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1994-02-03 Regular MeetingA regular meeting of the Kodiak Island Borough Assembly was held February 3, 1994, in the Assembly Chambers of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 7:30 p.m. The invocation was given by Reverend Earl Clark of the Community Baptist Church, followed by the Pledge of Allegiance. There were present: Alan Austerman, Presiding John Burt Gordon Gould Suzanne Hancock Mike Milligan Mary Monroe absent: Jack McFarland (out -of -town) comprising a quorum of the Assembly; and Jerome Selby, Mayor Donna Smith CMC, Clerk Linda Freed, Community Development Director Steve Hobgood, Engineering /Facilities Director Judi Nielsen, Deputy Clerk Assemblymember McFarland was out -of -town on business and asked to be excused. HANCOCK, seconded by MONROE VOTE ON MOTION TO EXCUSE MOTION CARRIED APPROVAL OF AGENDA 7 15 KODIAK ISLAND BOROUGH Regular Assembly Meeting February 3, 1994 moved to excuse Assemblymember McFarland. Unanimous voice vote GOULD, moved to approve the seconded by MONROE agenda. Deputy Presiding Officer Austerman announced that the requested legal opinion on postponing a contract was received from the Borough attorney. He placed the question of adding the opinion to the agenda before the Assembly. REGULAR MEETING ROLL CALL APPROVAL OF AGENDA Regular Assembly Meeting Volume XVIII February 3, 1994 Page 40 HANCOCK, seconded by BURT VOTE ON MOTION TO AMEND Ayes: Noes: Absent: MOTION FAILED VOTE ON MOTION TO APPROVE Ayes: Noes: Absent: MOTION CARRIED APPROVAL OF MINUTES None. AWARDS AND PRESENTATIONS B. Proclamation 7 moved to amend the agenda by adding to 12. New Business, D. Other Items, 1. Attorney's Legal Opinion. Burt, Hancock, Austerman Gould, Milligan, Monroe McFarland 3 Ayes, 3 Noes Burt, Gould, Hancock, Milligan, Monroe, Austerman None McFarland Unanimous A. Employee of the Month Mayor Jerome Selby presented the Employee of the Month Award to Duane Dvorak, associate planner /long range planning, in the Community Development Department. Mayor Selby proclaimed February, 1994 American History Month, urging all citizens to join in recognizing the importance of American history in our lives. Betts Johnson, on behalf of the Daughters of the American Revolution, accepted the proclamation. APPROVAL OF MINUTES AWARDS AND PRESENTATIONS EMPLOYEE OF THE MONTH PROCLAMATION Volume XVIII Regular Assembly Meeting February 3, 1994 Page 41 CITIZENS' COMMENTS A. Agenda Items Not Scheduled For Public Hearing B. Items Other Than Those Appearing on the Agenda Mike Rasmussen, thanked the Assembly for bringing forward questions on how money was spent on the hospital. He felt biased propaganda presented to the community misled people to believe the state was committed to fund the hospital remodel. Now, he felt the chances of matching funds was relatively slim because of the state's financial situation. He asserted that the Borough spent thousands of dollars to advertise the bond propositions. Deputy Presiding Officer Austerman understood that both Borough and hospital funds paid for advertising. Mr. Rasmussen did not understand why information released to voters was biased. He asked why the bond was floated when the state was not committed. He said the community and fishermen were suffering and he wanted to know how long it was since the hospital broke even. Deputy Presiding Officer Austerman stated the question would be answered later. Mr. Rasmussen asked the Assembly to consider questions raised at the last Assembly meeting. Although he did not argue the need for a new elementary school, he challenged whether the community could afford one. He felt it was logical to build the school on the new hospital site because a small fortune would be expended to develop the new school site. He asked the Assembly to use logic and put on the brakes. Gretchen Saupe was dismayed at questions raised at the last Assembly meeting. She felt a great deal of work was expended on the hospital project and voters overwhelmingly approved the bonds. She asked that people remember what the hospital offered to the community from birth to death, to young and old. She felt the hospital had a fine staff that worked in crowded, hard conditions. She said the community needed quality health care and it was wrong to slow the process because the time to raise questions was before the election. Since there was money for first phases, she urged the Assembly to not waste time but move forward. Dana Carros questioned how responsible it was to spend $8.5 million to develop the new hospital and ask for payment of the bonds when the Borough had $20 million in reserve. He felt the community was asked CITIZENS' COMMENTS Regular Assembly Meeting Volume XVIII February 3, 1994 Page 42 to vote for the bonds without complete facts and agreed with Assemblymember Austerman's motion to delay action. He announced that fishermen were putting forward a resolution to the North Pacific Fisheries Management Council to set aside 25% of cod quota for small boats. Judy Trousil supported the hospital remodel. She asked the Assembly to ask themselves how we can expect Juneau to offer support when local government cannot stand by their decisions and decisions of the people of Kodiak. She said nothing was gained by waiting months or years. She asserted that people voted overwhelmingly in favor of the hospital and school bonds and urged the Assembly to listen to the voice of the people and move forward. She had toured the hospital with a consultant and was embarrassed by conditions and emphasized that the community needed a better hospital. Marcia Oswalt, Monashka Bay resident, appreciated those who served on the Assembly and for listening to voters. She first used the hospital 24 years ago for the birth of her son. She was glad her need of the hospital was not great during past years but appreciated the fact that basic hospital services were available on Island. She contended that the current hospital x -ray facility was extremely crowded and difficult. Margaret Hall, echoed the comments of Ms. Oswalt and added that a quality care hospital was needed as the current hospital was inadequate for current needs. Dorothy Holm, 30 -year Kodiak resident, was grateful to have the hospital and urged the Assembly to move ahead because the community needed the facility. Chris Bublitz echoed support for going ahead. He saw the need to take responsibility for the hospital and community. Ed Nauahton, Chiniak resident, urged the Assembly to move slowly. He said it was not a question of whether the hospital would continue to exist but where to obtain funds. He said the bonds were voted on when the state fiscal situation was different and now there was a need to re- evaluate. He felt the state was coming up short of money and may not be able to provide even minimal funding. At his question regarding the status of the bonds, Deputy Presiding Officer Austerman explained that the bonds Regular Assembly Meeting Volume XVIII February 3, 1994 Page 43 s were sold and invested. Mr. Naughton stressed that it was incumbent upon the assembly to spend wisely and wait for assistance from the state. Mark Withrow felt discussion was appropriate and worthwhile but urged continuation of contract. He noted that $9 million would fund construction for a large part of the hospital for a better facility. He said the hospital was not designed to make money as revenue was received only from those who used the hospital that was available 24 hours a day. He contended that everyone paid for schools, even those without children. Jim Fisk served on the committee selected for marketing the bonds. Although the discussion was on how to get the message to the voters, he felt the committee was used to show support. He was opposed to the process in that the voters were misled because they were told the Borough would fund $9 million and the state would fund $9 million. He talked to the governor's staff and was informed that hospital funding was not coming. He urged the Assembly to delay action for 90 days or use part of the $20 million in Borough reserves to remodel the hospital. Mr. Fisk continued by saying the fisheries program transferring to Anchorage would hurt the community. He noted that the community was unified on this particular fishery issue and focus was needed on building, not destroying, Kodiak. COMMtITTEE REPORTS Assemblymember Monroe, Planning and Zoning Commission representative, reported Commission discussion with Jon Isaacs on the design of the Coastal Zone Management Plan. She said Mr. Isaacs would be at the March 2, 1993 Commission meeting and encouraged the public to attend. COMMITTEE REPORTS PUBLIC HEARING PUBLIC HEARING All ordinances and resolutions presented at this meeting were introduced by title only and copies made available to the public. A. Ordinance No. 94 -03 Creating an Exemption_From ORDINANCE Property Taxes for Community Purpose NO. 94 -03 Organizations. Regular Assembly Meeting Volume XVIII February 3, 1994 Page 44 7 Presented for consideration was Ordinance No. 94 -03 which, if adopted, exempted organizations not qualified for property tax exemption under current state statutes. GOULD, moved to adopt seconded by MILLIGAN Ordinance No. 94 -03. Mayor Selby explained that the new state assessor required compliance with the state statutes requiring tax bills to organizations not categorized as religious, educational or charitable. He said the five organizations in the ordinance were considered community interest organizations. He noted the Assembly previously exempted the Kodiak State Fair grounds. Deputy Presiding Officer Austerman opened the public hearing. Giovanni Tallino, Kodiak Island Sportsmans Association (KISA) president, supported adoption of Ordinance No. 94 -03. He said there were 400 plus members in KISA and the Association would cease to exist without the tax exemption. Curt Law, KISA board member, echoed the comments of Mr. Tallino. Deputy Presiding Officer Austerman announced the public hearing phone was not working during earlier citizen comments. He urged callers to call back at the end of meeting under citizen comments. Alan Schmitt, Kodiak Chamber of Commerce president, spoke in favor of the ordinance. Seine Cater, Senior Citizens of Kodiak president, urged the Assembly to adopt Ordinance No. 94 -03. He said that Native groups spoke well of their elders and all they produce for the community and that was the same for all senior citizens. Helen Hall, Kodiak resident since 1947, stated that the number of senior citizens was increasing as well as costs to senior citizens. Deputy Presiding Officer Austerman closed the public hearing and reconvened the regular meeting. _ Assemblymember Milligan, for the edification of the public, outlined the organizations affected by the ordinance and the dollar values. He thanked staff for maintaining clean books. Regular Assembly Meeting Volume XVIII February 3, 1994 Page 45 In response to a perceived conflict of interest expressed at the previous Assembly meeting, Deputy Presiding Officer Austerman personally saw none even though he was employed as the Kodiak Island Convention and Visitors Bureau executive director. The exemption caused him no financial gain. Assemblymember Burt, as a KISA member, also felt he had no conflict of interest because the exemption caused him no financial gain. Assemblymember Gould asked for a ruling from the chair as to whether he had a conflict of interest because his wife was the Senior Citizens Center director. Deputy Presiding Officer Austerman ruled no conflict of interest. VOTE ON MOTION TO ADOPT Ayes: A 7 Noes: None Absent: McFarland MOTION CARRIED Unanimous Gould, Hancock, Milligan, Monroe, Burt, Austerman, MESSAGES PROM THE BOROUGH MAYOR MESSAGES FROM MAYOR Mayor Selby considered the question of hospital funding to be part of the annual rites of spring because each year there was controversy. He was extremely disappointed and wished to lay the funding question to rest. He said that with regard to the new hospital site, the Borough moved ahead with full support of the state. He said no Borough funds were expended, the Borough did exactly what the state asked, and then the state changed the rules. He emphasized the lot was an asset. He noted that state guidelines required 15 acres for a school and suggested the Borough owned the one lot in the community large enough for a junior high school. He added that lot for the North Star Elementary School was purchased and funds budgeted for site development. He was confident funds were available to complete construction of phase I and II of the hospital without state funds. He said the Borough could fund $13 million for the new emergency room, new surgery Regular Assembly Meeting Volume XVIII February 3, 1994 Page 46 i 1 ,i i 7 suite, new radiology department, and new laboratory. He said the project was phased specifically to allow completion of important areas as funding allowed. He explained that in addition to the $9.5 million bond sale monies, $3 - 3 1/2 million was available from the $20 million reserve fund. He knew of two other funding sources to pursue when the monies were needed in 18 months. He related that no one was twisting Governor Hickel's arm when he said if the community funded half of the hospital project, the state would fund the other half. He wanted the governor of Alaska to fulfill his word. He emphasized this community has taken care of itself for many years. He underscored the issue as being whether the governor's word was good or not. He added that the bonds were sold and the Borough had two years to use the $9.5 million before it became taxable. He anticipated completing the design in 1994 and phase I and II in 1995, so additional funds were not needed for 18 months. He agreed that a bad fishing season was anticipated and money was needed in the community. His contention was that waiting a year to start the hospital and school projects lost money from jobs in construction. He enumerated the increase in construction costs if the project was delayed for a year. He contended that nothing was gained by delay. He said the Borough ran factual ads on the bonds as required by state statutes and noted there was a pro - hospital citizen's group that ran ads. He said there was a misconception that the Borough owned the Griffin building as it was owned by the state. He explained that without bonded indebtedness, the Borough received less school foundation formula funds. He said the bonds were sold at just over five percent for twenty years and that minimized costs because even a one percent increase in interest caused several additional interest dollars over the life of the bonds. He urged residents with questions to come to Borough staff and get the facts. He encouraged moving ahead with the hospital and school projects. r Regular Assembly Meeting Volume XVIII February 3, 1994 Page 47 He announced that Bryce Weeks, former Borough finance officer, passed away. He stated that Mr. Weeks put his heart and soul into developing the Borough's first financial system. He extended condolences to Mr. Week's family. He announced that Cape Chiniak was selected by the Alaska Aerospace Development Corporation as the Alaska launch facility site. He informed the assembly that the Shelikof Straits were deleted from Lease Sale 149. He met with Department of Fish and Game Commissioner, Carl Rosier, in an attempt to convince the Commissioner to rethink plans for creating a Region V office in Anchorage. Mr. Rosier would look at the issue again. It was a concern in that it seemed the State of Alaska was relocating to Anchorage from rural areas. Assemblymember Milligan thanked Mayor Selby for his clear statements on the hospital funding. He understood the hospital operated as an enterprise fund and asked what cost the Borough paid to subsidize. Mayor Selby stated that Borough funds were used for equipment purchase and maintenance but not operation of the hospital. Assemblymember Milligan felt that Prochaska and Associates phased the project well and asked when the revenue producing infrastructure would begin if the project was on schedule. Mayor Selby stated the new service areas were scheduled for completion by the summer of 1996. 1 OLD BUSINESS OLD BUSINESS None. NEW BUSINESS NEW BUSINESS A. BID AWARDS BID AWARDS None. B. RESOLUTIONS RESOLUTIONS 1. Resolution No. 94 -05 Approving Disposal, RESOLUTION for Fair Market Value, of all Borough Land NO. 94 -05 on Shuyak Island to the Exxon Valdez Trustee Council Regular Assembly Meeting Volume XVIII Page 48 February 3, 1994 Presented for consideration was Resolution No. 94 -05 which, if adopted, disposed of about 27,000 acres of Kodiak Island Borough land on Shuyak Island to ensure the land is available for public recreation purposes and to provide valuable habitat to support lands damaged by the Exxon Valdez oil spill. MILLIGAN moved to adopt seconded by GOULD Resolution No. 94 -05. Mayor Selby explained that the Planning and Zoning Commission recommended adopting the resolution. He said negotiations were initiated and the Exxon Valdez Trustee Council authorized moving ahead on the appraisals. At questions raised by Assemblymember Hancock, Mayor Selby stated that funds from the sale would initially be placed in the Borough land sale fund with the thought to bring a recommendation to the Assembly for a permanent fund for the Borough. At Deputy Presiding Officer Austerman's question, Mayor Selby said the fair market value of the property was estimated at $30 -35 million. VOTE ON MOTION TO ADOPT Ay 1 Hancock, Milligan, Monroe, Burt, Gould, Austerman Noes: None Absent: McFarland MOTION CARRIED Unanimous C. ORDINANCES FOR INTRODUCTION None. D. OTHER ITEMS None. INFORMATIONAL MATERIALS (No action required) 1. Womens Bay Service Area Meeting of December 6, 1993. 2. Planning and Zoning Commission Meeting of December 15, 1993. ORDINANCES FOR INTRODUCTION OTHER ITEMS INFORMATIONAL MATERIALS A. MINUTES OF OTHER MEETINGS MINUTES OF OTHER MEETINGS Regular Assembly Meeting Volume XVIII February 3, 1994 Page 49 3. Kodiak Island Hospital Advisory Board Meeting of November 10 and December 8, 1993. 4. Data Processing Steering Committee Meeting of November 19, 1993. 5. KIBSD Special Meeting of January 17, 1994. B. REPORTS REPORTS 1. Kodiak Island Borough January 1994 Financial Report. 2. KIBSD December 1993 Financial Report. C. OTHER OTHER 1. Kodiak Island Hospital and Care Center Advisory Board Resolution No. 93 -04. CITIZEN COMMENTS CITIZEN COMMENTS Betty Sprinahill, Hospital Advisory Board chairman, phoned and was abhorred by Jim Fisk's assassination of her character in his statement that she was willing to lie /fracture the truth at the Bonds Steering Committee meetings. She remembered the "unlevel playing fields" the committee knew going in to the project. She noted the school bond proposition passed with just a few votes more than the hospital bond proposition. Dennis Carlsen, Uyak Bay property owner, phoned and was curious what services he received for his property taxes because there were no Borough services in his area. Mayor Selby said it was hard to be specific but referred the Borough's general fund budget in that better than 50 percent went to school district operation. Mr. Carlsen contended that he did not have water, sewer or garbage service and did not have children. Mayor Selby explained that fire, water, sewer and garbage services were billed on an individual property owner basis to residents in service districts that received the service. Charles Hamerle phoned to state he felt that exempting organizations from taxation divorced members of the organization from the political process. He suggested lowering the tax rate to limit financial burden but still maintain involvement. Regular Assembly Meeting February 3, 1994 Volume XVIII Page 50 1 .t n ASSEMBLYMEMBER COMMENTS ASSEMBLYMEMBEr COMMENTS Assemblymember Hancock announced she would be out -of- town February 15 -17, 1994 and asked to be excused from the next regular meeting. She had good memories of Bryce Weeks and expressed condolences to his family. She noted that Mr. Fisk brought up the meeting on Region V and felt it was a deeper question than six staff members relocating to Anchorage. She urged the community to fight back by calling or writing commissioners and the governor. She suggested contacting the mayor's office or Fish & Game for more information. Assemblymember Gould expressed condolences to the Bryce Weeks family. He thanked those who spoke to both sides of the bond issue but urged that community projects needed to go forward. He believed economical factor for money spent in community multiplied three times. Assemblymember Burt received a call asking about the stability of the soil at the hospital. Mayor Selby explained that engineers were drilling test holes to test the site carefully before moving forward. Assemblymember Burt credited Ms. Springhill for not saying anything bad about the hospital. He felt the money spent for advertising the bonds was Borough money. Mayor Selby again reiterated that there was a private political action group separate from the Borough that also advertised the bonds. Assemblymember Burt never intended there not be a hospital. He knew the bond money would be used for the hospital but that it could be used more appropriately. Assemblymember Monroe congratulated Duane Dvorak as employee of the month. She attended the funeral of Bryce Weeks and extended condolences to his family. She felt Mr. Weeks was fiercely honest and difficult, but was fun because he was dogged in his belief to do what was right for the Borough, and left a legacy of many savings for the Borough. She felt it was a negative aspect to bring up the hospital bonding issue. She was polarized on the issue and felt that raking over old issues cost time and money. Assemblymember Milligan contended that debate was good. He noted that twelve individuals commented on the hospital - -four against, eight in favor - -and felt Regular Assembly Meeting Volume XVIII February 3, 1994 Page 51 Deputy Presiding Officer Austerman expressed condolences to the Bryce Weeks' family. He congratulated Duane Dvorak as employee of the month. He was totally amazed that the question of state funding was not simple. He felt the question was appropriate but the question was not whether to build the hospital, as he was a strong hospital advocate, but whether the state would remit funds. He said the Borough sold bonds based on $9 million from the state and the community needed to know where the rest of the money was coming from. He was sorry that so many took his question the wrong way because he recognized the needs of the community. He asked that the question of whether or not we need a new hospital be put to rest and concentrate on where the funds would come from. He was totally supportive of what management has accomplished in building a reserve fund. He was cautious because, given state finances, future needs should be considered. He hoped for discussion at the next Assembly worksession. He stated the Assembly received the Borough attorney's opinion and there was nothing specific so he considered it not confidential but a public document. Mayor Selby stated that the attorney was specific that the opinion was privileged information. Deputy Presiding Officer Austerman asked for that in writing, otherwise he would release the information. At his statement that an executive session was in order to discuss why the information was privileged, Mayor Selby stated that Presiding Officer McFarland requested an executive session after the March 3, 1994 regular meeting. 7 that was in keeping with the vote percentage. He felt strongly that the community needed an adequate hospital and schools to continue growth patterns. He anticipated a hard summer because of low fish prices but noted that taxes were the lowest in Alaska and people did not leave because of taxes. He felt that if the hospital was run prudently, it would capture a greater portion of revenues. He considered some of Assemblymember Austerman's comments well- founded and made based on a commitment to community. He strongly felt a need to proceed. He was proud of the mandate the community gave to build the hospital. He remembered that Bryce Weeks enjoyed good Christmas music. Regular Assembly Meeting Volume XVIII February 3, 1994 Page 52 VOTE ON MOTION TO ADJOURN MOTION CARRIED ATTEST: tan141 . Borough Clerk Approved: 02/1794 r. 7 Deputy Presiding Officer Austerman stated that the fact that there were $20 million reserves spoke well of the Borough management. In response to the fifth region issue, he stated that Mr. Rosier's comments that it would continue to be looked at were inaccurate because Department of Fish and Game employees understood it was a done deal. He felt it was sad and urged the public to write or call the governor in opposition. He supported increased staffing in Anchorage but not depleting staff in this region. Deputy Presiding Officer Austerman announced the Kodiak Island Borough Assembly would meet for a teleconference on Wednesday, February 9, 1994 at 12:00 noon in the conference room, work session on Thursday, February 10, 1994 at 7:30 p.m. in the conference room, joint Assembly /Council work session on Tuesday, February 15, 1994 at 7:30 p.m. in the assembly chambers and regular meeting on Thursday, February 17, 1994 at 7:30 p.m. in the assembly chambers. MONROE, moved to adjourn. seconded by GOULD Unanimous voice vote There being no further business to come before the Assembly, the meeting adjourned at 9:17 p.m. ng Officer ADJOURNMENT Regular Assembly Meeting Vo :. February 3, 1994 Pa 53