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2000-08-17 Regular MeetingKODIAK ISLAND BOROUGH Regular Assembly Meeting August 17, 2000 A regular meeting of the Kodiak Island Borough Assembly REGULAR MEETING was held August 17, 2000 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 Captain Dave Davis of the Salvation Army, followed by the Pledge of Allegiance. There were present: ROLL CALL Mayor: Gary L. Stevens Assemblymembers: Tom Abell Robin Heinrichs Scott Arndt (arrived at 7:32 p.m.) Tuck Bonney Greg Spalinger Pat Branson Darlene Turner comprising a quorum of the Assembly; and Dave Jensen, Manager Patti Kirkpatrick, Deputy Clerk Karl Short, Finance Director APPROVAL OF AGENDA APPROVAL OF AGENDA TURNER, moved to approve the seconded by BRANSON agenda. VOTE ON MOTION TO APPROVE APPROVAL OF MOTION CARRIED Unanimous voice vote MINUTES APPROVAL OF MINUTES 1. Kodiak Island Borough Assembly Regular Meetings of July 20 and August 3, 2000. ARNDT, moved to approve the seconded by BRANSON minutes of July 20 and August 3, 2000. Assemblymember Branson noted a typographical correction on page 3 of the July 20 minutes. VOTE ON MOTION TO APPROVE AS CORRECTED MOTION CARRIED Unanimous voice vote Regular Assembly Meeting Volume XXVI August 17, 2000 Page 120 AWARDS AND AWARDS AND PRESENTATIONS PRESENTATIONS A. Longevity Award LONGEVITY AWARD Manager Jensen presented Eileen Probasco, assistant planner in the Community Development Department, with a ten-year longevity pin. CITIZENS' COMMENTS CITIZENS' COMMENTS None. COMMITTEE REPORTS COMMITTEE REPORTS Phil Cline, Providence Kodiak Island Hospital administrator, reported that the hospital's year to date profit was $655,000, which was over the 6.5% operating income that was projected. He said a $150,000 reimbursement from Medicare was received for underpayment in fiscal year 1999. In response to inquiries, Mr. Cline said the loss of two surgeons last fall had a significant role in additional incurred expenses, which resulted in a reduced profit for 1999. Medicare reimbursed for care based on a per diagnosis basis, and the reimbursement was caused by an audit that revealed Medicare underpaid the hospital. He noted that in the event of overpayment, the hospital would reimburse Medicare. PUBLIC HEARING PUBLIC HEARING A. Ordinance No. 2000-11 Authorizing the Issuance of ORDINANCE General Obligation Bonds in the Principal Amount of NO. 2000-11 Not to Exceed $2,660,000 to Finance the Acquisition and Construction of School and Related Capital Improvements in the Borough, and to Submit the Question of the Issuance of Such Bonds to the Qualified Voters of the Borough at the October 3, 2000 Election. ARNDT, moved to adopt Ordinance seconded by TURNER No. 2000-11. Manager Jensen advised this was for the funding of the High School roof and the reimbursement for Peterson Elementary upgrades and repairs. He said the State Legislature passed House Bill 281, which became law on June 8, 2000. He advised the Kodiak Island Borough was allocated for debt reimbursement of $2,660,000 in project costs as a result of HB 281. He said the provisions of the Bill required that project allocation be approved by the State Department of Education (DOE) and the voters of the Kodiak Island Borough (KIB). Accordingly, KIB staff prepared and submitted a Capital Improvements Project application to DOE and received Regular Assembly Meeting Volume XXVI August 17, 2000 Page 121 approval August 17, 2000. He noted this ordinance set forth the terms and expenditures for sale of the bonds in the amount of $2,660,000, pending Assembly approval. DOE approved debt reimbursement of $1,135,843.30 for Peterson Elementary, which was at 70% of the project principal and interest that the KIB had already expensed as Peterson was 99.9% completed. DOE reviewed and approved the debt reimbursement for the high school roof repair on August 17, 2000, which they would reimburse 70% of the principal and interest to the KIB for a total amount of $1,342,651.92. Bond counsel advised that due to Federal Internal Revenue Service (IRS) Code regulations regarding arbitrage and rebate, the Peterson portion of the proposed bond issue would be issued at a taxable rate for bond purchasers. The high school roof funds would be issued at a non- taxable municipal rate for bond purchasers. IRS code specifically restricted the interest income at which bond proceeds may be invested to a yield not exceeding the yield currently on the bonds(arbitrage) and if any earnings from an investment of bond proceeds exceeded the yield on the bonds, those funds must be rebated to the United States Treasury (rebate). If money was borrowed at a lower interest rate, such as the municipal tax exempt rate, and then reinvested those funds at a higher paying interest investment rate that would be prohibited. Because the KIB had paid for Peterson and sought reimbursement of the funds expended, they were limited to using a fully taxable rate and could not arbitrage the expected reimbursement. Additionally, Title 29 set forth a statutory requirement that full disclosure be made on all general obligation (G.O.) debt issued. He said since this G.O. bond debt was pledging the full faith and credit of the KIB to repay the debt obligation, they were required to announce the potential tax affect on $100,000 of assessed real and personal property. He initially presumed a net, non-taxable municipal G.O. bond issue, but due to arbitrage and rebate laws, the G.O. bond would be partially issued at a taxable rate. Therefore, the ballot language had an increase of what the required tax disclosure would be to repay the debt obligation should taxes be levied. He noted it was not necessary that a tax be levied to retire 30% (the KIB portion) of the proposed debt. He noted that they were basically reimbursing the taxpayers for Borough funds already spent on Peterson Elementary and the KIB had sufficient capital to retire the bond over the term of the debt. He said the State of Alaska was basically reimbursing the KIB for 70% of the principal and interest for both projects, one of which was completed. Regular Assembly Meeting Volume XXVI August 17, 2000 Page 122 In response to Assemblymember inquiry, he said there was no need to levy taxes at this time to repay the debt; however, they were obligated to disclose the tax affect and would do so in the bond ballot language. If the voters approved the bond sale, the KIB would enter into an agreement with DOE for authorization to issue bonds in the approved amounts. ARNDT, moved to amend Ordinance seconded by BRANSON No. 2000-11 by substitution. Mayor Stevens opened the public hearing. Betty Walters, School District superintendent, urged the Assembly to approve the Ordinance. She said Peterson Elementary was in the best repair and the expansion allowed room for sixth graders. She appreciated the Assembly moving forward on repairing the high school roof. She would ensure that the school district promoted that passing the bond would not increase taxes. In response to Mayor Stevens, Ms. Walters said the school district would inform parents and the community that the bond would not increase taxes. She felt the bonding could also be addressed by churches and community service organizations. Mayor Stevens closed the public hearing and reconvened the regular meeting. In.response to Assemblymember Arndt, Director Short explained the tax exempt rate would be 5.28% and the taxable rate 6.780, which was an increase of 1.5%. Assemblymember Spalinger felt this was a good deal for the community as there would be no tax increase. Assemblymember Abell said this would put funds back into the account for use on other needed maintenance projects. He was pleased that Borough funds would not be spent to repair the high school roof. In response to Assemblymember Arndt, Manager Jensen said to receive state funding, all projects had to be approved by the DOE prior to issuing the bonds. He noted that had previous minutes reflected that the state would reimburse the Borough for Peterson, then that bond could have been issued at the tax exempt rate, but because it hadn't been mentioned, IRS regulations clearly stated the bond had to be issued at a taxable rate. VOTE ON MOTION TO AMEND BY SUBSTITUTION Ayes: Noes: Arndt, Bonney, Branson, Heinrichs, Spalinger, Turner, Abell None Regular Assembly Meeting Volume XXVI August 17, 2000 Page 123 MOTION CARRIED Unanimous B. Ordinance No. 2000-12 Rezoning Tract A -1A, Tract A - 1B, Tract A -1C, Tract A -1D-1, Tract A -1D-2, and Tract B, U.S. Survey 1671 From RR1-Rural Residential One To C -Conservation. (Generally located in Pleasant Harbor within Section 19, Township 26 South, Range 19 West, Seward Meridian east of the City of Ouzinkie on Spruce Island) HEINRICHS, seconded by ARNDT moved to adopt Ordinance No. 2000-12. Mayor Stevens called for public testimony; hearing and seeing none, he reconvened the regular meeting. VOTE ON MOTION TO ADOPT Ayes: Noes: MOTION CARRIED BOROUGH MANAGER'S REPORT None. Bonney, Branson, Heinrichs, Spalinger, Turner, Abell, Arndt None Unanimous MESSAGES FROM THE BOROUGH MAYOR Mayor Stevens advised the North Pacific Fisheries Management Council (NPFMC) recently toured Kodiak and met with various fishery groups to discuss trawl closure impacts to Kodiak. Discussion focused on the impacts to the small boat fleet and the large population of cannery workers. The Alaska Rural Electric Cooperative Association (ARECA) conference, held in Kodiak last week, went well. During his visit to Kodiak on August 17, he and Mayor Floyd would meet with Senator Stevens to discuss fisheries issues. He felt Senator Stevens would be receptive to their concerns. UNFINISHED BUSINESS None. ORDINANCE NO. 2000-12 BOROUGH MANAGER'S REPORT MESSAGES FROM THE BOROUGH MAYOR UNFINISHED BUSINESS NEW BUSINESS NEW BUSINESS A. CONTRACTS CONTRACTS 1. Contract No. 2000-25 Architect and Engineering CONTRACT Services for the Design for the Replacement of NO. 2000-25 the Roofs for the Kodiak High School Building, the VocEd Building, and the Alternative School Building. Regular Assembly Meeting Volume XXVI August 17, 2000 Page 124 TURNER, moved to approve Contract seconded by ARNDT No. 2000-25 with Jensen, Yorba, Lott, Inc. of Juneau for conceptual design only in an amount not to exceed $33,600. Manager Jensen wanted to proceed only with the conceptual design phase as outlined in the agreement. Then, the Borough engineer and Architectural Review Board, with Assembly concurrence, would select a roof replacement design, and the total cost for the roof replacement would be presented to the Assembly. VOTE ON MOTION TO APPROVE Ayes: Noes: MOTION CARRIED B. RESOLUTIONS Branson, Heinrichs, Spalinger, Turner, Abell, Arndt, Bonney None Unanimous 1. Resolution No. 2000-26 A Joint Resolution of the Assembly of the Kodiak Island Borough and the Council of the City of Kodiak Requesting the Movement of the Marine Mammal Section of the Alaska Fisheries Science Center from Seattle, Washington to Kodiak, Alaska; Requesting that the National Marine Fisheries Service be Proactive in Regard to Species Approaching Threatened Status in the North Pacific and Alaskan Waters; and Requesting the North Pacific Research Board be Appointed and Start Functioning as Soon as Possible. HEINRICHS, seconded by TURNER moved to adopt Resolution No. 2000-26. Manager Jensen said Mayors Stevens and Floyd requested the resolution in response to the August 11 NPFMC meeting that focused on action needed to alleviate potential economic stress if the current suspension of trawl fisheries remained in effect. Mayor Stevens said endangered species should be studied and the Kodiak Fisheries Research Center (KFRC) could accommodate those studies. Assemblymember Heinrichs felt it was important to promote the KFRC. He saw strong support for home porting a research vessel in Kodiak. He did not want Alaska victimized by outside research. Regular Assembly Meeting August 17, 2000 RESOLUTIONS RESOLUTION NO. 2000-26 Volume XXVI Page 125 VOTE ON MOTION TO ADOPT Ayes: Noes: MOTION CARRIED Heinrichs, Spalinger, Turner, Abell, Arndt, Bonney, Branson None Unanimous C. ORDINANCES FOR INTRODUCTION ORDINANCES FOR INTRODUCTION None. D. OTHER ITEMS OTHER ITEMS None. CITIZENS' COMMENTS CITIZENS' COMMENTS Betty Walters thanked the Assembly for supporting the high school roof repair. She said school would begin August 29. Roger Reddekopp wondered if there were plans for the reimbursed funds from the state. He felt the funds should be used for other needed maintenance projects. In response to Mr. Reddekopp, Manager Jensen said the reimbursed funds would go to the bond proceeds fund, which could be used to maintain Borough facilities. Tom Quick phoned to support 30 -day parking in the downtown area. He said the 72 -hour parking currently available was insufficient for village residents. Mayor Stevens would talk with Mayor Floyd and suggested Mr. Quick speak at the next City meeting. Assemblymember Arndt concurred with Mr. Quick and asked for discussion at the next joint work session. ASSEMBLYMEMBER COMMENTS ASSEMBLYMEMBER COMMENTS Assemblymember Abell said the BMX track was worked on over the 4th of July weekend. He invited parents of BMX youth who wanted to help finish the track to contact Tim at 580 North to coordinate a work party. Assemblymember Turner welcomed Captain Darrell Nelson, new captain of the C.G. Air Station, back to Kodiak. She congratulated Eileen Probasco on her longevity award, adding it was great working with her on the Planning and Zoning Commission. She concurred with Tom Quick's comments and the need to accommodate rural residents. Regular Assembly Meeting Volume XXVI August 17, 2000 Page 126 Assemblymember Heinrichs congratulated Ms. Probasco, noting she was a valuable asset to the community. He saw no small feat in an active working mother obtaining a degree. Assemblymember Branson appreciated Mr. Reddekopp's concern about maintenance project funds. She congratulated Ms. Probasco, noting it was always a pleasure to hear about long term employees. She reminded the community to vote on Tuesday, August 22, 2000. Mayor Stevens announced the Assembly would meet in a work session on Thursday, August 31 at 7:30 p.m. in the Borough conference room and a regular meeting on Thursday, September 7 at 7:30 p.m. in the Assembly chambers. He encouraged voters to vote at the August 22 primary election. Absentee voting was available in the Borough clerk's office, room 101 in the Borough building from 8:00 a.m. to 5:00 p.m. through August 21 for those who would be out of town on August 22. He announced that members of the Assembly would attend the Alaska Municipal League Legislative Committee summer meeting in Fairbanks August 24-25. ADJOURNMENT ADJOURNMENT There being no further business to come before the Assembly, the meeting adjourned at 8:30 p.,m-.- L. Stevens r ATTEST: iorodu A. ielse CMC Approved: 9/7/2000 gh Clerk Regular Assembly Meeting Volume XXVI August 17, 2000 Page 127