2009-07-09 Work SessionKodiak Island Borough
Assembly Work Session
Thursday, July 9, 2009, 7:30 p.m., Borough Conference Room
Work Sessions are informal meetings of the Assembly where Assembly members review the upcoming regular meeting agenda
packet and seek or receive information from staff. Although additional items not listed on the work session agenda are discussed
when introduced by the Mayor, Assembly, or staff, no formal action is taken at work sessions and items that require formal
Assembly action are placed on regular Assembly meeting agenda. Citizen's comments at work sessions are NOT considered part of
the official record. Citizen's comments intended for the "official record" should be made at a regular Assembly meeting.
CITIZENS' COMMENTS (Limited to Three Minutes per Speaker)
AGENDA ITEMS:
1. Metals Policy Review
2. Non - Profit Funding Discussion
PACKET REVIEW
PUBLIC HEARING
Ordinance No. FY2009 -01 E Amending Ordinance No. FY2009 -01 Fiscal Year 2009 Budget by
Amending Budgets to Account for Various Revenues that are Over Budget, Provide for Additional
Expenditures, Budget New Projects, and Move Funds Between Projects.
Ordinance No. FY2010 -02 Amending the Kodiak Island Borough Code of Ordinances Title 2
Administration and Personnel, Chapter 2.40 Records Management, Chapter 2.50 Borough Clerk,
Section 2.50.020 Duties, and Chapter 2.55 Engineering and Facilities Department, Section 2.55.010
Engineering and Facilities Department Director.
UNFINISHED BUSINESS — None
NEW BUSINESS
CONTRACTS
Contract No. FY2010 -09 Providence Kodiak Island Counseling Center Services to KIB School
District for School Year 2009 -2010.
*Contract No. FY2010 -01 Kodiak Island Borough Facilities Fuel Oil Delivery.
Contract No. FY2010 -10 Recycling Contract with Threshold Services Inc.
RESOLUTIONS
Resolution No. FY2010 -03 Approving Fiscal Year 2010 Kodiak Island Borough Non - Profit Funding.
*Resolution No. FY2010 -05 Appointing Members to the Kodiak Fisheries Development
Association.
ORDINANCES FOR INTRODUCTION
Ordinance No. FY2010 -03 Authorizing the Borough to Issue General Obligation Bonds in the
Principal Amount of Not to Exceed $80,000,000 to Finance the Planning, Design, and Construction
of School and Related Capital Improvements in the Borough Including Without Limitation the
Reconstruction and Renovation of the Kodiak High School, and to Submit the Question of the
Issuance of Such Bonds to the Qualified Voters of the Borough at the October 6, 2009 Regular
Borough Election.
Ordinance No. FY2010 -04 Authorizing the Borough to Issue General Obligation Bonds in the
Principal Amount of Not to Exceed $12,500,000 to Finance the Planning, Design, and Construction
of Renewals and Replacements of Borough Facilities; and to Submit the Question of the Issuance of
Such Bonds to the Qualified Voters of the Borough at the October 6, 2009 Regular Borough
Election.
OTHER ITEMS - None
MANAGER'S COMMENTS
CLERK'S COMMENTS
MAYOR'S COMMENTS
ASSEMBLY MEMBERS COMMENTS
FY2010 NON - PROFIT FUNDING BUDGET DETAIL
Organization
HEALTH & SOCIAL SERVICES
1 American Red Cross
2 Brother Francis Shelter
3 Hope Community Resources
4 Kodiak Area Transit System
5 Kodiak Baptist Mission (Food Bank)
6 Providence Counseling Center (Safe Harbor)
7 Kodiak Island Health Care Foundation (Clinic)
8 Kodiak Women's Resource & Crisis Center
9 Salvation Army
10 Senior Citizens of Kodiak
11 Special Olympics
12 Threshold Services
13 Humane Society
HEALTH & SOCIAL SERVICES SUBTOTAL
EDUCATION, CULTURE & RECREATION
14 KANA (WIC /ILP /Family Center)
15 Kodiak Public Broadcasting
16 Kodiak Arts Council
17 Kodiak Football League
18 Kodiak Girl Scouts
19 Kodiak Head Start
20 Kodiak Island Sportsman's Association
21 Kodiak Little League
24 Kodiak Teen Court*
25 Audubon Society
27 Kodiak Island Bed & Breakfast Assoc
28 Kodiak Rodeo & State Fair
EDUCATION, CULTURE & RECREATION SUBTOTAL
*requesting space rent in lieu of cash donation
FY09 FY10 FY10
FUNDING REQUEST ASSEMBLY
FUNDING
$ 7,000 $ 7,000
40,000 40,000
5,000 5,000
10,000 15,000
27,000 35,000
21,060 21,060
15,000 30,000
50,764 50,751
9,060 10,000
28,000 35,000
7,500 7,500
10,315 10,315
2,000 5,000
$ 232,699 $ 271,626
Budget $268,000
Available $268,000
12,000 $ 12,000
7,500 7,500
15,000 15,000
3,000 3,000
1,000 1,000
9,000 9,000
4,000 5,100
3,000 7,500
5,100 5,100
1,300 1,300
5,500
10,000
$ 60,900 $ 82,000
Budget $73,434
Available $73,434
Total Available $341,434
Application
Received? 501(c)3
due 4/30/08 on file
04/01/09
04/08/09
04/23/09
03/26/09
04/30/09
04/30/09
04/13/09
04/17/09
04/03/09
03/26/09
04/29/09
04/30/09
04/27/09
04/22/09
04/30/09
04/29/09
04/28/09
04/21 /09
04/07/09
04/30/09
04/30/09
03/31/09
04/01 /09
04/30/09
04/30/09
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
yes
no
no
no
Kodiak Island Borough
710 Mill Bay Road
Kodiak, AK 99615
Kodiak Island Borough School District
722 Mill Bay Road
Kodiak, AK 99615
Rural Schools Office
(907) 481 -6185
0 C!) 0 C
June 17, 2009
To The Honorable Jerome Selby and Borough Assembly,
I am contacting you on behalf of the Kodiak Island Borough School District Rural Schools program and
4H Club.
This year we hope to begin a new program for our students that will offer them the opportunity to
participate in a 4 -H air rifle program. We are asking for your help in providing this opportunity.
Specifically, we are asking for 14 rifles at a price of $379.99 each for a total of $5,637.86 (includes
freight).
We work very hard to provide equal opportunities for our rural students and hope we can count on you
for this generous donation.
On behalf of the children of our rural schools, I thank for your time and consideration and look forward
to whatever support you can provide.
If you require additional information regarding our program, please contact me and I will be more than
happy to answer any questions that you may have.
Phil Johnson, Administrator of Rural Schools
Kodiak Island Borough School District
\ 1
June 24, 2009
Kodiak Island Borough Assembly
710 Mill Bay Road
Kodiak, AK 99615
Issue
Solution
History
NICK'S AUTO WRECKING, SALVAGE AND
METAL RECYCLING, LLC
12347 Noch Drive
Kodiak, AK 99615
(907) 487 -2755
49,
IV, DI AK ISLAND BOROUGH
CI .ERK :S OFFICE
COP H TO
A��Sf:: =!B a MAYOR
s
MANACOt....._ OTHER
RE: Landfill Metal and Auto Disposal Fees
Dear Honorable Assembly Members:
Please accept this letter as a summary of issues and concerns that I wish to discuss with you at your next
regular meeting or work session preferably as an agenda item to provide for a more complete discussion.
It is my intent to summarize the history of my relationship with the Kodiak Island Borough (KIB) with
regard to my business, to set forth what I believe to be unrealistic assumptions in your calculation of
landfill fees for scrap metal and automobile disposal and to propose a solution to the current situation.
I believe KIB has set its auto disposal and metal recycling rates at amounts that will not allow it to cover
its costs. This unfair competition with private enterprise using taxpayer revenue conflicts with the intent
and purpose of local government.
Due to the Assembly's historical position to remove itself from the metal recycling business, I offer the
following as a solution:
• KIB will formally advertise that the landfill will no longer accept metals for recycling
after 30 days from the original date of advertisement;
• The newly hired KIB enforcement officer will devise a plan for monitoring and policing of
illegal dumping of metals into local dumpsters;
• My business will accept up to 50 tons of incidental scrap metal collected from dumpsters
from KIB annually at no cost, or KIB can process the incidental scrap metal itself.
Because many of the Assembly members have not been seated since this process began, I offer a little
history.
Beginning in the early part of this decade, it came to my attention that KIB could not possibly be covering
its cost at the landfill by charging only $ 88 per automobile disposal. Also, several assembly members at
the time were strongly encouraging KIB to get out of the metal business at the landfill.
Along with numerous other contacts and meetings, I met with then temporary Borough Manager Nancy
Galstad in March, 2005 regarding the costs associated with KIB auto disposal. The KIB Department of
Facilities and Engineering calculated that it cost KIB $ 505 for each auto it accepted. During its next
Kodiak Island Borough Assembly
June 16, 2009
budget cycle, KIB increased its auto disposal fee to $ 475 per auto and scrap metal disposal fee to $ 275
per ton.
Believing that I could provide this service at a lower price and that KIB, under the direction of the
Assembly was going to divest itself from the metal business, I secured the required land and equipment,
including an auto bailer capable of handling the quantity of autos presented annually, and started Nick's
Auto Wrecking, Salvage and Metal Recycling (Nick's). From the beginning, I have charged $ 300 per car
disposal and $ 180 per ton for scrap metal disposal, amounts significantly less than that charged by KIB.
I have also noted that after the departure of its onsite subcontractor several years ago, KIB didn't ship any
recycled metal for almost three years and simply accumulated the scrap metals. This is not a reasonable
approach for a land fill that the public is constantly being told is close to capacity. If KIB were to vacate
landfill real estate currently being used for its loss generating metal recycling activity, perhaps more room
could be made available for solid waste disposal.
The community has accepted my business as the location for metal recycling on the Island. During 2007
and 2008, KIB accepted only 376 and 250 tons of scrap metal while I processed 761 and 1,106 tons for
the same time period. Accordingly, my business collected 66% of the total scrap metal for 2007 and 81%
for 2008. The metal received by KIB in 2007 and 2008 includes metals recycled by the U.S.C.G.
Because the U.S.C.G. is now under contract to dispose of its metal at my business, KIB's collection
should continue to fall dramatically. Why would KIB want to reverse the direction of metal recycling
away from private enterprise and back to a loss generating government activity?
Proposed KIB fees
I have analyzed the Metal Recycling Cost Estimate included in your most recent budget and note the
following.
Your proposal assumes that 1,336 tons of quality scrap metal will be brought to the land fill. As
previously stated, I believe this number is overstated. Not once in the 5 '/z years that my business has
been operational has my metal collection approached this amount. I have taken the liberty of presenting,
along with your original budget estimate, what the numbers would look like using more realistic
quantities. This analysis is attached as Exhibit A.
I do not see any amount contained in the KIB original budget estimate for capital purchases related to
equipment to process the metals. If the argument is that the landfill will use existing equipment, I
question if current landfill operations are such that there is excess equipment on site not currently being
used to its full capacity. Secondly, the automobile crusher at the landfill is old and not capable of
handling the quantity of automobiles currently being presented for recycling.
I also do not understand how it can be that KIB determined its cost for a recycled automobile in 2005 to
be $ 505 but the current estimate is only $ 210 (See Note F at Exhibit A). With all due respect, it is very
uncommon for a governmental entity to reduce its cost of operations by 58% in four years.
Finally, I find it quite coincidental that your recommend disposal rates are exactly half of the rates I am
currently charging.
Costs borne by private enterprises
There are many costs and risks that private enterprise bears that are not borne by a governmental entity.
Taxes, both federal and local, are remitted on the profits and/or values of a privately owned business.
Small businesses are normally required to secure financing for major capital purchases thereby incurring
2
Kodiak Island Borough Assembly
June 16, 2009
interest charges not borne by governmental entities with deep taxpayer pockets. I also assume the risks
related to fluctuations in metal market prices and 2008 was quite an uncomfortable ride. Unlike KIB, the
only "inter- fund" transfers available to support my business are those from my own personal resources.
Impact on the Community
As a small business owner, I pay rents to a local business for the property I use. I have employed two full
time and, at times, up to two part time employees. I have paid federal income tax and local personal
property taxes.
I have allowed local nonprofits and community clean-up programs to dispose of their scrap metal at no
charge. I accept, free of charge, cars involved in the local race association's demolition events. In the
past, I have provided free cars to local volunteer fire departments for victim extraction training.
The KIB plans do not appear to address the need for recycling of non - ferrous metals, a service provided
by my business at little profit. In addition, I have made recycled automobiles available to local residents
as a source for used automobile parts, something KIB has failed to consistently provide in the past due to
the liability risk. This service is very important to those in our community without the resources to secure
new auto parts when faced with a major repair.
Summary
I started my business to provide a service to the businesses and residents of the KIB at a price that was
less than what KIB was charging and during a political climate where the Assembly was requesting that
KIB remove itself from the metal recycling business. It is not the government's duty to compete with
private businesses when comparable services can be provided at comparable prices. The prices and
expenses in your current proposed budget are not realistic. My business contributes back to the
community in the form of taxes, rents, jobs and cash and noncash contributions and provides services not
available in KIB's operational model.
Finally, I should not have to appeal my case again and again as the composition of the Assembly changes.
The KIB, based upon direction received from previous Assemblies, has reduced its involvement in the
recycling of metals to an inconsequential amount. Based upon those actions, I have made capital and
"sweat" investments to fill the need. KIB should definitively decide to permanently remove itself from
the metal recycling business.
Sincerely,
NICK'S AUTO WRECKING, SALVAGE AND
METAL RECYCLING
Nicholas Troxell
Managing Member
cc: J. Selby, KIB Mayor
R. Gifford, KIB Manager
3
EXHIBIT A
ATTACHMENT TO NICK'S AUTO WRECKING, SALVAGE
AND METAL RECYCLING, LLC LETTER TO KODIAK ISLAND
BOROUGH
June 24, 2009
REVENUE:
A
B
EXPENSES:
C
D
E
F
A
B
C
D
E
F
GATE REVENUE 120,240
SCHNITZER VALUE 116,900
237,140
PERSONNEL
OVERHEAD
SHIPPING
REVENUE
EXPENSE
KIB ASSUMPTION
AT 1,336 TONS PER
YEAR
TOTAL PER TON TOTAL PER TON
90.00
87.50
177.50
91,000 68.11
26,720 20.00
80,160 60.00
197,880 148.11
237,140 177.50
197,880 148.11
39,260 29.39
ESTIMATE NUMBERS
USING 1,100 TONS
PER YEAR
90,000
87,500
177,500
90.00
87.50
177.50
91,000 91.00
26,720 26.72
60,000 60.00
177,720 177.72
177,500 177.50
177,720 177.72
(220) (0.22)
ESTIMATE NUMBERS
USING 800 TONS PER
YEAR
TOTAL PER TON
72,000
70,000
142,000
90.00
87.50
177.50
91,000 113.75
26,720 33.40
48,000 60.00
165,720 207.15
1 42,000 177.50
165,720 207.15
(23,720) (29.65)
Recommend metal disposal fee
Price of scrap metal in Washington used in KIB original cost estimate. Note that KIB's original estimate
assumes that gross weight purchased is gross weight sold. This is especially not true with automobiles.
Assuming that personnel would need to be on site whether 1,336 tons or 800 tons of metal are recycled,
personnel costs are deemed to be fixed
KIB has not presented sufficient detail in its cost estimate to accurately determine how much of these
costs are fixed or variable.
Tied to quantity shipped.
KIB estimated cost per ton, $ 148.11 times 1.5 tons per automobile
Kodiak Island Borough Assembly
710 Mill Bay Road
Kodiak, AK 99615
Dear Sirs:
Sincerely,
I work at Nick's Autowrecking, Salvage and Metal Recycling. I used to
commercial fish in the winter and summer for several years until fishing took a
turn for the worse. Now with the global and national economic downturn, I am
fortunate to have a job at Nick's. I am writing to oppose the fee change that has
been instituted at the Borough landfill. With the new fee change, I will no longer
have a job at Nick's. I am asking that the Borough Assembly to reconsider this
decision to lower the fees at the landfill by 2/3.
::.—e
Douglas Hoedel
,(
712 Hillside Drive
Kodiak, AK 99615
June 24, 2009
June 16, 2009
Kodiak Island Borough Assembly
710 Mill Bay road
Kodiak, AK 99615
Dear Sirs:
I am currently an employee of Nick's Auto Wrecking, Salvage, and Metal Recycling,
LLC. The recent decision by the Borough Assembly to lower the rates at the Borough
landfill to 1/3 of the previous rates, puts Nick's business in jeopardy, thus it puts my job
in jeopardy. I would like for the assembly to reverse this decision. Thank you very
much.
Sincerely,
William G. Robe
William G. Roberts
777 Cottonwood Creek
Kodiak, AK 99615
Kodiak Island Borough Assembly
710 Mill Bay Road
Kodiak, AK 99615
Dear Sirs:
2765 Thurston lane
Kodiak, AK 99615
June 24, 2009
I work at Nick's Autowrecking, Salvage and Metal Recycling. I am writing to oppose
the fee change that has been instituted at the Borough Land Fill. With the new fee
change, I will no longer have a job at Nick's. I am asking the Borough Assembly to
reconsider this decision to lower the fees at the landfill by 2/3.
Sincerely,
Domingo F Castro
Kodiak Island Borough Assembly
710 Mill Bay Road
Kodiak, AK 99615
Dear Sirs:
P.O. Box 1311
Kodiak, AK 99615
June 24, 2009
I have worked part time at Nick's for about three years. I found work there when
salmon fishing took a turn for the worse. Now, with the global and national economic
down turn, I am fortunate to find a part time job. With the fee change that was instituted,
I will not have a job at Nick's. The Borough Assembly will have made me part of the
more than 10% unemployed nationally.
But I am only one person. By the Borough Assembly fee change, you have had a
broader, far reaching effect on the community as a whole. The Borough Assembly has
arbitrarily taken the income from the working class of our community. Instead of having
access to recycled auto parts to fix cars to go to work; new, retail parts have to be
obtained. Good for some people, but not for those who have reduced hours at work, and
have to pay rent, KEA, taxes, not to mention school clothes, food and basic necessities.
It is a critical situation for some.
I would have gone to the meeting to oppose the fee change if I had known it
would have been part of the meeting. I urge the Borough Assembly to revisit this issue
and change your vote. Rescind the fee change vote. Help keep people in Kodiak
working.
I■) ic k Jroxe I \
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KODIAK ISLAND BOROUGH
A WORK SESSION
k f unl(6
Work Session of: 1 f 9 / a01Y1
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