City Council Minutes City of Palmer, Alaska Regular Meeting February 22, 2005

City Council Minutes City of Palmer, Alaska Regular Meeting February 22, 2005 A. CALL TO ORDER A regular meeting of the Palmer City Council was held on February 22, 2005, at 7:00 p.m. in the council chambers, Palmer, Alaska. Mayor Combs called the meeting to order at 7:00 p.m. B. ROLL CALL, DETERMINATION OF A QUORUM Comprising a quorum of the Council, the following were present: Kathrine Vanover Ken Erbey Jim Wood Brad Hanson John Combs Steve Carrington [at 7:15 p.m.] Also in attendance were the following: Dan Contini, Acting City Manager Jack Snodgrass, City Attorney Pam Whitehead, Recording Secretary C. APPROVAL OF AGENDA The agenda was approved as amended, without objection. Items G3 and L2 were deleted. D. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Council Member Hanson. E. APPROVAL OF MINUTES 1. February 8, 2005, Regular Meeting were approved as presented. F. CONSENT AGENDA 1. Introduction Ordinance No. 05-013: Amending Chapter 2.20 (Planning Commission) of Title 2 (Administration and Personnel) of the Palmer Municipal Code (IM 05-016) G. COMMUNICATIONS AND APPEARANCE REQUESTS 1. Joe Lawton Alaska State Fair. Mr. Lawton updated the council as to matters concerning the Alaska State Fair, including: The 30,000 gallon Amerigas used propane tank, which the Fair now owns, is for sale and they are currently taking offers; HUD grant they are moving ahead slowly and carefully planning how the $20,000 grant is will be spent; Page 1 of 11

The Division of Parks has finished the design work on the six panels for the Glenn Highway Scenic Byway that will be placed at the South Palmer Station expects they will be put up in May; Alaska Demolition expects to begin working in the pit next month; Updated as to status of Fair improvements in some of the buildings, landscaping, and parking lots; and They have a tentative agreement with the Sprint Car Association have been reached to hold four events this summer. 2. Joseph Hawkins Development of Professional Building. Joseph Hawkins presented a model of the proposed Legacy Building, to be built on E. Arctic, to house his chiropractic practice, as well as provide high-quality professional office space to fill the growing needs in Palmer. He spoke to the changing dynamics of Palmer, encouraging its leaders to be proactive in preparing for the city's growth. Mr. Hawkins proposed a partnership and requested the City's assistance in making the building a reality by (1) helping in acquiring low-interest financing through bonding, (2) the City contracting to occupy one of the floors in the new building, and (3) the City abating or deferring taxes on the portions of the building that are not leased, until such space is occupied. A handout sheet was distributed more fully explaining the benefits that would be derived by the City of Palmer. Mr. Hawkins pointed out that although Palmer is growing, the center mass is moving towards Wasilla, and if the City is not proactive in providing class-a office space, he fears it will lose the borough and state offices to Wasilla. He concluded by asking the city council to consider his request. H. BOROUGH REPRESENTATIVE S REPORT I. AUDIENCE PARTICIPATION David Cheezem, Fireside Books, passed out a case study of a neighborhood in Chicago The Andersonville Study of Retail Economic. He stated that the study basically shows that independent retailers contribute more to the economy of a town than the big chains. He asked this fact in the minds of the council when national chains seek to locate here. He wanted the council to seriously consider the impact on independent merchants when it accepts the big box chains. Box chains could gut downtown Palmer in the process, the city would lose the locallyowned businesses and there would be a net loss to the community. He urged the council to be strong and specific, if it must accept a chain store, as to what the adverse affects will be on the downtown; spoke of mitigation factors, using the funds for the beautification of downtown Palmer noting those suggested by the University of Washington. J. HEARINGS, ORDINANCES AND RESOLUTIONS Item 1 Public Hearing Ordinance No. 05-008: Amending Chapter 2.24 (Fire Department) of the Palmer Municipal Code (IM 05-009) MOVED BY: Hanson To adopt Ordinance No. 05-008. SECONDED BY: Wood Chief Contini reported the only major change is in the name, from Fire Department to Palmer Emergency Services; that the rest of the proposed changes are basically housekeeping in nature. Page 2 of 11

Mayor Combs opened the public hearing on Ordinance No. 05-008. There were no members of the public who wished to testify. Council Member Wood inquired as to the reason for the change from Fire Department to Palmer Emergency Services. Chief Contini explained that the department has evolved into more than just a fire department, that there is also rescue, and most of the grants refer to Palmer Emergency Services; that the name better reflects the activities of the department. Council Member Wood stated that the time would be better spent updating the whole chapter and that he had numerous amendments. Moved by Seconded by Primary Amendment to Main Motion Wood To delete section 2.24.050, Chief of police Hanson assistance duty, for the reason that it is already covered under section 2.28.040 C which has to do with the police department. Council Member Wood argued that police assistance duty is better spelled out in 2.28.040 and the appropriateness of leaving the language in that portion of the code. Mayor Combs questioned the harm in having it in both places. Council Member Wood stated the police department already accounts for this requirement and felt it was superfluous in 2.24.050. Discussion ensued regarding the requirements of the police department. Council Member Carrington suggested that the language be made the same in both l code locations and voiced his preference of the broader fire department language. Vote on Amendment: Motion failed by 6-1 (Wood) voice vote. MOVED BY: SECONDED BY: Wood Vanover To postpone Ordinance No. 05-008 until the meeting of March 22, 2005 to allow time for pertinent city staff to meet and review both sections and consider any further amendments. VOTE ON MOTION: Motion to postpone carried by unanimous voice vote. Item 2 Public Hearing Ordinance No. 05-009: Amending Subsection 2.36.040 (Services to Residents Outside City) of Chapter 2.36 (Library Department) (IM 05-010) MOVED BY: Hanson To adopt Ordinance No. 05-009. SECONDED BY: Carrington Mayor Combs opened the public hearing on Ordinance No. 05-009. There were no members of the public who wished to testify. Library Director, Pat Kilmain, reported that effective January 1, 2005, the Mat-Su Borough instituted non-resident fees for library cards for those residents who live outside the Mat-Su Borough -- $10 for a three-month, limited use card and $35/year for a full privilege card. In order to keep the policies consistent, the Palmer Library has requested to charge the same non-resident fee, and by using language that leaves the fee-setting responsibilities to the Borough, further amendments to the code will be eliminated. Page 3 of 11

Item 3 Public Hearing Ordinance No. 05-010: Amending Chapter 17.44 (A-C Airport Commercial District) of Title 17 (Zoning) (IM 05-011) MOVED BY: Hanson To adopt Ordinance No. 05-010. SECONDED BY: Carrington Mayor Combs opened the public hearing on Ordinance No. 05-010. There were no members of the public who wished to testify. Community Development Coordinator, Sara Jansen, reported that the Planning & Zoning Commission recommended 14 lease lots at the airport be rezoned from P, Public, to Airport Commercial and Airport Industrial, which the council approved. A review of the code for these districts revealed some inconsistencies. Ms. Jansen explained the changes; noted the Commission unanimously recommended approval. Item 4 Public Hearing Ordinance No. 05-011: Amending Chapter 17.48 (A-I Airport Industrial District) of Title 17 (Zoning) (IM 05-012) MOVED BY: HANSON To adopt Ordinance No. 05-011. SECONDED BY: CARRINGTON Ms. Jansen explained the proposed changes; noted the Commission unanimously recommended approval. Mayor Combs opened the public hearing on Ordinance No. 05-011. There were no members of the public who wished to testify. Moved by: Seconded by Primary Amendment to Main Motion Wood To amend 17.48.020, Permitted uses, subsection Erbey J to read: Airport-related food service operations and restaurants. Council Member Wood felt that the only restaurants established at the airport should be to serve the flying public only, not the general public. Council Member Erbey opposed the restriction for the general public; argued that a nice restaurant that serves both the aviation community and the general public would be a great addition to the airport. Council Member Wood noted that ordinance doesn't distinguish whether the Airport Industrial District is inclusive of the airport itself or whether it includes surrounding or adjacent areas to the airport; suggested it be written into the ordinance that the Airport Industrial District is a district that is adjacent to or in close proximity to the Airport. Council Member Hanson pointed out that although the airport is primarily public, it has the potential for private; voiced opposition to the addition of the language as suggested. Mayor Combs called attention to identical language in 17.44.010, permitted uses, subsection J, Airport Commercial District. Page 4 of 11

Chief Contini pointed out that the Golf Course is adjacent to the Airport and it has a restaurant. City Attorney Snodgrass noted that one of the requirements of the airport lease is that the use is airport related. If the language is left in as is, without an amendment, the Golf Course restaurant would be allowed. Council Member Wood then withdrew his amendment; second Council Member Erbey concurred. Vote on Amendment: Motion withdrawn. Item 5 Public Hearing Ordinance No. 05-012: Amending Section 6.04.010 (Definitions) of Title 6 (Animals) of the Palmer Municipal Code (IM 05-014) MOVED BY: Vanover To adopt Ordinance No. 05-012. SECONDED BY: Carrington Mayor Combs opened the public hearing on Ordinance No. 05-012. Jeanne Novosad described the recent incident where her small dog was attacked, killed, and eaten by a wolf hybrid dog that was living in the city. She urged the council to pass the ordinance in an effort to not have another incident within the City. Ms. Novosad stated that it took two officers, two days, searching 15 acres, trying to capture the animal and that the day after the attack; it came back after her other dog. The officer advised her to arm herself with a gun in order to protect herself, her pets, and family members until the wolf is caught. Discussion ensued regarding regulations that relate to wolf hybrids within the City. Item 6 Resolution No. 05-003: Authorizing the Issuance and Sale of Utility Revenue Bonds by the City in the Principal Amount of Not to Exceed $2,300,000 for the Purpose of Financing Water and Sewer Improvements; Establishing the Terms of the Bonds; and Authorizing the Sale of the Bonds (IM 05-015) MOVED BY: Hanson To adopt Ordinance No. 05-003. SECONDED BY: Vanover Mayor Combs asked for public comment on Ordinance 05-003. There were no members of the public who wished to testify. Mayor Combs explained that the resolution authorizes the issuance and sale by the City of up to $2.3 million in utility revenue bonds to finance costs for water and sewer improvements, to include the construction of water and sewer utilities to serve the area southwest of Palmer and the area of the new hospital. It is the City's intention to enter into a loan agreement with the Alaska Department of Environmental Conservation for this funding. Page 5 of 11

Item 7 Resolution No. 05-004: Authorizing the City of Palmer, Alaska, to Issue General Obligation Refunding Bonds, 2005 Series A, in the Principal Amount of Not to Exceed $1,500,000 to Refund Certain Outstanding General Obligation Bonds of the City, Fixing Certain Details of Such Bonds and Authorizing Their Sale (IM 05-017) MOVED BY: Vanover To adopt Ordinance No. 05-004. SECONDED BY: Hanson Mayor Combs asked for public comment on Ordinance 05-004. There were no members of the public who wished to testify. Mayor Combs explained that bond counsel, Thomas Klinkner, has recommended this resolution granting authority to issue bonds to refund the outstanding 1995 bond if rates are favorable enough to realize at least a two percent savings on debt service. It has been recommended to have this resolution in place in case the Municipal Bond Bank determines that refunding is beneficial for this and other Bond Bank issues. Item 8 Resolution No. 05-005: Accepting an (FY-04) Assistance to Firefighters Grant from the Department of Homeland Security and the Office for Domestic Preparedness (IM 05-018) MOVED BY: Carrington To adopt Ordinance No. 05-005. SECONDED BY: Erbey Mayor Combs invited public comment on Resolution 05-005. There were no members of the public who wished to testify. Chief Contini reported that the Palmer Fire Department was awarded a Homeland Security Grant in the amount of $134,370. The Federal share of the grant is $120,933 and the City share is $13,437. The grant will be used to purchase portable radios, self-contained breathing apparatus, and other equipment allowed by the grant. K. BIDS L. UNFINISHED BUSINESS Item 1 Approve Lease Rate Increase for Palmer Airport Lease Nos. 81-2, 81-3, 91-1, 91-2, 96-1, 97-1, 00-1, and 00-2 (AM 05-010) (Postponed from the January 11 meeting) MOVED BY: Vanover To approve the lease rate increase for Palmer Airport SECONDED BY: Wood Lease Nos. 81-2, 81-3, 91-1, 91-2, 96-1, 97-1, 00-1, and 00-2, as proposed. Mayor Combs explained that Palmer Municipal Airport lease lots are eligible for rental rate increases at five year intervals. Currently, there are eight lease lots eligible for rental rate increases. City administration proposes to increase eligible lease lot rental rates to a minimum rental rate of $0.06/sf and for those leases with rental rates greater than $0.06/sf, the recommend increase is $0.01/sf. Leases require the city to initiate a lease adjustment proposal six months prior to the effective date of the proposed lease rate, which is usually July 1. Page 6 of 11

Mayor Combs opened a public hearing. The following persons testified: John Lee testified that he leases three parcels that total 11 acres on which he has built five buildings that range in size from 3200 sf to 12,000 sf. He employs 60 people. He does not dispute that lease rates have to change over time, however, it is proposed that one of his lease rates be raised to almost $0.09/sf (Lease 91-2), while almost all of the other leases at the airport are being increased to $0.06/sf. Lease 91-2 was set higher than the others to cover past due rent from a previous defaulted lease. He has been paying this elevated rate for 13 years now and the arrearage has long since been paid. He requested that the council set 91-2 at $0.06/sf like all the rest. He also asked the council to consider, as a matter of policy, for the leaseholder to come in and ask for a rewrite of the lease for 20 years of primarily lease with 20 years of optional extension. David Soulak attested to Mr. Lee taking over a lease and picking up an arrearage and actually did the City a big favor back in the 80's. He spoke to the Airport Enterprise Fund; pointed out that Public Works uses the old Woods Hangar for storage; noted that when the airport was constructed back in 1978, the FAA funded some heavy equipment, along with funding the equipment storage building. He suggested that the Enterprise Fund should be used for paying rent for uses that are unrelated to the airport, such as Woods Hangar being used for storage and use of the fire trailing tower. The leaseholders also feel that there should be better service to the airport, using the equipment that has been purchased through FAA funding. Jane Dale, Assistant to City Manager, noted that Lease 97-1 (Forestry) should not be acted on tonight and should be removed from consideration. Mayor Combs spoke in favor of increasing the lease rate from $0.05 to $0.06 on most of the lots and proposed that it would be fair and just, following questions and discussion to clarify status of the arrearage on Mr. Lee's lease, to leave as is, at $0.0798/sf for the next five years until the end of the lease term. Moved by: Seconded by Primary Amendment to Main Motion Vanover To remove Lease 97-1 (Forestry) from Wood consideration under this motion. Vote on Amendment: Moved by: Seconded by Primary Amendment to Main Motion Hanson That Lease 91-2 (Hinchinbrook) be fixed at its Vanover current rate of $0.798 for the next 5-year period. Vote on Amendment: Mayor Combs noted that the Airport Advisory Commission members have been appointed and its first meeting will be held on March 31, 2005. Motion, as amended, carried by unanimous voice vote. M. NEW BUSINESS Page 7 of 11

Item 1 Authorize City Manager to Enter Into an Agreement with the Consulting Firm Selected in the Proposal Process for Comprehensive Plan Update MOVED BY: Hanson To authorize the city manager to enter into an agreement SECONDED BY: Erbey with the consulting firm Agnew::Beck Consulting, LLC. in an amount not to exceed $50,000 Ms Jansen reported that three firms were interviewed by a team consisting of City Manager Tom Healy, Building Inspector David Meneses, and herself. The team was unanimous in their recommendation to engage the firm of AgnewBeck Consulting, LLC to update. She informed that they have set a pretty aggressive schedule and expects the comprehensive plan update to be completed and going through the approval process by both the City and the Borough in September, 2005. She noted that she has requested funding from the Borough. Item 2 Authorize City Manager to Enter Into a Grant Agreement with the Department of Housing and Urban Development for Alaska State Fair Improvements (AM 05-012) MOVED BY: Wood To authorize the city manager to enter into a grant SECONDED BY: Erbey agreement with the Department of Housing and Urban Development for Alaska State Fair Improvements in an amount not to exceed $29,823. Mayor Combs explained that the Alaska State Fair applied for a pass-through grant from HUD for improvements at the state fair grounds and on behalf of ASF, the City of Palmer received approval of Special Grant Funding from HUD in the amount of $29,823. The grant is a reimbursable grant proposed by the Fair to be used to construct flooring and/or add sheathing for the Farm Exhibits. Item 3 Authorize City Manager to Enter Into an Agreement with the Mat-Su Borough for Library Automation Services (AM 05-013) MOVED BY: Vanover To authorize the city manager to enter into an SECONDED BY: Carrington agreement with the Mat-Su Borough for Library Automation Services. Mayor Combs explained the history of the automation services and stated that the funding has been included in the Library s annual budget. Item 4 Authorize City Manager to Enter Into an Agreement with the Mat-Su Borough for Rescue Services (AM 05-005) MOVED BY: Vanover To authorize the city manager to enter into an SECONDED BY: Carrington agreement with the Mat-Su Borough for Rescue Services in the amount of $24,000 per year. Chief Contini explained that the Palmer fire department has been providing rescue services to the City and Greater Palmer Fire Service District, but has not been compensated for this additional service. He stated that since rescue service is a Borough function, it is necessary to have a Page 8 of 11

separate agreement for rescue services and for the Borough to provide additional funding for that service. He explained that under the agreement, the Borough will pay the City $24,000 per year for these services with the agreement to be reviewed annually. Item 5 Southwest Water and Sewer Extension Project Easements (AM 05-016) MOVED BY: Vanover To approve the proposed settlement on the SECONDED BY: Erbey Vanderweele property in the amount of $19,697 for easement, TCP, and damages. Mayor Combs explained that in the process of negotiating easements with private property owners for the Southwest Utility Extension Project, some situations have come up involving additional compensation for the easements than the easement policy approved by the council provides. The City's easement acquisition agents and engineers are still negotiating these issues, but one issue has reached the stage where the City must consider approving the property owner's counter-proposal. This case involves a request by the Vanderweele s to add a screening fence to replace trees that the project will remove. This administrative settlement will include payment of $2,897 for the easement calculated according to our approved policy, plus $16,800 for a 240-foot long fence. Mayor Combs proposed amending the agenda to add item M6: Easement Agreement with J&L Properties (copy of Agreement on the table). MOVED BY: SECONDED BY: Carrington Wood To amend the agenda to add item M6, Easement Agreement with J&L Properties Item 6 Easement Agreement with J&L Properties MOVED BY: Vanover To authorize the city manager to enter into an agreement SECONDED BY: Erbey with J&L Properties for easements across J&L's property for the Southwest Utility Extension Project in the amount of $45,000. As explained in City Manager Healy's 2/21/05 Memorandum, although J&L asked that the City pay significantly more for the easement than the City's easement policy provides, the property owner is entitled to fair market, appraised value, for the easement. The proposal from J&L for $45,000 is based on land value that will certainly rise, given the recent sale of an adjacent property. City Attorney Snodgrass noted that right-of-way agent, David Williams, recommended acceptance of the J&L offer as being reasonable, that it is supported by current market data, and property near the hospital site has continued to sell and increase in value. Council Member Hanson stated that it does not seem reasonable to him to have recently gone through a rather long rationalization of paying for right-of-way easements and questioned the result of the original rationalization concerning the easements. Page 9 of 11

Attorney Snodgrass asked the council to recall that the information it was given, primarily along the Springer, was based on property ownership that has remained mostly stable, but closer to the hospital, the land values have raised and the Springer numbers do not apply. Council Member Hanson argued that a policy that is universal and not territorial has been developed. The attorney explained that the underlying baseline for easements is fair market value; further explained that there are two parts to a condemnation 1) the taking, and 2) damages to the remainder. The benefit can only offset the damage; it cannot offset the take. In the J&L case, the City must pay fair market value for the taking. Brief further discussion ensued. Motion carried with a voice vote of 5/1 (Hanson). N. CITY MANAGER S REPORT O. CITY CLERK S REPORT P. AUDIENCE PARTICIPATION Joseph Hawkins expressed appreciation for listening to his earlier presentation. This being the first time he has sat through a council meeting, he questioned the process of placing an unpublished item on the agenda during the meeting, discussing it, and voting on it his point being that if he understood the process better, that his presentation might have been more appropriate under another heading Mayor Combs suggested that he consult with City Clerk, Janette Persinger, when she returns on March 1, for expert advice on the procedures for bring items before the council. Q. COUNCIL COMMENTS Council Member Vanover noted that Mr. Soulak pointed out some important issues concerning gray areas in the Enterprise Fund for the airport. She would like the administration to address the Public Works uses of the airport equipment, the snow plow, the storage, and placing the true cost where it should be; that even if it is being done correctly, she would still like a report on it. She would also like to follow up on asking for funds from the Borough to assist in the update of the comp plan. Council Member Woods is curious as to whether the city has entered into an agreement with the hospital about the private well that they dug; inquired if they will be shutting the well down when they connect to city lines or will they supplement their usage continuously with the well. Mayor Combs responded that the items are still in negotiation at this point. He will meet with the Board of Directors of the Hospital on March 1, at which that topic, as well as others, will be discussed. Council Member Carrington agreed with the comments concerning the golf course as it relates to the airport and the Enterprise Fund; suggested we should probably be looking at some form of compensation now that the golf course is doing fairly well. Council Member Hanson asked if Mr. Soulak could comment on the Borough's responsibility on planning and associated costs. There were no objections. Page 10 of 11

Mr. Soulak commented that in previous years, the Borough paid for the City's comprehensive plan update with funding in the amount of about $50,000 to $75,000. Council Member Hanson commented that it would be appropriate to review the expenditures of the Airport Enterprise Fund what we do out there and how we do it; thinks the Airport Advisory Board can be of much assistance; commented that the city has spent a lot of General Fund money on roads and matching funds over the years; noted that he does not think the Enterprise Fund is getting stiffed in any way; that we have right there spending whatever monies it takes to provide a good facility; that it should be pointed out that for the last five years, the city was worked very hard on the airport. R. ADJOURNMENT With no further business before the Council, the meeting adjourned at 9:50 p.m. APPROVED THIS 8 th day of March, 2005. John C. Combs, Mayor Janette M. Bower, City Clerk Page 11 of 11