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1994-12-08 Special Meeting1 There were present: Mike Milligan, Presiding Alan Austerman Jack McFarland McFARLAND, seconded by AUSTERMAN VOTE ON MOTION TO EXCUSE MOTION CARRIED ITEMS OF BUSINESS Special Assembly Meeting December 8, 1994 KODIAR ISLAND BOROUGH Special Assembly Meeting December 8, 1994 A special meeting of the Kodiak Island Borough Assembly was held December 8, 1994 in the conference room of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 12:16 p.m. John Burt Gary Stevens comprising a quorum of the Assembly; and Jerome Selby, Borough Mayor Donna Smith CMC, Borough Clerk Joel Bolger, Borough Attorney Assemblymembers Monroe and Hancock were out -of -town on vacation and asked to be excused. moved to excuse Assemblymembers Monroe and Hancock. Unanimous voice vote 1. Resolution No. 94 -41 Approving Disposal of all Borough Land on Shuyak Island to the State of Alaska. Presented for consideration was Resolution No. 94 -41 that, if adopted, disposed of all Kodiak Island Borough lands on Shuyak Island to the State of Alaska for the purchase price of $42 million, approved in the terms and conditions of the purchase agreement, and authorized the mayor to execute the purchase agreement and all other documents required for the completion of the transfer. McFARLAND, moved to adopt seconded by AUSTERMAN Resolution No. 94 -41. Mayor Selby explained the resolution approved the disposing of Borough -owned lands on Shuyak Island for REGULAR MEETING ROLL CALL BUSINESS ITEMS RESOLUTION NO. 94 -41 XIX Vc1u4me *±* Page 135 7 7 ! $42 million in accordance with the terms of the purchase agreement. The Exxon Valdez Trustee Council was required by federal statutes to obtain appraisals. Timber was valued at $24 million and land valued at $3 million for a total appraisal of $27 million. The Borough assessor appraised the property for $36.5 million. The Council was informed that their figures were low because calculations were taken from the low side of the values. The request for $6 million for the Fishery Industrial Technological Center (FITC) was included in the Shuyak Island land sale. The FITC facility was the 20 percent factored over the $36 million figure. The 20 percent factor was in lieu of interest because no interest was to be accrued. In appraising the roads, the Council assumed all 110 miles of roads would be class 3 and were factored in when determining whether it was economical to cut trees and the land value was figured low at $3 million. Mayor Selby felt $42 million was reasonable to present to the Assembly for consideration. He spoke of the support in the community to not cut trees on Shuyak Island and to use the area as a park. The areas west and north of the Borough land were already designated as State parks. The idea was to incorporate into one bill to ensure an island park. He spoke to the benefits resulting from the sale and subsequent designation as a State park. The Borough would benefit from the economic base of the park and the $36 million FITC facility. The Borough would develop a cash flow from interest earnings to aid in stabilizing tax rates in the Borough with the maintenance of facilities. Funding for facilities were a mandated but uncontrollable budget item. After capsulizing the agreement, Assemblymembers ensued in discussion. When asked how the $6 million figure for the FITC facility was calculated, Mayor Selby explained that a feasibility study by Congress showed a $36 million building. The $6 million was the 20 percent factor in the sale of Shuyak Island and because the University of Alaska were the owners of the building, the Borough would not have any further involvement. Special Assembly Meeting December 8, 1994 Volume XIX Page 136 Special Assembly Meeting December 8, 1994 3 In answer to discussion about the Council's $27 million appraisal figure versus the Borough's $36 million appraisal figure, Mayor Selby said that although he was requesting approval for the $42 million for extra leverage, the Assembly would approve any figure less than that. When it was suggested the Borough hold the $6,000,000 and bond the FITC contribution, Mayor Selby reported that the idea was being reviewed. Attorney Bolger supported the fact that Alaskan timber was underestimated. He said the Council would rely on appraisals because independent appraisals would be expensive and time consuming. It was hoped the Council can be convinced that some of the values were low. The Borough's argument on timber values was based on the fact that monies would not be spent to develop the roads to commercially harvest 10,000 acres of timber. The Borough assessor valued the land at $15- 16,000 per acres. Mayor Selby noted that full conveyance from the State had not been received but agreed it was not needed because the State would receive the land. The Borough retains the subservient interest in the sand and gravel rights but the State obtains the mineral rights. Assemblymember Stevens was not clear about the additional monies for the FITC facility. Mayor Selby explained that it was at the request of the Trustee Council because the Department of Justice legal office determined that restoration funds could not be spent on buildings. He reiterated that the FITC facility funds were added to the sale of the land and were not included in the value of the land. It was noted by Assemblymembers that all discussions on the sale were based on the premise that the Borough would assess the value of the property and the $6 million was an addition to the final figure. Mayor Selby explained that if the final assessment was less than $36 million, the final figure for the FITC facility would be 20 percent of the sale price. Although Mayor Selby thought that full value world_ he received if the sale price was $33 million, the Assembly indicated less land would be sold. Mayor Selby said the State of Alaska would be responsible for fish and game management. Regarding the impact to endangered species, Mayor Selby noted impact would happen regardless who owned the land. Volume XIX Page 137 1 7 Further discussion ensued on the ordinance to establish a fund with the monies. It was pointed out that future assemblies were not committed to the fund because the code could be changed. Discussion ensued on the fact that if the sale price was less than $42 million, approval of the Assembly would be needed. The resolution was approving the disposal of the land at $42 million, not less. The Assembly was setting policy by setting the sale price at $42 million. VOTE ON MOTION TO ADOPT Ayes: AUSTERMAN, seconded by STEVENS Special Assembly Meeting December 8, 1994 Austerman, Burt, McFarland, Stevens, Milligan Noes: None Absent: Monroe, Hancock MOTION CARRIED Unanimous 1. Contract No. 94 -38 Agreement for Sale and CONTRACT Purchase of Interests in Lands on Shuyak NO. 94 -38 Island. The motion to approve Contract No. 94 -38 was before the Assembly. Mayor Selby reiterated that most important, the resolution locked in the sale price at $42 million and was the document that authorized the mayor to sign the agreement. He emphasized the fact that the agreement could not be signed if the sale price was less than $42 million. It was suggested that the agreement be postponed until the appraised values were resolved and negotiations were final. Mayor Selby suggested amending the agreement to include the purchase price and terms of sale. moved to amend Contract No. 94 -38 Section 4 TERMS OF SALE to read as follows: "The purchase price is $42,000,000. The KIB will be paid an initial payment of $8,400,000 (20% of the purchase price) at the time of Volume XIX Page 138 Ayes: ATTEST: orough Clerk Apprmd: 01/05/95 Special Assembly Meeting December 8, 1994 VOTE ON MOTION TO AMEND 1 7 closing." and all other wording to remain the same. Ayes: Burt, McFarland, Stevens, Austerman, Milligan Noes: None Absent: Monroe, Hancock MOTION CARRIED Unanimous The Assembly felt it was wise to note the full price in the agreement because the monies for the FITC facility were identified. VOTE ON MOTION TO APPROVE AS AMENDED Noes: Absent: MOTION CARRIED AUSTERMAN, seconded by McFARLAND VOTE ON MOTION TO ADJOURN MOTION CARRIED McFarland, Austerman, Milligan Stevens, Burt, None Monroe, Hancock Unanimous moved to adjourn. Unanimous voice vote There being no further business to come before the Assembly, the meeting adjourned at 1:28 p.m. Presiding/Officer ADJOURNMENT w X :X . ;w :39