Solar Glasses for October 14th partial Solar Eclipse.
OOctober 14th-Solar Eclipse Day! Sign up for our final Eclipse event happening at Avtec from
10 am —12 pm. We will have a Dome inside the Avtec Gym where we can view the solar
system! Registration Required.
Movie @ 2
"Waves Over Seward," a movie about the 1964 Earthquake, will be hosted Tuesday-Saturday
and some Sundays at 2 p.m. in the downstairs community room of the library. Admission for
this event is priced at $5 per person, while children aged 12 and under can enjoy free entry.
Summer Reading Challenge has ended. Our finale was
held at the Coast Guard building where we enjoyed hotdogs,
a jN watermelon, and a water balloon fight to end the Summer
Reading Challenge. This year we had over 100 patrons sign up to
complete the challenge. Our grand finale happened Friday with
the Coast Guard where everyone enjoyed a tour of the boat, hot
dogs, watermelon, and of course a water balloon fight! We had
- over 50 people turn out to enjoy the morning with the Coast
Guard!
Saturday Storytime:
Join us for Story-time and an activity every Saturday at 11:00 a.m.
Library hours
Tuesday— Friday 9 a.m. —6 p.m.
Saturdays 9 a.m. —5 p.m.
Museum Summer Hours
Tuesday—Saturday 11-5 p.m.
Month of July Stats
WIFI Users— 1428
Patrons Served — 10701
Passports
We are currently taking passport appointments for new passports but not renewals.
Please call 907-224-4082 for appointments.
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Exploring Our Community Heroes! This
Summer
_ Reading Program has taken our readers on an
incredible journey, connecting with Alaska Waste,
i Library, Fire Dept, Sea Life Center, Police Department,
Public Works, and our grand finale with the United
States Coast Guard! Each local hero has graciously
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dedicated a morning to enlighten and inspire, sharing
.' their invaluable knowledge and unwavering
t" g commitment to serving our community. Together, we
discovered ways they make our town shine!
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Shows once a day at 2 PM
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- Community Room
• �;. Saward Community Library&Museum
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907-22224-4082
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Park Maintenance
Hoben Park Fountain is up and running. Continual upkeep and cleaning of debris
Woodlawn Cemetery Improvements
Replacing damaged boards on the Boardwalk
Sand filled in at Horseshoe pits near Branson Pavilion
Working on enhancing Park areas
Waterfront Bathroom maintenance, swapping out old hardware, replacing damaged materials.
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Updates to the Campspot website for Campground reservations. To limit the high volume of
phone calls with FAQ's and improving consumer usability.
Reconfiguration of camp sites
Replacing missing camp site numbers and relocating picnic tables
Working on electrical issues changing out old parts in breaker boxes and replacing water spickets
in hookup sites
Sports & Recreation
The Sports and Rec crew is back in the AVTEC Gym!
We've sure enjoyed the outdoors and the sun recently. We've been hard-at-it with youth soccer,
youth adventure camp and pop-up events.
The 4th of July was a bubble mania for Parks and Rec with basketball hoops, ladder ball,
cornhole and fun prizes to go along with all the bubbles a bubble machine could possibly make
at the kids corner.
Youth Soccer has 84 participants and over 10 volunteer coaches. It has been a successful year of
fun and great weather for the young footballers. We are heading into the last week of youth
soccer camp with t-shirts to be handed out soon. Our sponsors this year were Seward Coastal
Charters, Adventure 60 North and Seward Properties.
Pickleball continued on Wednesdays outdoor at Forest Acres with a decent crew.
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The Youth adventure camp comprised of 13, 10-14 year old's heading out into the outdoors all
five Saturdays in July. We hiked Harding Ice Field, Lost Lake and Grayling Lake, while also
fishing, kayaking, gold panning and making desserts over an open campfire. Participants
received backpacks with our sponsor Metco's logo on it, hats with a JAG sponsored patch,
fishing poles and foraging bags. It was a hit and sure to be a repeat next summer with new
adventures.
The Camp Stove Cookoff was a success with 11 participants on six teams. Ed McElroy and
Mark Swanson provided amazing music while each team had an hour to cook a meal comprised
of surprise ingredients in a backpacking backpack for a chance to win a $300 REI gift card.
Gillian Braver and Peter Frank narrowly edged out Andrew Smith and Cara Wallschlaeger with
an amazing chana masala. Our judges were Chad from Firebrand, Faith from the Porthole and
Erik from the Brewery, each of which were sponsors along with The Cookery. Another event
that we may see in the winter with the popularity. We were able to raise $140 for the Food
Pantry along with some food donations from the event.
Finally as we look forward to August we have some usual hits at AVTEC and some new events.
Skate Nights are back every other Saturday, while rock climbing, pickleball, volleyball and
basketball are weekly occurrences. The ever popular Kids Night is back and will take place on
Saturday August 19th. Leagues will be starting up in October so look for that. New to the docket
is Teen Hoops Tuesdays and Dungeons and Dragons, which will be held back to back from 4-
6pm and 6-8pm on Tuesdays. Finally to end the month we will have another pickleball
tournament on August 30th. If it lives up to the last one it's sure to be awe-inspiring! So much
more in September, so keep an eye out and spread the word about Sports and Rec and follow us
on social media or subscribe to our newsletter by emailing sportsandrecgcityofseward.net.
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Daily Activities: (August)
Tuesday: Open Gym: 10-6pm
*Senior Walking Hour: 11-12pm
Teen Hoops Tuesdays: 4-6pm (starts August 15th)
Dungeons and Dragons: 6-8pm (Starts August 22nd)
Wednesday: *Senior Walking Hour: 11-12pm
Open Pickle Ball: 6-8pm
101
Cribbage meetup: 6-8 pm (multi-purpose room)
Thursday: *Senior walking hour: 11-12pm
Youth Gym: 12-lpm
Open Basketball: 6-8pm
Friday: Senior Walking hour: 12-lpm
Youth Gym: 1-3pm
Open Volleyball: 6-8pm
Saturday: Open Pickleball: 12-2pm
Open Rockwall: 2-4pm
Adult Only Rockwall: 4-5pm
Skate Night: 6-8pm (every other Saturday)
Other events:
Tuesday & Thursday August 2-10: Youth Soccer 5:30-8pm, Elementary Field
Fridays August: Open Soccer 6-8pm, Elementary Field
August 12th: Back to School Skate Night, 6-8pm, AVTEC Gym
August 19th: Kids Night, 6-8pm, AVTEC Gym
August 26th: Autumn Skate Night, 6-8pm, AVTEC Gym
August 30th: Doubles Pickleball Tournament, 6-9pm, AVTEC Gym
102
Public Works Department
Doug Schoessler - Director
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➢ Public Works Director
• US Army Corp of Engineers -Tunnel:
-Had an on-site meet and greet visit with COL Jeffrey Palazzini,USACE Alaska District Commander
(Incoming District Commander) and team. There will be more visits as the project moves forward.
• Utility extensions:
-The Ballaine Blvd water and sewer proj ect's successful bidder was Metco Alaska. Construction this
fall will complete the water and sewer mains for residential services at the current 6th Ave Public
Works site.
Page 1 of 3
103
➢ Streets Department -Street crews have completed adding material to many of the alleys in town.
The efforts and continuing work on the alley ways is helping to smooth the surface and lessen the
puddling during rain events.
-Painting crosswalks and street lines continue. We have been notified by the State DOT that they
will only do minimal painting of center lines this year because of the 0-8 Project being done.
-Sweeping has begun and will continue.
-Street crews will continue to grade gravel roads and patch potholes.
➢ City Shop
-Regular and preventative maintenance work continues We are shorthanded this month in the shop.
-Some major work is being done on some of our loaders and road graders. Some fixes will be costly
enough to need council approval for the repair funds. More information will be provided as we
receive quotes.
➢ Water & Wastewater Department
-Some construction is already starting this season. The locate requests are coming in daily.
-Water systems and alarms are all showing normal and being monitored daily to ensure water quality
is above standards.
-Monthly testing of water and wastewater systems is being done and submitted to DEC as required
by the permits.
--------------------------------------------------------------------------------------------------------------------
➢ Wastewater Lagoon:
• -The City was successful through Senator Murkowski and others in recently getting approved for $2,000,000 of
funding for sludge removal on the City's sewer lagoons. This project is tentatively scheduled for 2025 depending
on sludge buildup in the lagoons. There is also a 20%match on those funds that will have to be paid.
• -We are currently working on other grant or loan funding to replace the liner at that same time.The liner replacement
will also require the use of a helicopter to lift out the 40 biodomes and reinstall them on the new liner.
• -This will also be the time to make any upgrades to the air systems and blower components since all "in-lagoon"
systems will have to be removed to install a new liner. Because the lagoon will have to be drained (one side at a
time). We can capitalize on construction costs and efforts by installing new system upgrades at the same time.
• The new DEC permits also added a disinfection requirement to be completed in the next 5 years.
• -We are working on the funding and coordination of the many components and the planning efforts in the next few
years will help make a successful project.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Page 2 of 3
104
-A repeating reminder to all residents not to flush wipes,feminine products, etc. down
the toilet. Also, never put grease down the drain. Sewer clogs due to these items cost
the sewer utility thousands of$$ each year to fix the problems that could have been
easily prevented. These losses of capital are to be reflected in monthly sewer service
rates.
Page 3 of 3
105
Community Development Department
Jason Bickling
➢ P&Z met on August 1st and took care of some business items at a regular
meeting and then followed with a work session on the Cemetery Master Plan.
➢ The Cemetery Columbaria have been installed: 1 in the Odd Fellows portion of
the City Cemetery and 2 in the American Legion Cemetery.
➢ The annual Municipal Lands Inventory and Use Plan review will be coming
before the commission in the next month for a work session or possibly two. It
will then be approved at a regular meeting and brought before council.
➢ We are continuing to work on platting pieces for the new Public Works Facility.
➢ We are continuing to work with the Utility Department regarding some
easements, right of ways, and pole placements - considering possible future land
use.
➢ We will be reviewing CUPs starting at the beginning of August. After we go
through our CUP review process P&Z will be reviewing applicable code. Our
code currently doesn't have a lot of teeth for following up and helping with non-
compliance to the CUP.
➢ We are continuing to work through the compliance process with the attorney on
the illegal STIR that we filed suit with. I believe that we are getting close to
resolution with compliance and fines/fees.
➢ We are still (patiently) waiting for the ADEC decision on the Jesse Lee Home
Property review. I will let Council know immediately when we hear back from
them on whether more mitigation will need to be done.
➢ Our long-term Temp is continuing to work on scanning and archiving for the Com
Dev, Fire, Public Works, and Electric Departments.
➢ We are continuing with our normal business of processing of records requests,
short term rental permits, replats, rezones, CUPs, and consulting regularly with
community members that have questions about the development and use of their
land and helping with applications.
106
GIS Report:
- Selena is continuing to work with Public Works data. She has created an updated
Water and Sewer Map so that the changes that are made in the field by Public
Works will reflect on the map.
- The web map for Conditional Use Permits has now been added to our
Mapping/GIS webpage under the Planning & Zoning section. The CUPs and
associated resolutions have been attached to the features themselves to make it
easier to read the conditions.
- Selena has finished updating the Muni Land Plan's mapping imagery for this
year's future review.
- Selena is working on a Future Land Use Map audit to coincide with Courtney's
work on the zoning history map. Once this research is finished, mapping
applications/layers will be added to the online zoning map as well as updating the
printed versions.
107
From: Rob Montaomery
To: Kris Peck
Cc: Stephen Sowell
Subject: FW: Please Review
Date: Tuesday,August 8,2023 2:45:13 PM
Kris,
Here is the bullet we would like to add to the City Manager's Report. Let me know if you have
questions.Thanks for your assistance.
Rob
Chugach Electric Maintenance and Assistance — Seward's electric utility will
operate its Fort Raymond Power Plant to assist Chugach Electric Association with
planned maintenance on its facilities in the Dave's Creek Substation near Cooper
Landing. Operating Fort Raymond will allow CEA customers around Moose Pass and
Cooper Landing, as well as City of Seward electric customers, to maintain power
service as CEA isolates equipment at Dave's Creek and later when the equipment is
placed back in service. CEA's maintenance activities will begin on August 22 and wrap
up on August 25. CEA will provide Seward with a work order number so that CEA can
be invoiced for fuel usage at Fort Raymond during the plant's operations.
108
ED
240 W.68th Ave.
Anchorage,Alaska 99518
August 7,2023
DOT&PF Central Region
4111 Aviation Avenue
PO Box 196900
Anchorage,AK 99519-6900
RE: 2023 Updated Rock Blasting Schedule
Seward Hwy MP17-22.5 Rehabilitation
Project No.0311032/Z536100000
Highway Closures: Change beginning August 21st, 2023, Mondays through Thursdays
between 8:30PM and 10:OOPM
Who: QAP, Southeast Roadbuilders (SERB), and Alaska Department of Transportation
Event: Rock Excavation with Explosive Agents
This notification is to alert the traveling public and other agencies to the change in schedule of rock excavation by use of explosives
beginning August 21"2023.Due to already decreasing light conditions the blasting schedule is being adjusted to be performed
slightly earlier.
Blasting activities will continue to require a FULL CLOSURE of the Seward Highway between MP19 and MP22 depending on
the blast location.Closures for blasting activities will still be performed on Mondays,Tuesdays,Wednesdays,and Thursdays
however the time will be adjusted for the full closure beginning between 8:30PM and 10:00PM.
QAP and SERB do not anticipate needing the full duration of the closures and will work diligently to reopen to a minimum of
one lane with a pilot car as soon as safe to do so.However due to unforeseen circumstances it may result in utilizing the full
closure duration to safely reopen the highway to traffic.Below table outlines the anticipated blasting schedule moving forward.
Date Range Blasting Closure Times Road Crew Shift
Today through Aug.20 9:30 PM to 11:00 PM(Monday—Thursday) 8:30 PM to 9:30 AM(Sunday—Thursday)
August 21 through Sept.15 8:30 PM to 10:00 PM(Monday—Thursday) 7:30 PM to 8:30 AM(Sunday—Thursday)
Sept.15 through End of Season 9:00 AM to 10:00 AM(Monday—Thursday) 8:00 AM to 8:00 PM(Sunday—Thursday)
If there are any questions,please feel free to use the contacts below for further information:
Matt Schram,QAP Project Superintendent mschramAcolaska.com 907-250-9452
Daryl Belanger,QAP Project Engineer d elan er ,col k com 907-350-8467
Sincerely,
Daryl Belanger
Project Engineer
109
Clerk's Report
August 14, 2023
Kris Peck
Along with our usual work, the Clerk's Office has been busy with the 4 high school
exchange students from Obihiro, Japan. Our Executive Assistant Karen picked
them up from the airport and thus began an action-packed week of boat tours,
kayaking, educational tours and walks, shopping, volleyball, biking, hiking and
more! A big thank you to their host families the Barnwells and the Crites! And
thank you to the Chamber of Commerce, Deputy City Clerk Jodi Kurtz and all the
locals that helped out with activities and joined them on their adventures. We
lucked out with perfect weather and they did NOT want to leave! We waved
goodbye at the train station as they headed to Anchorage to catch their flight back
to Japan. Next year, we are optimistic that Seward High School students will apply
for the program!
110
CHANDLER, FALCONER, MUNSON & CACCIOLA, LLP
ATTORNEYS AT LAW
SUITE 302
911 WEST EIGHTH AVENUE
ANCHORAGE, ALA SKA 99501
TELEPHONE:(907)272-8401
FACSIMILE:(907) 274-3698
bcf@bcfaklaw.com
August 2, 2023
Seward City Council
City of Seward
PO Box 167
Seward, AK 99664
Re: Status Report
Dear City Council:
This is our status report covering activity on legal matters worked on during July 2023.
General Matters:
We reviewed a ballot proposition for a charter amendment. We completed review of the Title 14
recodification ordinance. We reviewed and commented on revisions to Title 6. We advised on
revocation of the phone use policy. We commented on a preliminary certification related to the
ACOE project. We reviewed a bond proposition for the public works building project.
Electric Utility:
We began work on amendments to the purchase agreement with Homer Electric Association.
Parks:
We advised on parks facility rental forms.
Planning:
We advised on a contract for GIS services.
Port and Harbor
We continued work on revising a land exchange with the USCG. This includes a sale of city
property, USCG conveying a building to the City and shortening an existing USCG lease
agreement. We prepared a license agreement with NOAA for a tidal gage installation. We filed
suit to remove an abandoned vessel per council direction. We have worked with the harbormaster
111
Status Report to Seward City Council
August 2, 2023
Page 2 of 2
on code enforcement and resolving issues with nuisance vessels. We advised on a new assignment
of the Breeze Inn lease. We began work on a property sale agreement with 4JBC .
You can expect to receive our next status report by September 6th.
Very truly yours,
CHANDLER, FALCONER, MUNSON&
CACCIOLA, LLP
Brooks Chandler
112
DocuSign Envelope ID:6699DO48-C35D-4197-94DF-F7E9EOFE2EOE
Alaska Small Business
A Development Center
ALAS[A
SBDC LAr BUsfNESs ENTERPRISE INSUTUTE
July 18, 2023
City of Seward
410 Adams St
Seward, AK 99664
Dear Mayor McClure, City Council, and City Staff,
This letter serves as our quarterly report for the period April 1 to June 30, 2023. The Seward Business
Advisor, KellyAnn Cavaretta, continued her strong performance with a 100% satisfaction rating on
client surveys for the sixth consecutive quarter, a testament to the quality of advising she provides
entrepreneurs in Seward. As the COVID-19 pandemic faded, demand for in-person advising in Seward
continued to increase. In 2020 and 2021, the SBDC did not provide a single in-person advising session
to a Seward client. The past year, with KellyAnn established in Seward, that figure jumped to 73%
in-person. Here is a summary of deliverables to the Seward community during the quarter (year):
Client Hours: 190.5 (347.3) Jobs Supported: 165 (353)
Total Clients: 42 (59) Capital Infusion: $1,728,584 ($2,074,584)
New Businesses Started or Bought: 5 (6) Client Surveys: 100%positive (100%positive)
This report provides lists of the top advising topics and top industries obtaining technical assistance
from the Alaska SBDC in Seward. Assistance to entrepreneurs looking to purchase established
businesses jumped up to the number one topic this quarter, followed closely by assistance to start-ups.
Accommodation remained atop the industry list, followed by rentals and entertainment, with all of these
industries preparing for what was anticipated to be the highest grossing tourist season on record.
Topics Industries
1. Buy/Sell Business: 48.0 hrs (25%) 1. Accommodation: 56.3 hrs (30%)
2. Start-up Assistance: 47.3 hrs (25%) 2. Rentals: 34.5 hrs (18%)
3. Financing/Capital: 38.0 hrs (20%) 3. Entertainment: 31.6 hrs (17%)
4. Business Planning: 6.8 hrs (4%) 4. Retailers: 30.1 hrs (16%)
5. Tax Planning: 5.8 hrs (3%) 5. Food Services: 14.8 hrs (8%)
We would like to thank the City of Seward for their support of the Seward Business Advisor position.
KellyAnn continues to exceed expectations and we appreciate the knowledge and experience she brings
to our team and the Seward community. Please do not hesitate to contact us if you have any questions.
Sincerely,
DocuSigg�nneed by:
98AFA012679B4D U, 18 2023
Jon Bittner JJ Y '
Executive Director
Alaska SBDC
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190199508 Anchorage - Fairbanks - Juneau - Kenai Peninsula - Ketchikan - Mat-Su Valley
Seward Prevention Coalition
Statement of Financial Position
As of June 30, 2023
HYPER DAY CARE CITY DONATION TOTAL HYPER TOTAL
ASSETS
Current Assets
Bank Accounts
Edward Jones Investments 399,058.19 399,058.19 $399,058.19
FNBA Checking -513.97 -14,230.69 -14,744.66 $-14,744.66
Total Bank Accounts $-513.97 $384,827.50 $384,313.53 $384,313.53
Other Current Assets
Workers Comp Prepayment 0.00 0.00 $0.00
Total Other Current Assets $0.00 $0.00 $0.00 $0.00
Total Current Assets $-513.97 $384,827.50 $384,313.53 $384,313.53
TOTAL ASSETS $-513.97 $384,827.50 $384,313.53 $384,313.53
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
Payroll Liabilities $0.00
AK Unemployment Tax 31.40 31.40 $31.40
Federal Taxes(941/944) 422.44 422.44 $422.44
Wages Payable 1,806.09 1,806.09 $1,806.09
Total Payroll Liabilities 2,259.93 2,259.93 $2,259.93
Total Other Current Liabilities $0.00 $2,259.93 $2,259.93 $2,259.93
Total Current Liabilities $0.00 $2,259.93 $2,259.93 $2,259.93
Total Liabilities $0.00 $2,259.93 $2,259.93 $2,259.93
Equity
Retained Earnings 2,576.07 448,459.22 451,035.29 $451,035.29
Net Revenue -3,090.04 -65,891.65 -68,981.69 $-68,981.69
Total Equity $-513.97 $382,567.57 $382,053.60 $382,053.60
TOTAL LIABILITIES AND EQUITY $-513.97 $384,827.50 $384,313.53 $384,313.53
Accrual Basis Thursday,Jul)21, 2023 09:14 AM GMT-08:00 1/1
Seward Prevention Coalition
Statement of Financial Position
As of June 30, 2023
HYPER DAY CARE CITY DONATION TOTAL HYPER TOTAL
ASSETS
Current Assets
Bank Accounts
Edward Jones Investments 399,058.19 399,058.19 $399,058.19
FNBA Checking -513.97 -14,230.69 -14,744.66 $-14,744.66
Total Bank Accounts $-513.97 $384,827.50 $384,313.53 $384,313.53
Other Current Assets
Workers Comp Prepayment 0.00 0.00 $0.00
Total Other Current Assets $0.00 $0.00 $0.00 $0.00
Total Current Assets $-513.97 $384,827.50 $384,313.53 $384,313.53
TOTAL ASSETS $-513.97 $384,827.50 $384,313.53 $384,313.53
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Other Current Liabilities
Payroll Liabilities $0.00
AK Unemployment Tax 31.40 31.40 $31.40
Federal Taxes(941/944) 422.44 422.44 $422.44
Wages Payable 1,806.09 1,806.09 $1,806.09
Total Payroll Liabilities 2,259.93 2,259.93 $2,259.93
Total Other Current Liabilities $0.00 $2,259.93 $2,259.93 $2,259.93
Total Current Liabilities $0.00 $2,259.93 $2,259.93 $2,259.93
Total Liabilities $0.00 $2,259.93 $2,259.93 $2,259.93
Equity
Retained Earnings 2,576.07 448,459.22 451,035.29 $451,035.29
Net Revenue -3,090.04 -65,891.65 -68,981.69 $-68,981.69
Total Equity $-513.97 $382,567.57 $382,053.60 $382,053.60
TOTAL LIABILITIES AND EQUITY $-513.97 $384,827.50 $384,313.53 $384,313.53
Accrual Basis Thursday,Jul)21,4023 09:14 AM GMT-08:00 1/1
Roll Call
Present- Kaluza, Draper, Tustamena (on phone), Casagranda, Hatfield, Paquette,
Dunham, McCracken
Absent- Stauffer
Agenda - how were we going to compile items for the future agendas?
Agendas will be made at each meeting for the following meeting
Agenda for 7/31/23
Unfinished business -
Introductions because recordings weren't functioning last meeting
Rob answers all the questions we submitted to council
Discuss council's direction
Discuss Timeline for delivery of documents submitted to ad hoc committee on 7/31/23
Discuss next Agenda for 8/7
Introductions -
Tustemena - engineer retired from DOT and background education in power and electricity
Draper- background in finance
Dunham - Worked for Chugach Electric for 12 years, involved in electric utilities most of his
career, about 40 years (which included time with MEA, HEA, CEA and other utilities in their day
to day operations)
Paquette - 30 year resident, outside city with 5 meters, involved in PACAB
Kaluza - 6 years as an elected Nome joint utility board member and 6 additional years on Nome
city council that had oversite of the Nome utility.
Casagranda - Been in Seward all her life, served on city council, dad ran the Ft. Richardson
power plant, serving as an opportunity to learn more in electricity
McCracken - Here for the rate payers, been on fish and game committees and rate committees
Hatfield - lived in Seward 10 years, 3 years on Seward's PNZ
Questions Answered by Rob Montgomery
Motgomery answers to committee questions had been sent via email in the morning of 7/31
Avg cost per kilowatt- A little over .12 for summer rates, COPA was a little over .11 so .23 cents
per kilowatt for the summer for residential.
Kaluza asked for an average of costs and Montgomery responded that he can get it to the
committee after the rate study is completed.
McCracken pointed out the rate comparisons on page 245 of the packet between Chugach,
Homer, and Seward.
Casagranda asked for a definition of rail belt— Motgomery replied it is the area from Seward to
Fairbanks (where the railroad runs) including Homer Electric
Dunham pointed out the Chugach South includes Moose Pass, Cooper Landing who pay lower
rates than SES. Chugach South rate is .08
116
POWER FACTOR
SES measures it, but does not bill for it for about 30-40 customers who have meters that read
power factor. In order to read the power factor meters, personnel have to be near the meter to
read them with the remote. Montgomery thinks that the numbers seem inaccurate and with the
problems the utility has had with dealing with net metering for solar power, he feels it would be
biting off more than the department could chew at this point. If there were more resources (staff)
they could take that on.
Dunham asked if we could get the data from the 30-40 customers who had power factor meters.
We buy a full amount of power from Chugach and if our large corporations are doing something
to incur losses within the Seward system which may account for some of the losses that the rest
of Seward is paying for. Commercial operations that have old machinery or inefficient electrical
usage could be the reason that Seward has nearly the double amount of line losses than the
national average.
The company that was chosen to outsource billing uses the same software that Seward uses so
they can work within that system.
Large companies are required to track their own power factor, but Montgomery confirmed that
no company has been tested to ensure their power factor was adequate.
Dunham asked if the significant 8-9% line losses that were reported included places that were
not being metered (i.e. city buildings, etc.) and Montgomery said he was unsure and would get
back to the committee. Dunham stated that those losses, if they were there, were just being
passed on to the consumer base without anyone knowing. Montgomery replied that in order to
test and bill for the power factor the department would need more resources.
Montgomery's first priority when hired was safety - cleaning up the power lines and removing
trees, deteriorating power poles on Nash Road. By focusing on those things first he has cut
down on power outages by 75%. The other thing was to be interconnected, which he has made
strides with but still has far to go. But he still has a lot of things to deal with in billing. Outsourced
billing begins this month. Also had to renegotiate the contract with Chugach that was supposed
to be done in 2016 but had not been completed - that has currently been updated.
Montgomery will look into getting data from several large commmercial operations so we can
see if this is a true issue - suggested consumers to look at were SMIC when they lift a ship, OBI,
a school, and city buildings.
If there are unmetered city buildings and we sold the electric ulitiliy it could result in much higher
costs for the city after the sale because the new company will want everything metered.
Casagranda clarified that lights on 3rd ave are metered, but it was unclear if the other lights in
the city were.
117
CRUISE SHIP POWER
City is not leading the charge, the railroad is. Conference calls were held about getting power to
the cruise dock. Montgomery thinks that at some point there will be cruise ship power, but he
can't determine when. He sees the industry moving that way and requiring ships to use shore
power. Montgomery said that the city is well set up to make that happen in the future and it's not
a huge project. The plan is to be ready to run the line to the cruise dock from Fort Raymond
using the railroad easements. The 4-5 million dollar project to run lines to the dock was
cancelled until it can move forward.
Citizen Becky Dunn asked for an estimate on how much power the ships would use.
Montgomery had an estimate done and was looking at a gross of$2 million and net of around
$1.2 million. Typical load for a ship is typically 7-10 mega watts which is about double the load
of the entire city of Seward.
Casagranda asked if we can require that the ships plug into shore power. Kaluza suggested to
get the state involved so that if the ships didn't want to plug in, they might go to Whittier or
elsewhere. It was suggested that electric is cheaper for them than diesel.
Reierson asked how many communities for the state require ships to hook up to shore power?
How many towns have it? What is the cost to electrify one cruise ship dock? Approximately $12
million for the overall project, which includes transmission line upgrade, per Juneau's recent
project. Montgomery said if that was made a requirement, the RR, Seward and the cruise
companies would be able to work together to come up with the funds for the project.
McCracken said the cruise ships should put the infrastructure in - Montgomery responded that
that was part of the hiccup with the project is that the ships weren't able or willing to make it
work.
STAFFING
Earnings for other communities' staff is included in the packet. Dunham said that he would like
to see some communities that are absent such as Cordova.
Discussion ensued about the necessity of having a dedicated position for a liaison. Montgomery
said that SES is sitting on many committees and boards with the other rail belt utilities and there
is currently one person trying to participate in all those meetings. Dunham replied that typically
that person is the GM, or a couple other people (council members or a volunteer) to take that on
and asked Montgomery why that couldn't be the case for Seward. Montgomery responded that
some committees need someone with a specific background in electrical utilities. Casagranda
asked if Montgomery had an alternate for the committees. He responded that he did not.
Dunham asked if any other company has made an employee a railbelt liaison. Montgomery
responded that other companies are thinking about it. The liaison would be tracking state and
federal legislation, writing reports, and more. He sees it as being an expanded government
relations position. Dunham said that price is going to be around $100k and Montgomery agreed.
118
Paquette asked if there was another community we could share that position with? Montgomery
responded that they already have them. Also, with the constraints of the union contract, SES is
not able to add responsibilities to someone's position without an increase in pay or renegotiating
with the union.
Montgomery made the point that although we're not like the other railbelt utilities, we are tied by
a contract to the other utilities and Seward has to participate. Currently Dave Burlingame, owner
of Electric Poweer Systems, has been volunteering approximately 12 hours a week as a
representative for Seward. While Montgomery hopes to use volunteers in a lot of the
committees he mentioned the RRC will need to be a paid employee, there was some discussion
as to whether that should be the GM or a volunteer or an added position.
Montgomery stated that a part of the problem the entire city has had is a revolving door of staff
in key positions. Seward will need to pay enough to get people to be interetested in Seward and
then stay.
IN VS OUT CITY LIMITS
52% inside city limits and 48% outside city limits. Likely there are more KW being used inside
city limits with the commercial usage.
Chugach is asking for a 6.5% increase which will translate to approximately $5/month for
residential customers using 600kW or less.
CHUGACH CONTRACT
Every 3 years, expires in 2025. To terminate the contract you have to give a year's notice.
Chugach has always had the lower rate for a wholesale power contract. If the sale to Homer
goes through this fall, we wouldn't end up with HEA until Jan 1, 2025.
Seward owns 1.2% of Bradly Lake because they went by the total system load at the time the
sale went through, which gives Seward a credit of approximately $200-$300k per year.
Montgomery says that to rebuild we should have someone at the table to work with the other
utilities for the Bradley Lake Project.
CYBER SECURITY
Seward isn't subject to all the cyber security standards, but there is some monitoring that we are
subject to. There will be documents that are needed to be filled out and turned in to comply with
new regulations. Seward doesn't have 24 hour monitoring of our substations, and that is one
thing they are deciding on whether or not we would have to do.
Motgomery stated although the IT department of Seward has doubled in the past few years,
Dustin, the head of IT, sat in on a few meetings and determined that cyber security was over his
head and he was unable to do that. Montgomery said that he didn't think it needed to be a FT
position and it could be outsourced if that made the most sense, but it did need to be a person
familiar with the electrical utility.
119
Citizen Dunn asked if we could get a cost from the outsourcing company for that position from
the company that we are currently outsourcing our utility billing to and Montgomery said he
could ask them.
McCracken asked if other utilities (water/sewer) are also coming up against these cybersecurity
issues to perhaps share a position. No one thought that they had and it was suggested that
admin ask public works.
Seward has responsibiities due to contracts with Bradley Lake and a memorandum of
understanding with the RRC. Montgomery suggested that we hear from Burlingame (owner of
Electric Power Systems and SES current RRC representative) via zoom, Curtis Sayer
(executive director of the AK authority) in person, Mike Hubbard (rate study) could possibly
attend via zoom about rates. Dwayne Atwood (Alaska Railroad) could be a good person to
speak on the railroad. It was decided that these people would be scheduled one per meeting up
to 20 minutes to present their perspective.
DISCUSSION OF COUNCILS DECISION TO NOT ALTER THE MISSION STATEMENT
Kaluza mentioned that he wished he could have seen the mission statement before he
volunteered.
McCracken stated that the volunteers for the ad hoc committee were approved and then the
mission statement was approved after that, so it wasn't possible for any of the volunteers on the
ad hoc committee to know what they were signing up for.
The committee decided that they will stay on the council's mission covering the cost of
rebuilding.
DISCUSS THE TIMELINE OF DOCUMENT DISTIBUTION
Paquette wanted to make it clear that the documents were not held up for any reason except
general growing pains involving the creation of this new committee. Going forward, there
shouldn't be any problem getting things and info we need in a timely manner (not the day of) to
produce the deliverables.
Paquette asked Montgomery if we had everything we needed to create the deliverables and
there was a resounding "no". We need more info concerning office space, vehicles, etc. among
other things.
Paquette proposed that we tackle the first deliverable. Motion was made by Dunham and
seconded by Hatfield.
AGENDA FOR NEXT MEETING
1. Discuss where can we go to find information on each deliverable.
120
Although Montgomery has done extensive research on each of these deliverables,
council would like the committee to come up with their own research.
2. Presentation by Curtis Sayer (if available)
3. Discuss packet provided at last meeting - questions, important pages, etc.
4. Dicuss next meeting agenda
5. Citizen comments
6. Committee comments
CITIZEN COMMENTS
Reierson thought it might be worthwhile to create a board of 5 members to help run the utility, a
board of directors. Board could be responsible to communicate with the council to make sure
priorities are being met and on track. Make a more efficient and streamlined practice. This could
be added to the org chart. Because city government turns over every few years, this type of
board would give some continuity to the city for a complicated task of running a utility.
Becky wanted to reiterate that we need a finance director. Where is it being advertised and why
is it taking so long to fill positions in the city. Why are we fixing up the utility if we're going to sell
it? Get the Canadian company to give us a quote for cybersecurity.
Dunham asked for a table of contents for the packet- Casagranda said she'd talk to the clerk
about it. And can we get the password for the internet in the council chambers.
COMMITTEE COMMENTS
McCracken is looking forward to making some headway on this topic.
Kaluza hopes we keep in mind what it will cost the ratepayers whatever is decided.
Dunham would like to do a presentation on how the interconnected system works.
Hatfield thanked Montgomery for putting together all of the information
Draper asked if Jaffa's question about staffing in other communities' utitiliy departments.
Montgomery said the best place to start is the AK Power Association. We may need to call each
utility to learn a lot of this information about other communities and how they are organized. But
there's a need to make sure that other communities are a part of the railbelt to make a clear
comparison. Copper Valley could be a good comparison because they have distribution and
transmission lines. They have a similar problem getting staff as well, although they're not on the
railbelt.
Paquette thanked everyone for their participation and hoped that we can assume that everyone
is doing the best they can.
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122
HIlks iff%ma
KPMG LLP
Suite 2800
401 Union Street
Seattle,WA 96101
May 3, 2023
The Board of Directors
Providence Health &Services—Washington and the City of Seward
Seward, Alaska
To the Board of Directors of Providence Health & Services—Washington and the City of Seward:
We have audited the financial statements of Providence Seward Medical Center(the Medical Center) as of
December 31, 2022 and 2021, and for each of the years then ended, and expect to issue our report thereon
under date of May 3, 2023. Under our professional standards, we are providing you with the accompanying
information related to the conduct of our audits.
Our Responsibility Under Professional Standards
We are responsible for forming and expressing an opinion about whether the financial statements, that have
been prepared by Providence Health & Services—Washington (management)with the oversight of the Board
of Directors, are presented fairly, in all material respects, in conformity with the financial reporting provisions of
the Management and Operating Agreement between Providence Health &Services—Washington and the City
of Seward. We have a responsibility to perform our audit of the financial statements in accordance with auditing
standards generally accepted in the United States of America(AICPA). In carrying out this responsibility, we
planned and performed the audit to obtain reasonable assurance about whether the financial statements as a
whole are free of material misstatement, whether caused by error or fraud. Because of the nature of audit
evidence and the characteristics of fraud, we are to obtain reasonable, not absolute, assurance that material
misstatements are detected. We have no responsibility to plan and perform the audit to obtain reasonable
assurance that misstatements, whether caused by error or fraud, that are not material to the financial
statements are detected. Our audit does not relieve management or the Board of Directors of their
responsibilities.
In addition, in planning and performing our audit of the financial statements, we considered internal control over
financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinion on the financial statements but not for the purpose of
expressing an opinion on the effectiveness of the Medical Center's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Medical Center's internal control.
We also have a responsibility to communicate significant matters related to the financial statement audit that
are, in our professional judgment, relevant to the responsibilities of the Board of Directors of Providence Health
&Services—Washington and the City of Seward in overseeing the financial reporting process. We are not
required to design procedures for the purpose of identifying other matters to communicate to you.
Significant Unusual Transactions
In connection with our audit of the Medical Center's financial statements, no significant unusual transactions
were identified.
Uncorrected and Corrected Misstatements
Uncorrected Misstatements and Financial Statement Presentation and Disclosure Omissions
In connection with our audit of the Medical Center's financial statements, we have discussed with management
certain financial statement misstatements related to accounts and disclosures that have not been corrected in
123
Awi
The Board of Directors
Providence Health & Services—Washington and the City of Seward
May 3, 2023
Page 2 of 3
the Medical Center's books and records as of and for the year ended December 31, 2022. We have reported
such misstatements to management on a Summary of Audit Misstatements and have received written
representations from management that the effects of the uncorrected financial statement misstatements related
to accounts and disclosures are immaterial, both individually and in the aggregate, to the financial statements
taken as a whole. Uncorrected immaterial misstatements, or matters underlying them, could potentially cause
future-period financial statements to be materially misstated. Attached is a copy of the summary that has been
provided to, and discussed with, management.
Corrected Misstatements
In addition, during the course of our audit, we identified and discussed with management a financial statement
misstatement that was corrected by the Medical Center. Attached is a copy of the adjustment schedule that has
been discussed with management and corrected by the Medical Center.
Non-GAAP Accounting Policies and Practices
The Medical Center has adopted certain accounting policies or practices that, if applied to significant items or
transactions, are not in accordance with U.S. generally accepted accounting principles. The Medical Center has
evaluated the effect of the application of such policies and practices on the financial statements and concluded
that such effect is not material to the 2022 financial statements.
Auditors' Report
The auditor's report includes the following emphasis of matter paragraphs:
We draw attention to Note 2 of the financial statements, which describes the basis of accounting. As described
in Note 2 to the financial statements, the financial statements are prepared by the Medical Center on the basis
of the financial reporting provisions of the Agreement, which is a basis of accounting other than U.S. generally
accepted accounting principles, to meet the requirements of the Agreement. As a result, the financial
statements may not be suitable for another purpose. Our opinion is not modified with respect to this matter.
Additionally, as discussed in Note 2, in fiscal year 2022, the Medical Center adopted the provisions of
Government Accounting Standards Board (GASB) Statement No. 87, Leases. Our opinion is not modified with
respect to this manner.
Significant Accounting Policies and Practices
In connection with our audit of the Medical Center's financial statements, no new, or changes in, significant
accounting policies and practices were identified.
Qualitative Aspects of Accounting Practices
We have discussed with the Board of Directors and management our judgments about the quality, not just the
acceptability, of the Medical Center's accounting policies as applied in its financial reporting. The discussions
generally included such matters as the consistency of the Medical Center's accounting policies and their
application, and the understandability and completeness of the Medical Center's financial statements, which
include related disclosures.
Significant Accounting Estimates and Significant Financial Statement Disclosures
The preparation of the financial statements requires management of the Medical Center to make a number of
estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of
124
WA�d
The Board of Directors
Providence Health &Services—Washington and the City of Seward
May 3, 2023
Page 3 of 3
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the period.
Accounts Receivable Allowances
Management's estimate of the allowance for contractual and bad debt deductions on patient accounts
receivable is based on an analysis of historical rates of collection by payor for inpatient and outpatient services.
Management's estimate considered the impact of price increases as well as historical collection rates of
completion. We evaluated the key factors and assumptions used to develop the allowances, including possible
management bias in developing the estimate, in determining that the allowance for contractual and bad debt
deductions on patient accounts receivable is reasonable in relation to the financial statements taken as a
whole.
Noncompliance with Laws and Regulations, including Illegal Acts or Fraud
In connection with our audit of the Medical Center's financial statements, no identified or suspected instances
of non-compliance with laws and regulations, including illegal acts or fraud, have come to our attention.
Significant Difficulties Encountered During the Audit
We encountered no significant difficulties in dealing with management in performing our audit.
Management's Consultation with Other Accountants
To the best of our knowledge, management has not consulted with other accountants during the year ended
December 31, 2022.
Written Communications
Attached to this letter please find copies of the following written communications between management and us:
1. Management representation letter
Independence
Affirmation of Independence
In connection with our audit of the Medical Center, KPMG and relevant KPMG professionals have complied
with relevant ethical requirements regarding independence, as that term is defined by the professional
standards.
4 r r Yr v k W
This letter to the Board of Directors of Providence Health &Services—Washington and the City of Seward is
intended solely for the information and use of the Board of Directors of Providence Health & Services—
Washington and the City of Seward and management and is not intended to be and should not be used by
anyone other than these specified parties.
Very truly yours,
AMC, LOP
125
DocuSign Envelope ID:77CC7090-4271-42F1-BD43-87EEAA825A7A
4Providence 417 111 Ave,
Seward,AK 99664
Seward Medical Center (907)224-5205
providence.org
May 3, 2023
KPMG LLP
401 Union St, Suite 2800
Seattle, WA 98101
We are providing this letter in connection with your audit of the financial statements and the related
notes to the financial statements of Providence Seward Medical Center(the Medical Center) as of
and for the year ended December 31, 2022 and 2021, for the purpose of expressing opinions as to
whether these financial statements present fairly, in all material respects, the respective financial
positions, changes in financial positions, and, cash flows thereof in conformity with U.S. generally
accepted accounting principles (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material.
Items are considered material, regardless of size, if they involve an omission or misstatement of
accounting information that, in the light of surrounding circumstances, makes it probable that the
judgment of a reasonable person relying on the information would be changed or influenced by the
omission or misstatement.
We confirm, to the best of our knowledge and belief, having made such inquiries as we considered
necessary for the purpose of appropriately informing ourselves, as of May 3, 2023
1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter
dated November 4, 2D22, for the preparation and fair presentation of the financial statements
in accordance with U.S.GAAP.
2. We have made available to you:
a. All records, documentation, and information that is relevant to the preparation and fair
presentation of the financial statements;
b. Additional information that you have requested from us for the purpose of the audit;
c. All minutes of the meetings of Providence Alaska Region's Community Ministry Board
or summaries of actions of recent meetings for which minutes have not yet been
prepared. All significant board and committee actions are included in the summaries;
and
d. Unrestricted access and the full cooperation of personnel within the entity from whom
you determined it necessary to obtain audit evidence.
3. Except as disclosed to you in writing, there have been no communications from regulatory
agencies, governmental representatives, employees or others concerning investigations or
allegations of noncompliance with laws and regulations in any jurisdiction (including those
126
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May 3, 2023
Page 2 of 5
related to the Medicare and Medicaid antifraud and abuse statutes), deficiencies in financial
reporting practices, or other matters that could have a material adverse effect on the financial
statements.
4. There are no known instances of non-compliance or suspected non-compliance with laws
and regulations, such as those related to the Medicare and Medicaid antifraud and abuse
statutes, including but not limited to the Anti-Kickback Statute, Limitations on Certain
Physician Referrals (commonly referred to as the"Stark law"), and the False Claims Act,
whose effects should be considered when preparing the financial statements.
5. All material transactions have been recorded in the accounting records and are reflected in
the financial statements.
6. There are no side agreements or other arrangements (either written or oral).
7. All events subsequent to the date of the statement of net position and through the date of this
fetter for which U.S. GAAP requires adjustment or disclosure have been adjusted or
disclosed.
8. The effects of all known actual or possible litigation and claims have been accounted for and
disclosed in accordance with paragraphs 96— 113 of Governmental Accounting Standards
Board (GASB) Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989 FASB and A1CPA Pronouncements.
9. We are not aware of any pending or threatened litigation, claims, and assessments whose
effects should be considered when preparing the financial statements.
10. The effects of the uncorrected financial statement misstatements summarized in the
accompanying schedule is immaterial, both individually and in the aggregate, to the financial
statements for each respective opinion unit.
11. We acknowledge our responsibility for the design, implementation, and maintenance of
programs and controls to prevent, deter, and detect fraud; for adopting sound accounting
policies; and for the design, implementation, and maintenance of internal control relevant to
the preparation and fair presentation of the financial statements and to provide reasonable
assurance against the possibility of misstatements that are material to the financial
statements, whether due to error or fraud. We understand that the term"fraud" is defined as
an intentional act by one or more individuals among management, those charged with
governance, employees, or third parties, involving the use of deception that results in a
misstatement in financial statements that are the subject of an audit.
12. We have disclosed to you all deficiencies in the design or operation of internal control over
financial reporting of which we are aware, which could adversely affect the Medical Center's
ability to initiate, authorize, record, process, or report financial data. We have separately
disclosed to you all such deficiencies that we believe to be significant deficiencies or material
weaknesses in internal control over financial reporting, as those terms are defined in AU-C
Section 265.07, Communicating Internal Control Related Matters Identified in an Audit.
127
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13. We have disclosed to you the results of our assessment of the risk that the financial
statements may be materially misstated as a result of fraud.
14. We have no knowledge of any fraud or suspected fraud affecting the Medical Center
involving:
a. Management,
b. Employees who have significant roles in internal control, or
c. Others where the fraud could have a material effect on the financial statements.
15. We have no knowledge of any allegations of fraud, or suspected fraud, affecting the Medical
Center's financial statements communicated by employees, former employees, regulators, or
others.
16. We have no knowledge of any officer or director of the Medical Center, or any other person
acting under the direction thereof, having taken any action to fraudulently influence, coerce,
manipulate, or mislead you during your audit.
17. The methods, data, and significant assumptions used by us in making accounting estimates
and their related disclosures are appropriate to achieve recognition, measurement, or
disclosure that is reasonable in accordance with U.S. GAAP.
18. We have disclosed to you the identity of all our related parties and all the related party
relationships and transactions of which we are aware.
19. The following have been properly recorded or disclosed in the financial statements:
a. Related party relationships and transactions, of which we are aware, in
accordance with U.S. GAAP, including sales, purchases, loans, transfers, leasing
arrangements, guarantees, ongoing contractual commitments and amounts
receivable from or payable to related parties.The term "related party" refers to
government's related organizations,joint ventures, and jointly governed
organizations, as defined in GASB Statement No. 14, The Financial Reporting
Entity, as amended; elected and appointed officials of the government; its
management; members of the immediate families of elected or appointed officials
of the government and its management; and other parties with which the
government may deal if one party can significantly influence the management or
operating policies of the other to an extent that one of the transacting parties might
be prevented from fully pursuing its own separate interests. Another party also is a
related party if it can significantly influence the management or operating policies
of the transacting parties or if it has an ownership interest in one of the transacting
parties and can significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.
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b. Guarantees, whether written or oral, under which the Medical Center is contingently
liable.
c. The existence of and transactions with joint ventures and other related organizations.
20, The Medical Center has satisfactory title to all owned assets, and there are no liens or
encumbrances on such assets, nor has any asset been pledged as collateral.
21. The Medical Center has complied with all aspects of contractual agreements that would have
a material effect on the financial statements in the event of noncompliance.
22. Billings to third-party payors comply in all material respects with applicable coding guidelines
(e.g., ICD-10-CM and CPT-4) and laws and regulations(including those dealing with
Medicare and Medicaid antifraud and abuse) and only reflect charges for goods and services
that were medically necessary, ordered in writing by a treating physician, properly approved
by regulatory bodies (for example, the Food and Drug Administration), if required, and
properly rendered.
23. We have disclosed to you all accounting policies and practices we have adopted that, if
applied to significant items or transactions, would not be in accordance with U.S. GAAP. We
have evaluated the impact of the application of each such policy and practice, both
individually and in the aggregate, on the Medical Center's current period financial statements,
and the expected impact of each such policy and practice on future periods'financial
reporting. We believe the effect of these policies and practices on the financial statements is
not material. Furthermore, we do not believe the impact of the application of these policies
and practices will be material to the financial statements in future periods.
24. To the best of our knowledge and belief, we have provided you with a complete and accurate
listing of our affiliates as defined by the AICPA Code of Professional Conduct interpretation
ET 1.224.020, State and Local Government Client Affiliates.
25, Management is responsible for the accuracy and propriety of all cost reports filed and all the
required Medicare, Medicaid, and similar cost reports have been properly filed. All costs
reflected on such reports are appropriate and allowable under applicable reimbursement
rules and regulations and are patient related and properly allocated to applicable payors. The
reimbursement methodologies and principles employed are in accordance with applicable
rules and regulations. All items required to be disclosed, including disputed costs that are
being claimed to establish a basis for a subsequent appeal, have been fully disclosed in the
cost report. Recorded third-party settlements include differences between filed (and to be
filed) cost reports and calculated settlements, which are necessary based on historical
experience or new or ambiguous regulations that may be subject to differing interpretations
and audit adjustments by intermediaries, third-party payors, or other regulatory agencies.
While management believes the entity is entitled to all the amounts claimed on the cost
reports, management also believes the amounts of these differences are appropriate.
26. Based on our determination letter, the Entities have been classified as divisions of the City
under Section 115(a) of the Internal Revenue Code, and since the date of our determination
129
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letters, no changes have occurred in the organization or its operations that would change this
classification.
27. There are no representations provided in connection with your audits of the Entities' financial
statements as of December 31, 2021 and for the year then ended that requires modification.
28. We have properly recorded or disclosed in the financial statements significant relationships
with affiliated organizations, and the financial statements of those organizations, where
required.
29. In accordance with Government Auditing Standards, we have identified to you all previous
audits, attestation engagements, and other studies that related to the objectives of this audit,
including whether related recommendations have been implemented.
30. KPMG LLP assisted management in drafting the financial statements and notes. In
accordance with Government Auditing Standards, we confirm that we have reviewed,
approved, and accept responsibility for the financial statements and notes.
31. The Medical Center have no plans or intentions that may materially affect the carrying value
or classification of assets, deferred outflows of resources, liabilities, and deferred inflows of
resources.
Very truly yours,
Providence Seward Medical Center
EDocu5igned 6y:
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Amy Miller
Regional Chief Financial Officer
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Si'gnedby:
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Jim Martin
Group VP Controller
130
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Summary of Audit Misstatements-Corrected
Entity:Providence Seward Medical Center
For Period Ended:December 31,2022
Amounts 1n7 currency units
Entry
Balance sheet Income statement
Factual,
Misstatement in
ID Description of misstatement judgmental oraccounts or in Accounts(if applicable) Debit (Credit) Debit (Credit)
projected
disclosure?
misstatement?
Other current liabilities 234,417
An entry related to
AM3 equipment additions was Factual Accounts
incorrectly recorded, payable to Providence Health
and Services (234,417�
234,417 (234,417)
132
�r
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health & Services — Washington)
Financial Statements
December 31 , 2022 and 2021
(With Independent Auditors' Report Thereon)
133
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Table of Contents
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Position —Contractual Basis 3
Statements of Revenues, Expenses, and Changes in Net Position —Contractual Basis 4
Statements of Cash Flows—Contractual Basis 5
Notes to Financial Statements 6
134
it
811LE49 Ed
KPMG LLP
Suite 2800
401 Union Street
Seattle,WA 98101
Independent Auditors' Report
The Board of Directors
Providence Health &Services—Washington and the City of Seward:
We have audited the financial statements of Providence Seward Medical Center(the Medical Center), a
hospital owned by the City of Seward, Alaska (the City)and managed by Providence Health &Services—
Washington (a Washington nonprofit corporation), which comprise the statements of net position—contractual
basis as of December 31, 2022 and 2021, and the related statements of revenues, expenses, and changes in
net position--contractual basis; and statement of cash flows—contractual basis for the years then ended, and
the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the contractual
basis net position of the Medical Center as of December 31, 2022 and 2021, and the contractual basis changes
in net position and contractual basis cash flows thereof for the years then ended in accordance with the
financial reporting provisions of the Management and Operating Agreement between Providence Health &
Services—Washington and the City(the Agreement) in Note 2.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS). Our responsibilities under those standards are further described in the Auditors'
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of the Medical Center and to meet our other ethical responsibilities, in accordance with the
relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
Basis of Accounting
We draw attention to Note 2 of the financial statements,which describes the basis of accounting. As described
in Note 2 to the financial statements, the financial statements are prepared by the Medical Center on the basis
of the financial reporting provisions of the Agreement, which is a basis of accounting other than U.S. generally
accepted accounting principles, to meet the requirements of the Agreement. As a result, the financial
statements may not be suitable for another purpose. Our opinion is not modified with respect to this matter.
Adoption of New Accounting Pronouncement
Additionally, as discussed in Note 2, in fiscal year 2022, the Medical Center adopted the provisions of
Government Accounting Standards Board (GASB)Statement No. 87, Leases. Our opinion is not modified with
respect to this manner.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the financial reporting provisions of the Agreement. Management is also responsible for the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement,whether due to fraud or error.
135
Auditors'Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement,whether due to fraud or error, and to issue an auditors' report that includes our
opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not
a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when
it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in
the aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GARS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Medical Center's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in ourjudgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Medical Center's ability to continue as a going concern for a reasonable period
of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control related matters that
we identified during the audit.
Restriction on Use
Our report is intended solely for the information and use of the Board of Directors and management of
Providence Health &Services—Washington, the City, the State of Alaska Department of Health and Social
Services, and Altman, Rogers& Co., and is not intended to be and should not be used by anyone other than
these specified parties.
OW(Cs LLP
Seattle, Washington
May 3, 2023
2
136
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services-Washington)
Statements of Net Position-Contractual Basis
December 31, 2022 and 2021
(in thousands of dollars)
Assets 2022 2021
Current assets:
Cash and cash equivalents $ 5,946 1,197
Accounts receivable, less allowance for bad debts of$1,798 in
2022 and $2,052 in 2021 5,471 6,395
Other current assets 506 797
Total current assets 11,923 8,389
Capital assets, net 1,775 1,134
Funds held for capital additions 1,243 1,175
Other long-term assets 77 70
Total assets $ 15,018 10,768
Liabilities and Net Position
Current liabilities:
Accounts payable $ 1,018 1,250
Accrued compensation 1,219 1,106
Payable to Providence Health & Services-Washington 3,842 2,222
Due to contractual agencies 166 581
Current portion of lease liabilities 113 131
Other current liabilities 754 1,014
Total current liabilities 7,112 6,304
Other long-term liabilities 1,573 1,336
Long-term lease liabilities 1,157 686
Total liabilities 9,842 8,326
Net position:
Net investment in capital assets 505 317
Restricted 54 51
Unrestricted 4,617 2,074
Total net position 5,176 2,442
Total liabilities and net position $ 15,018 10,768
See accompanying notes to financial statements.
3
137
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health & Services—Washington)
Statements of Revenues, Expenses, and Changes in Net Position—Contractual Basis
Years ended December 31, 2022 and 2021
(In thousands of dollars)
2022 2021
Operating revenues:
Net patient service revenues, net of provision for bad debts
$2,586 in 2022 and$2,589 in 2021 $ 29,525 28,228
Other revenues 509 309
Total operating revenues 30,034 28,537
Operating expenses:
Salaries and wages 15,024 13,778
Employee benefits 3,407 3,282
Professional fees 169 94
Purchased services 3,236 2,898
Supplies 1,378 1,104
Depreciation and amortization 379 250
Other 1,070 1,175
Total operating expenses 24,663 22,581
Operating income 5,371 5,956
Nonoperating revenues 306 1,486
Excess of revenue over expenses 5,677 7,442
Restricted contributions and other 3 (10)
Change in net position before transfers 5,680 7,432
Transfers to the City of Seward (2,946) (3,084)
Change in net position 2,734 4,348
Net position—beginning of year 2,442 (1,906)
Net position—end of year $ 5,176 2,442
See accompanying notes to financial statements.
4
138
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health & Services—Washington)
Statements of Cash Flows—Contractual Basis
Years ended December 31, 2022 and 2021
(in thousands of dollars)
2022 2021
Cash flows from operating activities:
Cash received for patient care $ 30,884 24,407
Cash received for other services 509 309
Cash paid to employees (18,318) (17,073)
Cash paid to suppliers and others (5,055) (5,454)
Net cash provided by operating activities 8,020 2,189
Cash flows from noncapital financing activity:
Transfers to City of Seward (2,946) (3,084)
Provider Relief Funding — 277
Repayments of Provider Relief Funding — (2,019)
Net cash used in noncapital financing activity (2,946) (4,826)
Cash flows from capital and related financing activity:
Principal payments on financed purchase obligations (92) (72)
Cash paid for principal and interest on leases (233) (170)
Net cash used in capital and related financing activity (325) (242)
Increase(decrease) in cash and cash equivalents 4,749 (2,879)
Cash and cash equivalents, beginning of year 1,197 4,076
Cash and cash equivalents, end of year $ 5,946 1,197
Reconciliation of operating income to net cash provided by
operating activities:
Operating income $ 5,371 5,956
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation and amortization 379 250
Provision for bad debts 2,586 2,589
Changes in operating assets and liabilities (316) (6,606)
Net cash provided by operating activities $ 8,020 2,189
See accompanying notes to financial statements.
5
139
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
(1) Organization
Providence Seward Medical Center(the Medical Center) is a hospital owned by the City of Seward, Alaska
(the City)and managed by Providence Health & Services—Washington (a Washington nonprofit
corporation)(the Corporation). The Medical Center is an acute care and long-term care facility located in
Seward, Alaska.
Effective October 8, 2008, the Corporation and the City entered into a Management and Operating
Agreement(the Agreement)whereby the Corporation manages the Medical Center while all financial risks
and rewards from the operations of the Medical Center remain with the City. The City will fund shortfalls at
the Medical Center.
The Medical Center property, including the facility, is owned by the City and is not recorded on the Medical
Center's financial statements, and per the Agreement, the cost of such property is not charged to the
Medical Center.
Under the Agreement, the Medical Center pays only for directly identifiable administrative costs and
overhead costs, up to a specified limit, attributable to the Medical Center. All management fees and costs
reimbursed are included in purchased services in the accompanying statements of revenues, expenses,
and changes in net position—contractual basis.
The Medical Center pays a management fee to the Corporation according to the terms of the Agreement.
Management fees were $856 and $865 for the years ended December 31, 2022 and 2021, respectively,
and are included in purchased services in the accompanying statements of revenues, expenses, and
changes in net position—contractual basis.
(2) Summary of Significant Accounting Policies
(a) Measurement Focus and Basis of Accounting
The Medical Center reports as business-type activities, as defined by Governmental Accounting
Standards Board (GASB) Statement No. 34, Basic Financial Statements—and Management's
Discussion and Analysis—for State and Local Governments. Business-type activities are those that are
financed in whole or in part by fees charged to external parties for goods or services.
The financial statements of the Medical Center are prepared in accordance with the Agreement
between the Corporation and the City.Accordingly, the Medical Center's financial statements have
been prepared using the economic resource measurement focus and the accrual basis of accounting in
accordance with U.S. generally accepted accounting principles as prescribed by GASB, except they do
not include capital assets or depreciation expenses related to property, plant, and equipment of the
Medical Center, purchased or constructed by the City. These financial statements also do not include
long-term debt and related interest expenses related to the funding of purchase or construction of
property, plant, and equipment by the City.
These financial statements also exclude Management's Discussion and Analysis, which is required by
GASB Statement No. 34.
6 (Continued)
140
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
Measurement focus indicates the type of resources being measured, such as current financial
resources or economic resources. The basis of accounting indicates the timing of transactions or
events for recognition in the financial statements. Under the accrual basis, revenues are recognized
when earned and expenses are recorded when liabilities are incurred without regard to receipt or
disbursement of cash.
(b) Use of Estimates
The preparation of the financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
(c) Cash and Cash Equivalents
Cash and cash equivalents include cash and investments in highly liquid instruments with an original
maturity of three months or less.
Custodial credit risk for deposits is the risk that in the event of a financial institution failure, the Medical
Center's deposits may not be returned. The bank deposits are held with financial institutions and are
insured or collateralized. For the periods disclosed, the Federal Deposit Insurance Corporation
insurance was $250. As of December 31, 2022 and 2021, $5,745 and $958, respectively, of the
Medical Center's bank balance was subject to custodial credit risk.
(d) Classification of Revenues and Expenses
The Medical Center's financial statements of revenues, expenses, and changes in net position —
contractual basis distinguish between operating revenues, expenses, nonoperating revenues, and
capital contributions. Operating revenues, such as patient service revenue, result from exchange
transactions associated with providing healthcare services—the Medical Center's primary business.
Exchange transactions are those in which each party to the transaction receives and gives up
essentially equal values. Nonexchange revenues are reported as nonoperating revenues. As the City
reports the Medical Center as a blended component unit, nonexchange transactions between the two
entities are reported as transfers in the statements of revenues, expenses, and changes in net
position—contractual basis. Operating expenses are all expenses incurred to provide healthcare
services, other than financing costs.
(e) Capital Assets and Depreciation
Capital assets(primarily movable equipment)are stated at cost. Improvements and replacements of
plant and equipment are capitalized. Maintenance and repairs are expensed as incurred. The cost of
the capital assets sold or retired and the related accumulated depreciation are removed from the
accounts, and the resulting gain or loss is recognized at the time of disposal. The provision for
depreciation is determined by the straight-line method, which allocates the cost of capital assets
equally over their estimated useful lives. The estimated useful lives of movable equipment used by the
Medical Center are 3 to 15 years.
7 (Continued)
141
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health & Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(in thousands of dollars)
(fJ Net Position
Net position of the Medical Center is classified in the following three components:
(i) Net Investment in Capita!Assets
This component of net position consists of capital assets net of accumulated depreciation and
leases net of accumulated amortization.
(ii) Restricted
This component of net position consists of noncapitai assets that must be used for a particular
purpose, as specified by creditors, grantors, or contributors external to the Medical Center. When
both restricted and unrestricted resources are available for use, generally it is the Medical Center's
policy to use restricted resources first, and then unrestricted resources when they are needed.
(iii) Unrestricted
This component consists of all other funds available to the Medical Center that do not meet the
definition of net investment in capital assets or restricted for capital acquisition. If expenses are
incurred in excess of available funds the net position is reported as a deficit.
(g) Income Taxes
The Medical Center is a division of the City, and is exempt from federal income taxes, except on
unrelated business income, under Section 115(a) of the Internal Revenue Code.
(h) Leases
The Medical Center enters into noncancellable leases primarily for buildings and equipment. For leases
with a maximum possible term of 12 months or less at commencement, the Medical Center recognizes
expense based on the terms of the lease contract. For all other leases,the Medical Center recognizes
a lease liability, which is recorded within current portion of lease liabilities and long-term lease liabilities
in the statements of net position and a right-to-use lease asset, net of accumulated amortization at the
present value of payments expected to be made throughout the lease term,which is recorded in capital
assets, net. The Medical Center uses its estimated incremental borrowing rate based on information
available at the commencement date of the lease in determining the present value of lease payments
unless the rate that the lessor charges is known. Variable lease payments, other than those payments
that depend on an index or rate or are fixed in substance, are excluded from the measurement of the
lease and are expensed as incurred.
8 (Continued)
142
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
Subsequently, the lease liability is reduced by the principal portion of lease payments made. Interest
expense is recognized ratably over the contract term. The right-to-use lease asset is initially measured
as the initial amount of the lease liability, plus lease payments made at or before the lease
commencement date, plus any initial direct costs ancillary to placing the underlying asset into service,
less any lease incentives received at or before the lease commencement date. Subsequently, the
right-to-use lease asset is amortized on a straight-line basis over the shorter of the lease term or the
useful life of the underlying asset which is recorded within depreciation and amortization in the
statements of revenues, expenses, and changes in net position. Some leases include one or more
renewal options which are at the Medical Center's discretion and if it is reasonably certain that the
renewal options will be exercised by the Medical Center, the renewal options' payments and term are
included in the Medical Center's measurement of the lease liability and right-to-use lease asset.
{i) Recently Issued Accounting Standards
In June 2017, the GASB issued Statement No. 87, Leases, which is effective for the fiscal year ending
December 31, 2022, as amended by the issuance of Statement No. 95. The Statement changes the
previous classification of lease arrangements as either operating or capital leases and establishes a
single mode for lease accounting based on the foundation principle that leases represent a financing
transaction associated with the right to use an underlying asset. The Statement applies to contracts
that the right to use a nonfinancial asset in an exchange or exchange-like transaction for a term
exceeding 12 months. Lessees are required to recognize a lease receivable and deferred inflow of
resources. The Medical Center applied the standard retroactively to the period ending December 31,
2021. For the year ended December 31, 2021, the cumulative effect of adopting GASB Statement
No. 87 was a $202 increase in lease asset and lease liability and $0 change in net position.
(3) Covid-19 Pandemic and CARES Act Funding
The Medical Center has received relief in the form of grants and advance payments from the Coronavirus
Aid Relief and Economic Security("CARES")Act. The Medical Center received cumulative payments of
approximately$4,451 in total grants from the CARES Act, including $0 and $277 received during the years
ended December 31, 2022 and 2021, respectively. Substantially all of these amounts have been
recognized as other operating revenue, including $305 and $1,478 recognized during the years ended
December 31, 2022 and 2021. During the year ended December 31, 2021, $2,019 was paid back to the
U.S. Department of Health and Human Services.
In 2020, the Centers for Medicare& Medicaid Services ("CMS")distributed $954 of COVID-19 Accelerated
and Advance Payments("CAAPs")to the Medical Center in response to the COVID-19 Public Health
Emergency, which were repaid to CMS through the offsetting of payments. $624 and $330 was paid back
to Medicare during the year ended December 31, 2022 and 2021, respectively.
9 (Continued)
143
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
Under accounting principles generally accepted in the United States of America, management is required
to make estimates and assumptions that affect reported amounts. Accordingly, the impact of COVID-19
has increased the uncertainty associated with several of the assumptions underlying management's
estimates. COVID-19's overall impact on the Medical Center will be driven primarily by the severity and
duration of the pandemic; the pandemic's impact on the United States economy and the timing, scope, and
effectiveness of federal, state, and local governmental responses to the pandemic. Those primary drivers
are uncertain and beyond management's control and may adversely impact the Medical Center's revenue
growth, supply chain, investments, and workforce, among other aspects of the Medical Center's business.
The actual impact of COVID-19 on the Medical Center's financial statements may differ significantly from
the judgments and estimates made as of December 31, 2022.
(4) Revenue Recognition
(a) Net Patient Service Revenues
The Medical Center has agreements with governmental and other third-party payors that provide for
payments to the Medical Center at amounts different from its established charges. Payment
arrangements for major third-party payors may be based on prospectively determined rates,
reimbursed cost, discounted charges, and per diem payments.
Net patient service revenue is reported at the estimated net realizable amounts due from patients,
third-party payors, and others for services rendered, including estimated retroactive adjustments under
reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an
estimated basis in the period the related services are rendered and adjusted in future periods as final
settlements are determined. Adjustments from finalization of prior year's cost reports and other
third-party settlement estimates resulted in a decrease in net patient services revenues of$111 and
$29 for the years ended December 31, 2022 and 2021, respectively.
The mix of net patient charges for the years ended December 31, 2022 and 2021, from significant
third-party payors was as follows:
Patient service charges
2022 2021
Commercial and other insurance 30 % 36 %
Medicare 13 11
Medicaid 57 53
Total 100 % 100 %
10 (Continued)
144
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health & Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
In 2020 and 2019, the Medical Center received $1,000 from the State of Alaska for Medicaid
disproportionate share incentive payments. $0 was recognized in net patient service revenue, based on
eligible patient encounters, for both the years ended December 31, 2022 and 2021. The remaining
amount$551 as of December 31, 2022 and 2021, is included in other current liabilities in the
statements of net position.
(b) Provision for Bad Debts
The Medical Center provides for an allowance against patient accounts receivable for amounts that
ultimately become uncollectible. The Medical Center estimates this allowance based on the aging of
accounts receivable, historical collection experience by payor, and other relevant factors. There are
various factors that can impact the collection trends, such as changes in the economy, which in turn
have an impact on unemployment rates and the number of uninsured and underinsured patients, the
increased burden of copayments to be made by patients with insurance coverage, and business
practices related to collection efforts. These factors continuously change and can have an impact on
collection trends and the estimation process used by the Medical Center. The Medical Center records a
provision for bad debts in the period of services on the basis of past experience, which has historically
indicated the portion of the bill for which the patient is financially responsible is not expected to be
collected. The estimates made and changes affecting those estimates for the Medical Center for the
years ended December 31, 2022 and 2021, are summarized below:
2022 2021
Changes in allowance for bad debts:
Allowance for bad debts at beginning of year $ 2,052 1,667
Write-offs of uncollectible accounts, net of recoveries (2,840) (2,204)
Provision for bad debts 2,586 2,589
Allowance for bad debts at end of year $ 1,798 2,052
(c) Charity and Unsponsored Community Benefit Costs
The Medical Center has policies that provide for serving those without the ability to pay. The policies
also provide for discounted sliding scale payments based on the income and assets of the person
responsible for the bill. In addition to uncompensated care, the Medical Center also provides services
that benefit the poor and others in the community it serves.
Charity care is reported at cost and is determined by multiplying the charges incurred at established
rates for services rendered by the Medical Center's cost-to-charge ratio. The cost of charity care
provided by the Medical Center for the years ended December 31, 2022 and 2021, was $863 and
$268, respectively.
11 (Continued)
145
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health&Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
(5) Capital Assets
Changes in capital assets for the years ended December 31, 2022 and 2021, are as follows:
Balance, Balance,
January 1, Changes in December 31,
2022 capital assets 2022
Capital assets, being depreciated/amortized:
Movable equipment $ 739 407 1,146
Right-to-use lease assets 947 618 1,565
Total capital assets, being
depreciatedlamortized 1,686 1,025 2,711
Total capital assets at historical
cost 1,686 1,025 2,711
Less accumulated depreciationlamortization for:
Movable equipment (391) (177) (568)
Right-to-use lease assets (161) (207) (368)
Total accumulated
depreciationlamortization (552) (384) (936)
Total capital assets, net $ 1,134 641 1,775
Balance, Balance,
January 1, Changes in December 31,
2021 capital assets 2021
Capital assets, being depreciated/amortized:
Movable equipment $ 304 435 739
Right-to-use lease assets 202 745 947
Total capital assets, being
depreciated/amortized 506 1,180 1,686
Total capital assets at
historical cost 506 1,180 1,686
Less accumulated depreciationlamortization for:
Movable equipment (302) (89) (391)
Right-to-use lease assets — (161) (161)
Total accumulated
depreciationlamortization (302) (250) (552)
Total capital assets, net $ 204 930 1,134
12 (Continued)
146
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health& Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
For the year ended December 31, 2022,financed purchases of$435 and related accumulated depreciation
of$203 are included in Capital assets.
During the years ended December 31, 2022 and 2021, the City of Seward advanced funds to the Medical
Center for costs related to constructed assets. The Medical Center is constructing these assets on behalf of
the City of Seward.
(6) Leases
(a) Right-to-use Assets
The Medical Center's right-to use lease asset and related accumulated amortization accounts for the
fiscal years ended December 31, 2022, and 2021 is set forth below:
Balance, Changes in Balance,
January 1, right-to-use December 31,
2022 lease assets 2022
Right-to-use lease assets:
Building $ 928 618 1,546
Equipment 19 — 19
Total right-to-use lease assets 947 618 1,565
Less accumulated amortization for:
Building (155) (201) (356)
Equipment (6) (6) (12)
Total accumulated amortization (161) (207) (368)
Total right-to-use lease assets, net $ 786 411 1,197
Balance, Changes in Balance,
January 1, right-to-use December 31,
2021 lease assets 2021
Right-to-use lease assets:
Building $ 183 745 928
Equipment 19 — 19
Total right-to-use lease assets 202 745 947
Less accumulated amortization for:
Building — (155) (155)
Equipment — (6) (6)
Total accumulated amortization — (161) (161)
Total right-to-use lease assets, net $ 202 584 786
13 (Continued)
147
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
(b) Lease liabilities
Changes in lease liabilities during the fiscal years ended December 31, 2022, and 2021 are
summarized below:
Beginning Ending Current
balance Additions Deductions balance portion
Fiscal year ended:
December31,2022 $ 817 618 (165) 1,270 113
December31,2021 202 745 (130) 818 131
(c) Lease maturities
The following schedule shows future annual lease payments, for the next five years and in five-year
increments thereafter, as of December 31, 2022, for both principal and interest:
Princial Interest Total
2023 $ 113 62 175
2024 97 58 155
2025 106 53 159
2026 116 48 164
2027 126 42 168
2028—2032 712 103 815
Total payments $ 1,270 366 1,636
(7) Litigation and Contingencies
The healthcare industry is subject to numerous laws and regulations from federal, state, and local
governments. Compliance with these laws and regulations can be subject to future government review and
interpretation, as well as regulatory actions unknown or unasserted at this time. Government monitoring
and enforcement activity continues with respect to investigations and allegations concerning possible
violations by healthcare providers of regulations, which could result in the imposition of significant fines and
penalties, as well as significant repayments of patient services previously billed.
Management is aware of certain asserted and unasserted legal claims and regulatory matters arising in the
course of business. After consultation with legal counsel, management estimates that these matters will be
resolved without material adverse effect on the Medical Center's future financial position, results of
operations, or cash flows.
14 (Continued)
148
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services —Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
(8) Related Party Transactions
(a) Transactions with the City
In connection with the construction and operation of Seward Mountain Haven, the Medical Center
earns additional reimbursement from Medicaid through the capital add-on rate. The City and the
Medical Center have agreed on a formula to distribute the additional reimbursement to the City. In 2022
and 2021, $2,946 and $3,084, respectively, was transferred by the Medical Center to the City to pay
debt service.
The City made no transfers to the Medical Center to use at their discretion during the years ended
December 31, 2022 and 2021, respectively. The Medical Center is not obligated to reimburse the City
for transfers made in prior years.
In certain circumstances, the Medical Center acquires and constructs assets on behalf of the City.
When this occurs, the City transfers funds to the Medical Center who acquires the asset and then
transfers the asset back to the City after acquisition has been completed. These balances are reflected
in the statements of net position—contractual basis in funds held for capital additions with an offsetting
obligation to the City reflected in other long-term liabilities.As of December 31, 2022 and 2021, the
Medical Center held $1,243 and $1,175, respectively, on behalf of the City for asset acquisition and
recorded offsetting liabilities of$1,417 and$1,025, respectively, in 2022 and 2021.Additionally, as of
December 31, 2022 and 2021, the Medical Center held $196 and $287, respectively, of other current
assets purchased and costs incurred for construction of assets on behalf of the City which will be
transferred to the City upon completion.
(b) Transactions with the Corporation
(i) Payable to the Corporation
The accounting, management, and human resource functions of the Medical Center are provided
by the Corporation. All receipts and payments on behalf of the Medical Center are received or
made by the Corporation and are recorded in the accompanying statements of net position —
contractual basis. The amount payable to the Corporation has no set repayment terms and was
$3,842 and $2,222 as of December 31, 2022 and 2021, respectively.
(ii) Insurance Coverage
The Medical Center is covered for professional and general liability insurance on an occurrence
basis through the Corporation's self-insurance programs. The charge by the Corporation for annual
insurance expense was $36 and $24 for the years ended December 31, 2022 and 2021,
respectively, and was included in other operating expense on the statements of revenues,
expenses, and changes in net position—contractual basis.
15 (Continued)
149
PROVIDENCE SEWARD MEDICAL CENTER
(Managed by Providence Health &Services—Washington)
Notes to Financial Statements
December 31, 2022 and 2021
(In thousands of dollars)
(iii) Employee Benefits
All employees are employed by the Corporation. The Medical Center is not liable for employee
benefits including retirement plans and vacation and sick leave, except for the contribution
allocated by the Corporation. The Medical Center's contribution to these retirement plans for the
years ended December 31, 2022 and 2021, was $747 and $709, respectively, and was included in
the employee benefits expense on the statements of revenues, expenses, and changes in net
position—contractual basis.
(9) Subsequent Events
The Medical Center has performed an evaluation of subsequent events through May 3, 2023, which is the
date these financial statements were available to be issued.
16
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City of Seward,Alaska City Council Meeting Minutes
July 24, 2023 Volume 42, Page
CALL TO ORDER
The July 24, 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 DeMoss
Mike Calhoon Randy Wells
eh Robert Barnwell
comprising a quorum of the Council; and
Norm Regis, Acting City Manager
Stephen Sowell, Assistant City Manager
Brooks Chandler, City Attorney
Alan Nickell, Police Chief
Kris Peck, City Clerk
Jodi Kurtz, Deputy City Clerk
Excused—Finch
Absent—None
CITIZEN COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED
FOR PUBLIC HEARING
Skip Reierson, inside city limits, wanted to address the role that council played in the
decision to sell the electric utility. Reierson felt the opportunity for public input was deprived due
to the number of executive sessions. He would have preferred the work session format to include
more feedback from the public. He requested Resolutions 23-088 and 23-089 be tabled indefinitely
and instead develop a new plan to sell the electric utility. He was opposed to lowering the three-
fifths voter threshold for selling the electric utility.
Kevin Dunham, outside city limits, disagreed with the selection of Homer Electric
Association (HEA) over Chugach Electric for the proposed sale of the electric utility. Chugach
Electric had lower rates and also owned part of the natural gas field. He was opposed to the
executive sessions and wanted more public input.
Bruce Jaffa, outside city limits, spoke in opposition of Resolutions 23-088 and 23-089.
He felt the three-fifths voting threshold was being changed simply so the city could get what they
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City of Seward,Alaska City Council Meeting Minutes
July 24, 2023 Volume 42, Page
wanted. The founding fathers all spoke to the important to super majority of the three-fifths voting.
On another topic, Jaffa was surprised no members of city administration or council attended the
first Seward Electric Utility Ad Hoc Committee meeting.
Darryl Schaefermeyer, inside city limits, spoke in opposition to Resolution 23-088 and
Resolution 23-089. There was no crisis or emergency that would necessitate a change to the
Charter. Schaefermeyer didn't think that HEA could provide the same level of service as Chugach
Electric.
Sharyl Seese, inside city limits, addressed the parking issues at the Mt. Marathon hiking
trailhead. She had been calling the police to report violators who were blocking emergency access.
Seese said the current signage was inadequate and hoped it could be improved.
Christiana Smith, outside city limits, wanted Resolution 23-083 removed from consent
agenda. She felt the wording regarding children in the workplace was not specific enough. She
encouraged the city to develop family friendly workplace policy.
Carol Griswold, inside city limits, was opposed to amending the Charter to sell the utility
with a simple majority vote. She hoped the newly formed Ad Hoc Committee would be allowed
to finish their work without rushing. Griswold felt that attempting to change the Charter and repeat
attempts to sell the utility was not a wise plan. She hoped council would not support Resolution
23-088 or Resolution 23-089.
Laura Schneider, inside city limits, spoke in opposition to Resolution 23-088 and
Resolution 23-089. She hoped council would give the Ad Hoc Committee enough time to do
complete their mission statement. On another topic, Schneider recommended Action
Memorandum 23-010 be removed from consent agenda.
Casie Warner, inside city limits, requested Resolution 23-083 be removed from the
consent agenda. She felt the city policy about children in the workplace left a lot to be desired.
Lynda Paquette, outside city limits, spoke in opposition to changing the Charter's three-
fifths vote to a majority vote. She didn't think a simple majority vote would be fair to everyone.
Becky Dunn, inside city limits, said the intent of the Kenai Peninsula Borough changing
the election day was to increase voter turnout. On another topic, she was impressed that the new
Ad Hoc Committee had a lot of experts onboard. Dunn said she took a video recording of their
first meeting and uploaded it to the SAKTOWN YouTube channel. The video had already received
90 views which reflected a lot of public interest in the committee. Dunn hoped council would fail
Resolution 23-088 and Resolution 23-089 and give the Ad Hoc Committee a chance to work on
their mission.
Randall Stauffer, outside city limits, said he was a member of the new Ad Hoc
Committee. He found it disconcerting to find out Resolution 23-088 and Resolution 23-089 were
being presented to council tonight. Stauffer found it confusing as to what the Ad Hoc Committee
would be doing with their time if it was a foregone conclusion decision to sell the electric utility.
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July 24, 2023 Volume 42, Page
Shannon Thorn, inside city limits, wanted to speak to Resolution 23-083 about children
in the workplace. She didn't think children should be around the public government work
environment because it involved irate citizens. Thorn hoped the city could help with daycare for
city employees.
APPROVAL OF AGENDA AND CONSENT AGENDA
Motion (DeMoss/Osenga) Approval of Agenda and Consent Agenda
Wells removed Resolution 2023-83 from the consent agenda.
DeMoss removed Action Memorandum 2023-010 from the consent agenda.
Motion Passed Unanimous
The clerk read the following approved consent agenda items:
Approval of the June 12, 2023 City Council Meeting Minutes.
Approval of the June 26, 2023 City Council Meeting Minutes.
Approval of the July 10, 2023 City Council Meeting Minutes.
Resolution 2023-082: Authorizing The City Manager To Purchase From Belyea Company One
1,200 Amp Siemens Circuit Breaker For Installation In The Spring Creek Substation In A Not-To-
Exceed Amount Of$101,041.00
Resolution 2023-084: Authorizing The Matching Funds In The Amount Of$15,424 Towards The
City's Share Of Funding For The Scheffler Creek Flood Mitigation Project, And Appropriating
Funds
Resolution 2023-085: Authorizing The City Manager To Enter Into A Contract With AK Tree
Service, LLC, For The Purpose Of Clearing Transmission Line Corridors As Assigned By The
City's Electric Utility In An Amount Not To Exceed $350,000
Action Memorandum 2023-009: Authorizing The City Manager To Approve A Services
Agreement With Kelly Connect For The Provision Of Xerox Services
Action Memorandum 2023-010: Opposing Kenai Peninsula Borough Resolution 2023-048,
Regarding The Change In Election Date
Re-Appoint Bruce Jaffa to the Port and Commerce Advisory Board (PACAB) with a term set to
expire in July 2026
Non-objection to the renewal of liquor license #5400 —The Cookery, Restaurant/Eating Place
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July 24, 2023 Volume 42, Page
Non-objection to the renewal of liquor license #5974 — Mermaid Grotto Cafe, Restaurant/Eating
Place
SPECIAL ORDERS, PRESENTATIONS,AND REPORTS
Proclamations and Awards -None
City Manager Report
Acting City Manager Norm Regis addressed the recent tsunami alert that automatically
triggered warnings on every cell phone. The local sirens did not go off, but cell phones even as far
north as Fairbanks received the alert from the National Weather Service. In the future, this type of
alert could hopefully be narrowed down to target a more specific area.
Police Chief Alan Nickell said both the tsunami sirens and the phone alerts were valid
forms of warning. There were quite a few people who evacuated correctly; however there were
many other people chose to ignore the warning. During the incident, Police Dispatch had every
phone line lit up asking for guidance on what to do. Nickell emphasized that people need to
evacuate without hesitation and there was not time to call and ask questions. Nickell clarified that
the evacuation shelter was the Seward High School and not the hospital. The hospital cannot do
their job to help wounded people if the area is crowded with misplaced evacuees.
Assistant City Manager Stephen Sowell confirmed with council that Saturday, December
2, 2023 would be a good day for the council training session.
City Clerk Report—None
City Attorney Report
City Attorney Brooks Chandler noted that grievances were common and issues with
employees does not necessarily reflect poorly overall on the City of Seward.
Wells wanted to make it clear that the city council did as they were advised in regard to
the sale of the electric utility. Both the bidders requested their proposals be confidential. Wells
asked if Chugach was given an opportunity to make a last best offer. Chandler said that BEA
updated their original offer and Chugach Electric did not.
Other Reports and Announcements
Presentations -None
PUBLIC HEARINGS
Ordinances for Enactment—None
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City of Seward,Alaska City Council Meeting Minutes
July 24, 2023 Volume 42, Page
Resolutions Requiring Public Hearing
Resolution 2023-086: Authorizing The City Manager To Enter Into A Lease With Duchess, LLC
For Lot 5 Block 6 Fourth Of July Creek Subdivision, Seward Marine Industrial Center, Seward
Recording District, Third Judicial District, State Of Alaska
Motion (Osenga/DeMoss) Approve Resolutions 2023-086
Regis said the owner was great to work with and he recommended approval of Resolution
2023-086.
Notice of the public hearing being posted and published as required by law was noted and the
public hearing was opened.
Laura Schinder, inside city limits, spoke highly of the owner and her character.
No one else appeared and the public hearing was closed.
Motion Passed Unanimous
Resolution 2023-087: Authorizing The Maintenance And Operating Agreement With JAG Alaska
Inc. For An Additional Five-Year Period For The Shiplift And Dry Dock Area
Motion (DeMoss/Osenga) Approve Resolutions 2023-087
Regis said the owner had just signed the contract and they were ready to move forward
with this operating agreement.
Notice of the public hearing being posted and published as required by law was noted and the
public hearing was opened.
Bruce Jaffa, outside city limits, said JAG had brought stability and growth to the shipyard
industry in Seward.
Darryl Schaefermeyer,inside city limits, expressed his support and appreciation for JAG.
No one else appeared and the public hearing was closed.
Wells asked why the resolution was coming to council tonight because it was one day after
the July 23, 2023 deadline for renewal of the lease. Regis said JAG was in default for one day, but
the contract was now signed and they were moving forward.
Motion Passed Unanimous
UNFINISHED BUSINESS
Ordinances
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City of Seward,Alaska City Council Meeting Minutes
July 24, 2023 Volume 42, Page
Ordinance 2023-015: An Ordinance Of The City Council Of The City Of Seward, Alaska,
Amending Seward City Code Title 6 —Purchasing, Contracts And Professional Services For The
City Of Seward Recodification Project. This ordinance had a public hearing on June 12, 2023,
and was postponed to July 24, 2023
Motion (Already on the floor) Enact Ordinance 2023-015
Regis said the original ordinance was unfortunately introduced with a lot of errors and
would require several amendments to correct. A substitute ordinance had been provided a laydown
with all these corrections.
Motion (McClure/Wells) Enact Substitute Ordinance 2023-015
Motion Passed Unanimous
Council recessed the meeting at 8:14 p.m.
Council resumed the meeting at 8:19 p.m.
NEW BUSINESS
Resolutions
Resolution 2023-088: Submitting The Question Of Amending Seward City Charter Chapter 13.4
Disposal Of Municipal Utility Plants And Utility Property At A Regular Election In And For The
City Of Seward On October 3, 2023
Motion (Osenga/Wells) Approve Resolution 2023-088
Wells said he did research on the three-fifths super majority and asked if this was a
common practice for other cities. Chandler said he represented around a dozen communities and
was not aware of any other communities that used a super majority to sell a utility. However,
most of these communities also lacked a Charter. There was precedent to using the three-fifths
super majority in Anchorage with regard to raising taxes.
Calhoon said there was nothing else in the Charter than required a three-fifths super
majority vote.
McClure wondered what the reason was behind requiring the three-fifths vote in the
Charter. She felt the citizen feedback convinced her to vote no on this resolution.
Osenga said he would vote in favor of the resolution and send it out to the voters to make
the final decision.
Barnwell said there was a lot of community feedback saying the city was moving too fast
with this sale and the three-fifths rule would be a safeguard against hasty decisions.
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Calhoon said he had heard from many other citizens who were in favor of removing the
super majority requirement.
Motion Passed Yes: Calhoon, DeMoss, Osenga,Wells
No: Barnwell, McClure
Resolution 2023-089: Submitting The Question Of Selling The City Of Seward Electric Utility To
The Qualified City Of Seward Voters At A Regular Election In And For The City Of Seward On
October 3, 2023
Motion (Osenga/DeMoss) Approve Resolution 2023-089
Regis said that citizens had been asking when this item would come back on the ballot.
Wells said the council did everything they were guided and instructed to do per the request
of the bidders. He wished there was more time for everyone to ask more questions. At least now
the voters would know the rates were going up no matter what.
Barnwell wanted to point out to the Seward Electric Utility Ad Hoc Committee had not
had time to reach a conclusion yet. The decision to sell the utility was ultimately going to be the
voters decision. Barnwell felt the city was rushing into this and it would be wise to hit the brakes
and get more information.
Wells understood that HEA offer was extended through October and beyond that the city
would start all over. The Ad Hoc Committee would continue their work regardless of which way
the voters chose.
Calhoon supported this resolution. He didn't see it as an emergency situation, but rather a
projection of where Seward wanted to be down the road.
DeMoss noted the Ad Hoc Committee's mission was not to make a decision on whether or
not to sell the utility. McClure thanked her for the clarification.
Wells felt it would be beneficial to sell the Seward electric utility because it was falling
apart.
Barnwell didn't think the electric utility was falling apart. He was waiting for the ad hoc
committee to do their research.
Osenga supported the resolution and emphasized that it would be up to the voters to decide.
City Clerk Kris Peck asked if the ballot measure amending the Charter would take effect
immediately in regard to the other ballot measure to sell the utility. Chandler clarified that lowering
the threshold in the Charter would automatically convert the three-fifths requirement to a regular
majority for this election.
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Wells said there would be new rate study information coming out before October that
would be beneficial to the voters. The Ad Hoc Committee would be providing additional
information as well.
Motion Passed Yes: Calhoon,Wells, DeMoss, Osenga
No: Barnwell, McClure
Resolution 2023-083: Adopting Personnel Policy #2023-06: Children In The Workplace
Motion (Osenga/DeMoss) Approve Resolution 2023-083
HR Director Tammy Nickell said she sympathized with the lack of available daycare.
However,there had been several complaints about lack of productivity, crying babies, and children
running loose in the workplace. There were workarounds to alter the employee schedule and take
annual leave as needed. She said the City of Kenai allowed brief visits, while the City of Homer
and City of Soldotna banned children outright from the workplace.
Demoss appreciated the people speaking to this sensitive topic. She would love to see a
HYPER city daycare opened up with the money HYPER was given. However, given the limited
options, DeMoss understood why this policy needed to be in place.
McClure said it seemed reasonable to have this policy in place. She would also love to see
the HYPER money go towards daycare for city employees.
Motion Passed Yes: DeMoss, Osenga, Wells, Calhoon,
McClure
No: Barnwell
ACTION MEMORANDA
Action Memorandum 2023-010: Opposing Kenai Peninsula Borough Resolution 2023-048,
Regarding The Change In Election Date
Motion (Wells/Osenga) Approve Action Memorandum 2023-010
Sowell said the KPB Resolution 2023-048 was an advisory vote and he cautioned against
advisory votes in general due to their wishy-washy nature.
Peck said the other city clerks around the borough were alarmed about changing the
October election date to November. It would require the city to either follow suit or be forced to
buy election equipment to use in October. Another possible issue was competing with the State of
Alaska for the same small pool of election poll workers.
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McClure said the plan to change the election date initially sounded like a good way to
increase voter turnout, but the plan was heavily flawed. The possibility of purchasing election
equipment or competing for poll workers were deal breakers. There might be issues with a partisan
election as well.
DeMoss said she pulled it from consent agenda at the request of a citizen who wanted to
hear more information.
Motion (Wells/Osenga) Approve Action Memoranda 2023-010
Motion Passed Unanimous
OTHER NEW BUSINESS
Discuss Public Works Facility Bond
Regis said a special meeting would be required before August 11, 2023 to meet the 53-day
window for adding items on the October ballot. Administration's recommendation would be to
continue with the R&M design.
Sowell felt it would be a significant property tax burden on the community. He wanted to
do it in a way that did not have such an impact on the taxpayers.
DeMoss asked if property tax increase was the only mechanism. Sowell responded a geo
bond was also an option.
Discuss Current Plans and Updates for Obihiro Exchange
Council felt that citizens from both inside and outside city limits would be eligible for the
exchange. Ultimately, they would be unified as representing Seward.
Summary of Seward Electric Utility Ad Hoc Committee Meeting held on July 17, 2023
Regis said that Rob Montgomery would attend future Ad Hoc Committee meetings.
Administration would work on sending the Ad Hoc Committee the documents they requested.
Wells asked how many years of experience Montgomery had in the industry. Montgomery
responded that he had nearly 25 years of experience.
DeMoss did not want to change any of the mission statement. It was something it had
already been approved by council. There was no interest from council in changing the mission
statement.
Montgomery said operational side of the utility was good, but the business side was
lacking. The current salary for the utility manager was too low to entice much interest in the
position.
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July 24, 2023 Volume 42, Page
INFORMATIONAL ITEMS AND REPORTS —None
CITIZEN COMMENTS
Christiana Smith, outside city limits, thanked the HR Director for providing background
information on the children in the workplace policy. Smith was not against the policy, but rather
concerned how the policy was written. She felt there was too much leeway for the supervisor to
make exceptions which could result in inconsistencies across departments. Smith was happy to
hear one positive experience from a city employee, but she wasn't convinced it would be that way
for everyone. Smith noted was an article in the most recent Seward Journal that highlighted some
recent accomplishments from HYPER in the field of childcare.
Kevin Dunham, outside city limits, said he had 43 years of experience in the power
system. Seward has had a power system over 100 years. He didn't believe the Seward power
system was falling apart. Chugach Electric had always been a good player and felt that was untrue
to say that Chugach Electric had lied or misrepresented themselves in the bidding process. There
was no way HEA would be able to give Seward better rates than Chugach. Chugach had their gas
fields in Cook Inlet and the Kenai Reserves. Chugach would still own the line that connects to
Seward. No matter what HEA could offer, the power would still go through Chugach's line.
Dunham felt that this father Willard Dunham would be rolling in his grave at the thought of these
two upcoming ballot measures.
Laura Schnider, inside city limits, thanked the city council, the clerk's office and
administration for their work. She was disappointed that HEA and Chugach Electric were allowed
to keep all the materials confidential for such a long time. Schnider felt that after the sealed bids
were received, all presentations and materials should be open to the public. Moving forward,
Schnider wanted to see a new rate comparison over the next 10 years. She hoped new information
would help voters make an informed decision in October. Lasty, she was curious as to how HEA
seemed to know exactly what numbers to submit on their counteroffer.
Darryl Schaefermeyer,inside city limits, asked what the reasoning was behind the whole
idea to sell the electric utility. Enterprise funds were a revenue source to help keep our taxes down.
The electric fund allowed for many projects to be completed over the years while keeping property
taxes down. Over the last 10 years the electric fund had contributed over $20 million dollars. He
wanted an explanation how that divot would be replaced if the utility was sold. The money would
go to the Central Peninsula and Homer and be kept out of Seward. Schaefermeyer felt the contract
was deeply flawed and there was no mention of a stand-by plan. Schaefermeyer hoped for a real
townhall meeting and not just an HEA meet & great. Lastly, he noted that council wrote the
Request for Proposals and should have had complete control of the terms.
Jason Emmerson, outside city limits, said it was a myth that the Seward utility was falling
apart. The utility was running fine and there were no band aids required.
Lynda Paquette, outside city limits, wondered if the city could form a childcare co-op
with other large employers in Seward. On another topic, Paquette wished Rob Montgomery had
attended the initial Ad Hoc Meeting so he could have clarified their questions about the mission
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City of Seward,Alaska City Council Meeting Minutes
July 24, 2023 Volume 42, Page
statement. She looked forward to Rob Montgomery attending the Ad Hoc Committee meetings.
Paquette wanted to verify that administration would supply the Ad Hoc Committee with the
requested documents. She thanked the clerk's office, administration, and council for all their work.
Randall Stauffer, outside city limits, also wondered what drove the city to want to sell the
electric utility. He hadn't seen any evidence to support the decision. Stauffer wondered how the
city would replace the revenue lost from the Seward Electric Utility. If the people vote in October
to sell the utility, then the deliverables of the Ad Hoc Committee would be meaningless. He urged
council to be aware of the perceptions of the rate payer.
Rob Mongomery, inside city limits, emphasized that the utility was not falling apart.
However, repairs were expensive, and the costs of maintenance would impact the rates directly.
One of his fears was not investing into maintenance and technology and then end up in a bad
situation down the road. There were two options: Either rebuild from within or sell to a bigger
utility.
Skip Reierson, inside city limits, thanked council for their service. He noted that Seward
owns the utility and council could have made the conditions of the RFP to be public. There was
no need to let the bidders dictate the terms. Reierson felt a couple of work sessions would have
been fantastic way to get more discussion. He emphasized there was no rush to sell the utility.
Reierson was still waiting to see an actual rate comparison between HEA, Seward Electric, and
Chugach Electric.
Alan Nickell, outside city limits, spoke to the policy regarding children in the workplace.
He simply would not be able to allow a child in the workplace for his police officers. However,
the Police Department found creative solutions with scheduling to make it work. Nickell felt the
answer was more daycare opportunities in Seward.
COUNCIL AND ADMINISTRATION COMMENTS & RESPONSE TO CITIZEN
COMMENTS
Regis noted it was a tough meeting.
Calhoon thanked everyone for their comments tonight. He made decisions based on the
best information available and what was best for the community. Calhoon clarified that Seward
would still own the utility for an additional 12-18 months after the sale went through. That was the
reason to have the Ad Hoc Committee to continue their work regardless of the sale.
Barnwell said council voted appropriately for approving the childcare policy. He
appreciated Montgomery's candid comments as well as the citizen comments.He noted the electric
sale was a very emotional issue. Barnwell felt strongly that council had done their homework on
the issue. He found it hard to believe that HEA and Chugach rates would be much different in the
long run.
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City of Seward,Alaska City Council Meeting Minutes
July 24, 2023 Volume 42, Page
Wells hoped the community members felt their questions were answered and all the
information was available. The number of huge upcoming repairs to the electric utility was the
reason he had said the utility was falling apart.
DeMoss said some of the public comments lately had been offensive and hurtful. She
hoped citizens could treat the mayor and council with respect and refrain from abusive comments
and online bullying.
Osenga said council members took into account all public comments. He felt the Ad Hoc
Committee would be very helpful over the next couple years. Osenga thanked the Obihiro Planning
Committee for all their work and planning for the exchange programs with Japan. He lamented
not being able to travel to Obihiro as originally planned. He had fond memories of traveling to
Obihiro in high school.
McClure thanked the Ad Hoc Committee for their efforts. She thanked Bruce Jaffa for his
continued service on PACAB. She wanted to point out that Seward does not have a strong mayor
form of government. The mayor presided at the meetings and cut ribbons at ceremonies. She did
not appreciate online bullying from citizens.
ADJOURNMENT
The meeting was adjourned at 10:22 p.m.
Kris Peck Sue McClure
City Clerk Mayor
(City Seal)
175
•
Resolution 2023-090:
Accepting The Return Of$56,310.58 In Funds From The
Kenai Peninsula Borough That Was Intended For The
Japanese Creek Feasibility Study Project, And Appropriating
Funds
Documents:
• Agenda Statement
• Resolution 2023-090
• Return of Funds Email from KPB
• Resolution 2020-009
176
City Council Agenda Statement .
Meeting Date: August 14, 2023
To: City Council '
From: Norm Regis,Acting City Manager
Subject: Resolution 2023-090: Accepting The Return Of$56,310.58 In Funds From The
Kenai Peninsula Borough That Was Intended For The Japanese Creek Feasibility
Study Project,And Appropriating Funds
Background and justification:
Resolution 2020-009 authorized matching funds towards the Japanese Creek Feasibility Study, which
was devoted to obtaining better data on the flooding potential of Japanese Creek and possible
mitigation measures. The City of Seward contributed $135,000 towards the Japanese Creek
Feasibility Study. Kenai Peninsula Borough Emergency Operations Manager Brenda Ahlberg
notified the City of Seward on June 20 that $58,310.58 in funding would be returned and on July 17,
the City received the funds. In order to "accept"the return of funds and place the funding back into
the Capital Acquisition Account, the City must pass a Resolution Accepting and Appropriating the
funds.
on-Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
rtification of Funds
Total amount of funds listed in this legislation: $ 58,310.58
This legislation(✓):
Creates revenue in the amount of $ 58,310.58
x Creates expenditure in the amount of $
Creates a savings in the amount of $
Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
x Not budgeted
Not applicable
in Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking F1 Water F1 Healthcare
Motor Pool x Other Capital Acquisition
177
Note: amounts are unaudited
Available Fund Balance/Net Position $ 200,999
Finance Director Signature: c
ell 6�1
MEff-Attorney Review
RxYes Attorney Signature:
Not applicable Comments:
Administration Recommendation
eAdopt Res.
Other:
178
Sponsored by: Regis
CITY OF SEWARD,ALASKA
RESOLUTION 2023-090
A Resolution Of The City Council Of The City Of Seward, Alaska, Accepting
The Return Of$56,310.58 In Funds From The Kenai Peninsula Borough That
Was Intended For The Japanese Creek Feasibility Study Project, And
Appropriating Funds
WHEREAS, Resolution 2020-009 authorized matching funds towards the Japanese
Creek Feasibility Study; and
WHEREAS, The project was devoted to obtaining better data on the flooding
potential of Japanese Creek and possible mitigation measures; and
WHEREAS, The City of Seward contributed $135,000 towards the Japanese Creek
Feasibility Study; and
WHEREAS, The project was completed below the projected cost and the Kenai
Peninsula Borough is returning $58,310.58 to the City of Seward; and
WHEREAS, The returned funds will be appropriated back to the Capital Acquisition
Account.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
Section 1. Funding in the amount of$58,310.58 is accepted and appropriated from
Japanese Creek Flood Mitigation— City account no. 80117-0000-3710 to Capital Acquisition
Fund reserves account no. 80010-0000-3700.
Section 2. This resolution is effective upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of
August, 2023.
179
CITY OF SEWARD,ALASKA
RESOLUTION 2023-090
THE CITY OF SEWARD,ALASKA
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
180
From: Ahlbera,Brenda
To: Norm Regis;Stephen Sowell
Cc: Naneth Ambrosiani; Harbaugh.Brandi;Cinereski.Heather;Hames.Janelle; Friedersdorff.Chad;Griffith.Christina
Subject: Return of funds
Date: Friday,June 30, 2023 12:25:22 PM
Attachments: imaae001.pna
CoSeward R2020-009.pdf
Ordinance 2022-19-68.pdf
External Email:This email originated from outside of the organization. Do not click links or open attachments unless
you recognize the sender and know the content is safe.
Greetings Team Seward
The borough was recently awarded FEMA/State funds under disaster
declaration DR4161 to repair and mitigation work on Dieckgraeff Road. The
award also reimburses of preaward costs that included a portion of the City's
contribution to the USACE feasibility study in the amount of $58,310.58. Please
see attached legislation for your reference. Please feel free to contact us if
you have questions; otherwise, "da check is in the mail."
Happy Independence Day, B
Brenda Ahlberg
Emergency Manager
Community & Fiscal Projects
bahlbergCkpb.us
907-262-2098 direct
907-231-6505 mobile
907-714-2415 duty officer 24/7
00 8816 3153 0508 sat phone
907-714-2395 fax
Kenai Peninsula Borough
Emergency Response Center
253 Wilson Lane
Soldotna, AK 99669
bahlbera@kpb.us
www.kpb.us- Information by department
info.kpb.us- Updates from agencies responding to area-wide emergencies (new URL)
@KPBAlerts- Facebook Page
KENAI PENINSULA BOROUGH
144 Noah Binkley Street ,; k', .i
S-oldotna, Alaska 99669
•r
R iy
181
CITY OF SEWARD, ALASKA Sponsored by: Meszaros
RESOLUTION 2020-009
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING MATCHING FUNDS IN THE AMOUNT OF
$135,000 TOWARDS THE CITY'S SHARE OF FUNDING FOR THE
JAPANESE CREEK FEASIBILITY STUDY, AND APPROPRIATING
FUNDS
WHEREAS, Seward was built by diverting the two rivers that created our alluvial fans:
Lowell Creek was diverted by the diversion tunnel and Japanese Creek was diverted 90 degrees
to the north by a levee built following the 1986 and 1995 flood events; and
WHEREAS, the Seward City Council has adopted federal and state legislative priority
lists for many years, seeking federal and state funds to create a Japanese Creek Drainage Area
Improvement Plan; and
WHEREAS, the Japanese Creek levee now protects over $140 million in infrastructure,
including all three of our borough schools, city power plant, and Providence Mountain Haven
elder care facility; and
WHEREAS, the Japanese Creek has a history of stream damming and surge-release
floods. Debris-laden flood events have been reported I times in the last five decades, with
major flood events in 1986, 1995, 2006, and 2012; and
WHEREAS, the most recent study found the levee could be overtopped and breached in
a 10 to 20 year flood event. In the event of a landslide in the canyon, and a subsequent debris-
laden surge release, flows would have an unpredictable flow path and could cause severe and
possibly catastrophic damages along the alluvial fan; and
WHEREAS, the estimated cost of the feasibility study is $900,000, with the U.S. Army
Corps of Engineers (USACE) providing $450,000 towards this. The three local partners are to
provide the $450,000 match: the Kenai Peninsula Borough Mayor is in support of providing a
$135,000 match and a resolution will go before the assembly in February, 2020; and the Seward
Bear Creek Flood Service Area has allocated $180,000 of its funds; and
WHEREAS, following the feasibility study, construction of the selected preferred
alternative will require a local match of up to 35%. The feasibility study on its own will provide
important information regarding the current status of the levee and alternatives for flood risk
mitigation and sediment management.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
182
CITY OF SEWARD,ALASKA
RESOLUTION 2020-009
Section 1. The City Council hereby authorizes a City matching contribution of$135,000
toward the Japanese Creek Feasibility Study.
Section 2. Funding in the amount of$135,000 is hereby appropriated from the Capital
Acquisition Fund reserves account no. 80010-0000-3710-0000-80117 to the project contracted
services account no.80117- 0000-7009.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this
271'day of January, 2020.
T MSE , ASKA
Christy T rry, M r
0.
AYES: Osenga, Baclaan, Butts, McClure, Terry
NOES: None
ABSENT: Seese, Lane
ABSTAIN: None
ATTEST:
Brenda Y. ffafl , MMC
City Clerk
•ynsa+arr��
(City Se 01i SE.!,`•.�
Of
+
SEAL• Q
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*rF OF A N:"
183
Council Agenda Statement
Meeting Date: January 27, 2020
To: City Council
Through: Scott Meszaros, City Manager
From: Jackie C. Wilde, Community Development Director
Agenda Item: A Resolution of The City Council of The City of Seward, Alaska,
Authorizing Matching Funds in The Amount Of$13 5,000 Towards the
City's Share ofFunding for The Japanese Creek Feasibility Study, and
Appropriati ds
BACKGROUND & 3-USTIFICATION:
The Seward City Council has adopted federal and state legislative priority lists for many years,
seeking federal and state funds to create a Japanese Creek Drainage Area Improvement Plan.
Seward was built by diverting the two rivers that created our alluvial fans. Lowell Creek was
diverted by the diversion tunnel and Japanese Creek was diverted 90 degrees to the north by a
levee built following the 1986 and 1995 flood events. Japanese Creek has a history of stream
damming and surge-release floods. Debris-laden flood events have been reported 11 times in
the last 5 decades with major flood events in 1986, 1995, 2006, and 2012. The most recent
study found the levee could be overtopped and breached in a 10 to 20-year flood event. In the
event of a landslide in the canyon, and subsequent debris laden surge release, flows would have
an unpredictable flow path and could cause severe and possibly catastrophic damages along the
alluvial fan.
The Japanese Creek levee now protects over $140 million in infrastructure, including all three
of our borough schools, city power plant, and Providence Mountain Haven elder care facility.
The Seward/Bear Creek Flood Service Area Board has determined Japanese Creek levee as
their number one priority for risk mitigation. In 2010, the City requested assistance from the
USACE under the Continuing Authorities Program Section 205 of the 1948 Flood Control Act,
as amended. In 2013, the US Army Corps of Engineers completed a $1 OOK preliminary study
and authorized the project to progress to the feasibility study phase. In 2019, the Borough
Mayor, Seward City Manager and SBCFSA board chair requested the USACE move forward
with the feasibility study and agreed to share the cost of the required funding match.
The estimated cost of the feasibility study is $900K, with the USACE providing $450K towards
this. The three local partners are to provide the $450K match. The Kenai Peninsula Borough
Mayor is in support of providing a$135,000 match and a resolution will go before the assembly
in February and the Seward Bear Creek Flood Service Area has allocated$180,000 of its funds.
Following the feasibility study, construction of the selected preferred alternative will require a
local match of up to 35%.
184
INTENT
This $ 135,000 contribution will be used to conduct a feasibility study that will provide important
information regarding the current status of the levee and alternatives for flood risk mitigation and
sediment management.
CONSISTENCY CHECKLIST: Yes No N/A
Comprehensive Plan (2030, approved by Council May 30, 2017) x
14 Natural Hazards 14.2 14.2.3 (Pages 31 &32)
2. Strategic Plan (Approved by Council Resolution 99-043): x
3. Other x
FISCAL NOTE:
Matching funds for this study will be appropriated from the Capital Acquisition Fund. Current
reserve levels in this fund are just over$1.6 million.
,---Approved by Finance Department —1 �
ATTORNEY REVIEW: Yes No Not Applicable—X
RECOMMENDATION:
City Council approves Resolution 2020- 009 Authorizing Matching Funds in The Amount Of
$135,000 Towards the City's Share of Funding for The Japanese Creek Feasibility Study, and
Appropriating Funds.
185
•
Resolution 2023-091 :
Approving An Employment Agreement Between The City Of
Seward And Kathleen Sorensen For City Manager Services
Documents:
• Agenda Statement
• Resolution 2023-091
• Employment Agreement
186
City Council Agenda Statement
Meeting Date: August 14, 2023 `x
To: City Council
From: Sue McClure, Mayor
Subject: Resolution 2023-091:Approving An Employment Agreement Between The City Of
Seward And Kathleen Sorensen For City Manager Services
Background and justification:
On March 10, 2023, City Manager Janette Bower gave her resignation with a final date of May 10, 2023.
The City Manager position was listed on the city of Seward web page and various other sites. A total of
five applications were received and a special meeting was scheduled for June 12, 2023,to review all
applications. City Council chose to schedule interviews for all five candidates to be held on June 28,
2023. City Council made a motion to hire Kathleen Sorensen based on successful salary and contract
negotiations. Salary and contract negotiations are completed.
on—Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan: 3.7.1.3 Improve quality of City Governmental Services
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: S 145,000
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
x Has no fiscal impact
Funds are (✓):
x Budgeted Line item(s): City Manager Personnel Budget
Not budgeted
Not applicable
Fund Balance Information
Affected Fund(✓):
x General SMIC Electric Wastewater
Boat Harbor Parking Water Healthcare
Motor Pool Other
Note: amounts are unaudited
Fund Balance/Net position—restricted $
Fund Balance/Net position unrestricted/unassigned $
187
Available Unrestricted Cash Balance: $
No fiscal impact, already in
Finance Director Signature: budget
Attorne Review
eYes Attorney Signature:
Not applicable Comments:
Administration Recommendation
x Approve Res.
Other:
188
Sponsored by: McClure
CITY OF SEWARD,ALASKA
RESOLUTION 2023-091
A Resolution Of The City Council Of The City Of Seward,Alaska,Approving An
Employment Agreement Between The City Of Seward And Kathleen Sorensen For City
Manager Services
WHEREAS, City Manager Janette Bower gave her resignation on March 10, 2023, with
a final date of May 10, 2023; and
WHEREAS,the City Manager position was listed on the city of Seward web page and
various other sites; and
WHEREAS, A total of five applications were received and a special meeting was
scheduled for June 12, 2023, to review all applications; and
WHEREAS, City Council choose to schedule interviews for all five candidates to be
held on June 28, 2023; and
WHEREAS, after the interviews were conducted, City Council made a motion to hire
Kathleen Sorensen based on successful salary and contract negotiations.
WHEREAS, salary and contract negotiations are completed.
NOW, THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SEWARD,ALASKA that:
Section 1. The Seward City Council hereby approves the contract between the City of
Seward and Kathleen Sorensen in substantial form as attached hereto.
Section 2. The official date of hire for Kathleen Sorensen is September 10, 2023.
Section 3.Funding for this contract shall come from the City Manager budget.
Section 4. This resolution shall take effect upon adoption.
PASSED AND APPROVED by the City Council of the Cit of Seward, Alaska, this 14th day of
August 2023.
189
CITY OF SEWARD,ALASKA
RESOLUTION 2023-091
THE CITY OF SEWARD,ALASKA
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
190
1 .40
CITY MANAGER EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), effective as of, September 10, 2023,
is between the City of Seward, Alaska ("City") and Kathleen Sorensen ("Manager").
RECITALS
WHEREAS, the City wishes to employ Kathleen Sorensen as City Manager and
Kathleen Sorensen has agreed to serve the City in the capacity of City Manager as
provided for in this Agreement,
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants set forth in this Agreement, the City and Manager agree as follows:
Section 1. Duties of Manager.
A. Scope of Duties. Manager shall be employed by City as, and hold the title
of, "City Manager" of the City. Manager shall serve at the pleasure of, and report directly
to, the Seward City Council ("Council"). Manager shall perform all duties and discharge
all responsibilities of that position as prescribed by law, including but not limited to Seward
City Code 2.20.035. City Manager shall be aware of any changes in the laws governing
her duties and obligations under law and comply with those changes. Manager shall
maintain residency within ten miles from mile marker zero of the Seward Highway during
the entire term of this Agreement.
B. Confidentiality. Manager recognizes that she will receive and have access
to information of a confidential nature. Manager agrees any confidential information
obtained as a result of the City Manager position will be maintained as confidential to the
extent authorized by law. The City may terminate this agreement without notice and hold
Manager accountable to the greatest extent permitted by law if she violates this provision.
In order to find a violation of this provision, Manager's breach of confidentiality must be
evident in a document, at a public event or conceded by Manager.
Section 2. Compensation and Benefits of Manager.
A. Salary. Manager shall receive an annualized salary of ONE HUNDRED
FORTY-FIVE THOUSAND DOLLARS ($145,000.00) during the term of this Agreement,
payable in regular installments at the time other City employees are paid. All
compensation paid to Manager shall be subject to required employment deductions,
taxes, and contributions.
B. Exempt Status. Manager acknowledges that the position of Manager is
exempt from the overtime requirements of state and federal wage and hour laws and as
such, Manager is expected to work the hours necessary to accomplish the goals and
requirements of the position.
191
1 .40
C. Retirement Benefits. Manager shall be enrolled in the Alaska Public
Employees Retirement System (PERS) during the term of this Agreement, so long as the
City participates in the System.
D. Health and Welfare Benefits. Manager shall receive group medical and
dental insurance coverage as provided to the employees of City, including coverage for
family members, subject to the requirements of the applicable plan.
E. Paid Leave. Manager shall accrue leave of 13 1/3 hours per month (160
hours per year) for use for personal absences, vacation, and sick leave. Notwithstanding
the leave accrual provided under this section, Manager shall additionally receive a one-
time allotment of ninety (90) hours of leave effective at the commencement of the term of
this agreement. Leave continues to accrue when Manager is on paid leave. Manager shall
keep the Council generally apprised of planned absences; leave exceeding five (5)
consecutive days in duration must be approved by the Council. Upon employment
separation, including expiration of this Agreement, Manager shall receive payment for all
accrued, unused leave, in accordance with City policy and practices, so long as Manager
is in compliance with this Agreement. Any payment of accrued unused paid leave shall
be subject to all deductions, taxes and contributions required by law.
F. Travel, Meetings, and Professional Development Expenses. Manager shall
receive reimbursement from City for reasonable lodging and meal expenses while
travelling out-of-town for meetings or professional development in the interests of the City,
specifically to include the AML annual conference, and any other events as may be
approved by Council. City shall pay for professional dues for ICMA membership, and
other subscriptions or dues for participation in national, regional, state, and local
associations and organizations for the Manager's continued professional growth and
advancement, as may be approved by the Council.
G. Use of City Vehicle. City shall provide Manager with a vehicle for business
use in accordance with City policy on employee use of city vehicles.
H. Holidays. Manager will receive compensation for holidays recognized in
SCC 3.50.010 as set forth in SCC Chapter 3.50.
Section 3. Term And Termination.
A. Term. The term of Manager's employment under this Agreement shall begin
on the Effective Date and end three years after the Effective Date, unless extended in
writing or terminated as provided in this Agreement. The City and Manager shall advise
the other party of their intent to seek negotiation of a renewal or extension of this
Agreement, no later than sixty (60) days before the expiration of this Agreement.
B. Termination.
1. Manager's employment under this Agreement is terminable "at will" it being
expressly and explicitly understood and agreed by Manager that she holds the position
192
1 .40
of City Manager and serves as City Manager at the will of the Council. The City may
terminate this Agreement for any reason of for no reason following the affirmative vote of
at least four members of Council at a properly posted and duly authorized public meeting.
Manager acknowledges that any action by the Council in connection with terminating
Manager's employment under this Agreement is not subject to any administrative or
grievance procedure, and Manager hereby waives the benefit of any right to prior notice,
pre- or post- termination hearing or any other procedure that may now or hereafter apply
to any such action by the Council or be available to other City employees. Upon
termination pursuant to this paragraph, City shall be responsible for payment of three
months' severance pay inclusive of health insurance COBRA premiums in addition to the
balance of the Manager's accrued paid leave as the of the date of termination. Accrued
paid leave shall be paid as a lump sum.
2. In addition to termination for any reason or no reason, the City may terminate
Manager for "just cause" based upon the performance and professional conduct of
Manager. Should City intend to terminate Manager for "just cause", Manager shall be
given written notice of the reasons for the termination and an opportunity to respond in
person before the Council in either open or executive session at Manager's sole option
prior to the effective date of the termination of employment. If the City terminates Manager
for "just cause", separation pay will include only accrued leave and wages earned to the
date of termination, no severance will be paid.
3. Prior to any termination by the City, whether with or without "just cause" the
Council or a representative thereof shall consult with the City Attorney.
C. Resignation. Manager may resign her position upon sixty (60) days written
notice to City Council. Should Manager resign under this Agreement, she shall be entitled
to no additional compensation under this Agreement beyond the effective date of her
separation, other than accrued but unused paid leave in accordance with the terms of this
Agreement. At its option, the City may release Manager from her obligation to continue
working through the notice period upon payment of salary through the effective
resignation date; however, on no account shall Manager receive compensation in lieu of
service for a period longer than sixty (60) days regardless of the length of notice provided
by Manager. In the event Manager resigns prior to September 10, 2024, Manager shall
be obligated to reimburse City for all moving expenses and costs advanced or reimbursed
by the City. The City, in its sole discretion, may waive this obligation, in writing, in the
event circumstances warrant.
Section 4. Other Employment.
It is recognized that Manager must devote a great deal of time outside normal
office hours to business of the City, including but not limited to attendance at regular and
special City Council meetings. Normal work hours in a regular workweek hereunder shall
be construed to mean Monday through Friday, an 8-hour period between 7.00 a.m. and
6.00 p.m. Manager shall not take nor undertake employment with any other person, entity
or business, without prior approval of the City Council.
193
1 .40
Section 5. Indemnification by City.
The City shall indemnify, hold harmless and defend Manager against all claims
and liability which may result from any claim, action or suit by person based upon alleged
injury to or death of a person or alleged loss of or damage to property that may occur or
that may be alleged to have been caused by Manager in the course of performance of
her official duties during the duration of her employment with City under this Agreement,
provided, however, that City shall not be obliged to indemnify, hold harmless or defend
Manager against any such claim that was caused by Manager while acting outside the
course of performing her official duties, or from any false, deceptive, dishonest or criminal
act or omission under the laws and regulations of the United States of America, the State
of Alaska and/or any political subdivision thereof. The City shall not be responsible for the
defense costs or indemnification of any legal counsel or costs or fees under this section
unless Council approves reimbursement or payment of those costs and fees in writing
and before such costs and fees are incurred.
Section 6. Performance Evaluation.
Manager shall be evaluated by Council upon completion of six months of
employment. Thereafter Manager shall be evaluated annually on or near her
anniversary date. The procedure for evaluation of the Manager shall be as established
by City Council Resolution.
Section 7. General Provisions.
A. No Conflict of Interest. During the term of this Agreement, Manager will not
enter into any activity, employment or business arrangement which conflicts with the best
interests of the City, or otherwise interferes with performance of her duties under this
Agreement, as may be determined in the sole discretion of Council. Manager shall comply
with Seward City Code 2.01.020(a). Manager shall advise Council of any activity,
employment or business arrangement she is contemplating entering which might conflict
or give the appearance of conflicting with the City's interests; failure to do so may subject
Manager to termination.
B. Choice of Law and Venue. Any controversy or claim arising out of or related
to this Agreement or the breach thereof shall be governed by the laws of the State of
Alaska, and the City of Seward, Alaska, and the venue for any legal proceedings thereon
shall be the Superior Court for the State of Alaska, Third Judicial District.
C. Entire Agreement. This Agreement supersedes all prior oral or written
agreements, if any, between Manager and City, and constitutes the entire agreement
between Manager and City and approved by the Council.
D. Modification or Amendment. This Agreement shall not be supplemented,
modified or amended, except by a written agreement signed by Manager and approved
194
1 .40
by Council.
E. Severability. If any provision of this Agreement shall be declared invalid or
unenforceable, the remainder of this Agreement shall continue in full force and effect.
F. Title 3 Provisions. Sections 3.45.065 (military leave), 3.45.070 (jury duty
leave), 3.45.075(d) (FMLA leave), 3.45.075(e) (fitness for duty certification), 3.60.010
(gifts and gratuities), 3.60.020 (employment of family members), 3.60.025 (travel
expenses), and Chapters 3.70 (standards relating to drugs and alcohol), 3.75 (standards
relating to employee conduct) and 3.80 (workers' compensation) of Title 3 of the Seward
City Code apply to this Agreement. No other provision of Title 3 shall apply.
IN WITNESS WHEREOF the City has caused this Agreement to be signed and
executed on its behalf by its Mayor, and duly attested by its City Clerk. Kathleen Sorensen
has signed and executed this Agreement for and on behalf of herself, both in duplicate,
as of the day and year first above written.
CITY OF SEWARD CITY MANAGER
Sue McClure, Mayor Kathleen Sorensen
CITY OF SEWARD ATTEST:
Norm Regis, Acting City Manager Kris Peck, City Clerk
[City Seal]
195
•
Resolution 2023-092
A Resolution Of The City Council Of The
City Of Seward, Alaska, Authorizing The
City Manager To Enter Into A Loan
Agreement With The Alaska Department Of
Environmental Conservation
Documents:
• Agenda Statement
• Resolution 2023-092
• Attachments:
o DEC Online Application System (OASys) —ADWF
Loan Application
o Seward Project Information
196
City Council Agenda Statement .
Meeting Date: August 14th, 2023
To: City Council
Through: Norm Regis,Acting City Manager
From: Doug Schoessler, Public Works Director
Subject: Resolution 2023-092: Authorizing The City Manager To Enter
Into A Loan Agreement With The Alaska Department Of
Environmental Conservation
Background and justification:
The current SMIC water system uses chlorine gas cylinders in the SMIC water pumphouse. The declining
availability and hazards of chlorine gas cylinders necessitates a change to the same system that was already
installed at the North Seward Water Plant facility. CRW Engineering investigated sizing and other
requirements for infrastructure in the SMIC water pumphouse.
City staff utilized the CRW report as part of a master project list to identify potential funding sources. The
SMIC Hypochlorite Generator Project was placed on the master project list because of issues outlined in
both reports and staff observations.
If the City is successful in procuring funding, it will construct the SMIC Hypochlorite Generator to the
SMIC Water Pumphouse,which will serve the clean water needs of the Seward Marine Industrial Complex
on the East side of Resurrection Bay well into the future.
The City of Seward loan requires the City to commit to the State of Alaska(ADEC) and its intent to fund
$476,000 for the Hypochlorite Generator Pumphouse Project, with an estimated principal forgiveness of
$238,000 for a total repayment of $238,000 from the State of Alaska Department of Environmental
Conservation Drinking Water Fund. The repayment terms are over 20 years at a rate of interest equal to
1.5%, resulting in annual payments of approximately $15,470. This debt payment was not previously
budgeted in the Water Fund and will be subject to annual appropriations. Unfortunately, the Water Fund
does not have adequate cash reserves to fund the project without assistance. However, the most recent
Financial Capacity Assessment found the fund healthy enough to cover existing and potential loan
obligations.The Water fund generates sufficient revenue to fully pay anticipated expenses attributed to the
operation of the water system and also pay all debt service for existing loans and the proposed SRF loan
during the next 5 years.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
197
Certification of Funds
Total amount of funds listed in this legislation: S
This legislation(✓):
Creates revenue in the amount of: $
x Creates expenditure in amount of: $ 238,000/$15,470 Annually
Creates a savings in the amount of: $
Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
x Not budgeted
Not applicable
EMU Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking X Water Healthcare
Motor Pool Other
Note: amounts are unaudited
Available Fund Balance/Net Position $ 9,269,962
Finance Director Signature:
Attorney Review Ion
RxYes Attorney Signature:
Not applicable Comments:
Administration Recommendation
eAdopt Resolution
Other:
198
Sponsored by: Regis
CITY OF SEWARD,ALASKA
RESOLUTION 2023-092
A Resolution Of The City Council Of The City Of Seward, Alaska,
Authorizing The City Manager To Enter Into A Loan Agreement With The
Alaska Department Of Environmental Conservation
WHEREAS, city staff identified several issues necessitating the addition of a
Hypochlorite Generator for the SMIC water pumphouse, and
WHEREAS, staff completed and submitted the required questionnaire to for loan
monies being offered by the Alaska Drinking Water fund, and
WHEREAS accepting the total loan amount of $476,000 with loan forgiveness of
$238,000 from the Department of Environmental Conservation Clean Water Fund is in the
best interest of the city by allowing the city to utilize the fund to invest in infrastructure,follow
regulations set forth by the Alaska Department of Environmental Conservation and remain in
compliance with the current permit,
WHEREAS, the City of Seward seeks to obtain the necessary financial assistance to
complete the SMIC Hypochlorite Pumphouse Addition Project by obtaining a loan from the
State of Alaska Department of Environmental Conservation's Alaska Drinking Water Fund.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
Section 1. The City of Seward hereby confirms its commitment to the State of Alaska
(ADEC) and its intent to fund $476,00 for the SMIC Hypochlorite Generator Pumphouse
Project, with an estimated principal forgiveness of$238,000 for a total repayment of$238,000
subject to receiving a loan from ADEC.
Section 2. The City Manager is authorized to apply for a loan in the amount of
$238,000 from the State of Alaska Department of Environmental Conservation, Drinking
Water Fund for the water system improvement known as SMIC Hypochlorite Generator
Pumphouse Addition Project.
Section 3. The City Manager is hereby authorized to execute any and all documents
that may be necessary to affect a $238,000 loan from ADEC, the terms of its repayment
over 20 years at a rate of interest equal to 1.5% subject to annual appropriations, including
but not limited to an agreement for the loan and a promissory note. Annual loan payments
shall not exceed $15,470.
Section 4. This resolution shall take effect immediately upon adoption.
199
CITY OF SEWARD,ALASKA
RESOLUTION 2023-092
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of
August 2023.
THE CITY OF SEWARD,ALASKA
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
200
7/27/23, 12:00 PM Application Review
Department of Environmental Conservation
DEC Online Application System (OASys)
ADWF Loan Application
Status: Submitted
Status Details:
Completed
Signed-Administratively signed on 12/2/2021 9:25:21 AM
Application Submitted
SMIC Water Pumphouse
Tracking#: ADWFLA-0252 Facility: Addition&Hypochlorite Type: ADWF Loan Application
Gen
Org: City of Seward-Public Works
General Information Details
Project Title: SMIC Water Pumphouse Addition&Hypochlorite Gen
Data Universal Numbering System 037996634
(DUNS)Number:
Location Latitude: Converter 60.095973
Location Longitude: -149.342382
General Project Location: SMIC Water Pumphouse
Total Community Population: 1000
Population served by the system: 1000
Population served by the project: 1000
Project Type: New Construction
Is the proposed project an amendment to No
an existing SRF Loan?
If yes,exiisting SRF Loan Number:
Please indicate the type of amendment:
Project Scope Water Treatment
Distribution System
Capacity/Restructuring
Project Need:
Upgrade to onsite Hypochlorite Generator System and Pumphouse Addition.
Project Description:
Upgrade to onsite Hypochlorite Generator System and Pumphouse addition. Disinfects organisms/bacteria for safe and healthy
water distribution.Benefiting area for 25-30 years with system.Eliminating the issues with gas chlorine usage.
Public Health Benefit(s):
Water efficiency&rehabilitation of distribution: Elimination the issues with Chlorine Gas usage and upgrade to onsite
Hypochlorite Generator.Also,new pumphouse addition-structure and equipment benefiting area for 25-30 years. This will also
reduce costs in the future from eliminating Chlorine Gas usage.By eliminating Chlorine it reduces the risk of exposure to this
harmful chemical.
Providing fire protection? No
Expand the drinking water system to No
attract future population growth?
Expand the drinking water system to an No
undeveloped area?
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Contacts Details
Signatory Official Doug Schoessler
Public Works Director,City of Seward-Public Works
PO BOX 167
SEWARD,AK,99664-0167 US
Phone: 9072244058
doug*cityofseward.net
Financial Contact Sam Hickok
Deputy Financial Director,City of Seward
PO Box 167
Seward,AK,99664 US
Phone: 907-224-4067
shickok*cityofseward.net
Application Preparer Kirsten Loertscher
City of Seward
434 6thAvenue
Seward,AK,99664 US
Phone: 9072244058
kloertscher*cityofseward.net
Project Costs Details
Administration: 8,500
Engineering Design: 55,000
Engineering Construction: 25,000
Construction: 275,000
Equipment: 70,000
Contingencies: 42,500
Other(Identify Cost):
Amount: 0
Other(Identify Cost):
Amount: 0
Other(Identify Cost):
Amount: 0
Total of Other Costs: 0
Total Cost: (Sum of Above) 476,000
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Green Project/Component Information Details
Is this a green project? Yes
Identify the most appropriate"Green" Water Efficiency-the use of improved technologies and practices to deliver
category type. equal or better services with less water.Examples:water meters;fixture
retrofit,replace/rehabilitation of distribution,and,leak detection equipment.
Green Project/Component Description:
Water efficiency&rehabilitation of distribution: Elimination the issues with Chlorine Gas usage and upgrade to onsite
Hypochlorite Generator.Also,new pumphouse addition-structure and equipment benefiting area for 25-30 years. This will also
reduce costs in the future from eliminating Chlorine Gas usage.By eliminating Chlorine it reduces the risk of exposure to this
harmful chemical.
Is a project cost estimate attached? No
Administration: 8,500
Engineering Design: 55,000
Engineering Construction: 25,000
Construction: 275,000
Equipment: 70,000
Contingencies: 42,500
Other Component(description): N/A
Other Amount: 0
Other Component(description): N/A
Other Amount: 0
Other Component(description): N/A
Other Amount: 0
Total Costs: (Sum of Above) 476,000
Estimated Project Schedule Details
Is this application for a construction Yes
loan?
Loan Agreement Signed: 03/31/2022
Preliminary Engineering Report: 02/28/2022
Design Engineering: 02/27/2022
Preparation of Bid Documents: 02/14/2022
Award of Construction Contract: 03/15/2022
Construction Initiation: 03/31/2022
Construction Completion: 09/30/2022
Initiation of Operation: 04/01/2022
Anticipated first payment request: 01/01/2023
Other Funding Details
Federal Funds From:
Amount:
Other State Funds From:
Amount:
Other Local Funds From:
Amount:
Other(Identify Source):
Amount:
Other(Identify Source):
Amount:
Describe how these other funds will be used for this project:
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Financial Information Details
Loan Amount: 476,000
Desired Repayment Term(yrs): 20
Estimated Annual Payment:
(Given the above information,we will provide
this if you wish.)
General Funds 238,000
Capital Reserves 0
User Fees 0
Assessments,LIDS 0
Taxes(identify type) N/A
Amount 0
Other(identify) N/A
Amount 0
Describe whether or not any of these sources of funding or revenue have been previously pledged and,if so,please indicate the type
of pledge or encumbrance(such as a previous bond sale,special assessment,legal or judicial settlement,etc.),amount pledged and
any balance remaining:
(If none,enter'no')
N/A
Please describe any litigation that could affect your community's ability to repay this loan:
(If none,enter'no')
N/A
Does your community have a debt No
ceiling?
If so,what is it?
How much remains available?
Does your community have bonded No
indebtedness?
What is your current level of bonded
indebtedness?
Date:
Rating:
Amount:
Operating Revenues: 1,275,656
User Fees Collected: 1,275,656
Non-Operating Revenues: 55,139
TOTAL Revenues: 2,606,451
Operating Expenses: 1,320,878
Annual Debt Service: 893,570
Other Non-Operating Expenses:
TOTAL Expenses: 2,214,448
Reserves: 0
If User Fees are intended to repay any Current fee structure
portion of this loan,
please submit:
Number of existing residential and 1015
commercial users:
Number of proposed residential and 1015
commercial users:
How much will this loan repayment 0
increase user fees?
Please describe the increase:
N/A
Current Ave Monthly Residential 54
Customer Charge for Service:
Number of days in billing cycle: 30
Frequency of rate setting: Annually
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Number of changes in past 10 years: 10 _
Date of last rate increase: 01/15/2021
Description of guidance in rate setting:
Water and Sewer Tax Tariff.
ttached Document Checklist Details
ttachments Title(Type),Description
Other Documents Type
ADWF Loan Application Signature ADWFLoanApplicationSignPageV l0.pdf
Page.pdf
Xerox Scan_12022021092912.PDF Hardeopy signature page for ADWF Loan Application,Tracking Number:
ADWFLA-0252, Signed By:Doug Schoessler,Title:Public Works Director,
Authority:Not Applicable
ADWFLA-0252.pdf ADWF Loan Application.pdf
https://dec.alaska.gov/ApplicationsM/ater/OASys/PrintForRecords.aspx 205 5/5
State Revolving Fund Program—Alaska Drinking Water Fund
Financial Capacity Assessment
Project Name: Seward Marine Industrial Center(SMIC)Water Pumphouse Addition Hypochlorite
Generator System Upgrade
Project Number: 769121-S
Loan Applicant: City of Seward
Project Description: This project will include an addition to a pumphouse and upgrade the hypochlorite
generator system to eliminate the use of chlorine gas.
Date: 11/29/2022
Loan Amount $476,000
Proposed Principal Forgiveness $238,000
Loan Principal to be Repaid $238,000
Estimated Annual Debt Service $14,555
Assumed Loan Finance Rate (to be determined at time of loan offer) 2%
Loan Repayment Term 20 years
City of Seward—Population (2020 U.S. Census)' 2,717
Number of commercial and residential accounts 11015
Population served by project 1,000
Median Household Income $74,110
Audit Findings
Fiscal Year(FY) 2021—Type of Opinion Issued: Unmodified
Finding 2021-001—Lack of Internal Controls over Billings
A Corrective Action Plan was prepared to address this issue.
FY2020—Type of Opinion Issued: Unmodified
Finding 2020-001 —Lack of Internal Controls over Governmental Activities Capital Assets
Finding 2020-002—Lack of Internal Controls over Lack of Year End Close Procedures.
Finding 2020-003—Lack of Internal Controls over Utility Billing
Corrective Action Plans were prepared to address these issues.
FY2019—Type of Opinion Issued: Unmodified
Finding 2019-001 —Lack of Internal Controls over Year End Inventory Balances
Finding 2019-002—Lack of Internal Controls over Lack of Year End Close Procedures
Corrective Action Plans were prepared to address these issues.
FY2018—Type of Opinion Issued: Unmodified
No material weakness or significant deficiency was identified.
FY2017—Type of Opinion Issued: Unmodified
No material weakness or significant deficiency was identified.
' https://data.census.gov/cedsci/all?q=seward,alaska%20population
Z https://data.census.gov/cedsci/all?q=seward,alaska%20median%20household%20income
SOURCE OF REPAYMENT
State Revolving Fund (SRF) Program borrowers are required to submit documentation of the availability of, and the
commitment to use, one or more dedicated sources of revenue for repayment of the financial assistance and sufficient
206
reserves for the loan as may be necessary.The City of Seward (City) has indicated that the proposed loan will be repaid with
the General Fund.
OPERATING RATIO
The operating ratio indicator measures the utility's self-sufficiency—whether the revenues are sufficient to operate the
facility.The natural benchmark for the operating ratio is 1.0, or break-even, but often a higher number is desired. An
operating ratio of 1.2 with depreciation and 1.5 without depreciation is recommended to cover daily expenses, debt service,
capital replacement costs, emergencies, and unexpected revenue shortfalls.
As shown in the table below,the operating ratio with depreciation fell below 1.0 in two of the past five years, specifically in
2018 and 2020. For the past five years, when depreciation is excluded from the calculation,the operating ratio is below the
recommended EPA level of 1.5, except for two years: 2017 and 2021. Expenses dropped to the lowest in the five-year period
in 2020 due primarily to a drop in administration expenses in that year.
Operating Ratio—Water Enterprise Fund 2017 2018 2019 2020 2021
Operating Revenues $1,441,320 $1,356,104 $1,453,343 $1,275,656 $1,511,295
Operating Expenses $955,270 $1,084,964 $1,032,225 $897,206 $969,217
Depreciation $396,426 $393,587 $423,612 $423,672 $417,881
Operating Ratio(with Depreciation) 1.07 0.92 1.00 0.97 1.09
Operating Ratio(without Depreciation) 1.51 1.25 1.41 1.42 1.56
The table below shows projected water utility operating revenues and expenses that were provided by the City of Seward.
The projected operating ratio is above the recommended ratio of 1.5. It should be noted that the revenue and expense
projections are considerably higher than the amounts recorded in recent financial statements.The applicant pointed out the
fact that the projections were prepared using a cash accounting method, as opposed to the accrual method used for past
financial statements, as an explanation for the higher revenue and expense projections during the next five years. In
addition,the provided projections include a gradual increase in the number of customers throughout the projection period
from 1,017 in 2022 to 1,058 in 2026.
Operating Ratio Projections—Water
Enterprise Fund
(not including depreciation) 2022 2023 2024 2025 2026
Operating Revenues $2,121,597 $1,877,529 $1,909,080 $1,941,262 $1,974,087
Operating Expenses $1,204,169 $1,227,153 $1,251,696 $1,276,730 $1,302,264
Operating Ratio 1.76 1.53 1.53 1.52 1.52
The General Fund operating ratio has been included in this financial capacity assessment because, as stated in the SRF loan
application,the applicant has indicated that the General Fund will be the source of loan repayment.The General Fund
operating ratio remained at or above the 1.0 benchmark from 2017 to 2021. Both revenues and expenditures decreased
significantly in 2020.The City of Seward 2020 financial report states that"General Fund revenues came in $2.9 million lower
than in 2019, mainly due to the lack of tourism due to COVID-19, and expenditures came in $1.2 million dollars less." It
should be noted that the revenue/expenditures and the operating ratio increased considerably in 2021 compared to the
previous year; in fact,the 2021 revenues/expenditures were the highest in all of the five past years.The operating ratio was
the highest in this period as well, and this can be explained by a return of the tourism industry and "normal"financial
conditions in that year.
207
General Fund Operating
Ratio(not including
Depreciation) 2017 2018 2019 2020 2021
Operating Revenues $11,472,454 $12,382,548 $12,814,693 $9,941,142 $15,212,200
Operating Expenses $10,055,269 $10,513,847 $11,028,343 $9,934,619 $12,730,903
Operating Ratio 1.14 1.18 1.16 1.00 1.19
DEBT SERVICE COVERAGE
The debt service coverage ratio (DSCR) helps determine whether there are sufficient revenues available after operating and
maintenance expenses to pay debt service on existing and anticipated loans. A coverage ratio greater than 1.0 shows that
revenues exceed expenses; many lenders require a minimum coverage ratio greater than 1.0.
The City of Seward is currently repaying existing Alaska Drinking Water Fund loans. Repayment of those loans is reflected in
the DSCR shown in the table below.The DSCR was well above 1.0 for all five past years between 2017 and 2021.
DSCR—Water Enterprise
Fund 2017 2018 2019 2020 2021
Operating Revenues $1,411,320 $1,356,104 $1,453,343 $1,127,656 $1,511,295
Operating Expenses $955,270 $1,084,964 $1,032,225 $897,206 $969,217
Debt Service $156,844 $156,844 $156,844 $156,844 $156,844
Result 2.91 1.73 2.68 2.41 3.46
The DSCR for the General Fund for 2017 through 2021 is also included in the table below and remained above 1.0 for all
years, except for 2020 when the ratio fell to 0.02 due to the COVID-19 pandemic and the significant decrease in tourism
revenue in that year.
General Fund DSCR 2017 2018 2019 2020 2021
Operating Revenues $11,472,454 $12,382,548 $12,814,693 $9,941,142 $15,212,200
Operating Expenses $10,055,269 $10,513,847 $11,028,343 $9,934,619 $12,730,903
Debt Service $921,839 $1,030,497 $454,106 $434,581 $492,976
Result 1.54 1.81 3.93 0.02 5.03
The General Fund Beginning Ending and Change in Balance for the years 2017 through 2021 can be seen in the table below.
Overall,the table demonstrates a gradual increase in the Fund's Ending Balance within this time frame, although there is
some variability in both the Fund revenue and expenditures during the period between 2017 and 2021. It should be noted
that the General Fund is used for a variety of the City's programs, only one of which includes water projects such as the
proposed project discussed in this assessment. In addition, as has been mentioned above,the General Fund fluctuates with
the source of revenue.The low Change in Fund Balance in 2020 demonstrates how the recent COVID-19 pandemic and the
subsequent loss in tourism-related tax revenue affected the Fund.
General Fund Beginning,
Ending, and Change in
Balance 2017 2018 2019 2020 2021
Beginning Balance: $7,957,498 $7,477,288 $8,540,289 $10,031,708 $10,224,310
Ending Balance: $7,477,288 $8,540,289 $10,031,708 $10,224,310 $11,583,494
Change in Fund Balance -$480,210 $1,063,001 $1,491,419 $192,602 $1,359,184
208
The Water Fund DSCR is projected to remain well above 1.0 throughout the projection period.This indicates that there is
adequate revenue to cover operating expenditures and any debt service in each of the projected years.The City of Seward
expects to begin repaying the proposed loan (769121-S) in 2024 and this explains the increase in debt service and the
decrease in the DSCR in that year and subsequent years.
DSCR Projections 2022 2023 2024 2025 2026
Operating Revenues $2,121,597 $1,877,529 $1,909,080 $1,941,262 $1,974,087
Operating Expenses $1,204,169 $1,227,153 $1,251,696 $1,276,730 $1,302,264
Debt Service $156,844 $156,844 $171,399 $171,399 $171,399
Result 5.85 4.15 3.84 3.88 3.92
AFFORDABILITY
In order to determine the affordability of user rates,the U.S. Environmental Protection Agency(EPA) uses the user rates as a
percentage of Median Household Income (MHI).Typical benchmarks used by EPA are 1.5%for water rates, 2%for sewer
rates, and therefore, 3.5%combined.
The current average rate for residential water service, $54 per month, has been in effect since 2021.The user rate is
approximately 0.88%of MHI which is well under the EPA's benchmark for water rate affordability.
Current User Rates as Percentage of Median Household Income
Annual Water User Fees -Current $648
Median Household Income $74,110
User Fees as a%of MHI 0.88%
The City of Seward 2022 Utilities Tariff includes a provision for annual rate adjustments that reflect an average of the five
previous published years' annual increases in the Consumer Price Index published by the Alaska Department of Labor.
Because the current rate is under the affordability benchmark,the anticipated rate increases to adjust for inflation are not
expected to create unaffordable rates in the next five years.
SUMMARY
Some of the important summary points of this financial capacity assessment are listed below.
• Based on financial records provided for 2017-2021,The City of Seward's Water Enterprise Fund has
operated below the break-even point with an operating ratio including depreciation below 1.0 during two of
the past five years; however,the City's General Fund has operated at or above the break-even point for all
of the past five years.
• The General Fund Ending Balance increased annually between 2017 and 2021.
• Projected operating revenues for the Water Enterprise Fund exceed expenses in the next 5 years according
to information prepared by the City of Seward.
• The City's utility tariff includes a provision to allow for annual rate adjustments to reflect an average of the
five previous published years' annual increase in the Consumer Price Index. Current water rates are well
below the EPA benchmark for affordability;therefore, rates are anticipated to remain affordable over the
course of the next 5 years.
• The City is currently repaying existing Alaska Drinking Water Fund loans, and these are reflected in the
Water Enterprise Fund's debt service coverage ratio for the past five years (2017-2021);the coverage ratio
remained above the target of 1.2 during this period.
209
• The debt service coverage ratio for the past years (2017-2021)for the General Fund also remained above
the target of 1.2 except for one year: 2020.
• The Water Enterprise Fund projected coverage ratio through 2026 remains above a target of 1.2 Based on
the information supplied by the applicant,the City of Seward generates sufficient revenue to fully pay
anticipated expenses attributed to the operation of the water system and also pay all debt service for
existing loans and the proposed SRF loan during the next 5 years.
RECOMMENDATION
Based on the assessment of financial capacity, acceptance of the City of Seward's request for a loan of$476,000 with
$238,000 in principal forgiveness from the Alaska Drinking Water Fund is recommended.
It is also recommended that the SRF Program conduct an annual review of the City of Seward Certified Annual Financial
Report to detect changes in indicators such as the operating ratio and the debt service coverage ratio that may indicate
short-term weakness.
210
,
X
<tiv� j
1
Resolution 2023-093 :
Authorizing The City Manager To Enter Into A
Management And Operating Agreement With
Providence Health & Services Washington d/b/a
Providence Health & Services Alaska
Documents:
• Agenda Statement
• Resolution 2023-093
• Management and Operating Agreement
211
City Council Agenda Statement .
Meeting Date: August 14, 2023
To: City Council '
From: Norm Regis,Acting City Manager
Subject: Resolution 2023-093: Authorizing The City Manager To Enter Into A
Management And Operating Agreement With Providence Health & Services
Washington d/b/a Providence Health& Services Alaska
Background and justification:
The City owns certain real property consisting of land, a hospital, and a nursing home facility,
Seward Mountain Haven ("SMH"), which together with improvements thereon, but exclusive of
any space occupied or used for purposes of operating the Seward Community Health Center Inc's
federally qualified health center, shall be referred to collectively herein as the Providence Seward
Medical Center ("PSMC"). Since operations by Providence began in 1996, the Operating
Agreement has been amended numerous times. The current Management and Operating
Agreement expired in June 2023. The City of Seward and Providence have been working together
for the past several months to update the agreement to reflect current practices. The process has
included numerous meetings which included Management, Finance, and Legal representatives
from both entities. This operating agreement incorporates all of the relevant portions of the relevant
amendments and reflects the current operational relationship between the City of Seward and
Providence. The City desires to engage a company with sufficient healthcare knowledge and
expertise, and Providence has successfully operated the co-located hospital and long-term care
facilities on behalf of the City since 2002.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan: 2.2.6 Health Care
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: S 0
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
x Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
x Not applicable
212
AIIU Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking RWater R Healthcare
Motor Pool Other Hospital Fund
Enterprise
Note: amounts are unaudited
Available Fund Balance/Net Position $ 4,718,396
Finance Director Signature: No direct fiscal impact
Attorney Review
x Yes Attorney Signature:
Sam Severin 7/19/23
Not applicable Comments:
Administration Recommendation
eAdopt Res.
Other:
213
Sponsored by: Regis
CITY OF SEWARD,ALASKA
RESOLUTION 2023-093
A Resolution of the City Council of the City of Seward, Alaska, Authorizing
The City Manager To Enter Into A Management And Operating Agreement
With Providence Health & Services Washington d/b/a Providence Health &
Services Alaska
WHEREAS, the City owns certain real property consisting of land, a hospital, and a
nursing home facility, Seward Mountain Haven ("SMH"), which together with improvements
thereon, but exclusive of any space occupied or used for purposes of operating the Seward
Community Health Center Inc's federally qualified health center, shall be referred to collectively
herein as the Providence Seward Medical Center("PSMC"); and
WHEREAS, Providence has administered hospital and primary care clinic operations in
Seward since June 28, 1996, and long-term care operations since April 28, 2002; and
WHEREAS, effective February 15, 2014, the primary care clinic operations was assumed
by a newly formed 501(c)(3) organization, Seward Community Health Center, Inc., operating a
federally qualified health center under Section 330 of the Public Health Service Act as a co-
applicant with the City of Seward, and PSMC will no longer include the provision of primary care
clinic services within its prescribed scope of work or have responsibility for any aspect of the
management or operation of the FQHC; and
WHEREAS, the City desires to continue quality, affordable health care for its residents;
and
WHEREAS, the City desires a single delivery service for acute care and long-term care
services; and
WHEREAS,the City desires cost effective health care services with emphasis on
reducing duplication and inefficiencies in the delivery system; and
WHEREAS, the City desires to engage a company with sufficient healthcare knowledge
and expertise, and Providence has successfully operated the co-located hospital and long-term care
facilities on behalf of the City since 2002; and
WHEREAS, Providence owns and operates a number of health care facilities that are
operated in keeping with its philosophy, mission and values.
214
CITY OF SEWARD,ALASKA
RESOLUTION 2023-093
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
Section 1. The City Manager is authorized to Enter into a Management and Operating
Agreement With Providence Health& Services Washington d/b/a Providence Health& Services Alaska.
Section 2. This resolution is effective upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of
August, 2023.
THE CITY OF SEWARD,ALASKA
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
215
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
City of Seward
Management and Operating Agreement
This Management and Operating Agreement(Agreement)is made and entered into by and between
the City of Seward, a municipal corporation (the City) and Providence Health & Services
Washington d/b/a Providence Health & Services Alaska, a Washington non-profit corporation
(Providence).
WHEREAS, the City owns certain real property consisting of land, a hospital, and a
nursing home facility, Seward Mountain Haven ("SMH"), which together with improvements
thereon, but exclusive of any space occupied or used for purposes of operating the Seward
Community Health Center Inc's federally qualified health center, shall be referred to collectively
herein as the Providence Seward Medical Center("PSMC"); and
WHEREAS, Providence has administered hospital and primary care clinic operations in
Seward since June 28, 1996, and long-term care operations since April 28, 2002; and
WHEREAS, effective February 15, 2014, the primary care clinic operations was assumed
by a newly formed 501(c)(3) organization, Seward Community Health Center, Inc., operating a
federally qualified health center under Section 330 of the Public Health Service Act as a co-
applicant with the City of Seward ("FQHC"), and PSMC will no longer include the provision of
primary care clinic services within its prescribed scope of work or have responsibility for any
aspect of the management or operation of the FQHC; and
WHEREAS, the City desires to continue quality, affordable health care for its residents;
and
WHEREAS, the City desires a single delivery service for acute care and long-term care
services; and
WHEREAS,the City desires cost effective health care services with emphasis on
reducing duplication and inefficiencies in the delivery system; and
WHEREAS, the City desires to engage a company with sufficient healthcare knowledge
and expertise, and Providence has successfully operated the co-located hospital and long-term care
facilities on behalf of the City since 2002; and
WHEREAS, Providence owns and operates a number of health care facilities that are
operated in keeping with its philosophy, mission and values.
NOW THEREFORE, the City and Providence agrees on the following:
Page 1 of 17
216
DocuSign Envelope ID: DFAF177E-CBE6-4328-96DB-E179A80144AD
1. Operations
a. Agreement to Operate/Manage. The City hereby contracts with Providence to be the
sole and exclusive operator and manager of PSMC with respect to the hospital and long
term care components of that facility for the term of this Agreement; provided, however,
that nothing in this Agreement shall require Providence to provide any services to the
FQHC, bear any responsibility for any aspect of the FQHC's operations, or assume any
liabilities or obligations related to the operation of the FQHC within PSMC's building.
Notwithstanding anything to the contrary, both parties understand and agree that any and
all services provided by Providence during the term of this Agreement shall be provided
solely for the benefit of the City. During the term of this Agreement and subject to the
other provisions of this Agreement, Providence shall operate PSMC, and may perform
or arrange for the provision of the following:
1. Ensure timely deposits into the Accounts (as defined in Section 6) of all receipts
and moneys arising from the operation of PSMC and shall make disbursements
from such accounts in such amounts and at such times as the same are required.
2. Establish all prices, price schedules, rate, and rate schedules for PSMC.
3. Negotiate, prepare and execute any such other contracts reasonably necessary or
desirable in connection with the operation of PSMC in the usual course of business.
4. Hire or retain any consultants, accountants, attorneys, or other professional
personnel necessary and appropriate to assist Providence in carrying out its duties
and responsibilities in accordance with this Agreement.
5. Operate PSMC in a manner that is consistent with applicable federal, state and local
anti-discrimination laws, including the provision of services to persons at PSMC
without regard to race, creed, color, national origin or financial circumstances.
6. Operate PSMC in a manner consistent with their Medical Staff Bylaws, as
applicable. The parties hereby specifically agree to allow Providence, while acting
in the name of PSMC, to enter into certain exclusive contracts for the practice of
medical care.
7. Provide physician credentialing services and any and all other services as
reasonably required to facilitate and perform credentialing functions (as applicable)
at PSMC.
8. Employ or otherwise retain and be responsible for selecting, hiring, training,
supervising, and firing all management, professional, administrative, clerical,
secretarial, bookkeeping, accounting, payroll, billing and collection and other
personnel that are reasonably necessary and appropriate for the operation of PSMC.
9. Take all such actions reasonably necessary to cause PSMC to continue as
participating providers under the Medicare and Medicaid programs.
10. Prepare, execute and file any required documents with governmental or accrediting
agencies, including without limitation any Medicare cost reports, provider
agreements, and licensing documents.
11. Provide or arrange for the provision of all marketing and public relations services
that are reasonably necessary and appropriate for the operation of PSMC. The
parties hereby agree that Providence may, during the term of this Agreement,
identify PSMC as an entity under the operational management of Providence.
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12. Providence may, in its sole discretion defend, assert, settle, or otherwise dispose of
any claims, litigation,judgments, or liabilities in connection with PSMC, and will
notify the City of same.
13. Provide to the City a capital budget annually for PSMC by September.
14. Negotiate, contract for and generally supervise the disposal of all medical waste
and/or garbage refuse.
15. Conduct medical educational training programs at PSMC, including training of
interns and residents and other medical/technical personnel, in a manner consistent
with applicable governmental regulations and Providence's policies.
16. Unless otherwise specifically provided in this Agreement, Providence shall be
responsible for the performance of all other acts reasonably necessary in connection
with the operation of PSMC in accordance with the approved annual budget and
the terms and conditions of this Agreement.
Notwithstanding anything to the contrary in this Agreement, Providence shall not have
authority to bind the City or PSMC as to the following matters or to perform any of the
following on behalf of the City or PSMC without first obtaining approval from the City:
(i) any sale, lease, exchange, mortgage, pledge, or other transfer or disposition of all or
substantially all the assets of any of PSMC other than in the ordinary course of business;
(ii) any fundamental change in the nature of PSMC's businesses; (iii) any merger,
consolidation or affiliation of any of PSMC with another entity; and (iv) any material
change with respect to the insurance coverage obtained or provided through Providence,
unless such change is beyond Providence's reasonable control.
b. General Control of PSMC. Although the City has contracted day-to-day operations and
management of PSMC to Providence during the term of this Agreement, the City shall
continue to own and have financial responsibility for PSMC. The City shall also have
control over the facility other than day-to-day operations. The City represents that, as of
the Effective Date, it has a license as owner of PSMC, and has listed Providence on the
license as the manager to operate the PSMC with respect to its hospital and long-term
care operations. Providence agrees that it will take all steps necessary to maintain and
continue the PSMC and licenses, permits, and certifications for the term of this
Agreement, and the parties agree to take all steps necessary to preserve the designation
of colocation of the critical access hospital and long-term care facilities at PSMC, as such
designation is outlined in the regulations published by the State of Alaska Department of
Health and Social Services. The City grants Providence the authority and responsibility
for all related business licenses.
c. Required Notifications. Providence shall notify the City in writing with twenty-four
(24) hours of the occurrence of any one or more of the following events:
1. Any loss of licensure by PSMC.
2. At such time as Providence becomes aware of any material governmental
investigation or disciplinary proceeding relating to PSMC.
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3. At such time as PSMC becomes debarred, suspended or otherwise ineligible to
participate in any federal or state health care program, including the Medicare and
Medicaid programs.
4. At such time as Providence becomes aware of any act of nature or any other event
5. which has a material adverse effect on Providence's ability to operate PSMC.
6. At such time as Providence becomes aware of any issue which may have a material
adverse financial impact on the operations of PSMC.
2. Effective Date and Term. This Agreement shall become effective upon execution by both
parties following adoption of a Resolution (the "Resolution") by the Seward City Council
(the "Effective Date"). The term of this Agreement shall be five (5)years from May 8, 2023
unless sooner terminated as provided herein. The Parties may extend the Term for an
additional five (5) years based upon mutual written agreement. Such renewal (if applicable)
shall be on the same terms and conditions of this Agreement. Any change in the Annual
Fixed Periodic Fee ("AFPF") above the CPI increase allowed in Section 7, is subject to
approval by the Seward City Council. Providence understands that under the Charter and
Code of Ordinances of the City, the Resolution may be voided by referendum. Providence
agrees that if the Resolution is the subject of a referendum petition filed with the City Clerk,
this Agreement shall be ineffective unless and until the Resolution is approved by the voters
of the City, and Providence shall not be entitled to any damages or other relief against the
City in the event the Resolution is not so approved. In such an event, on the Effective Date,
the Prior Agreement shall terminate.
3. Operating Expenses.In accordance with the operating budget adopted annually,Providence
will incur costs generally associated with the operation of a health care facility providing
acute and long-term care services. Costs associated with the Providence Alaska Regional
Office and Providence System Office are deemed to be recovered in the form of the Annual
Fixed Periodic Fee as described in Section 7 and will not be billed to PSMC in addition to
the AFPF.
It is the City's expectation that Providence will exercise due care as it centralizes services
keeping in mind that all services are provided solely for the benefit of the City and that
services must be able to disconnect from Providence without undue complication should the
relationship end. Further, in the event that such centralization of services is deemed by the
City to have a significant adverse impact on the operational efficiencies or cost of operations
of PSMC,the City shall have the right to request PSMC seek alternative procurement of such
affected services. In the event the City and Providence discontinue their contractual
relationship,the costs incurred by PSCMCC in winding down and closing out its relationship
with the City shall be deemed Operating Expenses.
4. Capital Expenditures.Following completion of the annual capital budget, Providence may
purchase the listed items as cash flow allows.
In addition to capital budget items purchased from PSMC operating funds, the City may,
from time to time, provide additional funding for capital needs at PSMC. To the extent that
capital budget request items were identified by PSMC on a Capital Budget Plan submitted
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to, and accepted by the City, PSMC may spend City capital funds on those items in addition
to any other item whose individual item cost does not exceed $10,000, without further City
approval. All capital purchases procured in this manner will be the property of the City.
5. Equipment.
a. Providence shall maintain all equipment at PSMC, regardless of ownership. The
City will establish a separate account based on capital budget funds approved by
the City Council, to be used for PSMC capital purchases that will require only
approval of both the City and the facility administrator to access as a way to
streamline the capital purchasing process.
b. The City will retain title to all PSMC equipment owned by the City. Providence
may purchase replacement or additional equipment to be used in the maintenance
or improvement of Providence's operations of PSMC. Such additional equipment
shall be the City's property, and shall be tagged and recorded in the financial
records, as such. Providence shall annually provide a list of equipment to the City
detailing these assets as of December 31 of each year. This list should be provided
no later than February 281h of the following year.
6. Admission Policy. Providence agrees to accept any and all bona fide emergency patients
PSMC can accommodate. Providence shall treat patients in accordance with the services and
capacity available at PSMC. Providence agrees it shall not discriminate in the admission of
patients or delivery of outpatient services on the basis of race, religion, national origin or
color. Providence agrees that any patient seeking treatment at PSMC and requiring for
medical reasons transport to a larger facility, has the right to select the health provider(s) and
hospital of the patient's preference. Providence agrees to honor such determinations by
patients and will relate such directives to emergency transportation services.
Providence acknowledges the importance to the people of Seward of having a long-term care
facility within the City boundaries and operating at its fullest capacity, and agrees that except
to the extent necessary to meet patient choice, or the particular health or safety needs of a
patient, and only for such time as is necessary to meet such needs, Providence will not move
or cause patients to move to other facilities owned, operated or managed by Providence. The
City has the right to retrospectively review reasons for all such transfers, so long as such
review is in compliance with patient confidentiality laws. The "Green House" model was
chosen by the people of Seward for the long-term care facility in 2008 due to its emerging
reputation as the latest, state-of-the-art thinking for providing long term care services, and
because of its vast improvement over Seward's previous institutional model of care. After a
full decade of operations however, the practical limitations of the model constrain the ability
of staff to best meet the specific needs of fragile elders with high acuity needs, operate the
facility at maximum efficiency and address safety issues unique to Alaska's climate (e.g.
covered walkway). For example, the increased need for higher care delivery is constrained
by certain Greenhouse rules (e.g. restrictions on lifts in common areas), restrictions on
charging mechanisms, and the physical separation of nursing staff from the elders. From an
efficiency standpoint, some services have been shifted away from the Shabazim (laundry,
activities, housekeeping) in order to provide improved focus on elder care, but represent
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deviations from particular requirements of the Green House model. Fundamentally, the
Green House is a trade-marked concept that provides care in home-like settings where
services are brought to the residents rather than bringing residents to the services. The parties
intend to continue to support many of the concepts fundamental to the Green House model
of care, but find that the nature of process improvement in Seward requires changes which
are not in full conformance with the Green House model. It is determined therefore, that
Seward Mountain Haven and its elders are best served by retaining many qualities of the
Green House model while no longer seeking to qualify as an official "Green House" so that
Seward is better able to accommodate specific needs of a more vulnerable population of
elders with high acuity, to drive process improvements and seek better operational
efficiencies, and to perform facility modifications which are not entirely consistent with the
Green House model.
Providence further acknowledges the importance to the people of Seward of being able to
receive care and treatment in a local hospital, rather than to be transported out of town, and
agrees that except to the extent necessary to meet patient choice, or the particular health or
safety needs of a patient, Providence will not move or cause patients to move to other
facilities. The City has the right to retrospectively review reasons for all such transfers, so
long as such review is in compliance with patient confidentiality laws.
7. Disposition of Funds, Reporting and Administration.
a. Funds originating from the operation of PSMC and collected by Providence pursuant to
this Agreement shall be received, handled, managed and disposed of as follows:
1. Providence shall deposit all funds received by it from the operation of PSMC and
all amounts advanced by the City in a j ointly held bank account or accounts bearing
the name of PSMC(hereinafter the "Accounts") in a bank or trust company
approved by the City and Providence. Such funds shall in no event be commingled
with other City or Providence funds. Providence shall have no liability or
responsibility for any loss resulting from the insolvency, malfeasance or
nonfeasance of the bank or banks in which such funds are deposited.
2. Providence has the right to make withdrawals from and use the Accounts for the
purposes of operating PSMC and performing their obligations hereunder and
paying Providence's compensation herein until the expiration or termination of this
Agreement, at which time Providence shall resign as co-signatory for the Accounts.
3. Signatories and approvals as to the amounts on all checks drawn from the
Accounts shall be in accordance with the policies and procedures mutually agreed
to by Providence and the City.
b. Providence will perform all billing and collection activities for PSMC accounts
receivables, will process accounts payable, and will provide such other administrative,
accounting and clerical services as are necessary. All revenues and cash collections
including those from patients, third-party payers and other sources billed and collected
by Providence, and arising out of or related to services rendered during the term of this
Agreement, and all grants or portions thereof attributed to PSMC arising out of or related
to PSMC during the term of this Agreement, shall be used first to pay debt service on
Seward Mountain Haven bonds issued by the City, then to offset Operating Expenses of
PSMC incurred on or after the Effective Date. Providence shall aggressively collect all
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amounts billed for services provided at PSMC. The excess, if any, of such revenues over
such expenses shall accrue to the City's account, and be applied in the City's sole
discretion, to pay debt service on the City's existing general obligation and/or revenue
bonds related to the PSMC, the costs of repairs, renewals, improvements or additions to
PSMC, or to cover past, present or future operating losses.
c. Providence shall provide the City with audited year-end financial statements for the
PSMC as a co-located entity within 150 days after the end of each year. Upon request by
the City, Providence will make a representative available to make presentations to
Seward City Council and community groups concerning the annual report. The
information to be shared under this paragraph shall not include protected health
information covered by the Health Insurance Portability and Accountability Act of 1996
and regulations adopted thereunder("HIPAX).
d. Providence shall maintain all financial, medical and hospital records,including admitting
register books, schedules of room rentals, patients' insurance records, pertinent hospital
personnel records and such other books and records as are necessary to the continued
operation of PSMC. Original copies of medical and hospital records shall be maintained
and stored at PSMC or at another facility acceptable to Providence.
e. Providence will use reasonable efforts to operate PSMC consistent with the annual
budget. Under the terms of this Agreement, the City shall have the right to review and
approve Providence's budget.
Providence shall provide the Advisory Council with monthly updates comparing PSMC's
actual financial performance to the approved budget during the course of each year to
ensure that the City is fully aware of the financial performance of PSMC on a monthly
basis.
The parties acknowledge that the budget is only a projection for the upcoming year and
changed circumstances may require budgetary modifications. Providence will notify the
City of the following modifications to the budget: (i) instigation of any litigation on
behalf of PSMC against a third party where the amount in controversy exceeds
$1,000,000; and (ii) settlement of any litigation on behalf of PSMC where the amount in
controversy exceeds $1,000,000 or the proposed settlement involves payment by PSMC
of an amount in excess of$1,000,000.
8. Annual Fixed Periodic Fee. Beginning January 1, 2024 and each January 1st thereafter,
the AFPF will be payable by the City in equal quarterly amounts, and will be based upon
the total AFPF applicable in calendar year 2023, as adjusted by the Consumer Price Index
for the second preceding twelve-month period ended December 31 (Anchorage Alaska,
All Urban Consumers - Not Seasonally Adjusted, Base: 1982-1984). (For example,
January 1st 2024 will be adjusted based on the CPI for the full year which ended
December 31, 2022.) Partial years shall be pro-rated. Both parties understand and agree
that the City has other financial obligations to Providence pursuant to the terms of this
Agreement.
9. Medicare and Medicaid Reimbursement.
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From and after the Effective Date, Providence shall maintain Medicare and Medicaid
certification and shall prepare all Medicare/Medicaid cost reports in a timely manner and
shall provide all draft cost reports to the City for review and comment no less than 30
days prior to the date of submission, understanding that Providence may not be able to
include the "Home Office" cost report at that time. Alternatively, the parties may agree
to have the City hire an independent consultant to prepare the cost report. All expenses
incurred within this Section are considered Operating Expenses and shall be paid as costs
from Providence. The City may, as Operating Expenses, have the cost reports prepared
and/or analyzed by a financial consultant.
10. Working Capital and Cash Flow.
a. Providence will pay Operating Expenses as they become due, using funds from the
Accounts and provide the City with information satisfactory to the City supporting
such transfer of funds from City to Providence. Providence will assure that all
Operating Expenses are paid consistent with the various terms and conditions of
vendors, as well as the operating budget and applicable regulations governing
employee pay practices. In the event insufficient funds are available to pay Operating
Expenses, Providence will notify the City verbally and in writing via Email.
Providence will then have the sole discretion to require payment as described in
Subsection 11 (b) or Subsection 11 (c). In the event the City fails to transfer funds
adequate to support Operating Expenses in accordance with Section 11 (b) or 11(c),
and such failure is not cured within 60 days of the original notice, Providence may
terminate this Agreement by providing the City with 30 days' advance written notice
of such termination.
b. The City shall place a minimum of $500,000 of Emergency Funds into the City of
Seward General Fund account reserved for healthcare operation and capital shortfalls.
Such funds may be used for capital or operating shortfalls only and require the prior
written approval of the City Manager or designee. In the event that shortfalls are
expected to be in excess of$500,000,Providence will notify the City and within sixty
(60) days of receiving such notice, the City will transfer sufficient funds to PSMC to
cover the shortfall.
c. To the extent that the Accounts do not have sufficient cash available to reimburse
Providence for costs, Providence may, at its sole discretion, charge interest for the
cumulative unpaid portion of the monthly amount due.
d. Interest will be calculated monthly at the Prime Rate+ 1%on the average outstanding
balance for the month, where the Prime Rate is defined in the Wall Street Journal
Financial Section. Principal plus unpaid interest must be fully paid by December 31,
provided however,that this date may be extended by Providence only upon its written
consent. In the event the City fails to make such required payments, the City agrees
to pay on demand, all costs of collection, including reasonable legal expenses and
attorneys fees, incurred in enforcing this repayment.
11. Supplies. Providence shall, as part of its Operating Expenses, supply and maintain all
expendable supplies as may be required in Providence's discretion for the proper
operation of the PSMC. Upon termination of this Agreement, Providence will leave
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behind all of the supplies in inventory as well as floor stock items maintained at the
Property.
12. Condition on Surrender.Upon termination or expiration of this Agreement,Providence
shall surrender the Property to the City in substantially the same condition as exists on
the Effective Date, except for reasonable wear and tear, construction and demolition
required or permitted under the terms of this Agreement, and damage by fire and other
risks covered by the insurance policy in Section 15.
13. Alterations.
Providence shall have the right to make alterations, additions, improvements and
renovations to PSMC as Operating Expenses, provided: (a) Providence shall notify the
City with respect to any such work requiring any substantial expenditure; (b) such work
shall not adversely affect the structural integrity of PSMC or diminish the value thereof,
(c) any such work shall be performed in a good and workmanlike manner and in
conformance with all applicable building, fire and health regulations; and (d) the City
shall have approved in writing all such work exceeding $50,000,in advance, in the City's
sole discretion.
14. Insurance.
a. Providence shall either obtain or continue, occurrence-based, professional (including
medical malpractice)and general liability insurance relating to PSMC as Providence,
in its sole opinion, deems necessary and sufficient, and maintain such liability
insurance coverage for PSMC during the term of this Agreement. Such insurance
shall provide coverage for personal injuries, death or property damage to PSMC in
an amount of at least $5 million per occurrence and $10 million annual aggregate;
provided, however that Providence's reasonable allocated cost for providing or
continuing such insurance on the City's behalf shall be deemed an Operating Expense.
In addition, Providence shall maintain insurance, in reasonable amounts, subject to
reasonable terms, provisions and customary exclusions, for professional liability and
workers' compensation for all Providence employees who provide services at PSMC
pursuant to this Agreement. Providence shall also maintain automobile, crime,
directors and officers, property earthquake and fiduciary insurance coverage (as
requested by the City) relating to PSMC and maintain such insurance coverage for
PSMC during the term of this Agreement. Any insurance obtained or provided by
Providence under this Section may be provided by insurance or alternative risk
programs which may include self-insurance programs,provided such alternative risk
or self-insurance programs are fully funded (confidence level of 80% or higher) for
any reasonably projected liabilities, and contain customary and reasonable deductible
and coinsurance amounts. The City hereby acknowledges that Providence has
informed it of Providence's insurance's deductible/co- insurance amounts. The
Operating Expenses will include the payment of such deductible/coinsurance
amounts. All costs incurred by Providence under the terms of this Section 15 (a) shall
be deemed Operating Expenses and paid by City to Providence pursuant to the terms
of this Agreement. The Operating Costs shall include the payment of such
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deductibles/co-insurance in the event of any loss or casualty covered under the
insurance provided by Providence hereunder.
b. The City hereby acknowledges and agrees that upon the earlier of termination or
expiration of this Agreement, Providence shall no longer provide nor arrange for the
provision of any insurance of any kind whatsoever to PSMC.
c. The minimum amounts and types of insurance required under this section shall be
subject to revision in accordance with standard insurance practices, in order to
provide continuously throughout the Term, a level of protection consistent with good
business practice and accepted standards in the industry. Such factors as increases in
the cost of living shall be utilized in assessing whether the minimum insurance
requirements should be increased. The City shall notify Providence of any required
changes in insurance coverage.
All insurance policies shall include a waiver of subrogation and shall provide for 30
days' notice to the City of cancellation and/or material change in policy terms. All
such policies shall be written either by insurance companies legally authorized to do
business in the State of Alaska and acceptable to the City, or by self-insurance under
the same terms as the policies for healthcare centers, hospitals, or long-term care
facilities owned or operated by Providence, and acceptable to the City. The City shall
be named as an additional insured party on each such policy of insurance, and
certificates thereof shall be furnished to the City. Nothing herein shall be construed
as a representation by the City as to the sufficiency of any insurance coverage for any
purpose.
15. No Assumption of Liability: Indemnification.
a. During the term of this Agreement, Providence shall not assume or be liable for any
claim, liability, or obligation of PSMC, whether known or unknown, fixed or
contingent, accrued or unaccrued, arising from Providence's operation of PSMC
pursuant to this Agreement, except where such claim, liability or obligation arises
from Providence's negligence or material breach of this Agreement.
b. During the term of this Agreement, the City shall not assume or be liable for any
claim, liability or obligation arising from its responsibilities and duties under the
terms of this Agreement, whether known or 'unknown, fixed or contingent, accrued
or unaccrued pursuant to this Agreement, except where such claim, liability or
obligation arises from the City's negligence or material breach of this Agreement.
c. The parties will defend,indemnify and hold each other harmless from any loss, claim
or damage arising from the negligent acts and omissions of their respective
employees, officers and agents, including negligence connected with performing
their obligations under this Agreement. In the event that loss or damage results from
the conduct of more than one party, each party agrees to be responsible for its own
proportionate share of the claimant's total damages under the laws of the state of
Alaska.
d. The obligations under this Section 16 shall survive any termination or expiration of
this Agreement and shall continue until the expiration of the applicable statute of
limitations (with extensions)relating to the causes of action at issue.
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e. Providence shall have no obligation for, and the City shall indemnify and hold
Providence harmless from and against, any and all liability with respect to any claims
resulting from the negligence of the City or its agents or employees, or any claims
arising out of acts or omissions which occurred: (a)prior April 28, 2002 with regard
to the previous Wesley facility long-term care site; or (b) prior to 1996 with regard
to the hospital site; or(c) on or after February 15, 2014, with respect to the operation
of the FQHC or any uses of the FQHC space within the PSMC building.
16. Assignment. This Agreement may not be assigned by Providence except in whole to an
affiliate of Providence, as "affiliate" is defined in AS 10.06.990(2). Each and every
provision of this Agreement shall inure to the benefit of and shall be binding upon the
successors in interest of Providence and the City. This assignment provision is
specifically excluded as pertains to the Seward Community Health Center.
17. Early Termination. Either party shall have the option in its sole discretion, to terminate
this Agreement upon twelve (12)months written notice to the other party.
18. Religious and Ethical Directives: Termination. Providence shall not be obligated to
provide any services at PSMC that are in conflict with the Providence St Joseph Health
System Mission and Core Values and the Roman Catholic moral tradition as articulated
in such documents as The Ethical and Religious Directives for Catholic Health Care
Facilities, as amended from time to time. Providence shall at all times have the right,
power and duty to operate PSMC in accordance with, and to make decisions that in
Providence's reasonable discretion are necessary or desirable to comply with such
Directives. If at any time during the term, as a result of changes to Alaska law or
regulations, Providence shall be required to operate PSMC in a manner that is not
consistent with such Directives, then at its option, Providence may terminate this
Agreement upon 60 days advance written notice.
19. Termination for Cause.
a. Either party may terminate this Agreement in the event of breach of this Agreement
by the other party where such breach is not cured within thirty (30) calendar days
after the non-breaching party gives written notice of the breach to the breaching party.
b. This Agreement shall automatically terminate in the event either party files a petition
in voluntary bankruptcy, makes an assignment for the benefit of creditors, or takes
any other action voluntarily or involuntarily under any state or federal statute for the
protection of its debtors.
c. Either party may immediately terminate this Agreement in the event the other party
attempts to limit or otherwise avoid its obligations set forth in Section 16 of this
Agreement.
d. The dissolution or liquidation of Providence, other than as the result of merger or
consolidation under conditions permitting continued full compliance with the terms
of this Agreement, shall be cause for termination by the City.
e. The cessation by Providence of use of the Property for the purposes contemplated
hereby for a period of thirty (30) consecutive days, except for periods when the same
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may be untenantable shall be cause for termination by the City, and no Annual Fixed
Periodic Fee shall be owed following such cessation of use.
20. Winding Up. This Section 21 shall survive termination or expiration of this Agreement.
Upon the termination or expiration of this Agreement, the following procedure shall be
followed after the effective date of expiration or termination ("termination date"):
a. Providence shall work cooperatively with the City to facilitate a smooth transition
of the operation/management of PSMC.
b. The City shall retain as its property any equipment on the Property as of the
expiration or termination of the Term to the extent that such equipment was
acquired with the PSMC or City funds. The City may purchase, free and clear of
any encumbrances, any equipment owned by Providence at its then net book value.
Notice of the City's exercise of this option shall be effected by notice given at any
time before the expiration date. Providence shall remove from the Property at its
expense, any or all equipment that the City has not elected to retain under this
paragraph.
c. Providence shall give the City, or such other person identified by the City, all
records required for continued operations of PSMC.
d. All licenses and permits incident to operation of the PSMC will be transferred to
an operator identified by the City, including, but not limited to transfer of permits
for and inventories of alcohol, narcotics and dangerous drugs. Providence will file
a final cost report within 45 days after termination.
e. Upon termination, all accrued revenues and expenses related to the ordinary
course of business shall be the City's. Such expenses shall include any fees owed
to Providence under this Agreement, including an amount equal to the final bi-
weekly payroll costs.
21. Notices. Any notice permitted or required hereunder shall be in writing and shall be
deemed given on the date delivered in person, sent by electronic mail or fax, or deposited
in the United States certified or registered mail, postage prepaid, and addressed as
follows:
To the City: City of Seward
P.O. Box 167
410 Adams Street
Seward, Alaska 99664-0167
ATTN: City Manager
Phone: 907.224.4047
Fax No.: 907.224.4038
Email: citym r a,cityofseward.net
To Providence: Providence Health and Services - Washington
d.b.a. Providence Health and Services - Alaska
3760 Piper Street
P.O. Box 196604
Anchorage, Alaska 99519-6604
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ATTN: Chief Executive, Alaska Service Area
Fax No.:907-261-3041
Email: ella. oss(c_,providence.org
Such addresses may be changed by either party by ten (10) days' prior written notice to
the other party.
22. Authority.Each individual executing this Agreement on behalf of Providence or the City
represents and warrants that he or she is duly authorized to execute and deliver this
Agreement on behalf of such party, that all actions by such organization have been taken
to authorize execution, delivery and performance of this Agreement, and that this
Agreement is binding upon such party. The individuals signing on behalf of Providence
further warrant and represent that they are authorized to act on behalf of Providence in
all matters relating to this Agreement.
23. Representations and Warranties of Providence. As of the Effective Date, Providence
hereby represents and warrants as follows:
a. Providence is a Washington non-profit corporation in good standing under the laws
of the State of Washington and authorized to do business in Alaska.
b. Providence has full corporate power and authority to carry on its business as now
conducted and to enter into this Agreement. The execution and delivery of this
Agreement has been authorized by proper corporate action, and this Agreement
constitutes a valid and legally binding obligation of Providence.
c. Except as may have already been obtained, no consent or approval of any trustee or
holder of any indebtedness or obligation of Providence, and no consent, approval,
permission, authorization, order, or license of any governmental authority,is required
to be obtained by Providence for the execution and delivery of this Agreement or any
other instrument or agreement required of Providence under this Agreement.
d. Providence is not subject to any charter, bylaw, or contractual limitation or provision
of any nature whatsoever which in any way limits, restricts, or prevents Providence
from entering into this Agreement or from performing any of its obligations
hereunder.
e. Neither the execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
provisions hereto, materially conflicts with, violates, or breaches any charter, bylaw,
or stock provision of Providence, any of the material terms, conditions, or provisions
of any indenture,instrument, or agreement to which Providence is a party or by which
Providence is bound, any statute, rule or regulation, or any judgment, decree, or order
of any court or agency binding on Providence, or constitutes a default under any of
the foregoing which has not been waived or consented to in writing by the appropriate
party or parties, or results in the creation or imposition of any lien, charge, security
interest, or encumbrance of any nature whatsoever upon any of the property or assets
of Providence not permitted under the terms of any restriction, agreement,instrument,
statute, governmental rule or regulation, court order,judgement, or decree.
f. To the knowledge of Providence, there is no action, suit, proceeding, inquiry, or
investigation by or before any court, governmental agency, or public board or body
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pending or threatened against Providence which (i) affects or seeks to prohibit,
restrain, or enjoin the execution and delivery of this Agreement, (ii) affects or
questions the validity or enforceability of this Agreement, or(iii)questions the power
or authority of Providence to carry out the transactions contemplated by, or to
perform its obligations under, this Agreement.
g. When duly executed, this Agreement will be enforceable against Providence
according to its terms, except as may be limited by bankruptcy, insolvency,
reorganization, or other laws affecting creditors' rights generally as amended from
time to time.
h. Any certificate signed by an officer of Providence duly authorized to execute such
certificate and delivered pursuant to this Agreement shall be deemed to be a
representation and warranty by Providence as to the statements made therein.
i. The execution, delivery, or performance of this Agreement or consummation of the
transactions contemplated by this Agreement or compliance by Providence with any
of the provisions of this Agreement will not violate any statute (including Alaska's
Certificate of Need laws), rule, regulation, ordinance, code, order,judgment, ruling,
writ, injunction, decree, or award.
24. Representations and Warranties of the City. The City hereby represents and warrants
that neither the execution, delivery or performance of this Agreement nor the
consummation of the transactions contemplated by this Agreement, nor compliance by
the City with any of the provisions of this Agreement, will:
a. violate or conflict with any provision of Seward's City Charter or the Seward City
Code;
b. violate, conflict with, or result in a breach of any provision of, or constitute a default
(or an event which, with notice and/or lapse of time, would constitute a default)
under, terminate, accelerate the performance required by, or result in a right of
termination or acceleration under any of the terms, conditions or provisions of any
material contract, plan, indebtedness, note, bond, indenture, security or pledge
agreement, commitment, license, lease, franchise, permit, agreement, or other
instrument or obligation (i) to which the City is a party or (ii) by which the assets
relating to PSMC are bound; or
c. violate any statute (including Alaska's Certificate of Need laws), rule, regulation,
ordinance, code, order,judgment, ruling, writ, injunction, decree or award.
25. Parties in Interest.Nothing in this Agreement expressed or implied is intended or shall
be construed to confer upon any person, other than the parties hereto, any right, remedy
or claim, legal or equitable, under or by reason of this Agreement, this Agreement being
intended to be and being for the sole and exclusive benefit of the parties hereto.
26. Confidential Information. Providence shall comply with all laws, regulations,
directives or requirements in any form related to operating and managing hospitals and
long- term care facilities, including, but not limited to the Health Insurance Portability
and Accountability Act of 1996 ("HIPAA"), and regulations adopted under HIPAA. The
City shall not have access to Protected Health Information as defined by HIPAA. City
has read 45 C.F.R. 164.504(e), understands Providence's position is that 45 C.F.R.
Page 14 of 17
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164.504(e) applies to this Agreement, and that Providence therefore has the following
obligations:
Providence agrees to hold all individually identifiable patient health information
("Protected Health Information") that may be shared, transferred, transmitted, or
otherwise obtained pursuant to this Agreement strictly confidential, and provide all
reasonable protections to prevent the unauthorized use or disclosure of such information,
including, but not limited to the protection afforded by applicable federal, state and local
laws and/or regulations regarding the security and the confidentiality of patient health
care information. Providence further agrees to make every reasonable effort to comply
with any regulations, standards, or rules promulgated pursuant to the authority of the
HIPAA, including those provisions listed below, as soon as possible. Providence may
use and disclose Protected Health Information when necessary for Providence's proper
management and administration (if such use or disclosure is necessary), or to carry out
Providence's specific legal responsibilities pursuant to this Agreement. Specifically,
Providence agrees as follows: ( 1)to maintain safeguards as necessary to ensure that the
Protected Health Information is not used or disclosed except as provided herein; (2) to
mitigate, it possible, any harmful effect known to Providence of a use or disclosure of
Protected Health Information by Providence; (3) to ensure that any subcontractors or
agents to whom it provides Protected Health Information will agree to the same
restrictions and conditions that apply with respect to such information; (4) to make
available respective internal practices, books and records relating to the use and
disclosure of Protected Health Information to the Department of Health and Human
Services or its agents; (5) to incorporate any amendments or corrections to Protected
Health Information when notified that the information is inaccurate or incomplete; (6)to
return or destroy all Protected Health Information that Providence still maintains in any
form and not to retain any such Protected Health Information in any form upon
termination or expiration of this Agreement, if feasible or, if not feasible, Providence
agrees to limit any uses of Protected Health Information after this Agreement's
termination or expiration to those specific uses or disclosures that make it necessary for
Providence to retain the information; (7) to ensure applicable policies are in place for
providing access to Protected Health Information to the subject of that information; (8)
if requested by the City, report to City any use or disclosure of Protected Health
Information which is not provided for in the Agreement; and(9)to make Protected Health
Information and an accounting of disclosures available to the individual who is the
subject of the information or to City, to the extent required by HIPAA. Breach of this
section shall be considered material.
27. Access to Books and Records. Pursuant to 42 U.S.C. Section 1 3995x(v)(1 ), until the
expiration of four (4) years after the furnishing of services under this Agreement,
Providence shall make available and provide copies to the City, upon written request by
the Comptroller of the United States Department of Health and Human Services, or upon
request by the Comptroller General of the United States General Accounting Office, or
any of their duly authorized representatives, a copy of this Agreement and such books,
documents and records as are necessary to certify the nature and extent of the services
furnished by Providence under this Agreement. If Providence carries out any of its duties
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under this Agreement through a subcontract, with a value or cost of ten thousand dollars
($10,000) or more over a twelve (12) month period, with a related organization of
Providence, such subcontract shall contain a clause to the effect that until the expiration
of four (4) years after the furnishing of such services pursuant to such subcontract, the
related organization shall make available and provide copies to the City, upon written
request by the Secretary of the United States Department of Health and Human Services
or upon request by the Comptroller General of the United States General Accounting
Office, or any of their duly authorized representatives, a copy of such subcontract and
such books, documents and records as are necessary to verify the nature and extent of
such costs.
28. Miscellaneous.
a. This Agreement constitutes the entire agreement between the parties with respect to
the Property and operation of PSMC. Any prior representations and agreements are
of no effect except to the extent provisions of the Prior Agreement survive
termination by its terms.No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the City or Providence unless reduced to
writing and executed by the parties.
b. This Agreement shall be governed by and construed in accordance with the laws of
the State of Alaska, and venue for all disputes shall be in Anchorage, Alaska.
c. If any term, covenant or condition of this Agreement, or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term, covenant or condition
to other persons and circumstances shall be valid and enforceable to the fullest extent
permitted by law.
d. The terms, covenants and conditions hereof shall be binding upon and shall insure to
the benefit of the parties hereto and their respective legal representatives, successors
and assigns.
e. One City resident will be eligible to participate as a voting member on the Providence
Alaska Region Community Ministry Board which will vote on the operations of
PSMC.
f. Nothing in this Agreement expressed or implied is intended or shall be construed to
confer upon any person, firm, or corporation, other than the parties hereto, any right,
remedy or claim, legal or equitable, under or by reason of this Agreement, this
Agreement being intended to be and being for the sole and exclusive benefit of the
parties hereto.
g. Nothing in this Agreement, and no performance of either party hereunder shall cause
the relationship of the parties to be that of principal and agent, partners, or joint
venturers, or cause the parties to be associated in any manner other than as
independent contractors.
h. The parties to this Agreement will perform their obligations hereunder consistent
with applicable federal, state and local laws.
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In witness whereof, the parties have caused this Agreement to be executed by their
duly authorized representatives as of the dates set forth below.
AGREED TO BY AND BETWEEN:
FOR CITY OF SEWARD:
Norm Regis,Acting City Manager Date
FOR PROVIDENCE HEALTH & SERVICES-WASHINGTON
DBA PROVIDENCE HEALTH& SERVICES ALASKA:
DocuSigned by:
,S�l 7/20/2023
'Jelski, Administrator-PSMH/PSMC Date
rDocuSigned by:
UL 7/21/2023
Wf62 RffliffiT5cecutive Director Date
Real Estate & Strategic Operations -Alaska
DocuSigned by:
GbSS 7/21/2023
fia C oss,D1U'gional Chief Executive -Alaska Date
Page 17 of 17
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•
Resolution 2023-095
A Resolution of the City Council of the City of Seward,
Alaska, Authorizing the City Manager To Enter An
Independent Contractor Agreement With Selena Soto for
GIS Technical Services and Appropriating Funds
Documents:
• Agenda Statement
• Resolution 2023-095
• Attachments:
o Work Contract
o Information/ Work To Be Completed
o Flo Analytics GIS Needs Assessment
233
City Council Agenda Statement
Meeting Date: August 14, 2023 `x
To: City Council
Through: Norm Regis,Acting City Manager
From: Jason Bickling, Community Development Director
Subject: Resolution 2023-095: Authorizing The City Manager to Enter An Independent
Contractor Agreement with Selena Soto for GIS Technical Services and
Appropriating Funds
Background and justification:
The City of Seward has contracted for GIS services for on number of small projects in the past 20 years or
so at rates between $95 and $130 per hour. hi 2021,the City contracted with Flo Analytics to create a
comprehensive GIS needs assessment of the current status and needs going forward of the City's GIS
system.
The summary of the GIS Needs assessment is that:
- We need to have a full-time person dedicated to the tasks of cleaning up from the past and
building our GIS for the future.
- Across all departments,there was an articulated need for an accurate and modern GIS system.
- An accurate,up to date GIS system will save the City significant money in worker efficiency as
well as ensure the accurate information is being used for decision making. (The City is
significantly behind compared to most other municipalities which is costing us time and money in
efficiency.)
We cancelled the work portion of the contract with Flo Analytics because the rate was $220/hour and our
own internal employee (Selena Soto)could do higher quality work,more efficiently, at a significant
savings.
Selena will be moving, and we would like to continue to work with Selena and have her complete the
projects that she has started. Her GIS skillset is not a common skillset which is why the city has
contracted out for it in the past. We already know the rates that other entities that we have worked with
charge. Selena has demonstrated a very high quality of work and efficiency in getting work done.
If approved, Selena would continue to work as an integral part of the Community Development
Department. She would provide monthly detailed reports on work completed which would be included in
the Community Development CMR Report. By Code we cannot do more than a two-year contract. After
two years,we would evaluate and could then enter another contract if both parties agree. The amount
budgeted is a not to exceed amount and based on a$55 and hour rate for 40 hours a week for 50 weeks.
This does not remove a union position. She was originally hired as a Department Admin but was
reclassified to a GIS Tech. We will be posting for the department admin position in the near future.
234
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan: 3.2.2, 3.7.1.3
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: S $110,000 (not to exceed amount)
This legislation(✓):
Creates revenue in the amount of: $
X Creates expenditure in amount of: $ 110,000
Creates a savings in the amount of: $
Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
X Not budgeted
Not applicable
Fund Balance Information
Affected Fund(✓):
X General SMIC Electric Wastewater
Boat Harbor Parking Water Healthcare
Motor Pool Other
Note: amounts are unaudited
Available Fund Balance $
Finance Director Signature:
Attorney Review
X Yes Attorney Signature:
Sam Severin
Not applicable Comments:
Administration Recommendation
XeAdopt Resolution
Other:
235
Sponsored by: Regis
CITY OF SEWARD,ALASKA
RESOLUTION 2023-095
A Resolution of the City Council of the City of Seward,Alaska,Authorizing the
City Manager To Enter An Independent Contractor Agreement With Selena Soto for
GIS Technical Services and Appropriating Funds.
WHEREAS, According to the 2021 GIS Needs Assessment conducted by Flo
Analytics, the City of Seward needs a full-time staff person dedicated to cleaning up,
building, and maintaining our GIS system; and
WHEREAS,According to the 2021 GIS Needs Assessment, there was an articulated
need for an accurate and modern GIS system across all departments; and
WHEREAS, Having an up to date and maintained GIS system will save the city
significant money in worker efficiency and provide accurate information for decision
making; and
WHEREAS, over the last two years, Selena Sota has made significant progress in
cleaning up our GIS and beginning to lay the groundwork for getting it up to date; and
WHEREAS, Selena Soto has demonstrated her work ethic and ability to work well
with all departments and go above and beyond what is required of her; and
WHEREAS, the City wishes to continue our working relationship with Selena Soto
in our GIS development.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA that:
Section 1. The City Manager is authorized to enter into an Independent Contractor
Agreement with Selena Soto for GIS Technical Services.
Section 2. Funding in the amount of$110,000. 00 is appropriated from the General Fund
Unassigned Account Number 01000-0000-3400 to Contracted Services Account Number 01000-1122-
7009.
Section 3. This resolution is effective upon adoption.
236
CITY OF SEWARD,ALASKA
RESOLUTION 2023-095
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14th day of
August, 2023.
THE CITY OF SEWARD,ALASKA
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
237
INDEPENDENT CONTRACTOR AGREEMENT
The parties to this Independent Contractor Agreement ("Agreement") are Selena
Soto ("Soto") and the City of Seward (the "City").
WHEREAS, Soto, as the current GIS Technician with the City will be leaving the
state in the fall for personal reasons; and
WHEREAS, Soto has been a significant asset to the city with exceptional
performance in regard to the GIS work she has completed; and
WHEREAS, Soto has proposed an agreement to continue her work on the GIS
needs of the City as determined by the needs assessment conducted in the fall of 2021;
and
WHEREAS, the City desires to contract with Soto for this purpose.
NOW, THEREFORE, the City of Seward and Soto agree as follows:
1. Professional Services
Soto will contract as the City's GIS Technician to continue the work determined by the GIS
needs assessment. Soto will be bound by all rules, policies, procedures, and ordinances
about the position and its duties, including, but not limited to, City ordinances, state and
federal law. Soto shall be directly supervised by Community Development Director Bickling
and shall have such authority and responsibilities as may be delegated by the Community
Development Director, consistent with City Code. The work will be conducted remotely;
however, Soto is expected to be reasonable available during City work hours to answer
questions, receive assignments, participate in meetings and to conduct work-related tasks.
2. Independent Contractor Status
It is the intent of Soto and the City that Soto is and should be classified as an independent
contractor and not an employee of the City. As such, Soto is not entitled to additional or
procedural due process as may be applicable to City employees. Soto agrees to provide
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238
the City with the appropriate tax identification information and assumes responsibility for
reporting and withholding any and all income taxes. Soto will procure and maintain during
the life of the contract professional liability insurance coverage to include coverage for
errors and omissions, in a form and amount satisfactory to the City and have it on file
with the City.
3. Compensation
Soto will invoice the City bi-monthly for her services at the rate of $55 per hour up to a
maximum of 40 hours per week for a maximum of 50 weeks a year.
4. Conflict of Interest
Soto will devote full-time efforts to the position. Soto may accept or continue employment
for other business entities during the term of this Agreement subject to meeting the
performance obligations herein. In the event Soto learns of a potential conflict of interest,
whether actual or perceived, Soto shall provide written notice of said conflict to the City
Manager as soon as practical upon learning of the potential conflict.
5. Termination
The City may terminate this Agreement at any time upon written notice. Termination may
be for any reason or no reason and is at the sole discretion of the City. Upon termination,
Soto shall be paid through the last day worked. Soto shall provide the City thirty (30) days
written notice of her intent to terminate the Agreement; the City, at its election, may
continue to retain Soto's services or terminate the Agreement effective immediately. In
the event of such termination, Soto shall be entitled to compensation as stated herein,
but no other benefits.
6. Term
This contract shall not exceed two years. It may be evaluated and a new contract
developed at that time.
7. Assignment
Contractor may not assign or delegate this Agreement, or any part of it, except with the
prior consent of the City.
8. Indemnification
z
239
To the fullest extent permitted by law, Soto agrees to defend, indemnify and hold harmless
the City of Seward, its elected and appointed officials, employees, and volunteers against
any and all liabilities, claims, demands, lawsuits, or losses, including costs and attorney
fees incurred in defense thereof, arising out of or in any way connected or associated with
this contract.
9. Severability
Wherever possible, each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
10. Choice of Law and Forum
Any controversy or claim arising out of or related to this Agreement, or the breach thereof
shall be governed by the laws of the State of Alaska, and the venue for any legal
proceedings thereon shall be the Superior Court for the State of Alaska, Third Judicial
District, at Seward, Alaska.
11. Voluntary Execution
Soto represents and acknowledges that prior to signing this Agreement, she has read the
Agreement, understands its terms, conditions and provisions, and has voluntarily
executed this Agreement without coercion. Soto additionally represents that she has had
an adequate opportunity to consider entering into this Agreement, and if so desired, to
discuss the terms conditions and provisions of this Agreement, as well as all related legal
consequences, with an attorney of her choice.
12. Entire Agreement
This Agreement supersedes any and all other agreements, either oral or in writing,
between the parties hereto with respect to the performance of services by Soto and
contains all of the covenants and agreements between the parties with respect to the
rendering of such services in any manner whatsoever. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements, orally or
otherwise. have been made by any party, or anyone acting on behalf of any party, which
are not embodied herein, and that no other agreement, statement, or promise not
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240
contained in this Agreement shall be valid or binding. Any modification of this Agreement
will be effective only if it is in writing signed by the party to be charged.
DATED:
Norm Regis
Acting City Manager
City of Seward
DATED:
Selena Soto
4
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GIS Proposal: Work to be Completed
Included:
- Specific Needs and Recommendations from the Needs Assessment
- Work already completed
- Schedule of work to be completed
Detail Excerpt of Needs and Recommendations from the Needs Assessment:
From the needs survey.-
City departments identified a significant amount of desired data and data improvements Overall,
the majority of departments have outstanding data needs(capture and updates)and a need to
know they are always using the latest data. Data should be stored in a single location, marked
as authoritative,and contain sufficient metadata to assist users in understanding any specific
requirements or restrictions around its use.
Overall staff identified the following as high priorities
• Improved spatial control and data accuracy for internal datasets:
• Parcel accuracy improvements A ,parcel adjustment has been done that has
markedly improved the locations of parcel lines along the highway corridors As the
data moves away from the main roads, the quality of the data degrades and could
benefit from ongoing improvements
• Updated imagery.
• Updated addresses—especially campgrounds,,parks, etc.
• Data sharing between government organizations and internally.
• Community gardens,,parks, cemeteries,,parking lots, trails
• Infrastructure and utility datasets including meters, outfalls,,port, campgrounds
• Easements
• Setbacks
• Leases
• Ability to capture additional and temporary data as needed.
• Automated generation ofMapBooks as backups
• Emergency preparation data, tools, and processes
• Custom datasets for specific purposes(e.g., harbor spill recording).
Recommendations
1. Identify and address urgent data update requirements with data capture and update
projects Consider using external resources to minimize impact on existing staff. Projects
Include.-
Fire Hydrants(generating lat/long values and unique IDs)and addresses
• Attribute updates on all data
• Pipe/flow direction
• Leases and converting from MS Access to a GIS structure
• Incorporating as builts
2. Update existing AGO map links that use external layers
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3. Migrate GIS,project data to a network (mapping drive) and off the GIS workstation
in preparation for workstation replacement or retirement
4. Update ,project data management from ,personal geodatabases to file geodatabases
Archive obsolete data and maps
5. Prepare to move to service based editing over local data.
• Prepare file geodatabase with domains, structure etc as needed to support data
capture, field editing and synchronization
• Prepare authoritative City data for upload to AGO, upload and set as
authoritative, then archive local copies of the data.
• Establish scripts to create a backup file geodatabase of AGO hosted data.
• Review existing map documents and convert to ArcGIS Pro documents, or update file
paths to the AGO backup file geodatabase if conversion is not possible. Archive
any map documents deemed no longer necessary to maintain.
6. Review and document file structure, standards and naming conventions for map
documents and GIS project data management Establish CAD file best practices and
network locations
7. Build and automate mapbooks for regular pdf and paper map production requirements
8. Establish data specific sharing mechanisms Enter into discussions w1th the borough
(and other external parties) regarding data sharing agreements, and (optionally) the
possibility of the borough providing data hosting in their Enterprise environment
Data owned and managed/updated by the borough should be accessed directly using
GIS services If direct access is not available, automation of data updates from the
external sources should be set up.
9. Review potential geodatabase replication and synchronization process for data in
Public Works and offsite edits
E. WORKFLOWS AND END USER REQUIREMENTS
Findings
In general, the GIS data flow has been to update AGO from locally edited and maintained
datasets This workflow has not been effective for communicating needed changes, and it is
difficult to know when updates were performed. In addition, some AGO-hosted data has
received updates (notably electric, storm drain, and Public Works features) that have not
been brought back into the local geodatabase(s). As a result, the datasets are not in sync.
View-only and editable field data access is increasingly important Most departments have a use
case for being able to edit or create features in the field and edit attributes themselves, but
they do not have the resources to do this via the desktop GIS software.
There is a clear need for specialized, task-centric web applications, particularly related to
property(building inspections, easements,property lines, addresses, and streets). These need to
provide easy search and filtering tools as well as other functions such as an easy way to
access latitude and longitude coordinates via hover or click. Maps and data need to be available
offline. Data accuracy information is required for decision-making and use.
243
The Harbor department would benefit from the ability to easily generate and capture GPS
coordinates for spill response. This could be achieved via a GIS web/mobile application that
allows the user to capture and classify an event or location and provide a log and tracking of
related events
The City relies heavily on paper records Because of this, staff experience delays when
looking for Anding information. They are also uncertain what data are available.
The City receives a considerable quantity of calls and requests for information from residents
and visitors These can be substantial especially during the summer. Many of these requests
may be mitigatable via self-service tools
Address updates and creation. There is a clear need to ensure that all locations that may be
required for E911 or other use should have an address assigned. These addresses should
be sent to the Borough. Notable landmarks should be considered for addressing.
Leases are managed across departments Leases and municipal lands data were consolidated
in an access database for the Municipal Lands report. This database was on the GIS computer
and has been inaccessible for some time so is not considered current
CAD users require access to current GIS data to inform their work The City does want to ensure
that CAD data representing final locations and attributes is brought back into GIS. The Electric
Department is interested in an internal GIS app and field data collection tools to be able to
see data and make edits in the field. There is an internal map and electric data that includes
transformers and pictures
Recommendations
1. Build personalized AGO maps and dashboards to provide task-based information and
address specific work requirements (such as field data lookups or updates, providing
a system overview, or quickly Anding property information). Each department will be
in volved in defining the specifc needs and number of tools required. There are identirled
requirements for.,
• Harbor spill tracking and mapping
• Parks inventory and assets
• Electric systems
• Housing/planning tools
• Code compliance
• Hydrant map
• Leases, easements etc.
• Property viewers for all staff
• Public self-service tools
2. Refine processes related to the cemetery, including data management and mapping
tools
3. Evaluate parks department requirements for GIS support for the Asset Management
Systems (AMS) being considered. GIS data will likely be required for effective
244
implementation and use, and there may be opportunities for electronic forms outside of
work orders and maintenance.
4. Engineering and,project managers to ,nut,procedures in place to ensure undated as-
builts are requested and,provided after each,project and subsequently,put into GIS. It
is recommended that projects not be considered complete until GIS data loading, or as-
built readiness review is completed.
5. Ensure address updates and changes are propagated to the relevant
departments/authority and develop policies,procedures and training as needed.
Work Completed:
2022 Work Year
• Established a Mapping/GIS webpage to provide maps and mapping resources to
the public
o Created a Parks & Rec map for campgrounds, parks, and facilities
o Created a Murals points of interest map
o Created a Subdivision map
• Updated imagery from the Kenai Peninsula Borough given to us in March of 2022
o Used in multiple ArcGIS Online (AGO) mapping applications as a basemap
layer
o Used in the Municipal Lands Management Plan for 2023 update
• Updated and created more maps for the Municipal Lands Management Plan 2022
update
• Created a heat map for Fire Department on emergency calls frequency
• Finished mapping the City cemetery and created two maps for the public to use
o Created new webpages for the cemetery maps
• Identified a possible solution on how to share/store data with all departments via
SharePoint
2023 Work Year
• Attached as-builts and photos to Public Works data
• Created a new mapping application for the Public Works office to be able to edit
features and updated the public map to Esri's new mapping template (Experience
Builder)
• Purchased mobile field workers' licenses that allow Public Works personnel to
update features in the field
• Created a Master Address Table (MAT) and helped establish GIS flags for
OpenGov
245
• Designed an address form to update addresses within city limits
• Created static maps for different departments
o Parks & Rec
o Harbor — SMIC development plan maps
• Created a Conditional Use Permits mapping application with permits/resolutions
attached to features
• Conducting a zoning and future land use map audit
Work to be Completed:
2023 Work Year Continued
• Update online zoning map to include ordinances/revisions and a future land use
layer
• Create a dashboard on zoning history
• Design a new zoning map format to include all of city limits on one page for the
Comp Plan review
• Organize ArcGIS Online data and archive old datasets
• Fix geodata and update geodatabases
• Continue creating instructions for departments on how to use certain mapping
applications
• Update fire hydrants data with Fire Department's ESO software
• Work on setting up an internal utility network map for Public Works and Fire
Department data (flow/direction of utilities)
• Work on creating a leases map
• Create an address locator and check that all addresses are up to date in
MSAG/KPB
• Create a map with mosaic imagery from aerial imagery from the 1970s-1990s
• Start working on moving items to SharePoint
• Help create maps for the Cemetery Master Plan
• Maintain zoning updates, cemetery databases, OpenGov updates, Municipal Land
Management Plan updates
• Other departmental needs that may come up
2024 Work Year
• Continue working on utility network for Public Works/Fire department
o Create inspection forms if needed
o Find free online trainings available for staff to use software
• Finish setting up an open data portal for the public to download shapefiles/data
• Move items such as property files over to SharePoint for departments to access
and easily search for documents
246
• Work on Emergency Operations maps and processes
o FEMA/Haz - Floodplain mapping updates
o Harbor Spill Map
o EOC maps
o Streams flow/direction, surface water flow/direction
• Update maps for Comp Plan Review (water/sewer, zoning, etc.)/Strategic Plan
• Start and continue working on ROW/Easements solutions
o Create a public mapping application
• Organize GIS Mapping Drive and consolidate data
• Maintain other GIS tasks, help with other GIS departmental needs that may
come up
2025 Work year
• Continue working on ROW/Easements solution
o Create a public mapping application
• Continue moving items to SharePoint and making documents easy access and
search
• Look into grants for lidar/any other GIS projects
o If lidar data becomes available for the City:
■ Viewshed analyses
■ Site selection analyses
• Create a building layer/update it with accurate information
• Create other custom maps for departments, organizations, public
o Map of National Registry of Historic Sites
o Story map for Comprehensive Plan
o Story map for a possible cemetery walking tour (collaborate with HP)
o Mobile vendor map
o Building Permits map
o Violations/Code Enforcement map
o Ownership map (state, city, private lands, etc.)
• Maintain other GIS tasks/Open Data Portal, help with other GIS departmental
needs that may come up
• Create more instructions for staff and find any helpful trainings through Esri
• Create scripts to help automate certain GIS tasks
247
,aw��
Rnalytics FLOMEMORANDUM
To: Courtney Bringhurst, Jason Bickling Date: February 24, 2022
From: Grant Herbert, Gary Greenberg Project No.: F1948.01.001
RE: City of Seward GIS Needs Assessment
The purpose of the Geographic Information System (GIS) needs assessment is to better understand
the necessary requirements for further optimizing and integrating GIS at the City of Seward, Alaska
(City). The findings can be used to guide recommendations, priorities, and actions for implementing
both short- and long-term GIS program implementation tasks. The needs assessment includes the
following discussion topics:
• Understanding the City's short-and long-term general goals and objectives.
• Evaluating personnel resources and responsibilities.
• Evaluating the current use of GIS and GIS adjacent relevant software technologies.
• Identifying relevant spatial data repositories and needs.
• Evaluating hardware, server, and network resources, including mobile devices.
A series of interviews were held with City staff and associated parties during October 2021. A list of
participants is provided below:
• Courtney Bringhurst(Community Development Planner)
• Jason Bickling(Community Development Director)
• Dustin Phillips (IT Director)
• Patrick Burnett(Electrical Field Engineer)
• Clinton Crites (Fire Chief)
• Marcus Mueller (Kenai Peninsula Borough Land Management Officer and GIS Manager)
• Derek Haws (Kenai Peninsula Borough Addressing Officer)
• Bobbi Lay(Kenai Peninsula Borough GIS Specialist)
• Celina Robinson (Kenai Peninsula Borough GIS Specialist)
• Matt Chase (Deputy Harbormaster)
• Tyler Florence (Parks & Recreation Director)
• Doug Schoessler (Public Works Director)
• Nate Crossley (Building Official)
The purpose of these interviews was to better understand the current use of GIS tools, GIS, and other
data available to the organization, and establish the desired GIS state. Our findings are summarized
in this document and accompanied by recommendations in both descriptive and table form.
To the extent possible, our recommendations have been aligned with what we perceive to be City's
general short- and long-term priorities and goals, use the software technologies the City is currently
using or would like to better leverage, and keep the needs of the City's various users in mind.
FLOANALYTICS 1 1-888-847-0299 1 WWW.FLO-ANALYTICS.COM
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Abbreviations and Acronyms
AGO ArcGIS Online
Borough Kenai Peninsula Borough
CAD computer aided drafting
City City of Seward, Alaska
GIS Geographic Information System
AMS Asset Management System
GOALS AND OBJECTIVES
Based on conversations during the project kickoff meeting and subsequent interviews, it is our
understanding that the City has several priorities related to furthering its internal GIS program. In
general, the organization aims to:
• Improve business processes
• Capture institutional knowledge
• Reduce City departmental data silos
• Ensure the use of common data across all applications
• Establish departmental data responsibility and data management
• Have GIS be compatible with future applications
RECOMMENDATIONS OVERVIEW
The City has a vision to provide self-service public tools, and access to accurate and up-to-date
information to all staff whether in the office or field, that is compatible with other systems. This can
only be achieved with a comprehensive web application platform with centralized data. As the City
currently has Esri licenses and familiarity, we believe that AGO offers the best cost-benefit option
available related to internal management capacity.
Using AGO for authoritative data storage, map hosting, and field data access and capture, and moving
to online applications will enhance public and departmental access to data, capture institutional
knowledge, and consolidate data editing and management. Departments will have agency and
ownership over their data without requiring advanced GIS skills. Users and applications will connect
directly to authoritative web services to ensure a single point of GIS truth and reliable up to date
information. Task specific tools and dashboards will provide better data access, self service
capabilities and enable staff to make field data updates directly. GIS project work can be carried out
on network and local GIS resources, with any authoritative data being promoted to the AGO
environment as needed.
A series of data update projects will be required to ensure data is current. Establishing departmental
data stewardship and documenting data management practices will help ensure that data remains up
to date in the future, particularly as-builts and internal data capture efforts.
Additional users will need to be purchased in the AGO environment to handle field workers and editors,
however these are considerably cheaper than self-hosted alternatives. A scripted download of AGO
data to a file geodatabase can serve as a backup and source for map documents that must remain
ArcMap based for the interim. GIS specialists will migrate to using ArcGIS Pro (with training) and
convert old map documents as needed. A relationship with a consulting firm is recommended to
provide greater GIS capacity and support as required.
Completion of all the recommendations in this document will result in the development of
comprehensive GIS based tools available to all staff and the public, with editing capabilities and
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additional analysis available as needed. This system will provide for easier data and staff continuity,
reduce institutional knowledge silos, and be easier for the City and external partners to support.
Sharing of authoritative data between entities will improved data trust and decision making
A. PERSONNEL RESOURCES AND ROLES
Findings
The City has experienced sufficient staff turnover and loss of institutional knowledge. This has
impacted the ability of departments to easily manage their data responsibilities and handle transitions.
Departments are putting in place tools and processes to address some of these issues, but the efforts
are not centrally coordinated. In addition to staff turnover, the City has a seasonal workforce that
increases during the summer. Onboarding the seasonal staff requires simple and clear processes so
people can get up to speed quickly and be effective.
No staff have been specifically dedicated to maintaining GIS data and systems, but traditionally
Community Development has had GIS trained staff and equipment available and provided some
degree of GIS resources (especially printing large-format maps). Overall, most departments reported
that they had insufficient resources to handle the data updates required to get (and keep)their data
up to date. Historically,the City has used external contractors to handle GIS data updates and specific
projects, but this has been more sporadic in the recent past few years due to turnover. Contractor
support was traditionally regular and planned to ensure quality and currency of data. City staff have
varying amounts of GIS expertise,with the majority having minimal exposure, butthere is a willingness
to learn how to update and manage their data and to use electronic systems where these provide a
benefit.The City's strong preference is for mobile and web map tools in many departments for ease of
use and flexibility in data access. Overall, departmental staff desire to be capable of making GIS edits
directly with training in the use of appropriate tools.Some departments do not have any potential GIS
resources.
Departments may have split responsibility for facility management, and poor interdepartmental
communications and inconsistent data access has caused errors and issues. Data management
responsibilities may be poorly defined. One example is managing the cemetery, which currently
involves the city clerk (for gravesite purchases) and Parks & Recreation (that maintains the cemetery
and are notified where people are to be buried). Currently, any GIS and attribute data updates related
to the cemetery require Community Development resources. Another example is lease management
which is decentralized. Departments are frequently reliant on asking other departments to provide up-
to-date information, and important details like data quality and completeness are often unknown.
Overall, the City gets a significant number of calls from the public requesting information about City
facilities and processes, particularly during the summer. Departments have instituted new processes
and systems to help address this, such as the Parks & Recreation use of camp spot to handle
campground reservations (although they still must handle cancellations via telephone).The volume of
calls can be a significant workload for departments, and all expressed a desire to provide self-service
options.
Kenai Peninsula Borough (the Borough)is a significant partnerto the City in the management of shared
GIS data. Although they have more resources than the City, the Borough states they do not have
personnel resources available to assist the City. The Borough recognizes data sharing across
organizations is essential. This is most significant for Addressing and a-911 where each City is the
local addressing authority and the Borough is responsible for maintaining the Borough wide e-911
system. The Borough desires to coordinate GIS data and processes between the City, Borough and
state (via the new State of Alaska Geospatial Information Officer)to promote standardization.
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Recommendations
1. Identify GIS training required (particularly related to the move to ArcGIS Pro)for internal staff
and budget for yearly training updates.
2. Contract with external GIS contractors to fill skills gaps, quickly implement data updates and
provide GIS support as needed.
3. Establish Departmental data governance policies and personnel. This includes defining the
department responsible for specific GIS data updates (receiving updates or creating new data)
and the staff who undertake the data updates (this can be delegated).
4. Data sharing and data management conversations between borough, city and state as
applicable.
B. GIS SOFTWARE AND TOOLS
Findings
• Esri ArcGIS Desktop. The City has two ArcGIS Desktop Basic licenses (one in Community
Development and one in Public Works). The departments manage and fund the GIS
licenses.
• Esri ArcGIS Online (AGO). The City has two logins for AGO (based on their current ArcGIS
Desktop licenses) and the platform is working well for most staff. Currently there are
electric,water and sewer, cemetery and zoning applications available on the City's GIS and
Mapping Portal (https://seward.maps.arcgis.com/home/index.html), although there are
several external links to layers that are no longer working.
• FIREHOUSE Software.The City is replacing the existing fire software with ESO Fire Records
Management System software.
• ESO Fire Records Management System.The Fire Department is implementing the ESO Fire
RMS software (https://www.eso.com/fire), and this is expected to be operational in
January. The system will handle building and life safety inspections and hydrant activity.
The system does not receive data from the Borough.An application programming interface
is available to query the system if needed (e.g., extracting the last 20 updated incident
records)and can supply data in XML or JSON formats.There is no GIS integration at present
but the system can display hydrant locations if latitude and longitude fields are included in
the import.
• Autodesk AutoCAD 3D Mapping 2021 is used by the Electric Department to capture
location and as-built information.
• Microsoft SQL Server. The City has an installation of Microsoft SQL Server (slated for
upgrade soon) but would need to establish a new SQL Server instance if required to
support an Enterprise GIS.
• The City uses Laserfiche document management software to store and make available City
documents. Aweb portal is available.
• OpenGov. The City Clerk's office uses OpenGov Online cloud platform.
• Harmari.A cloud-hosted system for monitoring short term rental compliance (also used by
Kenai Peninsula Borough).
• Google Maps. Used by Parks & Recreation to provide public information via Google
Business listings that link to the City website.
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• The Borough is undertaking an internal GIS update to Esri Enterprise 10.9. The Borough
uses GeoCortex internally and has SQL Server Enterprise geodatabases. GIS Services
provided by the Borough have been used for City web maps.
• onX Hunt application. This mobile application is popular with City staff as it has better
imagery than most applications, shows property lines, and works offline.
Recommendations
1. Add additional AGO users for individual Iogins for all departments that require editor
capabilities or above. Individual Iogins are recommended for security reasons. If desired,AGO
Iogins could be connected to the City Active Directory to provide for a more seamless login
experience. At the time of evaluation Esri yearly pricing for AGO users is: Creator: $500, Field
Worker: $350, Editor: $200, and Viewer: $100. Suggested additional AGO Licensing by
department is below:
a. Seward Electric - 1 Field Worker License
b. Parks and Recreation - 1 Field Worker License
c. Harbor - 1 Field Worker License
d. Fire Department - 1 Field Worker License
e. Community Development - 1 Viewer License
f. City Manager - 1 Viewer License
g. Police - 1 Viewer License
2. Upgrade the community development ArcGIS license level from Basic to Standard to ensure
accurate editing and data management.
3. Ensure Esri ArcGIS licenses remain under maintenance to keep access to ArcGIS Pro.
4. Confirm the procedures for required data flows between the ESO RMS and GIS. Undertake a
project to fully evaluate the ESO RMS API for extracting inspection and test data for GIS linking
and visualization if needed.
C. HARDWARE,SERVER,AND NETWORK RESOURCES,AND MOBILE DEVICES
Findings
The City Information Technology department reports that, if required,they have sufficient resources to
accommodate additional virtual servers to support GIS activities. There is sufficient network storage
space for anticipated data needs. The City is comfortable with either on-premise or cloud-based
solutions.
Currently, the primary GIS machine (a Dell Precision GIS Workstation that is due for replacement) is
located in Community Development. City office computers generally have 15 processor, 16GB memory,
and an integrated Graphics Processing Unit and are not suitable for heavy GIS software use, but are
fine for GIS web applications.
Community Development is in the process of moving into City Hall from the existing annex building,
which is expected to improve their general network speed. Public Works is in a satellite building with
good connectivity.A site-wide virtual private network handles secure connections to the network.
Office internet access has improved over the past three to four years, and further enhancements are
planned. Internet access in the field can be variable, and apps and data access require offline
capability.
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The City budgets separately for mobile devices and departments request them on a case-by-case
basis. Departments prefer to use Apple iPads.
A large-format plotter is available in Community Development for in-house printing. The plotter is
connected to the network.
Recommendations
1. Local GIS editors should have a computer with GPU (required for Pro).With only two staff likely
to require access to GIS software directly it may be more cost-effective to provide computers
of sufficient capability and retire the GIS workstation. If the workstation is still required
(particularly for occasional/remote access), ensure that the system requirements are
sufficient for ArcGIS Pro and that workstation access can be provided remotely for users. With
AGO hosted data many users will be able to use web and mobile applications for data edits
and creation. Project data will be managed locally and stored on the network.
D.SPATIAL AND NONSPATIAL DATA REPOSITORIES
Findings
Almost all spatial data created by the City is considered public and freely accessible. The City has
significant dependencies on data provided by external entities, especially the Kenai Peninsula
Borough.
The City AGO account hosts a number of datasets, but updates have been infrequent, and the data
are generally of uncertain provenance. There are several broken external data layer links to Borough
GIS Services that need to be repaired—these data are very important and used by all departments.
The City uses a mix of personal and file geodatabases to store data. Copies of these geodatabases are
used by departments (particularly Public Works)to get around network issues they experienced. The
Community Development geodatabase is located on the GIS workstation computer while the Public
Works geodatabase is located on their server.The M (mapping) drive location is currently shared from
the GIS workstation in Community Development. We were unable to establish if there is a backup
process.
Existing M mapping drive structure and contents are shown below:
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Figure 1: Mapping Drive Folder Structure
i]`5c _-]"C ni::;r CJ Type Size
2019 �AVZ3249:A6AM Filefolder
9555bca012933d2504d16724E4e 9/112020&52PM Filefolder
Bringhurst 10IT12WI1;27PM Filefolder
Dalabase 11122120di 10:54AM He folder
Eng-GIS_Final E11412019Z-21PM Filefolder
EXPRESSIONS 101121202012d14 PM Filefolder
Geodata 1112.2120211&54AM Filefolder
Imagery V41201610;37 AM Fire folder
Maps 3/1 31201 6 9-58 AM File folder
profiles from c Q1412619 2!15 PM Filefolder
RecordDrawings I1115120211QZ9AM Filefolder
Selena 1V2./2CF2111:31AM Filefolder
Support 5/512016 5:37 PM Filefolder
TEMP 1 d13120N 3;23 PIM1 File folder
dfirm-2-I9 1011SJMb0 2:11.6 PM JPG File 156 KE
dfinn-4-I9 1011W2024 2•138 PM JPG File 255 KO
IN fort raymond whrte 912512017 3,30 PM Microsoft Edge P... 662 Itfl
Q fort roymond 9125120171;40 PM ArcGISAr€Map D,-, 1,115 Ke
IW fort reymond 917512017139 PM Mimsofr Edge P-.. 3,457 IU
hops 1Qlt$+20262:1d PM Microsoft Word D_,. 27 Q
j tJnhdled 1011&+213201,42 PM JPG File M KB
Figure 2: Mapping Drive Database Folder with Planning Personal Geodatabase
piny i;M:j Database
Name Date modified Type Size
12 CityParcels 7/24/20132:33 PM Microsoft Excel C,,, 4B KB
In IutZoningLanduse 11/71201 3 1 1:41 AM Microsoft Excel C,,, 1 KB
FJ IutZoningLanduse 11/71201 3 1 1:41 AM XML Document 1 KB
Muni Lands Plan2009withcorrections.DR... 7/24/20132:33 PM Microsoft Word 9... 1,029 KB
schema 1 1/71201 3 2:22PM Configuration sett... 1 KB
LJ SewardPlanningDatabase,Idb 12/212021 11:36 AM LDB File 1 KB
FJ SewardPlanningDatabase.mdb 11/29/2021 10:49AM MDB File 1,052 KB
In tblLanduse 11/7/201 3 2:22 PM Microsoft Excel C,,, 7 KB
Figure 3: Mapping Drive Imagery Folder with File Geodatabase
ping(U) > Imagery
Name Date modified Type Size
Aerial-photos 7/16/2020 2:23 P M Filefolder
Q LiDARW 3/1 3/201 6 9:36AM Filefolder
Q Murals 3/1 3/201 6 9:36AM Filefolder
D SBCFSA-Deliverables 7/16/2020 2:37 P M Filefolder
D Seward_Imagery,gdb 121212021 11:51 AM Filefolder
SewardHope 3/1 3/201 6 9:47AM Filefolder
D tiff 3/1 3/201 6 9:55AM Filefolder
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City of Seward Project No. F1948.O1.001
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Figure 4: Mapping Drive Geodata Folder with Personal Geodatabase
loping(M:) > Geodata
Name Date modified Type
addresses 11/9/2021 5:33 PM Filefolder
AsBullt 3/1 3/201 6 9:33AM Filefolder
cemetery 8/15/2017 2:17 P M Filefolder
census 7/6/2021 12:50 PM Filefolder
ChugachNationalForest 3/1 3/201 6 9:33AM Filefolder
DFIRM 2 3/13/2016 9:33 AM Filefolder
Electric 11/20/2013 1:53 PM Filefolder
FEMA 1 0/1 21201 5 2:41 PM Filefolder
GPS 10/15/2020 2:57 P M Filefolder
KPBData 6/4/2019 4:40 P M Filefolder
Lease 3/1 3/201 6 9:34AM Filefolder
Levee 3/1 3/201 6 9:34AM Filefolder
MiscRoadsData 2,/1/201$11:46AM Filefolder
smic 11/291202110:47AM Filefolder
soil_ak639 3/13/2016 9:34 AM Filefolder
StateofAlaska 3/1 3/201 6 9:34AM Filefolder
Tsunami_Innundation_Maps 3/1 3/201 6 9:34AM Filefolder
Control 11/1 91201 4 2:32 PM Microsoft Excel97,,. 25 K6
schema 3/30/2017 11:03 AM Configuration sett... 2 KB
Seward Geodata.ldb 121212021 11:36AM LDB File 1 KB
Seward_Geodata.mdb 12/1/2021 2:51 PM MDB File 149,252 KB
Y Seward-Geodata 10/4/2021 2:12 PM Compressed[xipp.., 62,449 KB
1p UnplacedBurials 3/30/2017 11:03 AM Microsoft Excel C,.. 124 KB
UnplacedBurials.txt 3/30/2017 11:03 AM XML Document 13 K6
IM UnplacedBurials 3/30/201711:11 AM Microsoft Excel W... 90 KB
Data location accuracy and spatial control has been a big issue in the past, particularly related to
parcel boundaries. Projects to improve spatial accuracy have improved the situation, but not all
datasets may have been adjusted fully. Overall, the data quality, accuracy, and completeness are
considered low. Many datasets need to be further evaluated to determine if additional attributes are
required.
The Borough is the platting authority and is responsible for parcels. It has processes to keep these up
to date with assessment and other attributes. The Borough also updates emergency management
data by inputting updates received from cities and pushing the combined data to emergency services.
Managing street data involves receiving notification from the City, approving street names, and
generating the GIS features and attributes. These are also fed into the network dataset used for
emergency dispatch. Address range information is applied differently between City and Borough
streets. Addresses are a shared responsibility between the City and Borough, with address points
maintained by the Borough and submitted by the cities through an online tool.
Other spatial data are generally stored in computer aided drafting(CAD)files, paper charts, and maps,
which may be digitized and available in Laserfiche. CAD files may not be georeferenced, or use local
coordinate systems. In addition, data captured was referenced to old parcel locations and so these
are now out of position spatially and will need to be corrected. CAD staff generally do not access GIS
data in the software.Some personal CAD files were used in the past, and an unknown number of these
are reported as being lost. Parks& Recreation has some informal work-task maps, a Google Earth map
of snow clearing areas, and paper maps.
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The City gets and provides some information from the Borough E911 system, but this process appears
to be informal. Departments reported that they would like access to more data from the City E911
system. Some datasets may require renumbering or identifying, such as hydrants. They use a
numbering system from previous firehouse software that does not match the sequential numbering
used by Public Works.
There is a significant amount of nonspatial data, generally managed in systems like Excel, or as
documents in Laserfiche. This includes various numbering system tracking sheets, headstone data,
and building inspection records(since 2013). Leases and municipal lands data were consolidated into
a Microsoft Access database for reporting. This data has not been updated and the data is not
generally accessible to all as it is hosted on the GIS workstation.
Data Wish List
City departments identified a significant amount of desired data and data improvements. Overall, the
majority of departments have outstanding data needs (capture and updates)and a need to know they
are always using the latest data. Data should be stored in a single location, marked as authoritative,
and contain sufficient metadata to assist users in understanding any specific requirements or
restrictions around its use.
Overall staff identified the following as high priorities:
• Improved spatial control and data accuracy for internal datasets.
• Parcel accuracy improvements. A parcel adjustment has been done that has markedly
improved the locations of parcel lines along the highway corridors.As the data moves away
from the main roads, the quality of the data degrades and could benefit from ongoing
improvements.
• Updated imagery.
• Updated addresses—especially campgrounds, parks, etc.
• Data sharing between government organizations and internally.
• Community gardens, parks, cemeteries, parking lots, trails.
• Infrastructure and utility datasets including meters, outfalls, port, campgrounds.
• Easements.
• Setbacks.
• Leases.
• Ability to capture additional and temporary data as needed.
• Automated generation of MapBooks as backups.
• Emergency preparation data, tools, and processes.
• Custom datasets for specific purposes (e.g., harbor spill recording).
Recommendations
1. Identify and address urgent data update requirements with data capture and update projects.
Consider using external resources to minimize impact on existing staff. Projects include:
• Fire Hydrants (generating Iat/long values and unique IDs)and addresses
• Attribute updates on all data
• Pipe/flow direction
• Leases and converting from MS Access to a GIS structure
• Incorporating as-builts
2. Update existing AGO map links that use external layers.
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3. Migrate GIS project data to a network (mapping drive) and off the GIS workstation in
preparation for workstation replacement or retirement.
4. Update project data management from personal geodatabases to file geodatabases. Archive
obsolete data and maps.
5. Prepare to move to service based editing over local data.
• Prepare file geodatabase with domains, structure etc. as needed to support data capture,
field editing and synchronization
• Prepare authoritative City data for upload to AGO, upload and set as authoritative, then
archive local copies of the data.
• Establish scripts to create a backup file geodatabase of AGO hosted data.
• Review existing map documents and convert to ArcGIS Pro documents, or update file paths
to the AGO backup file geodatabase if conversion is not possible. Archive any map
documents deemed no longer necessary to maintain.
6. Review and document file structure, standards and naming conventions for map documents
and GIS project data management. Establish CAD file best practices and network locations.
7. Build and automate mapbooks for regular pdf and paper map production requirements.
8. Establish data specific sharing mechanisms. Enter into discussions with the borough (and
other external parties) regarding data sharing agreements, and (optionally) the possibility of
the borough providing data hosting in their Enterprise environment. Data owned and
managed/updated by the borough should be accessed directly using GIS services. If direct
access is not available, automation of data updates from the external sources should be set
up.
9. Review potential geodatabase replication and synchronization process for data in Public
Works and offsite edits.
E.WORKFLOWS AND END USER REQUIREMENTS
Findings
In general, the GIS data flow has been to update AGO from locally edited and maintained datasets.
This workflow has not been effective for communicating needed changes, and it is difficult to know
when updates were performed. In addition, some AGO-hosted data has received updates (notably
electric, storm drain, and Public Works features) that have not been brought back into the local
geodatabase(s). As a result, the datasets are not in sync.
View-only and editable field data access is increasingly important. Most departments have a use case
for being able to edit or create features in the field and edit attributes themselves, but they do not
have the resources to do this via the desktop GIS software.
There is a clear need for specialized, task-centric web applications, particularly related to property
(building inspections, easements, property lines, addresses, and streets). These need to provide easy
search and filtering tools as well as other functions such as an easy way to access latitude and
longitude coordinates via hover or click. Maps and data need to be available offline. Data accuracy
information is required for decision-making and use.
R:\F1948.01 City of Seward\Document\001_2022.02.24 Needs 257ent\City of Seward GIS Needs Assessment.docx
City of Seward Project No. F1948.O1.001
February 24, 2022
Page 11
The Harbor department would benefitfrom the ability to easily generate and capture GPS coordinates
for spill response. This could be achieved via a GIS web/mobile application that allows the user to
capture and classify an event or location and provide a log and tracking of related events.
The City relies heavily on paper records. Because of this, staff experience delays when looking for
finding information. They are also uncertain what data are available.
The City receives a considerable quantity of calls and requests for information from residents and
visitors. These can be substantial especially during the summer. Many of these requests may be
mitigatable via self-service tools.
Address updates and creation. There is a clear need to ensure that all locations that may be required
for E911 or other use should have an address assigned. These addresses should be sent to the
Borough. Notable landmarks should be considered for addressing.
Leases are managed across departments. Leases and municipal lands data were consolidated in an
access database for the Municipal Lands report.This database was on the GIS computer and has been
inaccessible for some time so is not considered current.
CAD users require access to current GIS data to inform their work. The City does want to ensure that
CAD data representing final locations and attributes is brought back into GIS.The Electric Department
is interested in an internal GIS app and field data collection tools to be able to see data and make
edits in the field. There is an internal map and electric data that includes transformers and pictures.
Recommendations
1. Build personalized AGO maps and dashboards to provide task-based information and address
specific work requirements (such as field data lookups or updates, providing a system
overview, or quickly finding property information). Each department will be involved in defining
the specific needs and number of tools required.There are identified requirements for:
• Harbor spill tracking and mapping
• Parks inventory and assets
• Electric systems
• Housing/planningtools
• Code compliance
• Hydrant map
• Leases, easements etc.
• Property viewers for all staff
• Public self-service tools
2. Refine processes related to the cemetery, including data management and mapping tools.
3. Evaluate parks department requirements for GIS support for the Asset Management Systems
(AMS) being considered. GIS data will likely be required for effective implementation and use,
and there may be opportunities for electronic forms outside of work orders and maintenance.
4. Engineering and project managers to put procedures in place to ensure updated as-builts are
requested and provided after each project and subsequently put into GIS. It is recommended
that projects not be considered complete until GIS data loading, or as-built readiness review is
completed.
5. Ensure address updates and changes are propagated to the relevant departments/authority
and develop policies, procedures and training as needed.
R:\F1948.01 City of Seward\Document\001_2022.02.24 Needs 258ent\City of Seward GIS Needs Assessment.docx
•
Resolution 2023-094:
Repealing Resolution 2023-058: Personnel Policy
2023-01 : Phone Use and Recording Policy
Documents:
• Agenda Statement
• Resolution 2023-094
• Resolution 2023-058
• June 12, 2023 City Council Meeting Minutes
259
City Council Agenda Statement
Meeting Date: August 14, 2023 `x
To: City Council
From: Norm Regis,Acting City Manager
Subject: Resolution 2023-094: Repealing Resolution 2023-058:Personnel Policy 2023-
01: Phone Use and Recording Policy
Background and justification:
Seward City Code 3.05.015 A. 2. states the City Council shall adopt all personnel policies.
City Council approved Resolution 2023-058:Adopting Personnel Policy 2023-01 on May 8th 2023.
On June 12, 2023 City Council Directed the City Manager to draft a resolution to repeal personnel
policy 2023-01: Phone Use and Recording Policy. The Acting City Manager worked with the City
Attorney after this meeting to discuss repealing the policy. This resolution repeals Resolution 2025:
Personnel Policy 2023-01: Phone Use and Recording Policy.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
ertification of Funds
Total amount of funds listed in this legislation: S 0
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
x Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
x Not applicable
Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking Water Healthcare
Motor Pool Other
Note: amounts are unaudited
Available Fund Balance $
260
Finance Director Signature: No fiscal impact
Attorney Review
x Yes Attorney Signature:
A r.J
Sam Severin 7/28/23
Not applicable Comments:
Administration Recommendation
x Approve Res.
Other:
261
Sponsored by: Regis
CITY OF SEWARD,ALASKA
RESOLUTION 2023-094
A Resolution Of The City Council Of The City Of Seward,Alaska, Repealing
Resolution 2023-058: Personnel Policy 2023-01: Phone Use and Recording
Policy
WHEREAS, City Council approved Resolution 2023-058: Adopting Personnel Policy
2023-01 on May 8th 2023 ; and
WHEREAS, On June 12, 2023 City Council Directed the City Manager to draft a
resolution to repeal personnel policy 2023-01: Phone Use and Recording Policy.
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD,ALASKA,that:
Section 1. Resolution 2023-058 is hereby repealed. The Phone Use and Recording Policy
adopted on May 8, 2023 is rescinded.
Section 2. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska this 14th
day of August, 2023.
THE CITY OF SEWARD,ALASKA
Sue McClure, Mayor
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Kris Peck
City Clerk
(City Seal)
262
CITY OF SEWARD,ALASKA Sponsored by: Bower
RESOLUTION 2023-058
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA,ADOPTING PERSONNEL POLICY#2023-01: PHONE USE AND
RECORDING POLICY
WHEREAS, Seward City Code 3.05.015 A. 2. states the city council shall adopt all
personnel policies; and
WHEREAS,the city manager requests the city council adopt Personnel Policy#2023-
01; and
WHEREAS, Personnel Policy #2023-01 provides the parameters and restrictions
concerning phone use and surreptitious recording; and
WHEREAS, the policy is applicable to all employees.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
Section 1.The Seward City Council adopts Personnel Policy#2023-01: Phone Use and
Recording in its entirety as attached herein.
Section 2. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 8cn
day of May, 2023.
THE CITY OF SEWARD,ALASKA
Sue McClure,Mayor
AYES: Calhoon, Barnwell, DeMoss, Osenga, Wells, Finch, McClure
NOES: None
ABSENT: None
ABSTAIN: None
263
CITY OF SEWARD,ALASKA
RESOLUTION 2023-058
ATTEST:
/&J-(,-�
Brenda J. Ballc
City Clerk
(C e,++�5 . 9�...
.•'•� aRp°fir �4'
G
SEAL
•On....�
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264
City Council Agenda Statement
Meeting Date: May 8, 2023
To: City Council
Through: Janette Bower, City Manager
From: Tammy Nickell, Human Resources Manager
Subject: Resolution 2023-058: Adopting Personnel Policy #2023-01: Phone Use and
Recording Policy
Background and justification:
Seward City Code 3.05.015 A. 2. states the city council shall adopt all personnel policies and
the city manager requests the city council adopt Personnel Policy #2023-01.
Personnel Policy #2023-01 provides the parameters and restrictions concerning phone use and
surreptitious recording the policy is applicable to all employees.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation (✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
✓ Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
✓ Not applicable
Fund Balance Information
Affected Fund (✓):
General SMIC Electric Wastewater
Boat Harbor Parking F1 Wat F1 Healthcare
Motor Pool Other
2'65
Note: amounts are unaudited
Fund Balance/Net position — unrestricted/unassigned $ n/a
Finance Director Signature:
Attorney ew
✓ Yes Attorney Signature:
Not applicable Comments:
Administration Recommendation
Approve Res.
Other:
2'�
City of Seward
Phone Use and Recording Policy
Approved by City Council Resolution 2023-058
May 8, 2023
Personnel Policy #2023-01
Applicable to All Employees
Phone Use and Recording Policy
A. Phone use.
1. While at work, employees are expected to exercise discretion in using personal
phones and smartphones.
2. Excessive personal calls or text messages or smartphone use during the workday
can interfere with employee productivity and be distracting to others.
3. Employees are expected to make any personal calls and or text messages and
personal use of smartphones during nonwork time when possible.
B. Surreptitious recording with a phone or other audio or visual device is
prohibited.
1. Surreptitious recording is defined as the video and/or audio recording, on any
device, of clients, coworkers, other city employees, city manager, or city officials,
without their knowledge, on or adjacent to the recorder's work time or the work
time of the one being recorded.
2. Surreptitious recording is prohibited without the express prior written permission
of the recording employee's supervisor, with violations subject to discipline up to
or including dismissal for cause.
3. The sole exception to this prohibition is that employees who believe they have a
legal right or a concerted activity right to surreptitiously record must notify, or
have their legal or union representative notify, city management in advance of or
concurrent with the start of any surreptitious recording.
4. Failure to do so will result in discipline or dismissal regardless of the eventual
justification given for the surreptitious recording.
5. Video, photos, or audio recording in restrooms and/or locker rooms is strictly
prohibited.
6. This policy does not prohibit employer-owned cameras from recording for business
purposes.
Personnel Policy #2023-01
May 8, 2023
Page 1 of 1
267
City of Seward,Alaska City Council Meeting Minutes
June 12, 2023 Volume 42,Page 333
CALL TO ORDER
The.tune 12, 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 DeMoss
Mike Calhoon Randy Wells
Kevin Finch Robert Barnwell
comprising a quorum of the Council; and
Norm Regis, Acting City Manager
Stephen Sowell, Assistant City Manager
Jason Bickling, Community Development Director
Sully Jusino, Deputy Finance Director
Tammy Nickell, Human Resources Manager
Brooks Chandler, City Attorney
Karen Corrigan, Acting Deputy City Clerk
Excused—None
Absent—None
CITIZEN COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED
FOR PUBLIC HEARING
Alan Nickell, outside city limits, stated he was the Police Chief and announced the grand
opening for the animal shelter was held and they received an additional S818.11 for donations,
thanked the citizens and appreciated the support.
APPROVAL OF AGENDA AND CONSENT AGENDA
Motion (OsengalDeMoss) Approval of Agenda and Consent Agenda
Mayor McClure requested Action Memorandum 2023-006 to be removed from the consent
agenda.
Motion Passed Unanimous
268
City of Seward,Alaska City Council Meeting Minutes
June 12, 2023 Volume 42,Page 334
The clerk read the following approved consent agenda items:
Approval of the May 22,2023 City Council Meeting Minutes.
Introduction of Ordinance 2023-016, Amending Seward City Code Chapter 5.20 Improvement
Districts.
Introduction of Ordinance 2023-017, Amending Seward City Code Chapter 2.15 Ordinances and
Resolutions.
Resolution 2023-070, Accepting The State Of Alaska, Healthy & Equitable Communities Grant
In The Amount Of $49,162.00, Acting As A Pass-Through Agency For Seward Prevention
Coalition And Appropriating Funds
Proclamations and Awards-None
City Manager Report
Acting City Manager Norm Regis advised that the harbor had a second vessel sink in the
harbor due to unknown causes and there was no fuel spill from it.
Community Development Director Jason Bickling advised that preparation for a
planning and zoning meeting required four staff members' time to prepare the materials and attend.
He added there was an inconvenience when commissioners do not attend with no previous notice.
Agenda items for the commission were delayed due to the cancellation of the meeting when a
quorum cannot be met.
Deputy Finance Director Sully Jusino said that the net billing is planned to be in use in
July with the help of the company Utility Assist.
Bickling stated that there were three short term rental businesses not currently licensed and
his department was working with the owners to resolve the issue.
Regis advised that the road construction on Third Avenue would be an inconvenience for
the businesses during the day, but citizens complained that they cannot sleep at night due to
construction noise.
Electric Lineman Brian Thrall, said the generators leased for the Seward Industrial
Marine Center project required additional workers to maintain them, thus overtime hours should
be expected.
[Utility Manager Rob Montgomery said that he believed the rate increase for electricity
might be as high as 15%.
City Clerk Report was in the packet.
269
City of Seward,Alaska City Council Meeting Minutes
June 12, 2023 Volume 42, Page 335
City Attorney Report
City Attorney Brooks Chandler clarified that executive sessions were appropriate for the
city council to receive legal advice from the city attorney. Chandler added that actions by the city
council would always be made in public and not in an executive session.
Other Reports and Announcements
Kenai Peninsula Borough Assembly Report was not presented.
Presentations
Presentation on updates from the Kenai Peninsula Economic Development District
PUBLIC HEARINGS
Ordinances for Enactment
Ordinance 2023-015, Amending Seward City Code Title 5 Purchasing, Contracts and Professional
Services (This ordinance was introduced on May 22, 2023, and was coming tonight for public
hearing and enactment)
Motion (DeMoss/BarnweII ) Enact Ordinance 2023-015
Regis requested the ordinance to be postponed, due to corrections required, until the city
council meeting on July 10, 2023.
Notice of the public hearing being posted and published as required by law was noted and the
public hearing was opened. No one appeared and the public hearing was closed.
Motion (OsengalWells) Postpone Ordinance 2023-015 until July
10,2023
Motion Passed Unanimous
Resolutions Requiring Public Hearing
Resolution 2023-068, Updating the Municipal Lands Inventory and Management Plan to Include
Recommendations to Improve and Designate Parking and Access at the Fourth of July Beach and
Plat the Area into One Parcel and Rezone to Park.
Motion (Osenga/DeMoss } Approve Resolution 2023-058
Bickling stated that funding would be required for the replating and rezoning costs.
Notice of the public hearing being posted and published as required by law was noted and the
public hearing was opened.
270
City of Seward,Alaska City Council Meeting Minutes
.Tune 12,2023 Volume 42, Page 336
Carol Griswold, inside city limits, spoke in support of the ordinance and stressed the
importance to protect the area as a park and to provide increased parking for the public.
No one else appeared and the public hearing was closed.
Finch stated his support for this resolution.
Motion Passed Unanimous
Resolution 2023-069, Updating The Municipal Lands Inventory And Management Plan To
Include Recommendations To Increase Day Use Parking At The Spring Creek Campground,
Request An Easement To Maintain Beach Access To The North Of The Campground, And Plat
The Area Into One Parcel And Rezone To Park
Motion (DeMosslWells) Approve Resolution 2023-069
Bickling spoke on the point that access the area to the north was actually trespassing on
private land and this resolution allowed for a conversation with the owners and to provide for better
signage in the area.
Notice of the public hearing being posted and published as required by law was noted and the
public hearing was opened.
Carol Griswold, inside city limits, spoke in favor of the resolution and recommended a
change to include the city owned beach in the language.
No one else appeared and the public hearing was closed.
McClure suspended the rules to allow discussion with Griswold on a graphical correction on a
property line she suggested. The city council concluded that the graphical representation on
property lines was correct.
McClure went back on the rules.
Motion Passed Unanimous
UNFINISHED BUSINESS
Resolutions
Resolution 2023-046, Authorizing The City Manager To Enter Into A Recruitment Services
Contract With GovHR In The Amount Of$30,000.00,And Appropriating Funds (This resolution
was postponed on April 24, 2023)
Regis requested to postpone until the July 10, 2023 city council meeting.
271
City of Seward,Alaska City Council Meeting Minutes
.Lune 12, 2023 Volume 42,Page 337
Motion (OsengalDeMoss) Postpone Resolution 2023-046 until July
10, 2023
Motion Passed Unanimous
NEW BUSINESS
Action Memorandum 2023-006,Opposing KPB Ordinance 2023-11.
Motion (DeMosslFinch) Approve Action Memorandum 2023-006
McClure advised that the memorandum was created due to possible borough legislation
that would have eliminated the city's position on the borough's planning and zoning commission.
However, the borough had revised their legislation and the city's seat on the commission was
secured. McClure advised that the city council did not need to oppose this ordinance.
Motion Failed Unanimous
Other New Business
Future Of The City of Seward Electric Utility
Montgomery presented to the city council four options to consider for the electric utility:
Option 1 — Do Nothing, Option 2 - Rebuild the Utility, Option 3 — Services Contract, Option 4—
Place Sale on Future Ballot.
At Barnwell's request, Montgomery elborated further on Option 2 — Rebuild the Utility.
The additional six positions were required to properly operate the electric utility and perform the
upgrades. Salaries needed to be increased to be competitive in the industry. Montgomery spoke on
the aging infrastructure and replacement. He advised that another seven to eight million dollar
bond would be needed to upgrade the system.
Barnwell asked why Seward had difficulty being self reliant with electricity compared to
other small Alaskan towns.
Montgomery replied that because Seward's electricity was tied into other electrical systems
which have special requirements and specifications that must be met. He added that Seward had a
seat on several railbelt power projects and had to compete with other electric utility providers in
the area.
The city council discussed the requirements and timelines required to place the sale of the
electric utility back on the ballot. Chandler advised there were no restrictions on when an item
could be brought back to an election ballot, only that a 60 day notice was required for a special
272
City of Seward,Alaska City Council Meeting Minutes
June 12,2023 Volume 42,Page 338
election. Regis advised a 53 day notice was required for a proposal to be placed on the ballot for a
regular municipal election.
DeMoss noted that Option 2—Rebuild the Utility would require a large amount of time to
research the funding and budget required to move forward in rebuilding the utility and adding staff.
Calhoon recommended an ad hoc committee could perform research for Option 2 and
Option 4.
Council determined that the administration could bring forward Option 4, to place the sale
of the electric utility on the ballot for the regular municipal election in October this year, leaving
the ad hoc committee to handle researching Option 2
Motion (DeMoss/Osenga) Direct the clerk to advertise for a seven
member ad hoc committee, consisting of
four from inside city limits, three from
outside city limits within the utility service
area, to discuss the current status of the
Seward Utility
Motion Passed Unanimous
Council recessed the meeting at 9:21p.m.
Council resumed the meeting at 9:27 p.m.
Sixth Avenue Public Works Facility Location Determinations
Sowell mentioned the location on Sixth Avenue was to be prepared for sale and rezoned to
Urban Residential. Administration requested direction from the city council as to what lot sizes
they wanted the property replated. Administration's recommendation were for 30 feet by 100 feet
and 50 feet by 100 feet lots. Administration suggested that the lot could be sold to a developer as
another choice.
Wells stated that the lots should be saved for individual purchases.
Motion (Wells/DeMoss) Direct Administration to exclude a
developer from purchasing the property
and leave to purchase by the individual.
Motion Passed Unanimous
Motion (McClure/Wells) Direct Administration to create 60 feet by
100 feet lots on Ballaine Blvd. and 30 feet
by 100 feet lots on Sixth Avenue.
273
City of Seward,Alaska City Council Meeting Minutes
June 12,2023 Volume 42,Page 339
Calhoon stated that creating lots of 45 feet by 100 feet on Ballaine Blvd would add
additional lots.
Wells stated that having a plat drawing with different layouts would assist the city council
in a decision.
The motion was withdrawn by McClure with no objections from the city council.
Council directed administration to bring forward two plat designs: 30 feet by 100 feet on Sixth
Avenue, 60 feet by 100 feet on Ballaine Blvd, 30 feet by 100 feet on Sixth Avenue, 45 feet by 100
feet on Ballaine Blvd. for the city council to give direction at the June 24, 2023 city council
meeting.
Council Member Finch Requests Appointed Officials To Draft A Resolution To Repeal
Personnel Policy #2023-01 Phone Use and Recording Policy
Motion (Finch/DeMoss } To Draft A Resolution Repeal Personnel
Policy#2023-01 Phone Use and Recording
Policy.
Qsenga clarified if policy 2023-01 was repealed in its entirety, that the city would default
to following state law.
Brooks stated the city council could create more restrictive policies than the state law
required. The difference he added would be if the violator could be charged with a crime or with
a condition suitable for discipline.
Finch stressed the state had a one person consent for recording and that the current
approved policy took that legal right away from staff,
Wells pointed out that the policy did not stop the person from recording,nor did it require
their permission. The employee just needed to advise the other party of being recorded.
Motion Passed Yes: Wells, DeMoss, Calhoon, Finch,
Qsenga
No: Barnwell, McClure
CITIZEN COMMENTS
Skip Rierson, inside city limits, hoped that the utility could be sold, yet agreed that we
have a utility to run. He suggested that Seward may need to create a board of directors to help with
the utility. Skip emphasized that the finance department would need help researching the
information for the utility.
274
City of Seward,Alaska City Couned Meeting Minutes
.Tune 12, 2023 Volume 42,Page 340
Cindy Ecklund, inside city limits,verified that the City of Seward did meet the minimum
population requirement to have a seat on the Kenai Peninsula Borough Planning & Zoning
Commission, and that the city's seat on the commission would remain in place.
Beck Dunn, inside city limits, thanked the city council for the work on adding more
residential space. She recommended that some of the 30 feet lots be expanded to 40 feet. She
thanked the city council for moving to create an ad hoc committee and for including those out of
city limits to participate.
Bob Valdetta, inside city limits, wanted someone like Norm Regis as city manager. He
advised the city council to not cut parts out of projects to save money because past projects have
proven the shortfalls of this action.
Alan Nickell, outside city limits, stated he was a city department head and that pay wage
was a problem for all of the departments. Employees under pay scale grade 6 could not live here
on their city wages.
COUNCIL AND ADMINISTRATION COMMENTS & RESPONSE TO CITIZEN
COMMENTS
Regis noted that the finance director position was $20,000 less than the normal average
pay for this position.
Sowell appreciated the city council review of board and commissioner attendance and the
direction on the municipal land plan. He thanked Tim Dillon for his dedication to his position on
KPED❑ and would miss the base of knowledge that he provided.
Barnwell thanked Tim Dillon for his presentation.He believed the ad hoc committee would
be a good start to our resolution of the electric utility issue. He thanked Montgomery for his
presentation. He mentioned that the Obihiro planning committee had met three times and stated
they would need to request more funds at a future city council meeting for the adult delegation
traveling to Obihiro.
Finch thanked community development for what they are doing at the Spring Creek and
Fourth of July Creek recreational areas. In regard to the public works property, Finch was
interested in what the selling price of the individual lots would be.
Wells thanked everyone who helped with the animal shelter opening. Thanked the Seward
Pride Alliance for hosting a well-organized, positive event. He thanked the administration for
creating clear reports and answering questions. Wells thanked the city attorney for the detailed
explanation on executive sessions.
Calhoon reminded everyone that Wednesday was Flag Day, and patriotic proclamations
will be coming forward in the future, Calhoon stated that our nation's flag represents all of us and
that flag allows all other flags to fly without issue.
275
City of Seward,Alaska City Council Meeting Minutes
June 12, 2023 Volume 42,Page 341
DeMoss stated that the city needed to look at employee housing. Businesses have built
their own housing for employees, and the city should consider the same. DeMoss stated there
should be another wage study due to the large increase in wages that resulted from the recent
COVID crisis. She congratulated Nickell on the animal shelter opening. She thanked Seward Pride
Alliance for their event.
Osenga thanked Tim Dillon for everything he had helped Seward with.
Mayor McClure stated she enjoyed swearing in the new City Clerk Kris Peck. She met
with several other mayors who spoke highly of the work our city council was doing in Seward.
McClure attended the groundbreaking ceremony for the Chugachmuit Clinic and the animal shelter
opening. She mentioned the solstice cemetery tour would be held at the city cemetery at 10:30 pm
on June 21, 2023.
ADJOURNMENT
The meeting was adjourned at 10:45 p.m.
Karen Carrigan Sue McClure
Acting Deputy City Clerk Mayor
(City Seal)
�••••��[ G F SE�y'%
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AL - ■ :
276
•
Action Memorandum 2023-011:
Determining It Is In The Best Interest Of The Seward
Community To Sell The Electric Utility And Specifying The
Primary Reasons
Documents:
• Action Memorandum
• Resolution 2022-067
• Letter from Tony Izzo
277
City of Seward
Action Memorandum 2023-011
Meeting Date: August 14, 2023
To: City Council
From: Council Members DeMoss and Wells
Subject: Action Memorandum 2023-011: Determining It Is In The Best Interest Of The
Seward Community To Sell The Electric Utility And Specifying The Primary
Reasons
Background and justification:
The topic of selling the City of Seward Electric Utility has been an item of discussion, various action, and
community interest for several decades. On May 9,2022;the Seward City Council passed Resolution 2022-
067, directing the City Manager to develop a timeline and process for examining the advantages and
disadvantages of selling the Electric Utility and bring recommendations back to City Council for adoption.
Since that time,the question was placed on the ballot for a Special Election in May 2023. The proposition
obtained approval from 58.4%of voters and did not meet the Charter provided threshold of 60% in order
to pass. During the City Council meeting on July 24t'', City Council passed resolutions to place the question
on the October 3, 2023 ballot and provide voters another opportunity to vote on the question of selling the
Electric Utility.
In recent City Council meetings, members of the public have stated a desire to formally hear from City
Council members on "why selling the electric utility is a good thing for Seward". City Council members
have verbally discussed the reasons they believe selling the Electric Utility is a positive action for the
community,but no formal legislation has been passed which explicitly stated the reasons. The intent of this
Action Memorandum is to provide a formal list of those reasons so that the public can hear from City
Council as a body and put to rest any lack of clarity for the public.
City Council believes the following reasons are primary motivating factors for selling the Electric Utility:
1. RATES. Rates Over the next 10 to 15 years,the city' s electric system faces multiple rate increases
as the utility plays catch-up on deferred maintenance, and begins updating technology to modern
standards. Economic modeling shows ratepayers can expect several of these rate increases to reach
10 percent or more. This is the reality of a small utility that cannot spread costs over a large
population—the city of Seward has fewer than 3, 000 electric meters.When regular maintenance
is postponed, eventually bigger investments are required to get back on track. This is the situation
in Seward today.
2. RESOURCES.A larger utility brings more resources to bear,both human and financial. Our system
in Seward operates with only 10 employees, most in positions that are operations focused.
Additionally, limited personnel results in coverage gaps when an employee retires or otherwise
moves on from the utility.And as we all know,finding skilled new employees is often hard because
of Seward' s relatively remote location. Seward' s staffing limitations also mean the utility cannot
rely on in- house expertise offered by larger utilities, especially in areas like billing, engineering,
rate design, cybersecurity, and communications. Instead, Seward' s electric department relies on
consultants for these services, which is expensive and inefficient. This reality routinely results in
project delays.
278
3. RELIABILITY. Running an electric utility is expensive. It requires regular investments in
maintenance, new infrastructure, updated technology, and employee training and retention. In
Seward,it is even harder when only 2,900 meters are available to drive revenues and system growth
is stagnant. These factors make ongoing upgrades difficult to achieve. Overtime, this places the
utility in the difficult position of weighing system investments against the impact those costs will
have on customer rates,which could directly impact reliability.
on—Comprehensive and Strategic Plan ConsiMy Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation(✓):
Creates revenue in the amount of $
Creates expenditure in amount of: $
Creates a savings in the amount of $
x Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
x Not applicable
AEF—Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking R Water Healthcare
Motor Pool Other
Note: amounts are unaudited
Fund Balance/Net position—restricted $
Fund Balance/Net position—unrestricted/unassigned $
Available Unrestricted Cash Balance: $
Finance Director Signature: No fiscal impact
Attorney Review
RxYes Attorney Signature:
Not applicable Comments:
279
Administration Recommendation
rq Adopt AM
Other:
Disposition (Completed by the City Clerk's Office)
280
Sponsored by: Mayor Terry & Council Member Calhoon
CITY OF SEWARD,ALASKA
RESOLUTION 2022-067
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, DIRECTING THE CITY MANAGER TO DEVELOP A
TIMELINE AND PROCESS FOR EXAMINING THE ADVANTAGES AND
DISADVANTAGES OF SELLING THE ELECTRIC UTILITY AND BRING
RECOMMENDATIONS BACK TO CITY COUNCIL FOR ADOPTION
WHEREAS,the City of Seward currently owns and operates an electric utility; and
WHEREAS,on November 7,2000,City Council set a ballot proposition to sell the electric
utility based on deregulation, industry changes, and benefits to the public that included a future
trust fund from sale proceeds. The proposition failed to receive the required three-fifths of the
electors; and
WHEREAS, at various instances since that time, Administration, Elected Officials and
Public Members have proposed reviewing again the prospect of selling the Electric Utility; and
WHEREAS,it is crucial to have ample public involvement, full vetting of the advantages
and disadvantages, and education prior to conducting another ballot proposition in preparation of
a sale; and
WHEREAS, some items under consideration will include the continuation of quality
electric services and reasonable rates while at the same time seeking to manage City assets for the
long-term benefit of the citizens; and
WHEREAS, other items to consider include safety, accessibility for customers,providing
timely responses to inquiries, planning for and making system improvements, future economic
development, retaining local generation and staff; and
WHEREAS,the process moving forward could include involving the Port and Commerce
Advisory Board with task items,customer and employee surveys,public comments and questions,
town hall meetings, valuation reports of current and future infrastructure, and entertaining or
continuing discussions with potential purchasers; and
WHEREAS,the outcome of the process will provide a current evaluation of the question
and a recommendation for or against moving forward with an updated ballot proposition to sell
the utility.
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 3. The City Council directs the City Manager to develop a process and timeline to
281
CITY OF SEWARD,ALASKA
RESOLUTION 2022-067
study the option to sell our electric utility.
Section 2. The City Manager will bring the process and timeline recommendations to
Council for approval at the June 13, 2022 Regular Council Meeting.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 91h
day of May, 2022.
TH CI Y F S ARD 7
isty Terry, ayor
AYES: McClure, Osenga, Calhoon, Casagranda, DeMoss, Terry
NOES: None
ABSENT: Wells
ABSTAIN: None
ATTEST:
/2
Brenda J. Ball , M C
City Clerk
(City Seal) 0.■■' `•,� ���,
•,� F S 1y
. . of
SEALe
N
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may. OF A '.�•'`.
282
City Council Agenda Statement
Meeting Date: May 9, 2022 _
To: City Council
From: Mayor Terry and Council Member Calhoon
Agenda Item: Resolution 2022-067: Directing the City Manager to Develop a Timeline and
Process for Examining the Advantages and Disadvantages of Selling the
Electric Utility and Bring Recommendations Back to the City Council for
Adoption
Background and justification:
On November 7, 2000, the City Council set a ballot proposition to sell the electric utility based on
deregulation, industry changes, and benefits to the public that included a future trust fund from sale
proceeds. The proposition failed to receive the required three-fifths of the electors.
Since that time, administration, elected officials and public members have proposed reviewing the
prospect of selling the electric utility.
The current resolution proposes to direct the city manager to develop a process and timeline to
study the option to sell the electric utility and to bring the process and timeline to the city council on
June 13, 2022.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation (*"):
x Creates revenue in the amount of: $ 0 _
Creates expenditure in amount of: $
Creates a savings in the amount of: $
Has no fiscal impact
Funds are (V):
Budgeted Line items):
x Not budgeted
Not applicable
283
El-u—nassigned Fund Balance and Available Unrestricted Cash Balance Information
Fund {v"}:
General SMIC Electric Iq
Wastewater
Boat Harbor Parking Water Healthcare
Motor Pool Other
Finance Signature:
Atto"ey RevieWV Administration Recommendation
RxYes x Adopt Resolution
Not applicable B Other:
284
AMEA
MATANUSKA ELECTRIC ASSOCIATION
August 8, 2023
Sent via electronic mail
nregisCa)_cityofseward.net
Norm Regis
Interim City Manager
410 Adams Street
City Hall Building
Seward, AK 99664
Dear Mr. Regis
My name is Tony Izzo and I am the CEO of Matanuska Electric Association which serves the Mat-
Su Valley and Eagle River. During my seven years as CEO at MEA as well as my time serving
as the President of Enstar Natural Gas, I have prioritized and valued input and feedback from
colleagues at Seward Electric and been impressed with the resulting contributions and
perspectives.
MEA understands the City of Seward is at a crossroads as you consider options for providing
power to your residents. This also comes at a time when our natural gas supply is uncertain, our
transmission system limits our solutions, physical and cyber security threats are at their highest,
there are significant federal funds at play, and we have a Governor and legislature who are very
actively engaged and committed to solving these issues.
As we continue to face significant challenges and opportunities within our industry and our
regional system, no time has been more critical for Seward Electric to have a seat at the table
than right now.
Seward has an equal voice and vote to the other interconnected Railbelt utilities in our
collaborative structures. Rob Montgomery has established himself as a competent and valued
asset and informal leader in Railbelt discussions. He excels at highlighting Seward's needs,
perspectives, priorities and issues to his utility peers, critical stakeholders and policy makers as
we navigate sustainable, long-lasting change for the Railbelt electric system. Without his voice
and sustained presence in key discussions at both the leadership level as well as on key
committees, the City of Seward's needs and perspectives would not be represented in our
decision-making process.
As the person accountable for keeping the lights on in Eagle River and the Mat-Su valley, I
understand possible concerns with competing priorities for providing an essential service to the
residents of Seward. Rob is judicious and his time spent engaging in region-wide activities is
always focused and well considered. I am impressed by his ability to set boundaries with his time
when regional work threatens to interfere with his numerous other duties for the City of Seward. I
also firmly believe that his active participation in setting policy and operational standards for the
Railbelt region is essential for the City of Seward's future success and optimizing your options in
whatever capacity you choose to continue to provide power.
MATANUSKA ELECTRIC ASSOCIATION, INC.•P.O.Box 2929•2aM,Alaska 99645•t 907.745.3231 •f 907.761.9368•www.mea.coop
Mr. Norm Regis, Interim City Manager
August 8, 2023
Page 2
The Railbelt utilities and the City of Seward would find themselves at a large disadvantage without
Rob Montgomery's continued participation in region-wide activities. As you continue to consider
your path forward, I encourage the City of Seward to maintain its commitment to active regional
participation as we work together to define the future of the Railbelt system. The City of Seward's
input and Rob Montgomery's contributions are critical to our shared success. I am happy to make
myself available to provide further comments or additional information if it is helpful.
Sincerely,
�C
Anthon ,. I o
aj
Chief Executive Officer
286
•
Action Memorandum 2023-012:
Clarifying the Reasons Homer Electric Association is
the Preferred Electric Utility to Purchase Seward
Electric
Documents:
• Action Memorandum
• Resolution 2022-114
287
City of Seward
Action Memorandum 2023-012
Meeting Date: August 14, 2023
To: City Council
From: Council Members DeMoss and Wells
Subject: Action Memorandum 2023-012: Clarifying the Reasons Homer Electric
Association is the Preferred Electric Utility to Purchase Seward Electric
Background and justification:
On May 9, 2022, the Seward City Council unanimously approved Resolution 2022-067 to develop
a timeline and process for examining the advantages and disadvantages of selling the electric utility
and bring recommendations back to City Council for adoption. Subsequently to this, the City has
undertaken a thorough process to determine the pros and cons of selling the utility as well as
whether to sell the Electric Utility to Homer Electric Association or Chugach Electric.Both entities
submitted proposals to the City Council. After several meetings to discuss and review the
proposals, the City Council voted unanimously on Resolution 2022-114 during the November 14,
2022 meeting; which selected Homer Electric Association. The public has recently asked the City
Council to provide clarification on the reasons that Homer Electric Association was selected. This
action memorandum serves as a formal mechanism to communicate those reasons.
City Council believes the following reasons are primary motivating factors for selling the Electric
Utility to Homer Electric Association:
• HEA's long-term strategic plan and investments already made in its infrastructure and
operations.
• HEA being further along than other Railbelt utilities in its investments in cybersecurity and
other system technologies.
• HEA's plan for integrating into the Seward community.
• HEA ensuring Seward representation on the HEA board of directors.
• Existing synergies between HEA and Seward Electric since both utilities are located on the
Kenai Peninsula and each works closely with the Kenai Peninsula Borough.
• A merger between HEA and SES makes the Kenai Peninsula stronger.
• HEA's commitment to freeze consumer rates for at least three years.
• HEA effectively outline its long-term rates strategy.
• We are comfortable with the leadership stability of HEA.
• We are comfortable with the financial health of HEA.
• HEA offers grant opportunities not available with other utilizes.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
288
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation(✓):
Creates revenue in the amount of $
Creates expenditure in amount of: $
Creates a savings in the amount of $
x Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
x Not applicable
AM Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking F1 Water F1 Healthcare
Motor Pool Other
Note: amounts are unaudited
Fund Balance/Net position—restricted $
Fund Balance/Net position—unrestricted/unassigned $
Available Unrestricted Cash Balance: $
Finance Director Signature: No fiscal impact
OR Attorney Review
RxYes Attorney Signature:
Not applicable Comments:
Administration Recommendation
rq Adopt AM
Other:
Disposition (Completed by the City Clerk's Office)
289
CITY OF SEWARD,ALASKA Sponsored by: Bower
RESOLUTION 2022-114
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, SELECTING HOMER ELECTRIC ASSOCIATION AS THE
PREFERRED ELECTRIC UTILITY TO PURCHASE SEWARD
ELECTRIC
WHEREAS, on August 8, 2022, the Seward City Council passed Resolution 2022-087:
Submitting the Question of Selling the City of Seward Electric Utility to the Qualified City of
Seward Voters at a Special Election in and For the City of Seward on May 2, 2023; and
WHEREAS, the resolution directed that prior to voter approval of the proposition to sell
the electric utility, the city issue a Limited Solicitation Request for Proposals from interested and
qualified electric utilities in Alaska to provide electric services; and
WHEREAS, the resolution directed that following receipt of the proposals, the city will
negotiate with, and select, the utility most qualified to meet the electric service needs of Seward
while also sharing the City's community-focused values; and
WHEREAS, the resolution further directs the selected utility be announced to the public
prior to the vote on selling the utility and the selected utility be authorized to provide public
information to City voters; and
WHEREAS,the city received two proposals from qualified Alaskan electric utilities;
WHEREAS, pursuant to Seward City Code 2.10.033 C, the city council met in three
executive sessions to discuss the electric utility proposal and sale negotiations; and
WHEREAS, following the executive session on October 27, 2022, the city council
unanimously passed a motion to direct the city manager to bring a resolution before the council on
November 14, 2022, stating the city council unanimously selected Homer Electric Association as
the preferred electric utility to purchase Seward Electric.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA that:
Section 1. The Seward City Council hereby selects Homer Electric Association as the
preferred electric utility to purchase Seward Electric.
Section 2.The sale of the electric utility will only occur upon the affirmative vote by three-
fifths of the qualified electors voting on the proposition to approve the sale of the municipal utility
at the May 2,2023 special election.
290
CITY OF SEWARD, ALASKA
RESOLUTION 2022-114
Section 3. The city manager is hereby authorized to negotiate a sales contract with
Homer Electric Association and to sign all documents related to the negotiations prior to
the May 2, 2023, special election subject to approval by City Council resolution of the
negotiated purchase and sale agreement.
Section 4. If the voters approve sale of the electric utility at the May 2, 2023
special election the city manager is hereby authorized to sign all documents related to the
sale following certification of the May 2, 2023 special election.
Section 5. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 14tn
day of November, 2022.
THE CITY OF SEWARD, ALASKA
Sue McClure, Mayor
AYES: Calhoon, DeMoss, Osenga, Wells, Finch, McClure
NOES: None
ABSENT: None
ABSTAIN: None
VACANT: One
ATTEST:
A�a�— —
'Brenda J. Ballo , MMC
City Clerk
•I��1uurprr
,'' ri
(City Seal) +,�04 O�oEyV.giQ��.
•
SEAL
291
City Council Agenda Statement
Meeting Date: November 14, 2022
To: City Council
Through: Janette Bower, City Manager
From: Rob Montgomery, General Manager - Electric
Agenda Item: Resolution 2022-114: Selecting Homer Electric Association as the Preferred
Electric Utility to Purchase Seward Electric
Background and justification:
On May 9, 2022, Seward Mayor Christy Terry and Council Member Calhoon introduced and the
council unanimously approved Resolution 2022-067 to develop a timeline and process for examining
the advantages and disadvantages of selling the electric utility and bring recommendations back to
city council for adoption.
On July 25, 2022,the city council held a special meeting the purpose of assessing Seward's electric
utility future. At that meeting, the council directed the city manager to bring forward a resolution to
conduct a special election on May 2, 2023, and a resolution appropriating funds to influence the
outcome of an election.
On August 8, 2022, the city council approved Resolution 2022-087: submitting the question of
selling the City of Seward electric utility to the qualified City of Seward voters at a special election in
and for the City of Seward on May 2, 2023. The resolution language authorized the issuance of a
Limited Solicitation Request for Proposals from interested and qualified electric utility in Alaska to
provide electric services. The city council also approved Resolution 2022-088: appropriating funds in
the amount of $25,000 to influence the outcome of an election.
A Limited Solicitation Request seeking proposals from interested utilities was issued on August 17.
Homer Electric Association (HEA) was one of two utilities that submitted proposals. Following three
executive sessions, including one where the utilities presented to City Council, HEA was selected by
Council as its preferred electric service provider. Council then directed the City Manager to negotiate
a proposed contract with HEA, should citizens vote to approve the sale in the Special Election on
May 2.
Council selected HEA based upon several factors, including:
• HEA's long-term strategic plan and investments already made in its infrastructure and
operations;
• HEA being further along than other Railbelt utilities in its investments in cybersecurity and
other system technologies;
• HEA's plan for integrating into the Seward community;
• HEA ensuring Seward representation on the HEA board of directors;
• Existing synergies between HEA and Seward Electric since both utilities are located on the
Kenai Peninsula and each works closely with the Kenai Peninsula Borough;
• HEA's commitment to freeze consumer rates for at least three years.
HEA also addressed its future strategy for consumer rates. While higher today than four of the five
Railbelt utilities, HEA pointed to the investments it has already made in operations, infrastructure
and technology that are expected to stabilize future rates. HEA discussed how these investments
2V2
have positioned it well, since other Railbelt utilities will be making similar investments in the years
ahead, thus putting upward pressure on their respective rates. HEA indicated that its investments
were strategic, knowing the longer-term benefit of rate stabilization for consumers would outweigh
the upward pressure on rates in the short term.
For the City of Seward, the discussion related to rates is important since Seward Electric is facing
significant rate increases over the next several years. Should voters not approve the sale in May,
Seward Electric will move forward with a rate study that is expected to increase consumer rates by
no less than 10 percent in late 2023 or early 2024. This increase would be followed by future
double-digit increases every two to four years, as the utility plays catch up with its investments in
operations, infrastructure and technology.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan: 3.7.1.4"Continue to upgrade and expand utilities to meet existing needs and
encourage future development."
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation (✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
Not applicable
Finance Signature: IS
Attorney Review
✓ Yes Attorney Signature:
Not applicable Comments:
Administration Recommendation
e✓ Approve Resolution
Other:
213
•
New Business Item:
Seward City Tours Request to Purchase Property
Documents:
• Agenda Statement
• Appraisal
• Letter to Council
• Letter to Purchase
• Letter of Support Seward Community Health Center
• Letter of Support Seward Senior Center
• Letter of Support Qutekcak
294
City Council Agenda Statement .
Meeting Date: August 14, 2023
To: City Council '
From: Norm Regis,Acting City Manager
Subject: Seward City Tours Request to Purchase Property
Background and justification
On August 4t'', Seward City Tours sent the City Manager a letter requesting discussion with City Council
regarding a proposal to purchase the North Portion of Lot 10A, Fort Raymond Subdivision Replat No. 1
905 Sea Lion Avenue from the City of Seward. Please note the attached documentation which includes an
appraisal of the parcel and information sent by Seward City Tours. Administration requests City Council
discussion on whether to bring a Resolution to Council at a future meeting to approve the sale of this parcel.
The parcel is 1.4 acres, bordered on the north by Sea Lion Avenue, Seward Highway to the East, and
Dimond Blvd to the West. A June 2022 appraisal determined the fair market value of the parcel to be
$290,000.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with(citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: S
This legislation(✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
x Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
x Not applicable
Fund Balance Information
Affected Fund(✓):
General SMIC Electric Wastewater
Boat Harbor Parking Water Healthcare
Motor Pool Other
Note: amounts are unaudited
Available Fund Balance $
295
No direct fiscal impact for this
Finance Director Signature: discussion item
Attorney Review
RxYes Attorney Signature:
Not applicable Comments:
Administration Recommendation
Adopt Resolution
x Other: Provide Administration direction on whether to bring a resolution to sell
forward at a future City Council meeting.
296
MACSWAIN ASSOCIATES LLC
4401 Business Park Boulevard, Suite 22, Anchorage, Alaska 99503
APPRAISAL REPORT
City of Seward Land- 60,984± SF (1 .40± Acres)
North Portion of Lot 10A, Fort Raymond Subdivision Replat No. 1
905 Sea Lion Avenue, Seward, Alaska
NJSea Lion Avenue ti•,'=
t
SFA LIULJ AVE ... - - t.,•
wT4r F y Iy 0.k 4 r •' `
Appraised Landloll
V.
60,984±SF(1.40±Acres)
I vm'
Ir
} Dimond Boulevard 4 . ...
S� .�- � .�.. . a� - ,�,' •'�� `���� ?;:.gyp .'�
i r`. � Seward Highway
w
Date of Value: June 28, 2022 File No. 22-3700
Submitted To:
Janette Bower, City Manager
City of Seward
PO Box 167
Seward, AK 99664
297
MacSwain Associates LLC
4401 Business Park Blvd.,Suite 22
Anchorage,Alaska 99503
Phone: 907-561-1965
Fax. 907-561-1955
s.macswainUnacswain.com
July 1, 2022
Janette Bower, City Manager
City of Seward
PO Box 167
Seward, AK 99664
Re: City of Seward Land: 60,984± SF (1.40±Acres)
North Portion of Lot 10,Fort Raymond Subdivision Replat No. 1
905 Sea Lion Avenue, Seward,Alaska
Dear Ms. Bower:
We have prepared an Appraisal Report of the above-referenced City of Seward-owned land
fronting the Seward Highway in Seward, Alaska. The appraised parcel consists of 60,984±
square feet or 1.40± acres of vacant land, which is legally part of a 2.116-acre lot. It is a
hypothetical condition of the appraisal that the appraised 1.40± acres is legally separated
and developable to its highest and best use. The purpose of the appraisal is to assist the
client with a potential sale of the subject 1.40± acres. The type of value estimated is market
value. The property rights appraised is the fee simple estate. The report is prepared in
accordance with the Uniform Standards of Professional Appraisal Practice (USPAP).
Based on the data, reasoning, and analysis that follows, the market value of the appraised
property, as of June 28, 2022, is estimated as follows.
TWO HUNDRED NINETY THOUSAND DOLLARS $290,000
We direct your attention to the Scope of Work, Certificate of Appraisal, and Assumptions
and Limiting Conditions for an explanation of restrictions and limitations of this report. We
also direct your attention to the hypothetical condition of the appraisal. If you have any
questions,please contact our office.
Respectfully submitted,
r
Alex Kleinke Steve MacSwain, MAI
State of Alaska Certificate No. 148873 State of Alaska Certificate No. 42
22-3700—North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska
298
MacSwain Associates LLC
Appraiser Certification
The undersigned certifies that to the best of their knowledge and belief-
4 The statements of fact contained in this report are true and correct.
4 The reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, impartial, and unbiased
professional analyses, opinions, and conclusions.
4 We have no present or prospective interest in the property that is the subject of this report,
and no personal interest with respect to the parties involved.
4 We have no bias with respect to the property that is the subject of this report or to the parties
involved with this assignment.
4 We have not performed any services as an appraiser or in any other capacity, regarding the
property that is the subject of this report,within the three-year period immediately preceding
acceptance of this assignment.
4 Our engagement in this assignment was not contingent upon developing or reporting
predetermined results.
4 Our compensation for completing this assignment is not contingent upon the development
or reporting of a predetermined value or direction in value that favors the cause of the client,
the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a
subsequent event directly related to the intended use of this appraisal.
4 The reported analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.
4 The reported analyses, opinion, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
4 The use of this report is subject to the requirements of the Appraisal Institute relating to
review by its duly authorized representatives.
4 Alex Kleinke inspected the property on June 28, 2022. Steve MacSwain, MAI is familiar
with the property from other appraisal assignments in Seward.
4 No one provided significant real property appraisal assistance to the persons signing this
certification.
4 As of the date of this report, Alex Kleinke and Steve MacSwain, MAI are certified General
Real Estate Appraisers in the State of Alaska and have completed the education requirements
through June 2023.
4 As of the date of this report, Steve MacSwain,MAI has completed the Standards and Ethics
Education Requirements for Designated Members of the Appraisal Institute.
22-3700—North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska
299
MacSwain Associates LLC
4 As of the date of this report,Alex Kleinke has completed the Standards and Ethics Education
Requirements for Practicing Affiliates of the Appraisal Institute.
4 As of the date of this report, Steve MacSwain,MAI has completed the continuing education
program for Designated Members of the Appraisal Institute.
4 As of the date of this report,Alex Kleinke has completed the continuing education program
for Practicing Affiliates of the Appraisal Institute.
711122
Steve MacSwain, MAI Alex Kleinke Date
State of Alaska Certificate No. 42 State of Alaska Certificate No. 148873
22-3700—North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska
300
MacSwain Associates LLC
Table of Contents
Title Page
Transmittal Letter
Appraiser Certification
Table of Contents
Appraisal Summary 1
Chapter 1: Definition of the Appraisal Problem 5
Chapter 2: Seward Area and Market Summary 9
Chapter 3: Neighborhood Description and Analysis 13
Chapter 4: Site Description and Analysis 15
Chapter 5: Highest and Best Use Analysis 18
Chapter 6: Land Valuation - Sales Comparison Approach 20
Addendum
Assumptions and Limiting Conditions
Hypothetical Condition
Appraiser Qualifications
22-3700 North Portion of Lot 10A,Fort Raymond Subdivision Replat No. 1, Seward,Alaska
301
MacSwain Associates LLC
Appraisal Summary
Value Type: Market value
Property Type: Vacant Institutional-zoned land
Property Rights Appraised: Fee simple estate
Location: Southwest corner of Seward Highway and Sea Lion Avenue,
fronting east side of Dimond Boulevard, near Seward
Highway MP 2.1, approximately one mile north of the
Seward Small Boat Harbor, Seward,Alaska
Legal Description: North Portion of Lot 10A,Fort Raymond Subdivision Replat
No. 1, Plat No. 87-12.
Tax Parcel No: 145-026-08 (portion)
Physical Address: 905 Sea Lion Avenue, Seward,Alaska
Property Owner: City of Seward(per KPB)
Zoning: INS —Institutional
Site Description: Irregular-shaped parcel containing 60,984± square feet or
1.40± acres per client
Topography: Generally level to undulating/sloping, near to slightly below
access grade
Access/Frontage: No direct Seward Highway access, ingress/egress
constructed off Sea Lion Avenue (north boundary) and
Dimond Boulevard (west boundary), property has 206± feet
frontage on Seward Highway, 325± feet frontage on Sea
Lion Avenue, 229± feet frontage on Dimond Boulevard
Utility Service: Public water, sewer, electricity, and telephone
Soil and Subsurface Based on observations of surrounding development, soils
Conditions: appear to be suitable for development
Hazardous Substances: None known
Wetland Designation: None
Flood Hazard Restrictions: Zone X, an area outside the 0.2% annual chance floodplain
Easements and Restrictions: Per plat 87-12: 30-foot utility easement along east boundary
and 25-foot utility easement along west boundary
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Sale/Lease History: No known sales or leases of property in past three years
Highest and Best Use: Commercial development
Extraordinary Assumptions: None
Hypothetical Condition: The appraised 1.40f acres is legally separated and developable
to its highest and best use.
Date of Property Inspection: June 28, 2022
Effective Appraisal Date: June 28, 2022
Date of Report: July 1, 2022
Market Value Estimate: $290,000 ($4.75t/SF)
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Subject Property Photographs
Date: June 28,2022 Taken By: Alex Kleinke
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Chapter 1: Definition of the Appraisal Problem
Overview We prepare an Appraisal Report that analyzes a 60,984± square foot
(1.40± acre)parcel located approximately one mile north of the Seward
Small Boat Harbor. Currently,the appraised land is part of a 2.116-acre
parcel owned by the City of Seward. Thus, we invoke a hypothetical
condition that the appraised 1.40± acres is legally separated and
developable to its highest and best use. The purpose of the appraisal is
to assist the City of Seward with selling the subject property to Seward
City Tours; however, the City of Seward is the only intended user of
this Appraisal Report. The report is intended to comply with the
Uniform Standards of Professional Appraisal Practice (USPAP).
Value Type Market value
Client City of Seward
Intended Use of Assist client with selling property to Seward City Tours
Appraisal Report
Intended User of City of Seward,property owner
Appraisal Report
Property Inspection June 28, 2022
Date
Effective Appraisal June 28, 2022
Date
Date of Report July 1, 2022
Identification of Real The appraised property contains 1.40± acres, which is a portion of a
Estate Appraised 2.116-acre vacant lot. The Kenai Peninsula Borough identifies the
property as Parcel ID 145-026-08 and the physical address as 905 Sea
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Lion Avenue, Seward, AK. The land fronts the west side of Seward
Highway, approximately one mile north of the Small Boat Harbor.
Definition of The type of value estimated is market value. Market value is defined as
Market Value follows.
The most probable price which a property should bring in a competitive
and open market under all conditions requisite to a fair sale, the buyer
and seller each acting prudently and knowledgeably, and assuming the
price is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title
from seller to buyer under conditions whereby:
a. buyer and seller are typically motivated;
b. both parties are well informed or well advised, and acting in what
they consider their own best interests;
C. a reasonable time is allowed for exposure in the open market;
d. payment is made in terms of cash in US dollars or in terms of
financial arrangements comparable thereto; and
e. the price represents the normal consideration for the property
sold unaffected by special or creative financing or sales
concessions granted by anyone associated with the sale. I
We estimate the market value of the fee simple estate,which is defined
Property Rights as follows.
Appraised
Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by the governmental powers of
taxation, eminent domain,police power, and escheat.2
1 Appraisal of Real Estate,Fifteenth Edition(2020),by the Appraisal Institute,p.49.
2 Appraisal of Real Estate,Fifteenth Edition(2020),by the Appraisal Institute,p. 60.
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Legal Description The property is a portion of a 2.116-acre parcel. For the purpose of this
appraisal assignment, the legal description is as follows:
North Portion of Lot 10, Fort Raymond Subdivision Replat No. 1, Plat
No. 87-12.
Property Owner Public Records indicate the owner of the appraised property is as
follows.
City of Seward
PO Box 167
Seward,AK 99664-0167
Assessed The property is owned by the City of Seward and exempt from taxation.
Value The property's assessment history applies to the entire 2.116-acre
parcel, rather than the appraised 1.40± acres, and is not considered
applicable.
Three Year Sale and There have been no known sales or leases of the property in the past
Lease History three years. The property is being considered for purchase by Seward
City Tours,but no sale price has been established or was reported to the
appraisers.
Report Type and This Appraisal Report develops the sales comparison approach to
Methodology estimate market value. Neither the cost nor the income capitalization
approach reflects market behavior for vacant land. Qualitative
techniques are used to measure differences between the comparable
sales and the subject. The appraisal report is a summary of the
appraisers' data, analyses, and conclusions with supporting
documentation retained on file.
Scope of Appraisal Alex Kleinke of MacSwain Associates, LLC performed the inspection
of the appraised property, data collection, and analysis. Steve
MacSwain, MAI has observed the property during the course of other
Seward appraisal assignments and is familiar with the neighborhood. In
addition, Steve MacSwain, MAI administered the appraisal process,
reviewed draft appraisals, and concurred with an opinion of value.
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Preparation of this report encompassed the following scope of work that
concluded with an opinion of market value.
4 Inspected the appraised property on June 28, 2022;
4 Discussed the property with Stephen Sowell, Assistant City
Manager with the City of Seward;
4 Reviewed aerial mapping indicating appraised property premises
provided by City of Seward;
4 Reviewed KPB assessor map 145-026;
4 Reviewed Plat Map 87-12;
4 Reviewed City of Seward Zoning Map and zoning codes;
4 Reviewed City of Seward 2030 Comprehensive Plan Update
prepared by PDC Engineers, adopted May 30, 2017;
4 Gathered data from the KPB Assessor's office and State of Alaska
Recorder's office regarding ownership, assessments, and general
property information;
4 Interviewed Seward real estate Brokers,agents,and property owners
regarding land sales;
4 Interviewed Seward market participants regarding current
commercial land market conditions, trends, and expectations;
4 Gathered and confirmed information on comparable land sales;
4 Inspected the primary comparable sales we relied upon in our
comparative analysis; and
4 Applied the sales comparison approach to arrive at a market value
indication.
Exposure Time We have collected and analyzed market and economic data that projects
real estate trends and activity for similar land. Discussions with Brokers
and analysis of similar property sales indicate that a period of
approximately 6-9 months prior to our effective date of value is a
reasonable exposure period.
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Chapter 2: Seward Area and Market Summary
Overview We present a summary analysis of factors that define the socio-
economic factors defining the Seward economy and real estate market.
The map below depicts Seward location within Southcentral Alaska.
Seward is located at the head of Resurrection Bay, on the southeast side
of the Kenai Peninsula. It lies 70 air miles south of Anchorage or 126
miles via the Seward Highway. Seward has an ice-free port with year-
round access to the Alaska Railroad.
Location Map
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Population Within city limits, Seward's 2020 Census population was 2,717 and
2021 population estimate was 2,603,representing stability over the past
decade. Community growth areas are principally rural residential
neighborhoods to the north outside city boundaries. According to the
State of Alaska Division of Community and Regional Affairs (DCRA),
a table containing Seward's historic population follows.
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
2,603 2,717 2,545 2,569 2,512 2,663 2,740 2,768 2,487 2,752
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The actual contributory population to the Seward economy is 4,700±
residents with the inclusion of rural residential districts located outside
of city boundaries. Moreover, the seasonal population swells to nearly
6,000±during the prime summer months.
Seward Employment Seward employment is gradually shifting from trades and fishing to
leisure, hospitality, and government. Although Seward employment is
projected to increase,we anticipate unemployment to remain above the
statewide rate due to the seasonal character of the economy. Because
of high demand for seasonal employment,part of the work force resides
outside of the Seward residential sphere.
Seward Area Map
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Seward Economic Ice-free deep-water port facilities integrated with road and rail service
Sectors to interior Alaska drive the Seward economy. The port is home to a
commercial fishing fleet, and is the impetus for thriving tourism and
recreation. These latter economic sectors have enhanced retail and
service industries as well as increased demand for petroleum products.
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Diversification of the Seward economy has been a central theme of city
management, planning, and infrastructure development over the past
few decades. Examples of economic diversification include expansion
of the Small Boat Harbor, Alaska Vocational and Technical Center
(AVTEC),Aurora Energy Services Coal Terminal (not operating), and
the Spring Creek Correctional Facility. Furthermore, construction of a
breakwater to protect Seward Marine Industrial Center (SMIC) from
prevailing weather and seas will improve the economic viability as a
market alternative for shipbuilding and repair.
Evolving economic diversification is a stabilizing influence and cause
to enhance growth opportunities for corollary industries. Despite the
seasonal character of the Seward economy, government, natural
resources, health care, and transportation sectors contribute year-round
employment. A summary analysis of the primary components of the
Seward economy follows.
Tourism: Tourism has continued to be a strong economic sector of the
Seward Economy since the recovery from the national recession. Over
the five-year period from 2014 to 2018, the City of Seward reported a
17%increase in sales tax revenue,and a 31%increase in hotel/motel tax
over the same period, with 2019 figures anticipated to grow further.
New hotel construction in 2020 has the potential to further increase
revenues in future seasons. Cruise ship port calls increased from year
to year since 2013 (50 ships) to 2016 (67 ships) to 2019 (87 ships and
95 days with cruise ships in port). Consequently, Seward cruise ship
visitation increased by 84 percent over the same period,with 125,000±
passengers in 2013 to 230,000± passengers estimated in 2019.3 The
2013 figures represent an average passenger/ship ratio of 2,500
passengers,while 2019 figures indicate 2,640 passengers. The increase
is due to not only fuller ships, but also the industry replacing medium-
sized cruise ships with larger cruise ships. Conversely, expedition style
trips with 100 to 200 passengers are becoming increasingly common.
These ships,while lowering the passenger/ship average,offer exclusive,
high-cost ecotrips. As this trend continues, passenger volume should
continue to increase over the long term,with exception to the substantial
decline experienced for 2020 and 2021 due to the COVID-19 Pandemic.
According to the Cruise Line Agencies of Alaska Calendar, 76 cruise
ship dockings are planned for the Summer 2022 season.
PortActivity:As an industrial port, Seward has not reached the potential
that was invested in port infrastructure. However, over the past several
years, SMIC has benefited from increased demand for lease property.
3 City of Seward,Comprehensive Annual Financial Reporting.
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Companies that commenced leases in SMIC in 2013 and 2014 include
Raibow Fiberglass and Boat Repair and Vigor Alaska. Raibow
continued to expand their lease footprint, entering into new leases in
2016 and 2019. JAG Alaska, Inc. became the new operator at the
Seward shipyard after Vigor announced its withdrawal. Additional new
lessees in SMIC include SEWMAR, LLC and Hamilton Construction.
Established marine industrial uses that enhance economic productivity
include bulk fuel storage, ship repair and dry-dock, and fish processing.
The US Coast Guard has expressed interest in commencing land leases
in SMIC,however no official commitments have been made as of early
2021. SMIC recently completed a new $27M± rubble mound
breakwater, intended to improve protection and enable moorage of
larger ships,with a new dock rounding out recent SMIC construction.
Construction: A summary of construction projects that had a
measurable effect on the Seward economy include:
4 $30 million Seward Long-Term Care Facility (LTCF) in 2010
4 16,300± square foot, $5 million± Seward Community Library
and Museum in 2012
$13 million student housing complex for Alaska Vocational
Technical Center in 2014
4 Conversion of the 13,500± square foot former Elks Lodge into a
brewery/restaurant in 2013
New 80±room hotel on the corner of 4th Avenue and Van Buren
Street
4 19,000± square foot special-use marine industrial building
located north of the Seward Small Boat Harbor
Real Estate Market We anticipate the Seward real estate market to remain stable over the
Summary medium and long-term with upward trending prices for properties with
high demand and limited supply. Importantly,the real estate market has
a direct link to the health of Seward's economic sectors. For example,
increases in tourism and recreation cause greater demand for properties
that can accommodate cruise ships. These market dynamics will cause
upward price pressure. Short-term uncertainty existed throughout the
Summer 2021 tourist season; however, many expect a return to
normalcy for Summer 2022 as COVID-19-related worries subside.
Offsetting this optimism is rising fuel prices, which could dampen
demand. Moreover, an employee shortage has prevented many
businesses, primarily restaurants, from operating at full capacity and
taking advantage of the return of tourism, as hesitancy to travel has
diminished.
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Chapter 3: Neighborhood Summary
Overview The subject neighborhood is approximately one mile north of the Small
Boat Harbor, bounded by the Seward Highway. The neighborhood is
mixed-use in character, with commercial development evident on
properties fronting the west side of Seward Highway. The reader is
referred to the zoning map below illustrating neighborhood land use and
assisting with the description and analysis that follows.
City of Seward Zoning Map
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. Two Family Residential
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mar-Q ■ Industrial
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Neighborhood The neighborhood is situated along the Seward Highway corridor north
Description of the Seward Small Boat Harbor. Industrial use comprises the east side
of the highway with Leirer Subdivision and Alaska Railroad
Corporation land. In the subject's immediate vicinity, commercial
development fronts the west side of the Seward Highway extending
south to the harbor. Businesses along this corridor include Safeway,
Wells Fargo, Tesoro, Shore Side Car Wash, The Cup Espresso, and
Saltwood Smokehouse. Just to the northwest of the subject is the
Seward Military Resort. Further north, and to the west, development
consists of schools, athletic fields, and parks.
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While the neighborhood is mixed-use in character and includes a
multitude of zoning designations, the majority of land along the Seward
Highway is zoned Auto Commercial (AC), a highly regarded zoning
designation affording a wide range of uses including office, personal
services, retail and residential support which do not detract from
residential areas. However,the subject is within the Institutional Zoning
District, intended for public and private educational, administrative,
government and health care uses, including public land reserve for
future development.
Summary In summary, with tourism industry as the economic focal point,
Seward's outlook is promising. The subject neighborhood is just north
of the Seward Small Boat Harbor and benefits from its frontage on the
Seward Highway. Based on these factors, the outlook for the subject
neighborhood is positive.
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Chapter 4: Site Description and Analysis
Overview Analysis of land describes the characteristics that enhance or detract
from its utility or marketability. The site description and analysis is
based on our property inspection and review of the Plat Map No. 87-12,
aerial, Borough, and other mapping. The plat map below overlaid with
the approximate dimensions provided by the client, as well as the aerial
mapping on the following pages assist in the description and analysis of
the parcel that follows.
Plat Map No. 87-12
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Site Description Location: Southwest corner of Seward Highway and Sea
Lion Avenue, fronting the east side of Dimond
Boulevard, near Seward Highway MP 2.1,
approximately one mile north of the Seward
Small Boat Harbor, Seward,Alaska
Shape and Land Irregular-shaped parcel containing 60,984±
Area: square feet or 1.40± acres
Access: No direct Seward Highway access,ingress/egress
off Sea Lion Avenue on north boundary and
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Dimond Boulevard on west boundary(paved,two
lane roads)
Zoning: Institutional (INS) District, intended for public
and private educational, administrative,
government and health care uses,including public
land reserve for future development.
Frontage and 206±feet frontage on Seward Highway,325±feet
Exposure: frontage on Sea Lion Avenue, 229± feet frontage
on Dimond Boulevard
Easements and Per plat 87-12: 30-foot utility easement along east
Restrictions: boundary and 25-foot utility easement along west
boundary
Public Utilities: Public water,sewer,electricity, and telephone
Topography: Generally level to slightly sloping, slightly below
highway grade, dirt mound on west portion of
property
GIS Aerial Map (Kenai Peninsula Borough) 2020
Sea Lion Avenue
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Vegetation: Heavily vegetated with spruce, cottonwood, alder,
and low-lying vegetation
Soil Conditions: Based on observations of surrounding development,
soils appear to be suitable for development
Wetland None noted on KPB Wetland Mapper
Designation:
Flood Hazard: Zone X, an area outside the 0.2% annual chance
floodplain
Environmental The existence of any hazardous material or other
Conditions: type of environmental contamination,which may or
may not be present on the property, was not
observed by the appraisers nor do the appraisers
have any knowledge of the existence of such
substances. Our value conclusion assumes that the
property is free of environmental and hazardous
contaminants.
Site Minimal clearing and signage; signage excluded
Improvements: from valuation
Site Utility: The site is suitable for commercial-related
development. Due to highway frontage, exposure,
and Auto Commercial zoning,coupled with relative
proximity to other commercial areas including the
Small Boat Harbor, the site is well suited for
commercial development.
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Chapter 5: Highest and Best Use Analysis
Overview The parcel is located within the City of Seward, subject to zoning
regulations. Zoning is INS, Institutional. According to the City of
Seward Zoning Code, this designation was:
Intended for public and private educational, administrative,
government and health care uses, including public land reserve
for future development. The development standards are
intended to set a high standard to assure that the activities
provide visual amenity to the surrounding area.
Within the Institutional District, a variety of commercially-related uses
are permitted, such as medical clinics, offices, governmental and
quasigovernment administrative developments. Additional commercial
uses require conditional use or administrative permits. Industrial uses
allowed with conditional use permits include storage and distribution
warehousing and industrial cargo uses. Other permitted uses include
parking lots, recycling, schools, passenger dock, emergency services,
library, dorm-style housing, museum, impound lot, and utility facility.
After analysis, zoning limits the scope of physically possible uses.
Essentially, the intent of the zoning district does not accommodate
purely commercially-motivated uses,but rather those that serve a public
purpose in conjunction with a profitable use.
The appraised parcel contains 60,984± square feet or 1.40± acres, and
benefits from 206± feet of frontage on the Seward Highway, but lacks
direct access. Instead, access is from the north and west boundaries on
secondary streets. The property is generally level with a gentle slope,
and near access grade. There has been some clearing, but the majority
of the property is in a raw state and heavily vegetated. Public water,
sewer, electricity, and telephone are available. Surrounding
development varies; however, commercial development is evident on
parcels fronting the west side of the Seward Highway. The adjacent
property to the south is being developed for a medical clinic. The
location one mile north of the Small Boat Harbor coupled with highway
frontage encourages commercial development, however zoning limits
the scale and type of development permitted.
Determining the specific land use alternative that maximizes
productivity is a difficult analytical task. Based on highway frontage,
relative proximity to the Seward Small Boat Harbor and other
commercial areas, commercial development is considered financially
feasible. Thus, commercial development consistent with Institutional
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zoning restrictions is the highest and best use of the property, as vacant.
The most probable buyer is an owner-user.
Highest and Best Use As Vacant Commercial Development
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Chapter 6: Land Valuation - Sales Comparison Approach
Overview The sales comparison approach is a systematic procedure of estimating
the subject's market value by comparing it directly to property sales
afforded similar physical and economic character. The approach is
founded on the principle of substitution, theorizing value is a function
of a knowledgeable investor's (buyer) intent to pay no more for a
specific property than the cost of acquiring an alternative property
offering similar utility (economic satisfaction). The sales comparison
approach is the best approach for valuing vacant land.
Comparative Market Our sales search focused on vacant land with similar zoning, physical,
Analysis and economic character to the subject, located in the immediate
neighborhood. This search criteria produced a paucity of sale data,
compelling us to expand our search to alternatives locations with
varying zoning designations. This search produced four closed
transactions that transpired in from 2017 to 2021. Of these, three
transactions are land sales and one transaction is a land lease on ARRC
land. We also analyzed a pending sale of the adjacent property to the
south. The primary land transactions we relied upon are listed in the
table below. Additional details of the comparables are retained on file.
Summary of Primary Land Transactions
No. Location Zone Sale Date Sale Size $/SF
Price (SF)
1 Northwest corner of Seward Highway and AC 8/21 $663,500 144,184 $4.60
Aspen Lane, one mile north of SSBH (pending)
2 Southeast corner of Port Avenue and Fourth HC 10/21 $311,000 22,194 $14.01
Avenue
3 Northeast corner of Seward Highway and N/A 11/18 $130,000 74,923 $1.74
Seward Park Drive
4 North side of Seward Highway between N/A 7/18 $85,000 98,881 $0.86
Seward Park Drive and South Fork Lane
5 West side of First Avenue at corner of Madison INS 11/17 $200,000 41,818 $4.78
Street
---- Southwest corner of Seward Highway and INS o o -- -- 60,984 ----
Sea Lion Avenue, one mile north of SSBH
(Subject)
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Elements of The elements of comparison that have the greatest influence on market
Comparison behavior and the price paid for similar land in Seward is market
conditions, location, zoning, and physical character, including
clearing/grading, frontage/access, and size. We use a qualitative
comparison technique that rates elements of comparison as superior,
inferior, or similar.
Comparable Land Sales Map
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Pending Land Sale 1
Pending Land Sale 1 is the August 2021 pending sale of a property just
southwest of the subject fronting the Seward Highway. The irregular-
'` shaped parcel contains 3.31±acres or 144,184±square feet. At the time
of the purchase agreement, the property was a portion of a larger 11-
acre parcel. Thus the pending sale requires a replat prior to closing. The
platting process has caused an extraordinarily lengthy sale process The
+� property has public water, sewer, electricity, and telephone. Zoning is
-- r
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AC, Auto Commercial. The property has direct highway access and
benefits from 448± feet of frontage. It was previously used as the US
Air Force Recreation Center and is primarily cleared. The pending sale
price of$663,500 indicates a unit price of$4.60 per square foot. It is
based on the average of two appraisal reports; one completed for the
City of Seward (seller), and one completed for Chugachmiut (buyer).
The buyer intends to construct a medical clinic on the site. By
comparison, downward adjustments are required, primarily to reflect
superior zoning, access, and clearing. An offsetting upward adjustment
is necessary for inferior size differential. The net adjustment is
marginal, indicating a unit value approximating $4.60 per square foot
for the subject.
Land Transaction 2
Land Transaction 2 is the October 2021 lease of ARRC land located at
a the north end of the Seward Small Boat Harbor on the southwest corner
of Port Avenue and Fourth Avenue. The nearly-trapezoidal shaped site
.4 contains 22,194± square feet or 0.51± acre, including a small portion
S encumbered by public use easements. Access is from paved, two-lane
streets and all public utilities are available. Zoning is HC, Harbor
Commercial. The property is currently used for restaurant and tourism-
oriented uses, benefitting from its proximity to the harbor and railroad
depot. The lease rate of$24,880 per year indicates a capitalized value
of$311,000 using an 8% rental rate specified in the lease. The lease is
subject to five-year renewals based on an MAI appraisal. It indicates a
unit indicator of $14.01 per square foot. By comparison, downward
adjustments are required, primarily to reflect superior location, zoning,
and size differential. Thus, a unit value substantially less than $14.01
per square foot is indicated for the subject.
Land Sale 3
Land Sale 3 is the November 2018 sale located on the northeast corner
of the Seward Highway and Seward Park Drive, approximately 3.5
r�ti j miles north of the Small Boat Harbor. The irregular-shaped lot contains
74,923± square feet or 1.72± acres. Situated outside of Seward City
f, Limits, the parcel is unzoned. The listing Broker indicated there was a
` �. 700 square foot shop on the property connected to electric service, but
that power was turned off. Additionally, it was revealed the well and
septic on-site likely did not meet ADEC standards, and the well lacked
a well pump. The property was exposed to the market for 104 days,
originally listed for $150,000. The sale price of $130,000 indicates a
unit price of $1.74 per square foot. By comparison, downward
adjustments are necessary for lack of zoning restrictions, access, and
22-3700-North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska 22
323
MacSwain Associates LLC
improvements on the property at the time of sale. Conversely,
overriding upward adjustments are required for inferior market
conditions, lack of public water and sewer, and inferior location. Thus,
Land Sale 3 indicates a unit value greater than $1.74 per square foot for
the subject.
Land Sale 4
Land Sale 4 is the July 2018 sale located on the north side of the Seward
Highway between Seward Park Drive and South Fork Lane,
approximately 3.5 miles north of the Small Boat Harbor. The irregular-
4; shaped lot contains 98,881±square feet or 2.27±acres. Situated outside
of Seward City Limits, the parcel is unzoned. The listing Broker
indicated the lot has been cleared, and a building pad was prepped for a
structure approximating 40 feet by 70 feet. It was also revealed an
engineered septic system would be required to facilitate development.
The property was exposed to the market for 107 days, originally listed
for $95,000. The sale price of$85,000 indicates a unit price of$0.86
per square foot. Subsequent to the sale, a dental clinic was constructed
on the site. By comparison, downward adjustments are necessary for
site improvements at the time of sale and lack of zoning restrictions.
Conversely, overriding upward adjustments are required for inferior
market conditions, size differential, lack of public water and sewer, and
inferior location. Thus, Land Sale 4 indicates a unit value greater than
$0.86 per square foot for the subject.
Land Sale 5
Land Sale 5 is November 2017 located on the west side of First Avenue
near the corner of Madison Street, just north of the Seward Hospital.
The nearly rectangular-shaped lot contains 41,818±square feet or 0.96±
lot acre. Access is from First Avenue, a paved, two-lane road running
w a " north/south on the west side of the townsite. Zoning is INS,
Institutional, which also allows some commercial uses. At the time of
L
r sale, the property was vacant as the original structure had been razed
f -` prior to 2012. The property was exposed to the market for 108 days
before selling at the list price of$200,000. This indicates a unit price
of $4.78 per square foot. The motivation for the purchase was for
eventual medical-related expansion due to its adjacency to the hospital
campus. By comparison, downward adjustments are necessary for size
differential and to reflect the degree of clearing at the time of sale,which
reduces site preparation expenses. Offsetting upward adjustments are
necessary for inferior market conditions and lack of highway frontage.
The net adjustment is minimal, indicating a unit value approximating
$4.78 per square foot for the subject.
22-3700—North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska 23
324
MacSwain Associates LLC
Reconciliation of Presented below is a rating grid and analysis of the comparables used in
Comparative Market comparative analysis.
Analysis
No. $/SF Rank Net Adjustment
2 $14.01 Superior
5 $4.78 Similar -- --
1 $4.60 Similar -- --
Subject -- -- -- -- -- --
3 $1.74 Inferior T
4 $0.86 Inferior
The comparables indicate a wide value range from $0.86 to $14.01 per
square foot. Land Sales 3 and 4 are rated inferior indicating a unit value
greater than $1.74 per square foot. Conversely, Land Transaction 2
(which is a land lease) is rated superior indicating a unit value
significantly less than$14.01 per square foot. Pending Land Sale 1 and
Land Sale 5 are rated similar, indicating a unit value approximating
$4.60 and$4.78 per square foot. After comparative analysis and making
the necessary adjustments,we conclude with a unit range from $4.50 to
$5.00 per square foot. This develops the following indicators.
60,984 SF x $4.50/SF= $274,428
60,984 SF x $5.00/SF= $304,920
Based on the preceding analysis, we reconcile with a value near the
middle of the range. Therefore,the market value of the appraised land,
as of June 28, 2022, is estimated as follows.
Market Value Estimate $290,000
22-3700—North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska 24
325
Addendum
326
MacSwain Associates LLC
Assumptions and Limiting Conditions
This appraisal is subject to the following assumptions and limiting conditions.
4 No responsibility is assumed for the legal description provided or for matters pertaining to
legal or title considerations. Title to the property is assumed to be marketable unless
otherwise stated.
4 The property is appraised free and clear of all liens or encumbrances unless otherwise stated.
4 The information furnished by others is believed to be reliable, but no warranty is given for
its accuracy.
4 All maps, plot plans, and other illustrative material are believed to be accurate, but are
included only to help the reader visualize the property.
4 It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structures that render it more or less valuable. No responsibility is assumed for such
conditions or for obtaining the engineering studies that may be required to discover them.
4 It is assumed the property is in full compliance with all applicable federal, state, and local
environmental regulations and laws unless the lack of compliance is stated, described, and
considered in the appraisal report.
4 It is assumed the property conforms to all applicable zoning,land use regulations,and platting
restrictions unless the nonconformity is identified, described, and considered in the appraisal
report.
4 Possession of this report, or a copy thereof, does not carry with it the right of publication.
4 The appraisers, by reason of this appraisal, is not required to give consultation or testimony
or to be in attendance in court with reference to the property in question unless arrangements
have been previously made.
4 Neither all nor any part of the contents of this report shall be disseminated to the public
through advertising, public relations, news, sales, or other media without the prior written
consent and approval of the appraisers.
4 The existence of any hazardous material or other type of environmental contamination,which
may or may not be present on the property, was not observed by the appraisers nor do the
appraisers have any knowledge of the existence of such substances. However, the presence
of these substances may affect the value of the property. Therefore, the client is urged to
retain an environmental assessment for discovery and evaluation.
Hypothetical Condition
This appraisal is subject to the following hypothetical condition.
4 It is a hypothetical condition of this appraisal that the appraised 1.40± acres is legally
separated and developable to its highest and best use.
22-3700—North Portion of Lot IOA,Fort Raymond Subdivision Replat No. 1, Seward,Alaska
327
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22,Anchorage,Alaska 99503
Appraiser: Alex Kleinke
State of Alaska, Certified General Real Estate Appraiser—License 9148873
Education: Bachelor of Business Administration,Finance,University of Alaska Anchorage (2009)
Master of Business Administration(MBA),University of Alaska Anchorage (2012)
Professional Experience: 2009 to Present—MacSwain Associates LLC
Real estate appraiser of all property types throughout Alaska including commercial, industrial, land, rights-of-way,
and special-purpose properties. Appraisals performed for financing, right-of-way acquisitions, conservation
easements,leasing,insurance,taxation,estate planning,investment analysis, and buy-sell decisions.
Appraisal Education: The following is a list of recently completed appraisal courses and seminars.
2022—Fundamentals of UASFLA by the Appraisal Institute,Online
2021— Cool Tools:New Technology for Real Estate Appraisers by the Appraisal Institute,Online
2021—Analyzing Operating Expenses by the Appraisal Institute,Online
2021—Business Practices and Ethics by the Appraisal Institute,Online
2020— 7-Hour National USPAP 2020-2021 Update Course by the Appraisal Institute,Anchorage,AK
2017—Business Practices and Ethics by the Appraisal Institute,Online
2017— 7-Hour Equivalent USPAP Update Course by the Appraisal Institute,Online
2016—Advanced Market Analysis and Highest and Best Use by the Appraisal Institute,Chicago,IL
2016— General Sales Comparison Approach by the Appraisal Institute, Chicago,IL
2015—Real Estate Finance, Statistics, and Valuation Modeling by the Appraisal Institute, San Diego, CA
2015— General Report Writing and Case Studies by the Appraisal Institute,Las Vegas,NV
2015— General Income Approach Parts I and II by the Appraisal Institute, San Diego,CA
2013— The Discounted Cash Flow Model: Concepts,Issues, and Apps. by the Appraisal Institute, San Diego,CA
2013— General Appraiser Site Valuation and Cost Approach by the Appraisal Institute,Fort Lauderdale,FL
2012— General Market Analysis and Highest and Best Use by the Appraisal Institute, San Diego,CA
2011— IS-Hour National USPAP Course by the Appraisal Institute,Anchorage,AK
2010—Basic Appraisal Procedures by the Appraisal Institute,Anchorage,AK
2010—Basic Appraisal Principles by the Appraisal Institute,Anchorage,AK
Sample of Significant and Project Assignments:
2020-21 —Eight right-of-way appraisals for Knik-Goose Bay Road Reconstruction Project
2020—43 City of Seward Lease Parcels including commercial,industrial,and marine-type properties
2020—41 City of Kenai Lease Parcels including aviation,commercial,industrial,and marine-type properties
2019—City of Kodiak Lease Parcels including aviation and communication sites, seaplane base, and shipyard
2018—Fractional interest of land and sandwich leases for Anchorage hotel and fuel station properties
2017—Pacific Spaceport Complex,market rent of launch complex facilities within PSCA on Kodiak Island
2016-2017—Provided insurable value project appraisals for properties in Utgiagvik, Dillingham, Iliamna, Kotzebue,
Nome,Cordova,Naknek,Angoon,Haines,Hoonah,Juneau,Kake,Anchorage,Bethel,and Yakutat
2015 —40 City of Seward Lease Parcels including commercial,industrial, and marine-type properties
2015 —97 City of Kenai Lease Parcels including aviation,commercial,industrial, and marine-type properties
2015 —Assisted with cost estimate to acquire lands to develop proposed AKLNG from Pt.Thomson to Nikiski
2014-2020— 50+Right-of-way appraisals for Parks Highway MP 48.8 to 52.3 Reconstruction Project
2014—Assisted with project management and appraisals of Nikiski properties for Alaska LNG acquisitions
2012—Assisted in the income analysis portion of the Trans Alaska Pipeline System(TAPS)
2010-2022—Alaska Railroad Corporation(ARRC)land lease appraisals in Anchorage, Seward, and Whittier
Professional Affiliation: Practicing Affiliate—Appraisal Institute
Or
License is, 148813
Effective:5123/2021 State of Alaska
Expires:06130)2023 Department of Commerce, Community, and Economic Development
Division of Corporations, Business, and Professional Licensing
Board of Certified Real Estate Appraisers
Licensee: ALEXANDER H KLEINKE
License Type: Certified General Rea! Estate Appraiser
Status: Active
Commissioner: Julie Anderson
MacSwain Associates LLC
4401 Business Park Boulevard, Suite 22,Anchorage,Alaska 99503
Appraiser: Steve MacSwain, MAI
Member of Appraisal Institute -No. 5700
State of Alaska, Certified General Real Estate Appraiser-No. 42
Professional Experience: 1986 to Present-MacSwain Associates LLC
1976 to 1986 -Appraisal Company of Alaska-President
1970 to 1975 -Real Estate Services Corporation—Appraiser
1969 to 1970 - State of Alaska Department of Highways -Right of Way Agent
Real estate appraiser and consultant of all property types throughout Alaska including commercial, industrial,
subdivisions and special-purpose properties. Appraisals have been performed for financing, leasing, insurance,
condemnation,taxation,property damages,investment analysis,and buy-sell decisions. Appraisals include valuation
of both real property and business enterprises. Professional experience totals 49 years. Life-long Alaskan resident
of Alaskan Native descent.
Education: Bachelor of Business Administration,Finance (1969), University of Alaska Fairbanks
Appraisal Education: The following is a list of completed appraisal courses and seminars.
2021 Cool Tools:New Technology for Real Estate Appraisers by the Appraisal Institute
2021 Desktop Appraisals (Bifurcated, Hybrid) and Evaluations by the Appraisal Institute
2021 Hot Topics &Myths in Appraiser Liability by LIA Administrators &Insurance Services
2020 Uniform Standards of Professional Appraisal Practice Update by the Appraisal Institute
2019 How Tenants Create or Destroy Value:Leasehold Valuation and its Impact on Value by the Appraisal Institute
2017—Appraising Environmentally Contaminated Properties by the Appraisal Institute
2017 Residential& Commercial Valuation of Solar by the Appraisal Institute
2017 Right of Way Acquisition for Pipeline Projects by the International Right of Way Association
2015 Litigation Appraising: Specialized Topics and Applications by the Appraisal Institute
2015 Business Practices and Ethics by the Appraisal Institute
2013 Complex Litigation Appraisal Case Studies by the Appraisal Institute
2013 Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book)by the Appraisal Institute
2012 Appraisal Curriculum Overview by the Appraisal Institute
2010 Reviewing Appraisals in Eminent Domain by the International Right of Way Association
2010 Commercial Appraisal Engagement and Review Seminar for Bankers and Appraisers by the Appraisal Institute
2009— The Appraiser as an Expert Witness:Preparation and Testimony by the Appraisal Institute
2009 Attacking and Defending an Appraisal in Litigation by Whitmer Education
2008 Uniform Standards of Professional Appraisal Practice by the Appraisal Institute
2007 Business Practices and Ethics by the Appraisal Institute
2007 Eminent Domain Law for Right of Way Professionals by the International Right of Way Association
2007 Appraisal Review for Federal Aid Programs by the International Right of Way Association
2007 Analyzing Operating Expenses by the Appraisal Institute
1969-2006: Numerous appraisal classes pertaining to principles, income capitalization, cost analysis, sale
comparison approach, and highest and best use analysis by the Appraisal Institute, Society ofReal Estate Appraisers,
International Right-of-Way Association, International Association of Assessing Officers, and Marshall Valuation
Service
Membership and Organizations: Member of Appraisal Institute — No. 5700, International Right of Way
Association (IRWA), and Building Owners and Managers Association(BOMA)
Public Service: Past Chairman of the State Board of Certified Appraisers
Past Member of Board of Equalization, Municipality of Anchorage,National Experience Review Committee of
the Appraisal Institute, and Regional Ethics and Counseling Panel of the Appraisal Institute
Past President of Alaska Chapter 57 of the Appraisal Institute
Significant Assignments:
4 Appraised Pacific Spaceport Complex-Alaska (PSCA) land and facilities for Alaska Aerospace Corporation on
Kodiak Island.
4 Appraised proposed LNG Pipeline, a FERC-regulated 860-mile pipeline transporting liquefied natural gas.
4 Appraised the Trans-Alaska Pipeline System, a FERC-regulated 800- pipeline that transports crude oil from
Prudhoe Bay to Valdez, for TAPS ownership.
4 Appraised remote lands (65,000± acres) owned by three Native corporations damaged by the Selendang Ayu
grounding and subsequent oil spill.
4 Appraised Calais Company,Inc.,a real estate holding company consisting of 39 commercial parcels in Anchorage.
4 Principal real estate consultant and expert witness for all lands affected by the Exxon Valdez oil spill. Project
involved over 2,000,000 acres of remote land and nearly 2,000 private property owners.
4 Appointed as a representative of a three-member panel that analyzed and valued over 1,000,000 acres and 8,000
parcels for the Mental Health Lands Settlement.
Contract assessor for the North Slope Borough, Kodiak Island Borough, City of Nome, and the City of Valdez.
Represented Seibu Alaska, Inc. (Alyeska Resort and Alyeska Prince Hotel) in preparing of their property tax
appeal with the Municipality of Anchorage that resulted in a$65 million reduction in assessed value.
4 Appraised submerged tideland parcels and wetlands parcels located in Womens Bay on Kodiak Island for the
purpose of an exchange between Koniag,Inc. and U.S. Fish and Wildlife Service.
4 Appraised Common Carrier Pipeline right-of-ways leased and operated by BP Transportation Alaska and
ConocoPhillips Alaska.
4 Appraised 3,600 acres consisting of the former Adak Naval Air Station and Submarine Base conveyed to the City
of Adak and the State of Alaska.
Expert Witness Experience: Steve MacSwain, MAI is qualified as an expert witness in both the United States
Federal Court and the State of Alaska Superior Court. Steve has testified as an expert witness in State and Federal
courts. In addition, Steve has testified as expert witness in numerous Alaskan municipal tax courts,public hearings,
and depositions on matters related to real property.
Arbitrator Experience: Appointed a Master by the Superior Court of Alaska and Municipality of Anchorage to
serve as an arbitrator in determining just compensation.
FffeOe: "12021 State of Alaska
EHeMive:6l812021
Expires:0 613012 0 2 3 Department of Commerce,Community,and Economic Development
Division of Corporations,Business,and Professionai Licensing
Board of Certified Real Estate Appraisers
Licensee:STEVEN JAMES MACSWAIN
License Type:Certified General Real Estate Appraiser
Status:Active
Commissioner:Julie Anderson
POBOX 2031 Seward,Alaska 99664
907-231-5773 1 info@sewardcitytours.com
65eward 6"';%ty Jours
SEWARD, AK —
Dear Members of the Seward City Council,
Thank you for considering our land use request for:
City of Seward Land: 60,984f SF(1.40f Acres)
North Portion of Lot 10A,Fort Raymond Subdivision Replat No. 1905 Sea Lion Avenue, Seward,Alaska
As the operators of Seward City Tours, our shuttle service has proudly served our local community and tourists for
almost six years. We recently renewed our contract for another three years, with two potential three-year extensions.
However, to ensure our service's sustainability, we need to secure a dedicated area for vehicle maintenance, parking,
and affordable housing for our seasonal employees.
Our operation has suffered from repeated vandalism to our vehicles during winter storage on our property and various
rented lots. Coupled with the challenge of providing affordable seasonal housing, the urgency for dedicated land is
paramount. Despite these challenges, we accepted the contract extension to maintain our commitment to the
community.
Continued service at our current rate requires regular vehicle maintenance, which new bus purchases won't sustain,
given the escalating costs of fuel,labor,and replacements. This was evident when we extended the city rates far below
any competitors',ensuring our shuttle operation's survival.
Therefore, we propose purchasing city land to establish a maintenance shop and seasonal staff housing. Given the
challenges the current real estate market poses,this request is critical for our service's continuity.
We understand the city's reluctance for land sale proposals, but we request that you consider our request, given our
partnership with the city and the community service we provide. By approving this request,you directly contribute to
our local community's access to affordable and reliable transportation during the summer months.
Thank you for your time and consideration. We eagerly await your response and the opportunity to discuss this
proposal further.
Respectfully,
Jonah Swiderski Yen Ly
332
POBOX 2031 Seward, Alaska 99664
907-231-5773 1 info@ sewardcitytours.com
► cSewarct fG., ty
Jours
S E W A R D, AK -
To City of Seward,
This letter is a statement of SewardCityTours, LLC interest in purchasing:
City of Seward Land: 60,984± SF(1.40±Acres)
North Portion of Lot 10A, Fort Raymond Subdivision Replat No.1
905 Sea Lion Avenue, Seward,Alaska
SewardCityTours, LLC (STC) intends to use this property for building a
maintenance facility for the vehicles and housing for employees.
We would like to proceed with negotiations with the City of Seward for the
purchase of this property.
With Regards,
Jonah Swiderski and Yen Ly
333
• SEWARD COMMUNITY HEALTH CENTER
PO Box 2895/ 417 First Avenue — Seward, AK 99664-2895
°COMMUNITY PHONE (907) 224-2273
H EALTH FAX (907) 224-8501
CENTER www.sewardhealthcenter.org
August 2, 2023
To Whom it May Concern:
Seward Community Health Center(SCHC)is pleased to learn of SewardCityTours' intention to purchase
undeveloped land from the City of Seward. We have had several discussions with SewardCityTours and
know them to be a reputable company operating in Seward. They strive to provide service beyond the
standard in transportation and we have partnered with them in the past to provide a much-needed service
to our community.
A strong transportation system is critical to a community's health. Without reliable and consistent
transportation,people are unable to make it to their jobs, school, grocery store, doctor appointments,post
office, and so many other places that contribute to a full and healthy life.
To continue providing a high level of transportation service, SewardCityTours requires some
infrastructure. This is why we support their proposal to acquire land to build maintenance services for
their vehicles and housing for their employees.
We feel that with the purchase of this land, SewardCityTours will improve their ability to provide reliable
and safe transportation in Seward during the summer months, as they have been for the last six years.This
planned investment may be the beginning of addressing the larger community need for year-round public
transportation.
Seward Community Health Center looks forward to continuing to work with SewardCityTours
in the future and supports their efforts to improve transportation options for our community.
Sincerely,
Craig Ambrosiam
Executive Director
Where your health matters
August 2nd, 2023
Seward City Council
ti c/o City of Seward
PO Box 167
��R C Seward, AK
Board of Directors 2023
Francis Azzad-Smith, Chair RE: Purchase of Land from City for SewardCityTours, LLC
Rhonda Spurr, Vice Chair
Sharon Ganser,Sec/Treasurer
Dear City Council:
Carol Souza
Randy Nabb The Seward Senior Center is pleased to learn of
SewardCityTours, intention to purchase undeveloped land from the City
JJ Kaiser of Seward. We have had several discussions with SewardCityTours and
know them to be a reputable company operating in Seward. We know
Linda Amberg that they strive to provide service beyond the standard in transportation
and have partnered with them in order to provide service to our
OPEN community, which is an unduplicated and essential service to serve the
Executive Director resident and Seward visitors.
Dana Paperman
We understand that in order to continue to provide a high level of
Our Mission Statement service this company requires some infrastructure, and would support
To insure honor,dignity,security,and their proposal to acquire land in order to build maintenance services for
independence for older Alaskans their vehicles as well as housing for their employees.
through support services that assist
them in maintaining meaningful and We feel that with the purchase of this land SewardCityTours will
quality lives. continue to improve their ability to provide the public reliable and safe
transportation in Seward during the summer months, as they have been
Serving older Alaskans since 1978. for the last six years.
A non-profit agency We at senior center hope to continue to work with SewardCityTours in
TAX ID:92-0072425 the future and deeply support their efforts to pursue property that will
benefit their efforts to improve the service they provide to the community.
Email: sscnseward.net
Web: www.sewardsenior.ore
Facebook:
Seward Senior Center
Kind Regards,
Dana Paperman
Executive Director
MEALSOWHEELS
AMERICA
2023 MEMBER
Senior Center, PO Box 1195,Seward,AK 996641907-224-5604
335
ib
"Changing with the tides in harmony with
Our people, land and heritage."
City Council Members
Seward, AK
July 31, 2023
RE: Purchase of Land from City for SewardCityTours, LLC
Dear City Council Members of Seward,
We are pleased to learn of SewardCityTours, intention to purchase undeveloped land from the
City of Seward. We have had several discussions with SewardCityTours and know them to be a
reputable company operating in Seward. We know that they strive to provide service beyond
the standard in transportation and have partnered with them to provide service to our
community.
We understand that in order to continue to provide a high level of service this company requires
some infrastructure and would support their proposal to acquire land in order to build
maintenance services for their vehicles as well as housing for their employees.
We feel that with the purchase of this land SewardCityTours will continue to improve their ability
to provide reliable and safe transportation in Seward during the summer months, as they have
been for the last six years.
We at Qutekcak Native Tribe hope to continue to work with SewardCityTours in the future
and deeply support their efforts to pursue property that will benefit their efforts to improve the
service they provide to the community.
Kind Regards,
Jamilyn Fenn
Finance Manager
Qutekcak Native Tribe
336
City of Seward,Alaska Planning&Zoning Commission Meeting Minutes
June 6 2023 Volume 8, Page 16
CALL TO ORDER
The June 6, 2023 regular meeting of the Seward Planning & Zoning Commission was
called to order at 7:00 p.m. by Chair Clare Sullivan.
OPENING CEREMONY
Commissioner Charbonneau led the Pledge of Allegiance to the flag.
ROLL CALL
There were present:
Clare Sullivan presiding, and
Vanessa Verhey Nathaniel Charbonneau
Brenan Hornseth
Troy,Staggs Sean Ulman
Comprising a quorum of the Commission; and
Jason Bickling, Community Development Director
Courtney Bringhurst, City Planner
Selena Soto, GIS Technician
Kris Peck, City Clerk
Excused—None
Absent—Monaco, Staggs
CITIZEN COMMENTS ON ANY SUBJECT EXCEPT THOSE ITEMS SCHEDULED
FOR PUBLIC HEARING—None
APPROVAL OF AGENDA AND CONSENT AGENDA
Motion (CharbonneauNerhey) Approval of Agenda and Consent Agenda
i
Motion Passed Unanimous
The clerk read the following approved consent agenda items:
Approval of the May 9, 2023 Planning and Zoning Commission Meeting Minutes.
SPECIAL ORDERS,PRESENTATIONS AND REPORTS
Proclamations and Awards—None
City Administration Report
337
City of Seward,Alaska Planning&Zoning Commission Meeting Minutes
June 6, 2023 Volume 8,Page 17
Community Development Director Jason Bickling stated he would like to add the most
recent City Manager Report to the P&Z packets to keep the commissioners updated.
Sullivan asked about compliance issues with short term rentals. Bickling said their
compliance was very high, but the few that were out of compliance tended to be very difficult to
deal with.
Other Reports and Announcements—None
Presentations—None
PUBLIC HEARINGS
Resolutions Requiring Public Hearing
Resolution 2023-014,A Resolution of the Planning and Zoning Commission of the City of Seward,
Alaska, Recommending the City Council Amend Portions of Seward City Code; 15.10.222
Development Requirements—Table Notes,Letter E
Motion (CharbonneauNerhey) Approve Resolution 2023-014
Community Development Planner Courtney Bringhurt said the item was brought back
to P&Z at the request from city council.The main difference from the previous version was Harbor
Commercial Zone was not listed in Table Note E with the minimum of 9000 square feet.
Notice of the public hearing being posted and published as required by law was noted and the
public hearing was opened. No one appeared and the public hearing was closed.
Charbonneau wanted to postpone the resolution until P&Z could have a dedicated work
session on the topic.
Motion to Postpone(CharbonneauNerhey) Postpone Resolution 2023-014
Motion Passed Unanimous
UNFINISHED BUSINESS—None
NEW BUSINESS
Other New Business Items
Discuss creation of an ad hoc committee to review the compliance status of approved
Conditional Use Permits.
Bickling said there were a lot of Conditional Use Permits that had been issued, but there
was not a review process in place. He was interested in forming an ad hoc committee to review
338
City of Seward,Alaska Planning&Zoning Commission Meeting Minutes
June 6, 2023 Volume 8,Page 18
the permits that had been issued.
Motion (Sullivan/Charbonneau) Direction to Form an Ad Hoc Committee
to Review Compliance Status of Approved
Conditional Use Permits.
Motion Passed Unanimous
Discuss topic for work session on June 20,2023
The commission wanted to focus on Title 15 —Signs and push the Comprehensive Plan to a later
date.
INFORMATIONAL ITEMS AND REPORTS
Reminder: Tuesday, June 20, 2023 Planning and Zoning Work Session at 6:OOpm in the
Council Chambers, City Hall.
Reminder: Tuesday, July 11, 2023 regular meeting at 7:00 pm in the Council Chambers, City
Hall.
CITIZEN COMMENTS—None
COMMISSION AND ADMINISTRATION COMMENTS AND RESPONSES TO
CITIZEN COMMENTS
Charbonneau thanked administration for their work.
Bickling noted that P&Z Work Sessions started at 6:00 p.m.and the regular meeting started
at 7:00 p.m. Bickling wanted to standardize the P&Z meeting times so both the work sessions and
meetings were at a consistent start time.
Sullivan supported both earlier and more consistent start times. She noted this would be a
public hearing item to change city code.
ADJOURNMENT
The meeting was adjou d at 7:51 p.m.
Kris Peck �.•••""'�•,, lare Sullivan
City Clerk �.�':� OF SEI,Z,� Chair
��'� .•�Ap Ol d.•�Q
(City Seal)
SEAL
IJ
OF A,0 .•�',
1,„ 339
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1 2 3 4 5 1 2
6 7 8 9 10 11 12 3 4 5 6 7 8 9
13 14 15 16 17 18 19 10 11 12 13 14 15 16
20 21 22 23 24 25 26 17 18 19 20 21 22 23
27 28 29 30 31 24 25 26 27 28 29 30
SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRI DAY SATURDAY
Jul 30 31 (8:00pm
1 2 3 4 5
pm P&Z
eeting
P&Z WS
Cemetery
mmediately
after meet'
6 7 8 9 10 11 12
7:00pm Seward 6:00pm
Electric Utility Rescheduled-
Ad Hoc HPC Work
7:00pm
Rescheduled-
HPC Regular
Meeting to
13 14 15 16 17 18 19
7:00pm CC Mtg 6:00pm P&Z
(Council Work Session
(Council
20 21 22 23 24 25 26
7:00pm Seward 6:00pm HPC 6:00pm 55th
Electric Utility Work Session Sister City
Ad Hoc (Rescheduled Community
Potluck
7:00pm HPC (Branson
Regular
Meeting
27 28 29 30 31 Sep 1 2
5:30pm CC Work
Session
7:00pm CC Mtg
Council Calendar 1 8/7/2023 9:31 AM
340
September 2023 September 2023 October 2023
SuMo TuWe Th Fr Sa SuMo TuWe Th Fr Sa
1 2 1 2 3 4 5 6 7
3 4 5 6 7 8 9 8 9 10 11 12 13 14
10 11 12 13 14 15 16 15 16 17 18 19 20 21
17 18 19 20 21 22 23 22 23 24 25 26 27 28
24 25 26 27 28 29 30 29 30 31
SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRI DAY SATURDAY
Aug 27 28 29 30 31 Sep 1 2
3 4 5 6 7 8 9
Holiday- Labor 7:00pm P&Z 12:00pm PACAB
Day
7:00pm Seward
Electric Utility
Ad Hoc
10 11 12 13 14 15 16
7:00pm CC Mtg
(Council
17 18 19 20 21 22 23
7:00pm Seward !6:00pm P&Z 12:00pm PACAB
Electric Utility Work Session WS
Ad Hoc (Council
24 25 26 27 28 29 30
7:00pm CC Mtg
Council Calendar 2 8/7/2023 9:31 AM
341
October 2023 October 2023 November 2023
SuMo TuWe Th Fr Sa SuMo TuWe Th Fr Sa
1 2 3 4 5 6 7 1 2 3 4
8 9 10 11 12 13 14 5 6 7 8 9 10 11
15 16 17 18 19 20 21 12 13 14 15 16 17 18
22 23 24 25 26 27 28 19 20 21 22 23 24 25
29 30 31 26 27 28 29 30
SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRI DAY SATURDAY
Oct 1 2 3 4 5 6 7
7:00pm Seward 7:00pm P&Z 12:00pm PACAB
Electric Utility eetong
Ad Hoc
8 9 10 11 12 13 14
7:00pm CC Mtg
(Council
15 16 17 18 19 20 21
7:00pm Seward !6:00pm P&Z Holiday-Alaska
Electric Utility Work Session Day
Ad Hoc (Council 12:00pm PACAB
22 23 24 25 26 27 28
7:00pm CC Mtg
29 30 31 Nov 1 2 3 4
7:00pm Seward
Electric Utility
Ad Hoc
Council Calendar 3 8/7/2023 9:31 AM
342