PDF Packet
advertisement
KETCHIKAN GATEWAY BOROUGH Regular Assembly Meeting AGENDA December 1, 2014, 5:30 p.m. Assembly Chambers, 1900 First Avenue, Suite 144 A COMPLETE AGENDA PACKET IS AVAILABLE AT THE BOROUGH CLERK’S OFFICE AND ON THE BOROUGH WEBSITE. THE MEETING IS TELEVISED ON GCI AND KPU LOCAL CHANNELS. LIVE WEBSTREAM IS AVAILABLE ON THE BOROUGH WEBSITE AT http://www.kgbak.us 1. Call to Order - Pledge of Allegiance - Roll Call Ceremonial Matters - Presentations, Proclamations, Awards, Guest Introductions Citizen Comments - Comments on any topic other than scheduled public hearings. Scheduled Informational Reports and/or Presentations - Reports on construction progress, financial status, 2. 3. 4. presentations of budgets, audits, and reports or planning documents and related items. a. Board of Education Report Public Hearings - Procedure: Citizens will sign up on a sheet and testify in the order that they sign up. Citizens may present arguments in 5. favor or in opposition; staff report may be provided; after the close of the public portion of the hearing, the assembly will deliberate and render a decision on the matter at hand. 6. Acceptance of Claims a. Presentation of Claims for Checks #42052 - 42160 and Electronic Transfers #300680 - 300715 for the Period of 11/14/14 through 11/21/14, and for ACH Transfers and Bank Debits #9003588 - 9003601 for the Period of 11/13/2014 through 11/21/14 for Assembly Review and Acceptance 7. Consent Calendar - Matters listed under the consent calendar are considered to be routine and will be enacted by one motion and one vote. There will be no separate discussion on these items. Platting or zoning items that are subject to court appeal may not be listed on the consent calendar. If the Mayor or an Assembly Member requests discussion, that item will be removed from the consent calendar and will be considered under Unfinished Business . a. Approval of Minutes - November 24, 2014 8. Unfinished Business Transferred Consent Calendar New Business a. 9. a. Introduction of Ordinance 1742 Amending KGBC 4.50.220 and 4.55.140 (e) Regarding Bulk 12-01-2014 Borough Assembly Packet Page 1 of 93 a. Introduction of Ordinance 1742 Amending KGBC 4.50.220 and 4.55.140 (e) Regarding Bulk Transfers; and Adding a New 4.55.160 Regarding Payments Under Protest b. January Policy Session Topics 10. Reports of Committees, Executive, Administrators a. Manager's Report b. Mayor's Report c. Committee Reports Assembly Members' Comments 11. 12. Executive Session - Procedure: Motion is made and voted upon. If adopted, executive session is held. If necessary, action is taken in public session following the executive session. If there is more than one executive session topic, each topic will be handled completely separate from the other. a. Executive Session to Discuss Legal Strategy in Pending Litigation with the State of Alaska Regarding the Constitutionality of the Mandatory Local Contribution to the Basic Need for Education Funding and Related Matters b. Executive Session to Discuss Legal Strategy in Potential Litigation with the State of Alaska Regarding the Borough's 2014 Full Value Determination 13. Adjournment - The meeting must adjourn by 10:00 p.m. unless that deadline is extended to 10:30 p.m. by a motion approved by a majority of the assembly members present. Any extension beyond 10:30 p.m. requires a unanimous vote of all assembly members present. If the meeting is not adjourned or extended prior to 10:00 p.m., or such extended time as has been set, the meeting shall automatically recess at that time and shall be reconvened at 5:30 p.m. the following day. 12-01-2014 Borough Assembly Packet Page 2 of 93 Assembly - Regular Meeting Date: Submitted For: 6. a. 12/01/2014 Mike Houts Submitted By: Department: Finance Approved for Submittal: Mike Houts, Finance Director Cynna Gubatayao, Assistant Manager Dan Bockhorst, Manager Charlanne Thomas Approved as to form: Information TITLE Presentation of Claims for Checks #42052 - 42160 and Electronic Transfers #300680 - 300715 for the Period of 11/14/14 through 11/21/14, and for ACH Transfers and Bank Debits #9003588 - 9003601 for the Period of 11/13/2014 through 11/21/14 for Assembly Review and Acceptance RECOMMENDED ACTION I move to approve the presented claims totaling $6,334,113.97, comprised of 40% for the School District, 50% for City of Ketchikan and City of Saxman Taxes, 3% for Community Grant and Capital Projects, and 7% for Borough operations. SUMMARY OF ISSUE With the passage of Ordinance 1214 on May 6, 2002, the claims are not required to be reviewed by an Assembly member. The check registers are being presented for Assembly acceptance. The claims are categorized as follows: KGBSD Disbursements $ 2,536,963.16 40% City of Ketchikan ($3,100,758.22) / City of Saxman ($38,355.77) Taxes $ 3,139,113.99 50% Community Grants ($12,946.30) and Capital Projects ($186,361.25) $ 199,307.55 3% Borough Operations $ 458,729.27 7% Total Claims $ 6,334,113.97 100% Fiscal Impact Amount Budgeted: 0 Expenditure Required: 0 Appropriation Required: 0 Additional Fiscal Information: A standing finding was adopted by the Assembly on November 3, 2014, that the Mayor does not hold a 12-01-2014 Borough Assembly Packet Page 3 of 93 A standing finding was adopted by the Assembly on November 3, 2014, that the Mayor does not hold a substantial financial interest when participating in the Claims as presiding officer; that the business relationships of the Mayor do not constitute a substantial financial interest in presiding over the discussion of the Claims; and that if called on to vote on acceptance of the Claims, the Mayor will be considered to have abstained from the individual claims in the same manner as Assembly Members who have financial interests noted in the Claims. Claims to Mayor and Assembly Members: LANDIS - Ketchikan Daily News - #42137 - $2,716.91 HARRINGTON - NONE VAN HORN - NONE PAINTER - SE Diesel & Electric - #300693 - $1,210.78 SE Diesel & Electric - #300714 - $1,324.32 PHILLIPS - NONE THOMPSON - Alaska Pacific Environmental - #42106 - $4,080.69 Full Cycle - #300701 - $13,440.00 ROTECKI - NONE BAILEY - NONE Attachments Claims 120114 12-01-2014 Borough Assembly Packet Page 4 of 93 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description Inv Amount Dept ACS LONG DISTANCE/INTERNET 11/21/14 1703604 Check # Oct 2014 Oct 2014 internet 300694 11/21/14 $766.21 Automation $766.21 AFLAC 11/21/14 503457 Check # 11/20/14 Payroll Contribution 42102 11/21/14 $4,128.80 Payroll $4,128.80 AIRGAS NORPAC 11/21/14 9033121939 Check # 41684 Wire wafer, spacer metal, freight 42103 11/21/14 $13,863.63 Airport Field $13,863.63 ALASKA AIRLINES, INC 11/14/14 427681 Check # 11/21/14 41430 42052 428674 Check # Freight 41430 42104 $57.80 11/14/14 Freight $57.80 $57.46 11/21/14 South Tongass Treatment South Tongass Treatment $57.46 ALASKA DEPT OF ENV CONSERVATION 11/14/14 13899 Check # 15624 42053 CEU renewal - Astry 11/14/14 $50.00 South Tongass Treatment $50.00 ALASKA DEPT OF ENVIR CONSERVATION 11/14/14 201500676 Check # 15614 42054 Underground storage tank base fee 11/14/14 $50.00 Airport Field $50.00 ALASKA ELECTRICAL TRUST FUNDS 11/21/14 IBEW111514 Check # Nov 2014 300695 Union dues, pension contribution $5,382.13 11/21/14 $5,382.13 Payroll ALASKA MARINE LINES INC 11/21/14 178111 41817 Global Industrial $70.80 Recreation 11/21/14 182049 41817 Global Industrial $70.80 Rec CIP 11/21/14 $141.60 Check # 42105 ALASKA PACIFIC ENVIRONMENTAL SRVCS 11/21/14 127492 Oct 2014 Oct 14 services $3,976.26 11/21/14 127566 41803 Oct 14 services $38.31 North Tongass Fire 11/21/14 127568 41766 Oct 14 services $66.12 South Tongass Fire 11/21/14 $4,080.69 Oct 14 services $360.00 11/21/14 $360.00 Check # 42106 Airport Terminal ALASKA PEST MANAGEMENT INC 11/21/14 15502 Check # 41744 300696 Airport Field ALASKA PUBLIC EMPLOYEES ASSOCIATION 11/21/14 112014 Check # 112014 42107 Payroll Contribution 11/21/14 $2,443.72 Payroll $2,443.72 ALASKA SAFETY INC 11/21/14 294361 Check # 15565 42108 Extreme 3HD LED red $488.00 11/21/14 $488.00 South Tongass Fire 12-01-2014 Borough Assembly Packet Page 5 of 93 1 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description Inv Amount Dept ALLIANT INSURANCE SERVICES 11/14/14 282254 FY 14/15 Hull & machinery protection & indemnity $120.00 Airport Ferry 11/14/14 283565 FY 14-15 Public Official Bond - Houts $240.75 Insurance Check # 42055 11/14/14 $360.75 Ethernet cables $43.85 11/21/14 $43.85 ALLTEK NETWORK SOLUTIONS INC 11/21/14 10609 Check # 15600 42109 North Tongass Fire AMARA CLEAVELAND 11/21/14 111714 Check # 15655 42110 GRC rental refund $77.00 11/21/14 $77.00 Automated clock system $485.38 11/21/14 $485.38 Recreation AMERICAN TIME & SIGNAL COMPANY 11/21/14 733944 Check # 15539 42111 Recreation AMERIGAS 11/14/14 55013450 Check # 41841 42056 Propane, tank fittings 11/14/14 $35.02 PW Maintenance $35.02 ANCHORAGE TRACTION 11/21/14 35831 Check # 41529 42112 Hid Kamp assm, freight $1,356.00 11/21/14 $1,356.00 Airport Field ANDERES OIL COMPANY INC 11/14/14 296802 41479 Vehicle fuel $902.97 11/14/14 296805 41479 Vehicle fuel $1,351.13 11/14/14 296828 41775 Vehicle fuel $73.61 Assessment 11/14/14 296828 15632 Vehicle fuel $76.79 Recreation 11/14/14 337244 41757 Heating fuel- SRE Bldg. $448.22 Airport Field 11/14/14 337246 41757 Vehicle fuel $859.13 11/14/14 337248 41757 Heating fuel- KIA Terminal $2,004.43 Airport Terminal 11/14/14 340773 41758 Ferry fuel- KE2 $2,101.45 Airport Ferry 11/14/14 341587 41712 Heating fuel- 1175 Copper Ridge Ln $215.20 Transit 11/14/14 342269 41811 Heating fuel- 1111 Stedman St $379.23 Animal Protection Check # 42057 11/14/14 296885 41865 Vehicle fuel 11/21/14 336877 15591 Mobil trans HD10 11/21/14 342302 41788 Heating fuel- GRC $1,901.52 11/21/14 342860 41758 Ferry fuel- KE2 $2,096.97 11/21/14 342927 41479 Propane 11/21/14 343200 41758 Ferry fuel- KE2 11/21/14 345508 41814 Heating fuel- 13110 N Tongass 11/21/14 346158 41758 Ferry fuel- KE2 42113 11/21/14 Public Works Airport Field $8,412.16 11/21/14 Check # Wastewater $36.04 $347.04 $26.42 $2,057.46 $602.69 $2,055.70 Code Enforcement Airport Field Recreation Airport Ferry PW Fields Airport Ferry North Tongass Fire Airport Ferry $9,123.84 AP&T WIRELESS INC 11/21/14 21297 Check # 15652 42114 Radio repair, freight 11/21/14 $149.01 South Tongass Fire $149.01 ARROWHEAD LP GAS 11/14/14 51441 15602 Tank rental $75.00 North Tongass Fire 12-01-2014 Borough Assembly Packet Page 6 of 93 2 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. Check # PO number 300680 Description Inv Amount 11/14/14 $75.00 Oct 14 services $23.88 11/14/14 $23.88 Dept ATLANTIC AVIATION 11/14/14 AAC00383746 Check # 41750 42058 Airport Terminal BAM LLC 11/14/14 3 Check # 41671 300681 Mike Smither pool demolition 11/14/14 $135,390.00 School Bond $135,390.00 BDO USA LLP 11/14/14 110314 Check # 41866 9003591 FY 14 Financial Audit 11/14/14 $49,188.05 Finance $49,188.05 BERNIES 11/21/14 22664 Check # 15529 42115 Frigidaire fridge/freezer $294.99 11/21/14 $294.99 Wastewater BIG BROTHERS BIG SISTERS MENTORING 11/14/14 1 Check # 41834 42059 FY 15 grant 11/14/14 $1,189.76 Economic Development $1,189.76 BONNIE BROMLEY 11/21/14 Nov 2014 Check # 15642 42116 Mileage reimbursement $2.80 11/21/14 $2.80 Recreation BOTTLED WATER EXPRESS 11/14/14 12013 Check # 15635 42060 Oct 14 deliveries 11/14/14 $20.00 Assembly $20.00 BOUND TREE MEDICAL LLC 11/21/14 81511609 41855 IV Solution 11/21/14 81576938 41771 11/21/14 81578880 41771 Syringes, nasal delivery device, trauma shear yellow Nasal delivery device, adhesive bandages 11/21/14 81579569 41855 11/21/14 81581570 11/21/14 81587869 11/21/14 $166.74 North Tongass EMS $66.27 South Tongass Fire $38.82 South Tongass Fire $135.27 North Tongass EMS 41855 BVM spur II, CPR stat pads, KWIK heat, disinfectant bottles Particulate respirator $79.17 North Tongass EMS 41855 CPR stat pads electrodes $195.87 North Tongass EMS 81589016 41771 IV solution $7.18 South Tongass Fire 11/21/14 81589017 15544 Fit test solutions $280.09 South Tongass Fire 11/21/14 81589018 41771 Needles, gloves, IV flush syringe $332.17 South Tongass Fire 11/21/14 81592195 41771 Stethoscope $243.79 South Tongass Fire 11/21/14 81592196 15544 Fit test solution, bitter $107.34 South Tongass Fire Check # 42117 11/21/14 $1,652.71 CATHOLIC COMMUNITY SERVICE 11/21/14 1 Check # 41677 300697 5th day meal program grant 11/21/14 $6,223.76 Economic Development $6,223.76 CENTRAL CHILD SUPPORT RECEIPTING UNIT 11/21/14 112014 Check # 11/20/14 42118 Payroll Contribution 11/21/14 $352.50 Payroll $352.50 CHANNEL ELECTRIC INC 12-01-2014 Borough Assembly Packet Page 7 of 93 3 Ketchikan Gateway Borough Claims Register Inv Date 11/21/14 Invoice No. PO number 78888 Check # 15583 42119 Description Metal halide lamps, photocell twistlock 11/21/14 Inv Amount $145.83 Dept PW Maintenance $145.83 CHILD SUPPORT ENFORCEMENT DIVISION 11/21/14 112014 Check # 11/20/14 42120 Payroll Contribution 11/21/14 $576.82 Payroll $576.82 CHIMA LEKWAUWA 11/21/14 111314 Check # 15646 42121 CDL renewal reimbursement 11/21/14 $100.00 Transit $100.00 CITY OF KETCHIKAN 11/14/14 2014-795 Oct 2014 Oct 14 landfill 11/14/14 932065 Oct 2014 Oct 14 garbage- Major league field Check # 11/17/14 CITY 103114 Check # 42061 Oct 2014 42100 11/21/14 111314 41867 11/21/14 2014-834 Oct 2014 Check # 42122 11/14/14 Oct 14 taxes 11/17/14 Borough poriton of municipal election expenses Oct 14 landfill 11/21/14 $150.90 $29.19 Animal Protection PW Fields $180.09 $3,100,758.22 Taxes $3,100,758.22 $2,698.60 Clerk $1,322.40 PW Transit $4,021.00 CITY OF SAXMAN 11/17/14 SAX103114 Check # Oct 2014 42101 Oct 14 taxes 11/17/14 $38,355.77 Taxes $38,355.77 CIVIL AIR PATROL MAGAZINE 11/21/14 TT1019882 Check # 15610 42123 Advertisement 11/21/14 $195.00 Airport Admin $195.00 CNA SURETY 11/14/14 58271821 Check # FY 14/15 42062 Notary errors and omissions policy 11/14/14 $208.00 Insurance $208.00 CODE PUBLISHING COMPANY 11/21/14 48035 Check # 41697 300698 Web hosting 11/21/14 $350.00 Clerk $350.00 CORNERSTONE CREDIT SERVICES 11/21/14 COLL103114 Check # Oct 2014 42124 Commission fees 11/21/14 $130.56 Finance $130.56 DAVIES-BARRY INSURANCE 11/21/14 265180 Check # FY 14/15 42125 Add GL for 16' skiff 11/21/14 $88.40 Airport Ferry $88.40 DOWL HKM 11/21/14 1422.70606.01-4 Check # 40941 42126 Aug/Sep 14 services 11/21/14 $2,881.25 School Bond $2,881.25 EAGLE SAFETY SOLUTIONS 11/21/14 12-00108-01 41816 SCBA tank bracket, facepiece, thread saver, freight $650.20 Airport Field 12-01-2014 Borough Assembly Packet Page 8 of 93 4 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. Check # PO number 42127 Description 11/21/14 Inv Amount Dept $650.20 EFTPS 11/14/14 EFTPS111414 Check # 11/20/14 Payroll taxes 9003590 EFTPS111514 Check # 11/14/14 Payroll taxes 9003598 11/20/14 $956.58 Payroll $956.58 $82,214.82 Payroll $82,214.82 ENTENMANN ROVIN COMPANY 11/14/14 103304 Check # 15452 42063 Police badges, insurance 11/14/14 $307.50 Airport Terminal $307.50 ERICKA RUD 11/21/14 SEP/OCT 2014 Check # 15643 300699 Mileage reimbursement $65.52 11/21/14 $65.52 Recreation FASTENAL 11/14/14 AKKET8461 Check # 41594 300682 First aid kits 11/14/14 $78.36 $78.36 11/21/14 AKKET8408 41748 HCS 9/16-18 x 1 YZ8 11/21/14 AKKET8527 41711 11/21/14 AKKET8529 41852 Shop towels, gloves, utility knives, lithium grease, brake c Ice melt $1,491.90 11/21/14 AKKET8530 41840 Ice melt $3,481.10 11/21/14 AKKET8534 41748 Epoxy Acrylate anchoring gel Check # 300700 11/21/14 South Tongass Treatment $5.68 $116.65 $16.99 Airport Field Transit Airport Ferry PW Maintenance Airport Ferry $5,112.32 FEDEX CORPORATION 11/14/14 2-824-27186 Check # Oct 2014 42064 Freight- ferry inspection paperwork 11/14/14 $47.36 Airport Ferry $47.36 FIRST CITY ELECTRIC 11/14/14 22357 41861 Beacon light and motor repair 11/14/14 22457 41747 PAW2422 Check # 42065 11/14/14 $2,489.87 Airport Field $207.48 Airport Ferry $2,697.35 11/21/14 22498 41596 Troubleshoot tripping circuit $630.00 11/21/14 22508 41596 Troubleshoot parking lot lights $105.00 White Cliff 11/21/14 22514 41794 Outdoor lights $91.80 Recreation Check # 42128 11/21/14 $826.80 Oct 14 services $13,440.00 11/21/14 $13,440.00 South Tongass Treatment FULL CYCLE LLC 11/21/14 96 Check # 41481 300701 Wastewater GALLS AN ARAMARK COMPANY 11/14/14 2408741 15383 Tac U shirt $53.99 Airport Terminal 11/14/14 2442513 15384 Tac U pant $68.23 Airport Terminal 11/14/14 2466422 15383 Tac U pant $35.99 Airport Terminal 11/14/14 2476482 15383 Tac u pant $71.99 Airport Terminal Check # 11/21/14 2553289 42066 15523 11/14/14 $230.20 1/4 zip job shirts $213.95 South Tongass Fire 12-01-2014 Borough Assembly Packet Page 9 of 93 5 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description Inv Amount Dept 11/21/14 2572764 15477 Boots $115.88 11/21/14 2574093 15477 Cargo trousers $146.21 South Tongass Fire 11/21/14 2598343 15477 Uniform shirts $89.13 South Tongass Fire 11/21/14 2607418 15477 Uniform shirt w/canvas details $57.93 South Tongass Fire 11/21/14 2634749 15477 Nameplate $20.50 South Tongass Fire Check # 42129 11/21/14 South Tongass Fire $643.60 GATES & CONTROLS 11/14/14 155463 Check # 41759 Hydraulic gate opener $10,838.00 11/14/14 $10,838.00 42067 Airport Field GENERAL COMMUNICATIONS INC 11/14/14 59406909 Check # Oct 2014 Sep 14 cell phones 42068 11/14/14 11/21/14 19146577 Nov 2014 Nov 14 cable service 11/21/14 59952804 Oct 2014 Oct 14 cell phones Check # 42130 11/21/14 $1,267.43 Airport $1,267.43 $82.41 $417.19 White Cliff Airport $499.60 GILLIG LLC 11/14/14 40048606 08/04/14 5032925 11/14/14 40050190 41454 Solenoid, chain strand, link, spring Speaker asm 41720 Door lock, filter element, svc kit, wheelchair tie-down Pressure switch 08/12/14 5033003 11/14/14 40050669 41720 Coolant filter, oil filter 11/14/14 40051064 41720 11/14/14 40057992 41720 Check # $390.91 Transit $8.83 Transit $431.76 Transit $65.64 Transit $1,008.10 Transit Thermostat $129.48 Transit Wiper blades, mirror $743.45 Transit 42069 11/14/14 $2,629.23 11/21/14 40058397 41720 Toggle switch, rubber switch boot $32.60 Transit 11/21/14 40059921 41720 Mirror harness $46.10 Transit Check # 42131 11/21/14 $78.70 GLOBAL EQUIPMENT COMPANY INC 11/21/14 107362211 Check # 41817 Picnic table, freight to barge 42132 11/21/14 $799.00 Rec CIP $799.00 GOLDBELT HOTEL 11/14/14 11566 871014 Reeve $159.00 Transit 11/14/14 5937 870981 Holderman $318.00 PW Admin Check # 42070 11/14/14 $477.00 GOVERNMENT FINANCE OFFICERS ASSOC. 11/14/14 111214 15644 GAAFR supplement 11/14/14 125002 15626 Membership dues- Houts and Crosby Check # 42071 11/14/14 $40.00 Finance $340.00 Finance $380.00 GRAINGER 11/14/14 831986534 Check # 41822 42072 DC motor 11/14/14 $503.00 South Tongass Treatment $503.00 GRANICUS INC 11/14/14 59235 15619 Monthly managed services: encoding appliance $251.67 Automation 12-01-2014 Borough Assembly Packet Page 10 of 93 6 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. Check # PO number Description 300683 11/14/14 Inv Amount Dept $251.67 HANSEN'S HOMECARE 11/21/14 121 Check # 15545 Oxygen 42133 11/21/14 $60.00 North Tongass EMS $60.00 HARBOR ENTERPRISES INC. 11/14/14 512697 Check # 11/21/14 15558 300684 512638 Check # Grease 41864 11/14/14 Oil drums 300702 11/21/14 $47.76 Airport Field $47.76 $651.83 Airport Field $651.83 HELENA RESIDENCE INN 11/14/14 25874 Check # 870999 Jeff Langkau 42073 11/14/14 $256.66 Airport Field $256.66 ICMA RETIREMENT TRUST - 457 11/20/14 101880931 Check # Payroll contributions 9003595 11/20/14 $2,790.00 Payroll $2,790.00 INLAND BOATMEN'S UNION OF PACIFIC 11/21/14 112014 Check # 11/20/14 Payroll Contribution 300703 11/21/14 $441.00 Payroll $441.00 INT'L ORGANIZATION OF MM&P 11/21/14 112014 Check # 11/20/14 Payroll Contribution 42134 $270.00 Payroll 11/21/14 $270.00 Ambulance medications $100.45 11/14/14 $100.45 Ambulance medications $526.50 North Tongass EMS Ambulance medications $356.40 North Tongass EMS ISLAND PHARMACY 11/14/14 13994 Check # 41769 42074 11/21/14 13973 10/24/14 13960 11/21/14 8638 41796 Ambulance medications $42.00 North Tongass EMS 11/21/14 8790 41769 Ambulance medications $46.90 South Tongass Fire Check # 41796 South Tongass Fire 42135 11/21/14 $259.00 Oct 14 services $95.87 11/14/14 $95.87 Mileage reimbursement $171.19 11/14/14 $171.19 ISLAND TO ISLAND VETERINARY CLINIC 11/14/14 2987 Check # 41566 42075 Animal Protection JERRY KIFFER 11/14/14 OCT 2014 Check # Oct 2014 42076 North Tongass Fire JUD'S OFFICE SUPPLY INC. 11/14/14 15272 41746 Toner $129.58 Airport Field 11/14/14 15323 41830 Folders $21.46 Finance 11/14/14 15324 41830 Calendars $20.72 Finance 11/14/14 15347 15578 Chair mat $65.99 Automation 11/14/14 15415 41746 Binders $66.99 Airport Ferry 11/14/14 15416 41702 Calendars, planners $83.94 Clerk 12-01-2014 Borough Assembly Packet Page 11 of 93 7 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description 15467 11/14/14 15417 15584 Sharpies, pens, paper, binders, notebooks $166.38 Assembly 11/14/14 15458 15618 Calendars $155.93 Planning 42077 11/14/14 $27.34 Dept 11/06/14 Check # Callendar exchange Inv Amount Clerk $683.65 11/21/14 15450 15616 Calendars $38.06 Animal Protection 11/21/14 15501 15584 Cover, bnd, rgncy $99.84 Assembly Check # 42136 11/21/14 $137.90 KARLSON MOTORS 11/14/14 43493 Check # 41710 42078 44U Arm and p 11/14/14 $67.26 Catholic Community Services $67.26 KETCHICANDIES 11/14/14 111214 Check # 15641 42079 Chocolate for AAMC Legal Session 11/14/14 $118.50 Clerk $118.50 KETCHIKAN AUTOBODY & GLASS 11/14/14 13969 15387 Window replacement 11/14/14 13972 41634 PA-25 repair Check # 42080 11/14/14 $273.30 Public Works $2,508.30 Public Works $2,781.60 KETCHIKAN BAR ASSOCIATION 11/14/14 111014 Check # 15634 42081 Bar dues- Brandt-Erichsen $100.00 11/14/14 $100.00 $287.00 Law KETCHIKAN DAILY NEWS 11/21/14 AP14-1029 41745 Classified- Deckhand II 11/21/14 CL14-1001 41696 Recruitment 11/21/14 CL14-1004 41696 Election 11/21/14 CL14-1004 41696 Recruitment 11/21/14 CL14-1004 41696 Agenda $215.56 Clerk 11/21/14 CL14-1010 41696 Public hearing $38.04 Clerk 11/21/14 CL14-1011 41696 Date change $38.04 Clerk 11/21/14 CL14-1011 41696 Meeting $88.76 Clerk 11/21/14 CL14-1011 41696 Midterm $63.40 Clerk 11/21/14 CL14-1015 41696 Hearing $50.72 Clerk 11/21/14 CL14-1018 41696 Agenda $228.24 Clerk 11/21/14 CL14-1018 41696 Midterm $63.40 Clerk 11/21/14 CL14-1025 41696 Vacancy $63.40 Clerk 11/21/14 MG14-0927 41525 Classified- Deckhand $180.80 Manager 11/21/14 MG14-0927 41525 Classified- Airport Firefighter $166.40 Manager 11/21/14 MG14-0927 41525 Classified- Ferry captain $146.00 Manager 11/21/14 MG14-1001 41524 RFP- S Tongass Utility Scada SCADA System Integrator Agenda $348.80 Manager $50.72 Airport Ferry Clerk $132.43 Clerk $50.72 Clerk 08/16/14 CL14-0816 $228.24 Clerk 11/21/14 MG14-1001 41524 IFB- Resubdivision $278.40 Manager 11/21/14 PL14-1011 41781 Planning $126.80 Planning 11/21/14 PL14-1014 41781 Planning $88.76 Planning 11/21/14 PL14-1021 41781 Planning notice $88.76 Planning 11/21/14 TR14-1006 41707 Cut bus passes and punch passes $75.00 Transit 11/21/14 TR14-1027 41707 Cut monthly unlimited bus passes $75.00 Transit Check # 42137 11/21/14 $2,716.91 12-01-2014 Borough Assembly Packet Page 12 of 93 8 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description Inv Amount Dept KGB SCHOOL DISTRICT 11/13/14 KGBSD111314 Check # 11/13/14 11/20/14 9003592 11/17/14 Additional Payroll November 18, 2014 9003594 11/18/14 A/P claims 9003600 KGBSD112114 Check # 11/13/14 A/P claims KGBSD112014 Check # 11/21/14 9003589 KGBSD111814 Check # 11/13/14 November 12, 2014 Payroll KGBSD111714 Check # 11/18/14 9003588 KGBSD111314 Check # 11/17/14 November 2014 Mid-Month Draws & Payroll 403B Adj 11/20/14 November 25, 2014 Payroll 9003601 11/21/14 $55,150.00 School District $55,150.00 $6,933.87 School District $6,933.87 $272,174.00 School District $272,174.00 $4,000.00 School District $4,000.00 $117,549.00 School District $117,549.00 $2,012,627.91 School District $2,012,627.91 KPU ELECTRIC 11/14/14 104892 Oct 2014 13993 5690 Roosevelt Dr $645.05 11/14/14 108033 Oct 2014 15150 1111 Stedman St $251.58 11/14/14 117193 Oct 2014 15550 599 Schoenbar Rd $23,549.53 Recreation 11/14/14 117195 Oct 2014 12641 601 Schoenbar Rd $5,085.97 Recreation 11/14/14 334114 Sep 2014 15578 1900 First Ave Hm $932.55 White Cliff 11/14/14 334117 Sep 2014 20051 1900 First Ave 100 $2,723.01 White Cliff 11/14/14 334118 Sep 2014 26983 1900 First Ave 200 $646.13 White Cliff 11/14/14 334119 Sep 2014 26979 1900 First Ave 300 $1,373.35 White Cliff 11/14/14 469429 Oct 2014 15028 981 N Point Higgins 11/14/14 469431 Oct 2014 25718 981 N Point Higgins Rd Check # 42082 11/14/14 South Tongass Fire Animal Protection $237.40 PW Fields $36.16 PW Fields $35,480.73 11/21/14 103040 Oct 2014 12630 1122 Forest Park Dr $767.51 Forest Park Service Area 11/21/14 104011 Oct 2014 19243 Corner of Roosevelt Dr $0.64 South Tongass Distribution 11/21/14 104212 Oct 2014 18184 78 Wood Rd $0.18 South Tongass Distribution 11/21/14 104280 Oct 2014 25898 8661 S Tongass Hwy $368.41 South Tongass Treatment 11/21/14 104405 Oct 2014 25487 7483 S Tongass Hwy $24.73 South Tongass Distribution 11/21/14 104702 Oct 2014 14024 6229 Roosevelt Dr $686.47 South Tongass Treatment 11/21/14 104967 Oct 2014 19026 Mt Pt Sewer & Water Prv2 $15.45 South Tongass Distribution 11/21/14 105362 Oct 2014 15611 Mt Pt Sewer & Water $54.08 Wastewater 11/21/14 105439 Oct 2014 14004 5541 S Tongass Hwy $1,039.17 Wastewater 11/21/14 105442 Oct 2014 18922 5591 S Tongass Hwy $26.91 Wastewater 11/21/14 105444 Oct 2014 236397 Mt Pt Sewer & Water LS #4 $90.17 Wastewater 11/21/14 105445 Oct 2014 18921 Mt Pt Sewer & Water Prv 3 $23.08 South Tongass Distribution 11/21/14 105446 Oct 2014 16712 Mt Pt Lift Station #1 $28.00 Wastewater 11/21/14 105447 Oct 2014 16711 Mt Pt Lift Station #2 $31.64 Wastewater 11/21/14 105448 Oct 2014 25899 5 Marine Dr $0.82 Wastewater 11/21/14 105550 Oct 2014 12738 11 Old Homestead Rd LS#6 $114.67 Wastewater 11/21/14 105557 Sep 2014 26833 402 Old Homestead Rd $134.93 PW Fields 11/21/14 105559 Oct 2014 17361 404 Old Homestead Rd $0.18 PW Fields 11/21/14 105561 Oct 2014 25890 410 Old Homestead Rd $229.79 PW Fields 11/21/14 10557 Oct 2014 26833 402 Old Homestead Rd $27.82 PW Fields 11/21/14 105750 Oct 2014 15590 4027 S Tongass Hwy $28.81 Wastewater 12-01-2014 Borough Assembly Packet Page 13 of 93 9 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description Inv Amount 11/21/14 106135 Oct 2014 18619 3536 S Tongass Hwy 11/21/14 106335 Oct 2014 15592 3260 S Tongass Hwy LS #7 11/21/14 106544 Oct 2014 26778 94 Chacon Rd 11/21/14 109595 Sep 2014 Whale Park Water $1.88 PW Parks 11/21/14 109595 Oct 2014 Whale Park Water $49.44 PW Parks 11/21/14 112645 Oct 2014 27647 1229 Park Ave $42.18 PW Fields 11/21/14 112646 Oct 2014 20502 1229 Park Ave $1,592.37 PW Fields 11/21/14 112690 Oct 2014 11558 Fair St 11/21/14 114005 Oct 2014 Tunnel Park Water 11/21/14 117017 Oct 2014 26400 Ball Park 11/21/14 117035 Oct 2014 8800 Walker Field II A Booth 11/21/14 117037 Oct 2014 11/21/14 117040 Oct 2014 Check # 42138 $23.36 Dept PW Parks $246.08 Wastewater $60.90 Wastewater $223.57 PW Parks $49.44 PW Parks $306.31 PW Fields $0.91 PW Fields 9864 1111 Park Ave $532.48 PW Fields 17841 218 Schoenbar Rd $197.39 PW Fields 11/21/14 $7,019.77 KPU TELECOMMUNICATIONS 11/14/14 10463-001-7 Oct 2014 247-3881 $194.61 Wastewater 11/14/14 10463-002-5 Oct 2014 225-7907 $0.04 Wastewater Check # 11/21/14 2266-001-3 Check # 42083 Oct 2014 42139 11/14/14 225-2010 11/21/14 $194.65 $83.02 Recreation $83.02 LADYBUGS JANITORIAL 11/14/14 1848 41625 Strip and wax breakroom floor $375.00 Various 11/14/14 1857 41625 Oct 14 services $2,339.58 Various 11/14/14 $2,714.58 Check # 300685 LEGACY COMM SERVICES 11/14/14 037 Check # 11/21/14 038 Check # 15404 300686 41776 300704 Programming software and cable for radios 11/14/14 Remote head radios, mobile repeater, portable radio w/charge $255.00 North Tongass Fire $255.00 $9,440.65 11/21/14 $9,440.65 Oct 14 services $50.00 11/14/14 $50.00 South Tongass Fire LEXIS NEXIS 11/14/14 1242341-20141031 Check # 15623 42084 Finance LN CURTIS & SONS 11/21/14 2118060 15467 Float for pressure valve $178.00 South Tongass Fire 11/21/14 2118893 41845 Responder flashlights $596.52 South Tongass Fire Check # 300705 11/21/14 $774.52 LOVE IN ACTION 11/14/14 3 Check # 41661 300687 FY 15 grant 11/14/14 $2,918.78 Economic Development $2,918.78 MADISON LUMBER & HARDWARE INC 11/14/14 927337 41482 Hex nuts 11/14/14 935783 41743 Univ cart filter, foam filter 11/14/14 935961 41743 11/14/14 935966 41743 Treated wood,machine bolt, flat washer, hex nut, lock washer Spade WD bit $2.56 PW Maintenance $41.97 Airport Field $403.36 Airport Field $8.99 Airport Field 12-01-2014 Borough Assembly Packet Page 14 of 93 10 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Outlet boxes, wire connectors Inv Amount 936527 09/10/14 927336 11/14/14 937383 41482 Appl cord, blnk cover $10.98 South Tongass Treatment 11/14/14 937683 41482 Treated wood $13.20 Wastewater 11/14/14 937845 41789 Screws 11/14/14 937847 41482 Filter bags, landscape foam, brush 11/14/14 937882 41482 Ferrules w/stops $2.29 PW Fields 11/14/14 937893 41789 Screw tap, cob drill bit $18.16 Recreation 11/14/14 937900 41743 Thermoplastic swiv caster, marine sealant $61.96 Airport Field 11/14/14 937987 41482 White dove covers $13.28 Wastewater 11/14/14 938229 41482 $34.39 PW Fields 11/14/14 938250 41482 Deck screws, hex nuts, flat washers, hex machine bolts Cedar shims handy PK, hex nuts 11/14/14 938264 41482 Plugs, connectors, gloves $29.96 11/14/14 938579 41763 Gorilla epoxy $5.49 South Tongass Fire 11/14/14 938701 41763 $72.43 South Tongass Fire 11/14/14 939094 41482 Bucket, epoxy, heat bulb, duct tape, installer bit, cord Closure plug, snow blower glove $19.98 South Tongass Treatment 11/14/14 939871 41743 Rubb whl caster $25.98 Airport Ferry 11/14/14 940080 41482 Toilet seat $24.99 PW Parks 11/14/14 940277 41482 Light bulbs $35.98 White Cliff 11/14/14 940279 41482 Batteries 11/14/14 940785 41482 11/14/14 941137 41482 Bondo fill, paint brushes, roll refill, box cover, roller tr Teflon lubricant, tie downs Hex nuts 42086 11/14/14 $125.32 Dept 11/14/14 Check # 41482 Description $2.56 South Tongass Treatment PW Maintenance $8.60 Recreation $43.46 Wastewater $5.99 $4.79 PW Fields South Tongass Treatment White Cliff $77.20 South Tongass Treatment $52.45 PW Maintenance $1,141.20 11/21/14 157626 41789 Folding tables 11/21/14 935660 41482 Gloves, hose clamp, hose barb, cable ties $55.24 South Tongass Treatment 11/21/14 935742 41482 Screwdriver, PVC tube $18.53 South Tongass Treatment 11/21/14 939569 41482 Wall plate, bungee cord $10.48 South Tongass Treatment 11/21/14 939677 41800 Gas cylinder, hang strap, fitting $24.33 North Tongass Fire 11/21/14 940134 41743 Super clean, trowel $38.47 Airport Ferry 11/21/14 940186 41800 Spray paint, primer $34.96 North Tongass Fire 11/21/14 941357 41743 Carbon filters $45.98 Airport Field 11/21/14 942776 41482 Gloves, landscape foam $29.96 Wastewater 11/21/14 942792 41482 Utility knives, lock defroster $37.94 PW Maintenance 11/21/14 943052 41709 Sealant 11/21/14 943350 41482 Snap it knock out, knockout seal 11/21/14 943993 41482 File set, slim files, file handle $40.63 Wastewater 11/21/14 K41200 41709 Heater $31.99 Transit Check # 42140 11/21/14 $174.95 $9.79 $1.78 Recreation Catholic Community Services South Tongass Treatment $555.03 MAGNUM ENTERPRISES 11/21/14 6435 Check # 15649 300706 Snow plow parts 11/21/14 $175.21 Recreation $175.21 MASS MUTUAL FINANCIAL GROUP 11/20/14 MASS111514 Check # Payroll contributions 9003596 11/20/14 $1,500.00 Payroll $1,500.00 M-B COMPANIES, INC. 11/14/14 188861 Check # 41637 42085 WU core bar 11/14/14 $4,497.49 Airport Field $4,497.49 12-01-2014 Borough Assembly Packet Page 15 of 93 11 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. PO number Description Inv Amount Dept MERITAIN HEALTH 11/14/14 MH111414 Weekly claims $21,320.96 Insurance 11/14/14 MH111414 Weekly claims $68,528.38 School District Check # 9003593 11/14/14 $89,849.34 MOTZNIK INFORMATION SERVICES 11/21/14 R011885 Check # 15645 300707 Oct 14 usage 11/21/14 $71.34 Finance $71.34 MPLC 11/21/14 503926694 Check # 41870 42141 Music license agreement 11/21/14 $573.48 Recreation $573.48 MURRAY PACIFIC SUPPLY OF AK, LLC 11/14/14 114693 41742 11/14/14 115207 41742 Check # 11/21/14 115632 Check # 42087 41742 42142 Lock nut, flat washers, eyebolts, corrosion blocker Navigation bulbs 11/14/14 Navigation bulbs 11/21/14 $11.54 Airport Ferry $68.18 Airport Ferry $79.72 $351.27 Airport Ferry $351.27 NC MACHINERY 11/14/14 JUCS0122491 15435 Oil, freight $237.76 Airport Field 11/14/14 JUCS0122543 15561 Elements, seals, filters, freight $225.92 Airport Field Check # 300688 11/14/14 $463.68 NORTHERN ELECTRIC SUPPLY CO 11/21/14 11409 Check # 15476 42143 Backup emergency sign, freight 11/21/14 $475.32 Recreation $475.32 NORTHERN SALES COMPANY INC 11/14/14 K325599 41483 11/14/14 K344660 41756 11/14/14 K360355 11/14/14 K364467 Check # $139.65 PW Fields $929.94 Airport Terminal 41483 Fram floater foam, foam gasket, ribbed blades Paper towels, bath tissue, gloves, bleach, soap Paper towels, bath tissue, canliners $572.18 PW Parks 41756 Paper towels, bath tissue, seat covers $573.45 Airport Terminal 300689 11/14/14 $2,215.22 11/21/14 K329242 41832 Foam gun $174.00 Recreation 11/21/14 K365063 41832 Shampoo $460.30 Recreation 11/21/14 K366267 41756 Room spray refills, peroxide cleaner $135.47 Airport Terminal 11/21/14 K368618 41756 Trigger sprayer $3.40 Airport Terminal 11/21/14 K372919 41483 Canliners, bleach 11/21/14 K376443 41832 11/21/14 K378901 41756 Paper towels, canliners, toilet cleaner, shampoo, soap Paper towels, bath tissue, soap, gloves Check # 300708 11/21/14 $101.00 $1,045.52 $796.15 Wastewater Recreation Airport Terminal $2,715.84 NORTHWEST SAFETY CLEAN 11/14/14 14-9390 Check # 15519 42088 Nametags 11/14/14 $207.00 South Tongass Fire $207.00 NW AIR & SAFETY 11/21/14 1705 41849 CO monitor sensor cell assembly $1,395.00 South Tongass Fire 12-01-2014 Borough Assembly Packet Page 16 of 93 12 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. Check # PO number 42144 Description 11/21/14 Inv Amount Dept $1,395.00 ORIENTAL TRADING COMPANY INC. 11/21/14 668282284 Check # 15586 300709 Fall stickers, turkey stamps, coloring books, slap bracelets 11/21/14 $282.11 Recreation $282.11 OSHKOSH CORPORATION 11/14/14 1484006 41718 11/14/14 1491834 15550 Check # 300690 Wheel, side ring, lock ring, o-ring, stem-valve, freight Liquid level transducer, freight 11/14/14 $2,805.57 Airport Field $288.59 Airport Field $3,094.16 PC HYDRAULICS 11/14/14 37406 Check # 11/21/14 37439 Check # 15551 42089 15588 42145 Thread sealant, o-ring kit 11/14/14 Swivels, hose 11/21/14 $54.62 Airport Field $54.62 $91.24 PW Fields $91.24 PK BUILDERS 11/21/14 KGB-LOR-14 Check # 41760 42146 Loring dock repairs 11/21/14 $11,500.00 Loring Service Area $11,500.00 R&M ENGINEERING-KETCHIKAN INC 11/21/14 42565.02-120 41484 Forest Park wastewater testing $310.00 Wastewater 11/21/14 42565.03-122 41484 Mt Point wastewater testing $620.00 Wastewater 11/21/14 42565.05-99 41484 South Waterfall outfall testing $150.00 Wastewater 11/21/14 42565.06-99 41484 North Waterfall outfall testing $150.00 Wastewater 11/21/14 42565.07-85 41484 N Point Higgins wastewater testing $150.00 Wastewater 11/21/14 42565.08-48 41484 Victorson Court wastewater testing $150.00 Wastewater 11/21/14 42565.09-89 41484 Clover View wastewater testing $150.00 Wastewater 11/21/14 42565.10-44 41484 Gena Outfall wastewater testing $150.00 11/21/14 42565.11-67 41484 South Tongass water utilities Check # 300710 11/21/14 $50.00 Wastewater South Tongass Treatment $1,880.00 RECREONICS INC. 11/21/14 678580 Check # 41842 300711 ECO tester, free chlorine reagent, PH reagent, freight 11/21/14 $874.21 Recreation $874.21 RENDEZVOUS SENIOR DAY SERVICES 11/14/14 3 Check # 41663 300691 FY 15 grant 11/14/14 $2,614.00 Economic Development $2,614.00 RWC INTERNATIONAL 11/21/14 4406R Check # 15611 42147 Wiper, freight 11/21/14 $204.63 Airport Field $204.63 SAMSON TUG AND BARGE CO INC 11/14/14 S060-KET-08-N Check # 41759 42090 Freight for Gates & Controls 11/14/14 $115.97 Airport Field $115.97 SCHMOLCK MECHANICAL CONTRACTORS INC 11/14/14 K128058 41595 Brass fittings, pressure gauge 11/14/14 K128354 41741 Magnetic valve $48.21 Wastewater $113.84 Airport Field 12-01-2014 Borough Assembly Packet Page 17 of 93 13 Ketchikan Gateway Borough Claims Register Inv Date 11/14/14 Invoice No. K128568 Check # 11/21/14 K129075 Check # PO number 41741 Description Toilet seal 42091 41850 11/14/14 Thermostats 42148 11/21/14 Inv Amount $39.92 Dept Airport Terminal $201.97 $782.75 Airport Terminal $782.75 SE BUSINESS MACHINES INC 11/14/14 315156 41833 Toner kits $865.00 Non Departmental 11/14/14 315157 41546 Move and set up copier in new location $120.00 Automation Check # 42092 11/14/14 $985.00 SECON 11/14/14 8177 Check # 41416 Paving- Station 6 42093 11/14/14 $48,090.00 North Tongass Fire $48,090.00 SERVICE AUTO PARTS INC 11/14/14 100205 15465 Bulbs 11/14/14 101634 15489 Brake pads, wheel seal $3.27 South Tongass Treatment 11/14/14 101647 15492 Oil filters, air filters, oil 11/14/14 101947 41740 Distributor cap and rotor, spark plug wire set, valve, filte Return: solenoid, u-joins, filter kits, core deposit $190.16 Airport Field $190.00 Transit 41719 DLX combo light $105.04 Transit U-joint return $2.91 Transit $59.02 PW Fields $26.41 PW Fields 10/31/14 190.00 11/14/14 102973 10/31/14 103114 11/14/14 103019 41719 Clevis pin 1/2" $18.00 Transit 11/14/14 103265 15515 Oil filter, oil $58.33 PW Parks 11/14/14 103268 41719 Oil, oil filters $62.76 Transit 11/14/14 103296 41486 Nuts and bolts $2.59 PW Maintenance 10/10/14 103419 Bolts exchange $1.59 PW Maintenance 11/14/14 103420 41486 Tailight bulbs $3.86 PW Maintenance 11/14/14 103566 41486 Nuts/bolts $5.37 PW Maintenance 11/14/14 103677 41486 Spark plugs $3.90 PW Maintenance 11/14/14 104467 41719 Needles, grease coupler 11/14/14 105682 41719 Fuse kits 11/14/14 105968 41740 Hydraulic, fuel filters, tap wrench $98.32 Airport Field 11/14/14 106374 41486 $79.92 PW Parks/Fields 11/14/14 106380 41740 Propane torch kit, diesel conditioner, funnels, mixing bottl Fuse 11/14/14 106992 41486 Battery 10/27/14 107061 11/14/14 107417 $9.69 $5.94 $123.45 Core depsoit refund $15.00 Transit Transit Airport Field PW Maintenance CPV 41740 Hydraulic filters, air filters, coolant filters, adapter Core deposits $277.18 Airport Field $252.94 Airport Field $130.34 Airport Field 10/13/14 104142 11/14/14 107962 41740 Hydraulic filter 11/14/14 107966 41486 RV AF Check # $14.67 300692 $29.94 11/14/14 PW Parks/Fields $845.72 SHARPS COMPLIANCE INC 11/21/14 710128 Check # 15595 42149 TakeAway recovery system $225.67 11/21/14 $225.67 Oct 14 services $17,065.00 11/21/14 $17,065.00 Airport Terminal SHORELINE SEPTIC SERVICE INC 11/21/14 2014-172 Check # 41488 42150 Wastewater SIGN PRO 12-01-2014 Borough Assembly Packet Page 18 of 93 14 Ketchikan Gateway Borough Claims Register Inv Date 11/21/14 Invoice No. PO number 2737 Check # 15590 300712 Description Equip. start stickers 11/21/14 Inv Amount $31.62 Dept North Tongass Fire $31.62 SOFTWARE ENGINEERING OF AK LLC 11/21/14 2850 41804 $150.00 Automation 41804 Make local version of Airport PD case card database Check SQL backups, set up new machine 11/21/14 2851 $500.00 Automation 11/21/14 11/21/14 2852 41804 Update ABM to V6.30 $225.00 Finance 2853 41804 $375.00 Automation 11/21/14 2854 41804 $500.00 Automation 11/21/14 2857 41804 $150.00 Finance 11/21/14 2858 41804 Finish new machine set up, get Power Plan update Set up all SQL backups to new path, troubleshoot FE Run ABM script to fix report fonts, update ABM Check SQL backups, set up ODBC for document tracker $125.00 Automation Check # 300713 11/21/14 $2,025.00 SOUTHEAST DIESEL & ELECTRIC 11/14/14 16400 41754 Oil pressure sender, gasket, freight 11/14/14 16404 41754 Oil filters, labor Check # 300693 11/14/14 $176.82 Airport Ferry $1,033.96 Airport Ferry $1,210.78 11/21/14 16411 15603 Valve kit, core chargte, gasket $398.97 Transit 11/21/14 16418 41875 Generator repairs $925.35 Airport Terminal Check # 300714 11/21/14 $1,324.32 SPORTY'S PILOT SHOP 11/21/14 26427042 Check # 41853 42151 Icom IC-A14 Transceiver 11/21/14 $649.95 Airport Terminal $649.95 STATE OF ALASKA- DEC 11/21/14 6163 15654 CEU renewal - Rodgers 11/21/14 FS151529 41868 11/21/14 FS151537 41868 11/21/14 FS15154409 41868 11/21/14 FS15154410 41868 Food service permit- Weiss Field Concession Food service permit- Dudley Field Concession Food service permits- Senior League Concessions Food service permit- Major League Concession Check # 42152 11/21/14 $50.00 Wastewater $150.00 PW Fields $150.00 PW Fields $150.00 PW Fields $150.00 PW Fields $650.00 STATE STREET BANK & TRUST COMPANY 11/20/14 PERS111514 Check # PERS contributions 9003599 $67,934.51 11/20/14 $67,934.51 Payroll STONETREE VETERINARY CLINIC 11/21/14 103114 41807 Oct 14 services $1,973.06 Animal Protection 11/21/14 103114 41807 Oct 14 services $256.97 Animal Protection 11/21/14 $2,230.03 Check # 300715 THYSSENKRUPP ELEVATOR CORP. 11/21/14 3001385582 Check # 41869 42153 Elevator maintenance 11/21/14 $863.27 Recreation $863.27 TIMBER & MARINE SUPPLY INC. 11/14/14 310698 15414 Bar oil, file guide $28.93 PW Fields 11/14/14 312225 15625 Chain saw chains $77.34 South Tongass Fire 12-01-2014 Borough Assembly Packet Page 19 of 93 15 Ketchikan Gateway Borough Claims Register Inv Date Invoice No. Check # PO number Description 42094 11/14/14 Inv Amount Dept $106.27 TONGASS BUSINESS CENTER 11/14/14 48695 15507 Pens, envelopes $44.35 Wastewater 11/14/14 48695 15507 Pens $22.31 Wastewater 11/14/14 49361 15562 Sharpies, indexes, binders, sheet protectors $42.94 Wastewater 11/14/14 49395 15562 Indexes, Sharpies, binders, tabs $49.02 Wastewater 11/14/14 49395 15562 Indexes $42.64 Wastewater 11/14/14 49534 15574 Pencils, binder clips, binders $61.30 PW Admin 11/14/14 49935 15520 Envelopes Check # 42095 11/14/14 $3.28 Manager $265.84 TONGASS FEDERAL CREDIT UNION 11/20/14 TFCU111514 Check # Payroll contributions 9003597 11/20/14 $1,329.98 Payroll $1,329.98 TONGASS TRADING CO INC 11/14/14 2497077 41669 Carhartt logger jeans 11/14/14 2497480 15577 Safety stops, rubber flashlight $21.56 PW Fields 11/14/14 2497571 41669 Carhartt logger jeans $47.99 Airport Field Check # 42096 11/14/14 $383.92 Airport Field $453.47 TOPSTITCH EMBOIDERY 11/21/14 12251 Check # 15651 42154 Name embroidery 11/21/14 $100.00 South Tongass Fire $100.00 TRANSAFE TECHNOLOGY 11/21/14 102652 Check # 41690 42155 Tapley model recalibration 11/21/14 $725.00 Airport Field $725.00 TSS INC 11/14/14 28218 41428 5 panel rapid 11/14/14 28301 41716 Random selection testing Check # 42097 11/14/14 $48.00 $285.00 PW Fields Transit $333.00 WI SCTF 11/21/14 112014 Check # 11/20/14 42156 Payroll Contribution 11/21/14 $113.50 Payroll $113.50 WILLIAM ANTHES MD 11/14/14 B490001R Check # Grand Total: 15629 42098 Firefighter physical 11/14/14 $166.50 South Tongass Fire $166.50 $6,334,113.97 12-01-2014 Borough Assembly Packet Page 20 of 93 16 Assembly - Regular Meeting Date: 12/01/2014 Submitted By: Kacie Paxton, Borough Clerk, Clerk Department: Clerk 7. a. Information TITLE Approval of Minutes - November 24, 2014 RECOMMENDED ACTION I move to approve the minutes of the November 24, 2014 regular Assembly meeting. SUMMARY OF ISSUE Attachments 2014-11-24 Minutes 12-01-2014 Borough Assembly Packet Page 21 of 93 KETCHIKAN GATEWAY BOROUGH Regular Assembly Meeting November 24, 2014 Assembly Chambers, White Cliff Building Call to Order—Pledge of Allegiance—Roll Call The regular meeting of the Ketchikan Gateway Borough Assembly was called to order at 5:30 p.m., on Monday, November 24, 2014, by Mayor Landis in Assembly Chambers. PRESENT: BAILEY, VAN HORN, PAINTER, PHILLIPS, ROTECKI, THOMPSON, HARRINGTON Staff present included: Manager Bockhorst, Assistant Manager Gubatayao, Finance Director Houts, Planning Director French, Assessor Hurt, Public Works Director Schofield, Transit Manager Reeve, Deputy Clerk Garrison, and Clerk Paxton Ceremonial Matters - Presentations, Proclamations, Awards, Guest Introductions There were no ceremonial matters. Citizen Comments - Comments on any topic other than scheduled public hearings. Dale Miller, UAS Ketchikan Campus Marine Transportation Department, thanked Borough and School District staff and the Borough Assembly for program assistance. He explained that the UAS Ketchikan Maritime Program offered U.S. Coast Guard-approved courses and said the department issued more than 300 certificates each year. Diana Chaudhary, UAS Ketchikan Campus Marine Transportation Department, also complimented and thanked staff for Borough assistance with the program. Leona Haffner, Saxman City Clerk and Administrator, requested support for a $250,000 CPV grant for the Edwin Dewitt Carving Center expansion project, which she estimated would cost around $825,000. She said the City of Saxman, which hosted approximately 120,000 tourists last summer, would like to accommodate more visitors by expanding the carving center. Administrator Haffner said Saxman would not request payment from the Borough until matching funds were secured and did not anticipate approaching the Borough in FY 2016 for another CPV grant if the current grant request were approved. She explained that the City of Saxman leased its carving center, tribal house and theater to Cape Fox Tours for five months annually. In response to a question from Assembly Member Painter, City of Saxman grant writer Maxwell Mercer explained that the City of Saxman raised approximately $250,000 from tourist-related leases and fares. He explained that money was used for totem park maintenance and operational expenses. Assembly Member Thompson said Assembly members had previously voiced concern that the venue generated revenue and effectively competed with other venues in the community which were not eligible to receive CPV funding. He said CPV funds were supposed to be used to mitigate the impact of cruise ship passengers not for enhancement projects. Assembly Member Rotecki said he liked the project but suggested Cape Fox should contribute to the cost of the project. He discussed a breakwater project in downtown in which the City of Ketchikan was asking adjacent businesses to financially participate. Kyle Johansen, Borough resident and former legislator, supported providing a CPV grant to the City of Saxman. Mr. Johansen provided a history of CPV funding, which he expected would be litigated in the future. He explained that Saxman had initially approached his office and the office of Senator Stedman with concerns that the State Regular Assembly Meeting November 24, 2014 – Page 1 12-01-2014 Borough Assembly Packet Page 22 of 93 Statute was worded so that CPV funds would be shared with “a city within a borough.” He said the fact that there were two cities within the Ketchikan Gateway Borough was caught too late in the process and Saxman was effectively left out. He said the issue was brought to legislative leadership and other legislators expressed their belief that the City of Saxman’s funding needs would be addressed by the Borough. He suggested that the Assembly consider the amount of CPV funding being spent on beautification, planters and Borough operations. Scheduled Informational Reports and/or Presentations - Reports on construction progress, financial status, presentations of budgets, audits, and reports or planning documents and related items. Board of Education Report Robert Boyle, School District Superintendent, reported: Kayhi projects – engineering contract for generator executed; biomass project moving forward; HVAC project could result in significant savings in combination with other energy conservation efforts; former Mike Smither’s pool parcel now has light pole and stairs, and is ready to be used as parking lot Fawn Mountain Elementary – arctic entry project nearly completion; looking at conservation measures to reduce electric bill Safety Committee – set to meet December 2; School Board to meet with Safe Havens on January 14 Budget revision – adopted by School Board; to be discussed at Assembly-School Board Liaison meeting on December 9; student count higher than projected; additional grants received; seeking increase in expenditure authority to recognize grant funds and higher student count Safety concerns – School Board discussed potential safety hazard at intersection of Totem Row and South Tongass; requesting that DOT consider sidewalk/crosswalk; seeking Assembly support M/V Jack Cotant – received commitment from Alaska Department Fish and Game for power troll permit In response to a question from Assembly Member Phillips, Superintendent Boyle said the District’s budget revision did not reflect the recent drop in fuel prices, but the District was expecting substantial savings. In response to Assembly Member Bailey, Superintendent Boyle said the District was looking at replacing instrumentation on M/V Jack Cotant at a cost of approximately $7,000. Assembly Member Thompson asked the superintendent to provide a breakdown of how grant funds would be th expended at the December 9 Assembly-School Board Liaison Committee meeting. Public Hearings - Procedure: Citizens will sign up on a sheet and testify in the order that they sign up. Citizens may present arguments in favor or in opposition; staff report may be provided; after the close of the public portion of the hearing, the assembly will deliberate and render a decision on the matter at hand. Acceptance of Claims Presentation of Claims for Checks # 41948- 42051 and Electronic Transfers #300650 - 300679 for the Period of 10/31/14 through 11/07/14, and for ACH Transfers and Bank Debits #9003574 - 9003587 for the Period of 10/28/2014 through 11/10/14 for Assembly Review and Acceptance M/S: THOMPSON/VAN HORN to approve the presented claims totaling $3,744,913.17, comprised of 87% for the School District, 1% for Community Grant and Capital Projects, and 12% for Borough operation Clerk's Note: A standing finding was adopted by the Assembly on November 3, 2014, that the Mayor does not hold a substantial financial interest when participating in the Claims as presiding officer; that the business relationships of the Mayor do not constitute a substantial financial interest in presiding over the discussion of the Claims; and that if called on to vote on acceptance of the Claims, the Mayor will be considered to have abstained Regular Assembly Meeting November 24, 2014 – Page 2 12-01-2014 Borough Assembly Packet Page 23 of 93 from the individual claims in the same manner as Assembly Members who have financial interests noted in the Claims. Mayor and Assembly Member Abstentions on Claims: LANDIS – Ketchikan Daily News - #41971 - $235.56 PAINTER – SE Diesel & Electric - #300661 - $6,921.21 Upon roll call the vote on the MOTION was: YES: BAILEY, HARRINGTON, PHILLIPS, THOMPSON, VAN HORN, PAINTER, ROTECKI MOTION DECLARED CARRIED Consent Calendar - Matters listed under the consent calendar are considered to be routine and will be enacted by one motion and one vote. There will be no separate discussion on these items. Platting or zoning items that are subject to court appeal may not be listed on the consent calendar. If the Mayor or an Assembly Member requests discussion, that item will be removed from the consent calendar and will be considered under Unfinished Business. Approval of Minutes - November 3, 2014 Authorization to Purchase a Truck for the Public Works Department Planning Commission Appointment North Tongass Service Area Board Appointment M/S: PAINTER/BAILEY to approve the Consent Calendar as presented Upon roll call the vote on the MOTION was: YES: HARRINGTON, THOMPSON, ROTECKI, PHILLIPS, PAINTER, VAN HORN, BAILEY MOTION DECLARED CARRIED Unfinished Business There was no unfinished business. New Business Appeal of Notice of Intent to Award Contract for South Tongass Utility SCADA System Integrator Services Respondent Dan Rogers, Electric Power Systems, Inc. (EPS), joined the meeting via teleconference. Mayor Landis announced the Assembly would be sitting in its quasi-judicial capacity when hearing the appeal. He reminded the Assembly that ex parte contacts were to be avoided and if they occurred, would need to be disclosed. He asked if there were any disclosures to be made; there were none. 1. Presentation of Appellant – Boreal Controls, Inc. (BCI) Regular Assembly Meeting November 24, 2014 – Page 3 12-01-2014 Borough Assembly Packet Page 24 of 93 The Clerk informed the Assembly that the appellant would not be participating in the hearing, but the written appeal material provided in the packet, and the written rebuttal material, would be included in the record. 2. Presentation by Respondent – Electric Power Systems, Inc. Dan Rogers, Principal Engineer, EPS, stated after the notice of intent to award was issued, Boreal Controls protested it based on their previous work history in Ketchikan. Mr. Rogers said, if awarded, EPS would do the best job possible, and had 16-20 fulltime control system programmers plus engineering staff. He explained the team worked on water, sewer, power systems, mining, and pipeline work. Mr. Rogers stated in 18 years of work as the founder of the company, he had never had to defend a proposal. 3. Presentation by Respondent (Borough) Manager Bockhorst referenced his five-page analysis and recommendation included in the record. He noted he had offered six findings of fact: the first two dealt with procedural matters which were satisfied by the appellant. In terms of the merits of the appeal, he said, the appeal was lacking. He explained that BCI alleged that criteria was used in the evaluation for the technical and project experience components other than those set forth in the RFP. He stated his findings were that staff did comply and applied only the criteria set out in the terms of the RFP. Manager Bockhorst further explained that BCI alleged a phone conversation was held with the Public Works Director in which the Director indicated the proposal was denied based on one element. He said it was determined that the phone conversation was cut short before the issues could be thoroughly discussed; therefore the allegation was not found meritorious. Lastly, he said BCI contended the Borough considered other criteria for the price component other than those set forth in the RFP. The formula for the price component, he stated, was properly applied by staff, and he noted that the score for BCI was scored higher than EPS. Manager Bockhorst summarized that the allegations of BCI were unfounded and he recommended the Assembly reject the appeal. 4. Rebuttal by Appellant - BCI A written rebuttal was submitted by BCI to the Clerk prior to the meeting. The Clerk distributed the rebuttal to all parties to the appeal, and it was made a part of the record. 5. Deliberation and decision by Assembly M/S: THOMPSON/VAN HORN to reject the appeal of Boreal Controls, Inc. regarding the Notice of Intent to Award the Contract for the South Tongass Utility SCADA System Integrator to Electric Power Systems, Inc. Assembly Member Thompson said he had reviewed the facts in the case and agreed with the findings and recommendations of Manager Bockhorst. He said he could not find any instance in the case where there was evidence to overturn the evaluation committee’s recommendations. Based on the findings in Manager Bockhorst’s response, he said, was how the Assembly should rule. Assembly Member Harrington requested staff to respond to allegations contained in the rebuttal. He summarized an allegation that a staff member sought out and requested a bidder because of a friendship. Manager Bockhorst read a portion of the rebuttal statement. Assembly Member Harrington asked if anyone's mind was made up prior to the submission of proposals. Director Schofield responded that was not the case; that the only objective was to identify the best proposal and service. In response to Assembly Member Painter, Director Schofield said there were three staff members on the review team. Assembly Member Bailey asked if there was any noticeable variance between the three scoring sheets. Manager Bockhorst said the decision was unanimous and he did not believe there was significant fluctuation. Assembly Member Rotecki commented the allegations indicated the need for care with verbal conversations. Regular Assembly Meeting November 24, 2014 – Page 4 12-01-2014 Borough Assembly Packet Page 25 of 93 Upon roll call the vote on the MOTION was: YES: BAILEY, VAN HORN, HARRINGTON, PAINTER, PHILLIPS, ROTECKI, THOMPSON MOTION DECLARED CARRIED 6. Findings of Fact by Assembly The members of the Assembly provided the following findings of fact supporting the motion: Assembly Member Bailey stated the finding that the allegation that utilization of criteria other than that called for in the RFP was not substantiated. Assembly Member Thompson voiced agreement with the recommendation of Manager Bockhorst, which, he said, characterized the findings of fact concisely, particularly findings (3) and (4). Clerk’s note: The Manager’s recommended findings (3) and (4) are incorporated herein: (3) BCI’s contention that the Borough considered criteria other than those set forth in the RFP concerning the Technical Proposal Section is unfounded. BCI asserts that it provided detailed information about the current system while EPS did not. EPS countered that BCI has proprietary knowledge of the Borough’s SCADA system and that the proprietary information was not made available to respondents. EPS notes further that particular circumstance potentially limits BCI’s approach and that EPS’s approach will provide the “best product and most long-lasting value.” Respondents were asked to “Describe [their] understanding of the present operating SCADA systems and its objectives, including data specific to the South Tongass Water System.” Respondents were also advised that “Proposals will be reviewed based upon the firm’s understanding of present SCADA systems.” However, those elements were only part of one of the six components of the Technical Proposal Criteria listed on pages 10 – 11 of the RFP. Those six components addressed (1) Project Objective, (2) Project Approach. (3) Software, (4) Written Statement of Qualifications, (5) Subcontractors, and (6) Proposal Form and Content. When all six of the components making up the Technical Proposal Evaluation were taken into consideration, the evaluation of the two proposals was legitimate and no scoring mistakes were made. (4) BCI’s contention that the Borough considered criteria other than those set forth in the RFP concerning the Relevant Project Experience is unfounded. The RFP listed three elements to be considered regarding Experience. These were: (1) similar experience (change orders, litigation and other claims, project completion in terms of schedule and budget, workmanship, and owner satisfaction); (2) owner references, and (3) project cut sheets, informational articles, photographs, drawings and specification examples, technical data submittals, and letters of recommendation from prior projects. When all three of the components making up the Relevant Project Experience criterion were taken into consideration, the evaluation of the two proposals was legitimate and no scoring mistakes were made. Mayor Landis declared the findings of fact would be included in the record, and declared the hearing closed at 6:38 p.m. Award of Contract to Electric Power Systems, Inc. in the Amount of $187,807 for the South Tongass Utility SCADA System Integrator Services M/S: PAINTER/PHILLIPS to authorize the Borough Manager to award a professional services contract to Electric Power Systems, Inc. in the amount of $187,807 for the installation of a SCADA operational monitoring control system for the South Tongass Water Treatment Plant; integration of communications between the Mountain Point Regular Assembly Meeting November 24, 2014 – Page 5 12-01-2014 Borough Assembly Packet Page 26 of 93 Wastewater Treatment Plant and South Tongass Water Treatment Plant; and to provide ongoing integration services as the Borough's Integrator of Record Upon roll call the vote on the MOTION was: YES: HARRINGTON, PHILLIPS, THOMPSON, VAN HORN, PAINTER, ROTECKI, BAILEY MOTION DECLARED CARRIED The Assembly recessed at 6:36 p.m. and reconvened at 6:46 p.m. Resolution 2568 Supporting International Joint Commission (IJC) Involvement in the Alaska and British Columbia Transboundary Region M/S: THOMPSON/PAINTER to approve Resolution 2568 supporting International Joint Commission involvement in the Alaska and British Columbia Transboundary Region Assembly Member Painter commented on the importance of fisheries to the local economy. Assembly Member Thompson discussed the Polley Mine disaster and the resulting mudslides on the Fraser River. Assembly Member Rotecki supported the resolution and suggested that it also be sent to the Governor. Upon roll call the vote on the MOTION was: YES: PAINTER, ROTECKI, BAILEY, HARRINGTON, PHILLIPS, THOMPSON, VAN HORN MOTION DECLARED CARRIED Resolution 2569 Authorizing a Commercial Passenger Vessel (CPV) Grant Agreement with the City of Saxman in the Amount of $250,000 for Funding of the Construction of the Edwin Dewitt Carving Center Expansion Mayor Landis disclosed his relationship with Cape Fox Tours, which he explained was owned by his employer. He handed the gavel to Vice Mayor Thompson to rule whether he held a conflict of interest. Vice Mayor Thompson asked Mayor Landis if the decision would cause him to gain or lose a contract and/or employment. Mayor Landis confirmed that it could. Vice Mayor Thompson ruled Mayor Landis had a conflict of interest. There was no objection from the Assembly and Mayor Landis left the dais. M/S: BAILEY/VAN HORN to adopt Resolution 2569 directing the Manager to execute a commercial passenger vessel (CPV) grant agreement with the City of Saxman in the amount of $250,000 to assist with funding the construction of the Edwin Dewitt Carving Center Expansion In response to Assembly member questions, Saxman grant writer Maxwell Mercer stated: Project to go out to RFP once funding was secured Architectural drawings at 10-15 percent; architects comfortable with the cost estimate If additional funding for the project was not secured, Borough funds would not be utilized Compelling project from a grant writing perspective Cape Fox Tours has exclusive rights to bring customers into the carving shed; renovations would allow expanded use of the carving shed Grant must be in mail by December 1; with no substantial local government support the grant likely would be rejected Regular Assembly Meeting November 24, 2014 – Page 6 12-01-2014 Borough Assembly Packet Page 27 of 93 Assembly Member Harrington voiced concern that the center was not open to everyone. Assembly Member Painter said the City of Saxman demonstrated a need for the project but said CPV funds were intended to be used to mitigate impacts of tourism not for enhancements. He said there was a considerable amount of revenue produced and voiced concern that money had not been budgeted for capital improvements and repairs. Assembly Member Painter said the expansion would result in significantly more revenue for Cape Fox Tours. Assembly Member Phillips said totem poles were a major attraction for the community and that the project was an appropriate use of CPV funds. He suggested Assembly members consider the amount of people who visited the Saxman totem park each summer. Assembly Member Bailey voiced concern that funding for upgrades and repairs was not built into the Cape Fox Tours contract. He also expressed support for phased-in funding and his desire to expand access to the facility. Assembly Member Van Horn discussed an email from a tour operator expressing concern about access to the carving shed. Assembly Member Rotecki said he supported the project, but questioned using CPV funds when public access was restricted during the lease period. He suggested opening the shed to the public based on proportionality of the funding. Assembly Member Thompson said the contract would be reopened after the expansion and some of the access concerns could be addressed at that time. He said the project seemed appropriate when weighed against other projects and operations funded with CPV monies. He suggested the Assembly look at how much CPV funding had been received by the Borough over the years and how much of that had been allocated to Saxman. Assembly Member Thompson also suggested the Borough look at future loans from the CPV fund in lieu of grants. Assembly Member Harrington suggested the Borough, as a condition of the grant funding, require that the City of Saxman issue an RFP for lease of the facility. Mr. Mercer said he met with independent tour operators and there was a desire expressed for increased access to the carving shed. Even if the City of Saxman could open the carving shed to all visitors, Mr. Maxwell said there was not enough room to accommodate the current volume of tourists. M/S: HARRINGTON/ROTECKI to amend to add at the end “the Borough expects the City of Saxman, upon completion of the project, will allow additional tour operators access to the facility” Assembly Member Harrington said he understood the statement was not binding but it expressed the intent of the Assembly. Assembly Member Painter said the Borough should not be involved with the operation of the carving facility. Assembly Member Bailey said it was the City of Saxman’s responsibility to manage its facilities. Assembly Member Rotecki agreed. Assembly Member Thompson opposed the amendment because it appeared to be close to interfering with a legal contract. Upon roll call the vote on the AMENDMENT was: YES: HARRINGTON NO: ROTECKI, PHILLIPS, PAINTER, VAN HORN, BAILEY, THOMPSON MOTION DECLARED FAILED Upon roll call the vote on the MAIN MOTION was: YES: BAILEY, VAN HORN, PHILLIPS, ROTECKI, HARRINGTON, THOMPSON NO: PAINTER MOTION DECLARED CARRIED Mayor Landis returned to the dais and assumed the chair. Regular Assembly Meeting November 24, 2014 – Page 7 12-01-2014 Borough Assembly Packet Page 28 of 93 Reports of Committees, Executive, Administrators Manager's Report Manager Bockhorst reported: Oil prices– topic of lower oil prices and resulting effect on State and municipalities discussed at AML and AMMA Thomas Basin seawall – City of Ketchikan has not formally approached Borough for funding; cost of breakwater being borne by City and property owners; likely that Borough would be asked to participate in funding of seawall Assembly Member Thompson said the seawall project could be contentious. City Park drainage – staff intends to move forward with SSRAA request to address drainage Assembly Member Thompson asked about the OceansAlaska payment plan with BAM, Inc. for a $31,000 debt. He questioned whether other unknown debts would surface and voiced concern that there be proper oversight before moving forward with the loan. In response to a question from Assembly Member Painter, Manager Bockhorst said he was not aware previously of the BAM debt and that it was not included in OceanAlaska’s business plan. Planning Director French said OceansAlaska Board President Tomi Marsh told him that the previous OceansAlaska board did not agree to pay the contractor due to a disagreement over whether the work had been satisfactorily completed. He said the current board agreed to work with BAM on a payment plan. Assembly Members Phillips and Bailey requested additional information about the contract and work completed by BAM. Assembly Member Painter requested a summary of the monthly OceansAlaska grant reports be included in the Manager's report. Assembly Member Thompson suggested the Borough publish a legal advertisement in the newspaper asking that anyone having outstanding debts with OceansAlaska come forward. Big Thorne lawsuit – November 19 US District Court granted motion for Borough and others to intervene as party defendants; attorney Clark deems it essential for party defendants to participate in other two cases; 16 party defendants have characteristics to provide strong defense against injunction; no additional cost; intends to consent to intervening; all three cases before same judge; all three could be consolidated into one case Required Local Contribution Statute – deemed unconstitutional by Judge Carey; big win for Borough; will discuss options with attorneys; executive session to be held on December 1 to discuss strategy with regard to further action on lawsuit Crosswalk at South Tongass at Totem Row – staff to move forward with letter in support to DOT if no objection AT LEAST FOUR ASSEMBLY MEMBERS indicated support of staff drafting a letter to DOT in support of a crosswalk at the intersection of South Tongass and Totem Row. Mayor's Report Mayor Landis reported: Senator Murkowski and Senator Rubio sponsored bill to extend moratorium for small vessel discharge Congratulated Dan Ortiz on his election to House District 36 Attended AML in Anchorage November 19-21; topics discussed included: o Oil price drop and resulting State budget deficit Regular Assembly Meeting November 24, 2014 – Page 8 12-01-2014 Borough Assembly Packet Page 29 of 93 DOT official presentation indicated that Southeast in good shape and has fewer needs than Southcentral o AEA presentation – engaging local stakeholders for local needs; SB128 has energy compensation for communities not adjacent to the gas pipeline o Ballot Measure 2 – challenges forthcoming; take effect 90 days after certification; State has one year to develop rules for sale of marijuana Mayor to participate in community tree lighting scheduled on November 30 o Committee Reports KVB – Assembly Member Phillips reported that he attended the KVB annual retreat and membership drive luncheon. He said the Ketchikan Story videos are slated to be sold in retail stores. AML – Assembly Member Van Horn reported that he attended a Department of Labor presentation at AML regarding an outflow of baby boomers in the labor force and voiced concern for the pending loss of workers. Assembly Members' Comments Assembly Member Thompson said marijuana had been legal in Alaska since 1972. He suggested that the Borough wait and see how other communities respond. He congratulated Manager Bockhorst on the landmark decision of Superior Court. Assembly Member Phillips commented on the price of oil and the effect on the budget. He discussed the percentage of CPV funds to be provided to Saxman and wished everyone a happy Thanksgiving. Assembly Member Rotecki wished residents a happy Thanksgiving. Assembly Member Van Horn said the State’s budget problems were a matter of spending not revenue. Assembly Member Painter encouraged everyone to be thankful. Assembly Member Harrington mentioned the current fiscal state and urged the Assembly to look for cuts and hold the line on spending. He also expressed a need to analyze CPV project funding. Executive Session - Procedure: Motion is made and voted upon. If adopted, executive session is held. If necessary, action is taken in public session following the executive session. If there is more than one executive session topic, each topic will be handled completely separate from the other. There was no executive session. Adjournment - The meeting must adjourn by 10:00 p.m. unless that deadline is extended to 10:30 p.m. by a motion approved by a majority of the assembly members present. Any extension beyond 10:30 p.m. requires a unanimous vote of all assembly members present. If the meeting is not adjourned or extended prior to 10:00 p.m., or such extended time as has been set, the meeting shall automatically recess at that time and shall be reconvened at 5:30 p.m. the following day. The meeting was adjourned at 8:08 p.m. Regular Assembly Meeting November 24, 2014 – Page 9 12-01-2014 Borough Assembly Packet Page 30 of 93 _____________________________________________________ David Landis, Borough Mayor ATTEST: ________________________________________________________ Kacie Paxton, Borough Clerk APPROVED: _______________, 2014 Regular Assembly Meeting November 24, 2014 – Page 10 12-01-2014 Borough Assembly Packet Page 31 of 93 Assembly - Regular Meeting Date: Submitted For: 9. a. 12/01/2014 Scott Brandt-Erichsen Submitted By: Scott Brandt-Erichsen Department: Law Approved for Submittal: Mike Houts, Finance Director Approved as to form: Scott Cynna Gubatayao, Assistant Manager Brandt-Erichsen, Dan Bockhorst, Manager Attorney Information TITLE Introduction of Ordinance 1742 Amending KGBC 4.50.220 and 4.55.140 (e) Regarding Bulk Transfers; and Adding a New 4.55.160 Regarding Payments Under Protest RECOMMENDED ACTION I move to introduce Ordinance 1742 and set it for public hearing on December 15, 2014. SUMMARY OF ISSUE Recent review of the City of Ketchikan Code identified two housekeeping changes which are recommended for the Borough Code. The Ketchikan Gateway Borough Code should be revised to remove the section within the Borough Sales Tax Code which refers to the Uniform Commercial Code-Bulk Transfers as there is no longer a Bulk Transfers section in the Uniform Commercial Code. The Ketchikan City Council is considering a similar amendment, along with an ordinance bringing its penalties for sales tax violations in line with those made more recently in the Borough Code. Separately, the current KGBC contains provisions for payment of sales taxes under protest, but lacks similar provisions for transient occupancy taxes. Ordinance 1742 adds an appeal method for transient occupancy taxes. Fiscal Impact Attachments Ordinance 1742 COK Amend KMC 3.28 COK Amend KMC 3.04 12-01-2014 Borough Assembly Packet Page 32 of 93 KETCHIKAN GATEWAY BOROUGH ORDINANCE NO. 1742 An Ordinance of the Assembly of the Ketchikan Gateway Borough, Amending KGBC 4.50.220 and 4.55.140 (e) Regarding Bulk Transfers; and Adding a new Section 4.55.160 Regarding Payments Under Protest RECITALS A. WHEREAS, the Assembly finds that the Ketchikan Gateway Borough Code should be revised to remove the section within the Borough Sales Tax Code which refers to the Uniform Commercial Code- Bulk Transfers as there is no longer Bulk Transfers section in the Uniform Commercial Code; and B. WHEREAS, the Assembly finds that the current KGBC contains provisions for payment of sales taxes under protest, but lacks similar provisions for transient occupancy taxes. NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KETCHIKAN GATEWAY BOROUGH as follows: Section 1. KGBC Section 4.50.220 (Sale of business – Final return) is hereby amended to read as follows: 4.50.220 Sale of business – Final return – Liability of purchaser. If any seller sells his business to another person, he shall make a final sales tax return within five (5) days after the date of selling the business; and his purchaser, successor, successors, or assigns shall withhold a sufficient portion of the purchase money to pay the amount of sales taxes, penalties and interest due and unpaid to the city or borough or both; and provided further, the purchaser, successor, successors, or assigns are personally liable for the payment of said taxes, penalties and interest, accrued and unpaid to the city or borough or both on account of the operation of the business by any former owner, owners or assigns as shown by the final return or an audit conducted by the borough within thirty (30) days of the filing of the final return. Not later than 10 days b[B]efore the sale, lease, assignment, transfer or other disposition of the business is completed, the seller shall file with the Ketchikan Gateway Borough an informational notice identifying the name and address of each person or entity involved in the transaction, the nature of the transaction, and the effective date of the transaction.” [ANY SUCH SALE IS COMPLETED, THE BUYER AND SELLER SHALL SEND TO THE BOROUGH, BY REGISTERED FIRST-CLASS New wording is underlined—Deleted wording is [CAPITALIZED AND BRACKETED] 12-01-2014 Borough Assembly Packet Page 33 of 93 Ordinance No. 1742 Page 2 UNITED STATES MAIL, POSTAGE PREPAID, A COPY OF THE NOTICE REFERRED TO IN AS 45.05.522 WHICH STATUTE IS HEREBY MADE A PART HEREOF, AND SAID NOTICE SHALL BE SO SENT REGARDLESS OF WHETHER SUCH NOTICE WOULD HAVE OTHERWISE BEEN REQUIRED TO HAVE BEEN MADE AND SENT UNDER THE OTHER PROVISIONS OF AS 45.05.510 ET SEQ., UNIFORM COMMERCIAL CODE – BULK TRANSFERS.] Section 2. KGBC Section 4.55.140 (Sale of business – Final return) is hereby amended to read as follows: 4.55.140 Sale of business – Final return – Liability of purchaser. (a) If any operator sells or otherwise transfers his business to another person, such seller or transferor shall make a final transient occupancy tax return within five (5) days after the date of sale or other transfer of the business and the purchaser, transferee, successor, successors or assigns shall withhold a sufficient portion of the purchase money or other consideration to pay the amount of transient occupancy taxes, penalties and interest due and unpaid to the borough until such time as the selling or transferring operator produces a receipt from the revenue collector showing that all taxes, penalties and interest have been paid or produces a tax clearance certificate from the revenue collector stating that no tax, penalty or interest is due. (b) If the seller or transferor does not present a receipt or tax clearance certificate within thirty (30) days after such successor commences to conduct business, the transferee shall deposit the withheld amount with the revenue collector pending settlement of the account of the seller or transferor. (c) Not later than fifteen (15) days after receipt of a written request from the transferee for a tax clearance, the revenue collector shall either issue the certificate or mail notice to the transferee at the address stated in the request of the estimated amount of the tax, interest and penalty that must be paid as a condition of issuing the certificate. (d) If the transferee to the business fails to withhold a portion of the purchase price as herein required, such transferee shall be liable for the payment of the amount required to be withheld. (e) Not later than ten (10) days prior to close or completion of any sale or transfer, the buyer or transferee and the seller or transferor shall [SEND TO THE REVENUE COLLECTOR, BY REGISTERED FIRST-CLASS UNITED STATES MAIL, POSTAGE PREPAID, A COPY OF THE NOTICE REFERRED TO IN AS 45.06.105, WHICH STATUTE IS MADE A PART OF THIS CHAPTER, AND SUCH NOTICE SHALL BE SO SENT REGARDLESS OF WHETHER SUCH 12-01-2014 Borough Assembly Packet New wording is underlined—Deleted wording is [CAPITALIZED AND BRACKETED] Page 34 of 93 Ordinance No. 1742 Page 3 NOTICE WOULD HAVE OTHERWISE BEEN REQUIRED TO HAVE BEEN MADE AND SENT UNDER THE PROVISIONS OF AS 45.06.101 ET SEQ., UNIFORM COMMERCIAL CODE – BULK TRANSFERS. ] file with the Ketchikan Gateway Borough an informational notice identifying the name and address of each person or entity involved in the transaction, the nature of the transaction, and the effective date of the transaction.” Section 3. A new section, 4.55.160 (Protest of Tax), is added to the Ketchikan Gateway Borough Code to read as follows: 4.55.160 Protest of tax. (a) A buyer who protests the payment of tax levied under this chapter shall pay the tax and shall provide the seller and the finance director with a written statement of protest within five (5) working days of the sale that identifies the sale, rental or service that is the subject of the tax protested, the amount of tax paid, the buyer’s and seller’s name, mailing address, telephone number and the basis for the protest. (b) If the seller protests his liability on an assessment under KGBC 4.55.090(c) which has become final, he shall pay the tax under written protest setting forth the basis for the protest. No action for a refund may be maintained nor may a defense to nonpayment be maintained in a civil action unless the amount in dispute has been paid by the seller under written protest filed at or before the time of payment. Section 4. Effective Date. Sections 1 and 2 of this ordinance shall be effective upon the first day of the month following the adoption of a substantially similar ordinance by the City of Ketchikan. Section 3 of this ordinance shall be effective as provided in KGBC 1.15.040(a). ADOPTED this ____ day of ______, 2014. EFFECTIVE the ____ day of ______, 2014. 12-01-2014 Borough Assembly Packet New wording is underlined—Deleted wording is [CAPITALIZED AND BRACKETED] Page 35 of 93 Ordinance No. 1742 Page 4 __________________________________________ David Landis, Borough Mayor ATTEST: __________________________________________ Kacie Paxton, Borough Clerk APPROVED AS TO FORM: __________________________________________ Scott A. Brandt-Erichsen, Borough Attorney 12-01-2014 Borough Assembly Packet New wording is underlined—Deleted wording is [CAPITALIZED AND BRACKETED] Page 36 of 93 12-01-2014 Borough Assembly Packet Page 37 of 93 12-01-2014 Borough Assembly Packet Page 38 of 93 12-01-2014 Borough Assembly Packet Page 39 of 93 12-01-2014 Borough Assembly Packet Page 40 of 93 12-01-2014 Borough Assembly Packet Page 41 of 93 12-01-2014 Borough Assembly Packet Page 42 of 93 12-01-2014 Borough Assembly Packet Page 43 of 93 Assembly - Regular Meeting Date: Submitted By: Department: Approved for Submittal: 9. b. 12/01/2014 Kacie Paxton Manager's Office Mike Houts, Finance Director Approved as to form: Cynna Gubatayao, Assistant Manager Dan Bockhorst, Manager Information TITLE January Policy Session Topics RECOMMENDED ACTION I move to approve the list of topics and format for the annual policy session to be held January 9-10, 2015. SUMMARY OF ISSUE The 2015 Assembly policy session has been scheduled for two sessions beginning Friday January 9, 2015, at 9:00 a.m. and reconvening Saturday January 10, 2015, at 9:00 a.m. Staff has proposed time allocations for each topic. The topics and schedule for the policy session are as follows: Friday, January 9, 2015, beginning at 9:00 a.m. Topic Time Allocation Initial Work Session to Establish Assumptions and Guidelines for Preparing the FY 2016 Borough Budget (before KGBSD funding is addressed) 1.5 hours Economic Development - Business Retention and Expansion 1 hour Nonareawide Library Funding 30 minutes Criteria for Inter-Fund Loans 30 minutes Review of Property and Sales Tax Exemptions 1 hour Water and Wastewater Issues 1 hour Options to make the Ketchikan International Airport more self-sustaining 1 hour Animal Protection Facilities and Policies 1 hour Saturday, January 10, 2015, beginning at 9:00 a.m Topic Joint Work Session with School Board regarding* Time Allocation 12-01-2014 Borough Assembly Packet Page 44 of 93 a. Update on State education funding studies to be completed by June 15, 2015 b. “School Safety, Security, and Emergency. Management Assessment” for the KGBSD by Safe Havens c. Responsibility for maintenance of school facilities d. Form and content of budget for purposes of KGBC 2.35.050 and AS 14.14.060(c) e. Borough contractual services to the KGBSD f. School District capital project planning (inclusion of KGBSD projects in KGB legislative proposals, coordination of KGBSD capital project planning process with KGB, funding needed for KGBSD capital projects for FY 2016 g. FY 2016 School District Budget (required local contribution, discretionary local contribution, contractual services funding) 15 minutes 30 minutes 30 minutes 1 hour 1 hour 30 minutes 1.5 hours *This listing is tentative. Listed topics are for the joint meeting will be addressed at the December 9 meeting of the Assembly / School Board Liaison Committee Final Work Session to Establish Assumptions and Guidelines for Preparing the FY 2016 Borough Budget (addressing KGBSD funding) 30 minutes Fiscal Impact Attachments No file(s) attached. 12-01-2014 Borough Assembly Packet Page 45 of 93 Assembly - Regular Meeting Date: 12/01/2014 Submitted By: Deanna Garrison, Deputy Clerk, Clerk Department: Clerk 10. a. Information TITLE Manager's Report RECOMMENDED ACTION SUMMARY OF ISSUE Attached is the Borough Manager's Report containing departmental activities and public policy issues for the period of November 20, 2014 through November 26, 2014. Attachments Manager's Report Exhibit A - Grant Agreement 12-01-2014 Borough Assembly Packet Page 46 of 93 BOROUGH MANAGER’S Semi-Monthly Report to the Ketchikan Gateway Borough Assembly November 20 through November 26, 2014 Significant Activities and Public Policy Issues Activities and issues are reported by department or other component of the Borough; however, it is typical that more than one department or component had significant involvement in the activity or issue. Four hands and highlighting are used to draw attention to issues for which direction from the Assembly is requested. A star and highlighting are used to draw attention to other issues of particular significance. ASSESSMENT 5 Employees $728,315 budget ($350/hour based on 8-hour per day/5-day per week operation) Assessment of 7,651 real properties and 681 sets of personal property with a taxable value of $1,348,282,900. Assessor Attends AAAO Winter Meeting The Assessor was in Anchorage November 17 & 18 attending the winter meeting of Alaska Association of Assessing Officers (AAAO). This meeting is held annually on the Monday and Tuesday prior to the Alaska Municipal League Conference. Major issues of discussion at this year’s session were how to process same sex exemptions and “Transfer on Death” deeds. Alaska Housing Finance Corporation (AHFC) Residential Energy Efficiency Valuation tools were also discussed. Farm and Agricultural Tax Deferment was brought up, but would be unlikely to have any effect on Ketchikan Gateway Borough. CODE ENFORCEMENT 1 employee $148,414 budget ($71/hour based on 8-hour per day/5-day per week operation) Provides for enforcement of Borough Code provisions relating to planning and zoning; airport parking; solid waste. Potentially Dangerous Animal Appeal Hearings Held A potentially dangerous dog appeal hearing resulted in findings that the dog was not potentially dangerous, but the determination requires the dog to be kept in confinement when the owners are not present on the property. The determination came about as a result of findings that the owner had purchased an electronic fence to keep the dog within a 120’ radius of the controlling device, and is taking additional steps to ensure the dog is never at large again. The electronic fence worked correctly until the battery compartment on the collar cracked allowing water to short out the batteries making the shock collar inoperative. Animal Protection may make a potentially dangerous determination again should the dog attack other animals, or if the owner fails to follow through on commitments made to the hearing officer. The evidence presented by the owner and by Animal Protection in the third potentially dangerous dog hearing held in three weeks is being considered. A decision is expected within the week. 12-01-2014 Borough Assembly Packet Page 47 of 93 BOROUGH MANAGER’S to the Ketchikan Gateway Borough Assembly November 20 - November 26, 2014 Page 2 of 7 ECONOMIC DEVELOPMENT 0.75 Employees $3,627,063 budget ($384,811 for administration [$185/hour based on 8-hour per day/5-day per week operation]; $3,230,752 in grants). OceansAlaska Update Planning staff has been working with OceansAlaska on a review of September and October grant reports based on the business plan. Once the review is complete, a write-up in the December 15 Manager’s Report will be provided including links to the 120 page September report and the 60 page October report. Planning staff is also working with OceansAlaska on the recent issue with BAM, LLC, which was discussed at the Assembly meeting on November 2. Staff will provide an update and additional information in the Manager’s Report for the meeting on December 15. Ketchikan Marine Industry Council (KMIC); Maritime Work Plan Grant The Planning Director and the Borough Attorney met with Doug Ward and Chelsea Goucher from KMIC to refine and revise the existing scope of work for the Maritime Work Plan Grant, to more accurately reflect the current status of the associated tasks. This amendment will change the completion date to December 31, 2015, remove task 4 – Regional Workforce Investment System, and alter the Matching Fund Reserve Task, allowing the grantee to use up to $50,000 of the grant to be used to match private or other funding opportunities, subject to concurrence of the Borough Manager. The proposed amended grant is attached as Exhibit A. Borough staff is seeking Four Hands direction to approve the amended grant agreement with the Greater Ketchikan Chamber of Commerce for the Maritime Consortium Work Plan. MANAGER 5 Employees $767,377 budget ($36/hour based on 8 hour per day/5 day per week operation) Management of Borough operations (except the Department of Law, Office of the Borough Clerk, and School District), Borough procurement and contract administration, personnel management, and costs for federal and state lobbying services. Borough Consents to Intervene in Two Additional Lawsuits Relating to Big Thorne Timber Sale In October, the Borough agreed to be a Party Defendant Intervenor in Southeast Alaska Conservation Council, et al. v. U.S. Forest Service. et al., Case no. 1:14-cv-00014-RRB, in the United States District Court for the District of Alaska. On November 25, the Borough consented to be a Party Defendant Intervenor in the following two related cases: (1) the SEACC case against the Tongass Land Management Plan; and (2) the Cascadia case to enjoin the Big Thorne Sale. The Borough Manager signed Declarations for use in those two additional cases. The Borough is being represented in those cases by Robertson, Monagle & Eastaugh. The total cost to the Borough for legal representation in all three cases is $5,000. Proposal Surfaces to Make Senior and Disabled Veteran Tax Exemptions Optional. 12-01-2014 Borough Assembly Packet Page 48 of 93 BOROUGH MANAGER’S to the Ketchikan Gateway Borough Assembly November 20 - November 26, 2014 Page 3 of 7 During the 2014 Alaska Municipal League’s Annual Local Government Conference, a resolution was proposed to urge an amendment to State law to convert from mandatory to optional the $150,000 property tax exemption for Senior Citizens and Disabled Veterans that has been in place for decades. Under the education funding scheme declared unconstitutional by Judge William Carey, such a change in State law would add more than $110 million to the full value of the Ketchikan Gateway Borough. That, in turn, would add nearly $300,000 – 7% -- to the unfunded mandates of the Borough regarding schools. Borough officials successfully beat back the proposal. However, there were indications that a bill to make the exemptions optional will likely be introduced during the 2015 legislative session. Niblack APDES Permit under Review The Alaska Department of Environmental Conservation (ADEC) has prepared an Alaska Pollutant Discharge Elimination System (APDES) preliminary draft permit for the Niblack Project. The Preliminary Draft Permit and associated documents are available for comment by Niblack Project LLC for a 10-day review ending December 10, 2014. Following the close of the 10-day applicant review period, ADEC will prepare a draft permit and fact sheet for a formal 30-day public review period. Public comments will be accepted during that formal 30-day review period. The permit documents are available for review on DEC’s Wastewater Discharge Authorization Program webpage at: http://www.dec.state.ak.us/water/wwdp/index.htm PARKS AND RECREATION 15 Employees $2,453,414 budget ($507/hour based on 101 hour per week operation) Provides fitness and recreation programs and facilities in the community at the Gateway Recreation Center, and the Gateway Aquatic Center. Parks and Recreation Statistics PARKS AND RECREATION Oct 2014 FY2015 YTD Attendees: 35 67 Preschool: crafts, tours … Youth: martial arts, clinics… 208 516 Camps: summer, holiday, spring 0 2,455 Adult: martial arts, aerobics, dance, clinics… 1,841 4,840 Special Events: fitness challenges, dog obedience, specials etc.. 7 710 Swim Lessons: youth and adult swim lessons, dive lessons 1,608 6,312 Swim Team: Killer Whales, K-Hi, Gateway Swimmers 2,624 7,138 Schools: swim lessons, recreation school swims 1,088 2,429 Rentals: pool, gym, rooms, skating, parties… 967 5,933 Memberships: check in with membership (basketball, fitness, lap swim, track, open swim, ch. rm, games, showers, skating) 6,004 25,922 Daily Use: paid for use (non-member) (basketball, fitness, lap swim, track, open swim, ch rm, games, showers, skating, etc…) 2,454 11,350 TOTAL ATTENDANCE: 16,836 REVENUE FOR THE MONTH: Oct 2014 DEPARTMENT REVENUE TOTAL $70,940 VALUE OF SCHOLARSHIPS GRANTED: Oct 2014 DEPARTMENT SCHOLARSHIP TOTAL $2,448 67,672 FY2014 YTD 101 619 1,163 5,650 587 4,479 5,180 1,880 4,678 26,140 11,942 62,419 FY2015 YTD FY2014 YTD $208,900 $231,966 FY2015 YTD FY2014 YTD $10,089 $11,067 12-01-2014 Borough Assembly Packet Page 49 of 93 BOROUGH MANAGER’S to the Ketchikan Gateway Borough Assembly November 20 - November 26, 2014 Page 4 of 7 PLANNING 4.70 Employees $677,457 budget ($326/hour based on 8 hour per day/5 day per week operation) Carries out the Borough’s duties regarding areawide planning, platting, and land use regulation. November 18, 2014 Planning Commission Public Hearing Case 14-048 is a Request to Name an Unnamed Private Drive "Meredith Way" at 606, 610 and 626 Sunset Drive, Ketchikan Gateway Borough. Case summary: The applicant requests to name an unnamed private drive after Philip Meredith, the first property owner to build a home on the driveway. Mr. Meredith recently passed away and his children wish to have the driveway named "Meredith Way" in his honor. Owners of two other properties on the driveway have also signed the petition. APPROVED Case 14-052 is a Request for a Major Variance to Allow the Construction of an Attached Garage to Encroach up to Three Feet into the Required Fifteen Foot Front Yard at 8352 S. Tongass Highway; Lot F of the Legion Beach Subdivision, Ketchikan Gateway Borough. Case summary: The applicants want to add enclosed parking to their home, which is on a substandard lot. According to the applicant the only practical location for a garage is at the front of the property. There is not enough room between the front lot line and the existing home to build a garage without encroaching into the required front yard. APPROVED Case 14-053 is a Request by White Rock Development LLC to Rezone Lots 5 through 19, Inclusive, of the White Rock Estates Subdivision, Phase II from Future Development to Suburban Residential; located on White Rock Court behind D-1 Loop Road, Ketchikan Gateway Borough. Case summary: The applicant is seeking a rezone of their recently-platted residential subdivision to the same residential zoning as the adjacent D-1 /D-2 Loop Road neighborhood. RECOMMENDED APPROVAL TO BE FORWARDED TO ASSEMBLY Case 14-055 is a Request for a Preliminary Plat to Subdivide Tract A-1, U.S. Survey 1083 into Three Lots within the Heavy Industrial Zone; located at 4300 Block, Tongass Avenue, City of Ketchikan. APPROVED Tideland Leases - Update Ordinance 1729, amending KGBC 11.55.040, Tideland Lease Terms, became effective August 5, 2014. To date, five lessees have contacted Planning staff to request a lease amendment to benefit from the revised minimum rental rate. One lease has expired which requires Assembly approval to execute a new lease, while the other four will be reviewed by the Manager for a decision once Planning staff receives the final paperwork from the lessee. Bear Valley Mitigation Bank – Update On November 20, Planning staff met telephonically with the U.S. Army Corp of Engineers, U.S. Environmental Protection Agency, U.S. Fish and Wildlife Service, and State of Alaska staff from the Department of Environmental Conservation and Department of Natural Resources to discuss comments received from the Interagency Review Team (IRT) regarding the Borough’s draft Mitigation 12-01-2014 Borough Assembly Packet Page 50 of 93 to the Ketchikan Gateway Borough Assembly BOROUGH MANAGER’S November 20 - November 26, 2014 Page 5 of 7 Bank Instrument (MBI). Another meeting is scheduled with the IRT for the week of December 8, to further discuss the comments and responses in order to complete the MBI for final submission. SERVICE AREA – SOUTH TONGASS Fire Protection and EMS 2.6 Employees and $ 812,030 budget ($390 per hour based on an 8 hour per day/5 day per week operation) Mountain Point Water Utility 1.71 FTE Employees and $ 136,481 budget ($66/hour based on an 8 hour per day/5 days per week operation) STVFD Breathing Air Compressor The Department’s breathing air compressor has been out of service because of a CO sensor problem for the past 3 weeks. The sensor has been replaced, but the problem is still occurring. The manufacturer has been contacted for assistance. STVFD Vehicle Sustained Damage in Accident Chief Rydeen was returning to Station 4 from the Borough offices on November 10, when he was hit from behind by a pick-up truck. Chief Rydeen was stopping for a dog in the road with the owner chasing it when he was struck. There were no injuries in the accident and the vehicle has been repaired and is in service. STVFD Home for the Holidays Project STVFD crews will be participating in “Home for the Holidays” program again this year. This program allows loved ones in the Pioneer Home to go home and spend time with family during Thanksgiving and Christmas. STVFD members donate their time to transport these folks home and take them back to the Pioneers Home. The South, North, and City fire departments all participate in the program. STVFD Participates in Training STVFD is sending 5 members to the ETT class put on by NTVFD. This program gives our new members a basic level of training to prepare them for an upcoming EMT class in the spring. All of STVFD officers and senior members will be attending a National Fire Academy class being held at Ketchikan Fire Department on January 17 and 18, 2015. The class is Initial Company Operations to help the officer’s size up and initiate a fire attack at the company level. South Tongass Volunteer Fire Department Action New applications Approved membership Inactive members Active members Fire calls EMS calls Mutual Aid Other incidents/Service November 2014 2 2 Jan – Dec 2013 16 16 35 Calendar YTD 9 6 7 n/a 2 5 1 1 36 138 8 6 24 143 9 10 38 12-01-2014 Borough Assembly Packet Page 51 of 93 BOROUGH MANAGER’S to the Ketchikan Gateway Borough Assembly November 20 - November 26, 2014 Page 6 of 7 TRANSIT 13.75 FTE Employees $2,140,023 budget ($403/hour based on 102 hours per week operation) Provides for maintenance and operation of the Borough Bus system, Para-transit services, and Senior Transportation services. FCC Radio Licensing, New Repeater and Base Station Transit is now properly FCC radio licensed and has expanded radio coverage due to a newly installed repeater system located at Ketchikan International Airport. New base stations were installed at the Transit Maintenance Facility. Transit would like to thank Chris John of Legacy Comm Services for his excellent work on the project. Poor radio coverage has been an issue for several years, and completion of the project improves communication and safety for the drivers. KGB on Google Transit Transit is in the final phases of testing KGB Transit’s Google Transit Bus feed that will integrate schedule and route data into Google Maps. KGB Transit’s information will become easily accessible to millions of Google users in forty languages, using a common and familiar interface for planning trips. Locals and visitors alike will be able to plan trips (including walking directions) on their computers, smart phones, tablets, etc. This may lead to increased ridership by attracting new riders who have never considered transit before, and by helping seasoned riders to learn new routes that they are unfamiliar with. Google does not charge for this service. Transit staff would like to thank Jim Pomplun (P.W. GIS) for his great work on this effort. WASTEWATER (NONAREAWIDE) 1.50 FTE Employees $742,371 budget ($254/hour based on 8-hour/365-day operation) Provides for maintenance and operation of the Mountain Point Sewer Utility; nonareawide sludge collection and disposal. Sludge Pumping Contract Under Negotiation At the July 21, 2014 regular Assembly meeting, the Assembly adopted Ordinance 1727 which increased fees for users connected to the public sewer system. The Assembly did 12-01-2014 Borough Assembly Packet Page 52 of 93 BOROUGH MANAGER’S to the Ketchikan Gateway Borough Assembly November 20 - November 26, 2014 Page 7 of 7 not increase fees for residences in the sludge pumping program, and directed staff to bring an ordinance addressing increased fees for the sludge pumping program on December 1, after the anticipated award of the new sludge pumping contract. An Invitation for Bids for the Borough’s sludge pumping contract was published on October 14, with a closing date of November 6. The current contractor submitted the only bid. The initial bid price was higher than anticipated, so the Public Works Director is working with the bidder to confirm and clarify the scope of work, and to negotiate a final price. In addition to the lack of a final price, sludge pumping program issues are complex. Staff is not prepared to present information on December 1, but will be bringing the contract award and an ordinance for a rate increase for the sludge program for consideration on December 15. 12-01-2014 Borough Assembly Packet Page 53 of 93 KETCHIKAN GATEWAY BOROUGH GRANT AGREEMENT – AMENDMENT NO. 4 THIS AGREEMENT, made and entered into this ___ day of ___________, 20__, by and between the Ketchikan Gateway Borough, a general law municipality and a borough of the second class, 1900 First Avenue, Ketchikan, Alaska 99901, hereinafter referred to as the "Borough," and the Greater Ketchikan Chamber of Commerce, 2417 Tongass Avenue, Suite 223A, Ketchikan, AK 99901, hereinafter referred to as the “Grantee”: The Grant Agreement for the Maritime Industry Development Work Plan, Borough Document 12-013, is hereby amended deleting current text and amended in its entirety to read as follows: Section 1. Definitions. For purposes of this agreement the following terms shall have the meanings set forth: A. “Grant Administrator” means the Borough employee identified in this agreement as the point of contact responsible for administration of this agreement on behalf of the Borough. B. “Grantee Representative” means the person identified in this agreement who is: 1) authorized to act on behalf of and bind the Grantee; 2) responsible for communication with the Borough concerning the Project; and 3) responsible for ensuring compliance with the terms of this agreement on the part of the Grantee. C. “Payment Schedule” means the timing and frequency of payments under the grant as set out in this agreement. D. “Project” means the item to be constructed or service to be provided with the grant funds as described in Exhibit A. (Exhibit A contains the scope of work for the grant.) E. “Project Match” means any funds or the value of labor and materials provided by the Grantee for the Project. 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 54 of 93 Section 2. Agreement to be bound. The Grantee agrees to perform the work described in Exhibit A (“the Project”), which is attached hereto and incorporated by reference as if fully set forth herein. The Grantee represents that it is willing to undertake the Project under the terms of this agreement, and has the capacity to fulfill the obligations set forth in this agreement. Further, the Grantee represents that the individual executing this agreement is authorized to sign on behalf of the Grantee and bind the Grantee to the provisions of this agreement. Section 3. Project Funding and Terms of Payment. A. The total amount of funds to be provided by the borough under this agreement is not to exceed $116,000. The payment of funds under this agreement is subject to the availability of lawfully appropriated funds. B. Payments of grant funds shall be made based upon invoices. Grantee shall seek private funding to cover costs of services provided under this agreement with the objective of leveraging the Borough provided funding on a 2 to 1 ratio, that is, the funding for the program of work shall be provided by the Borough at a rate such that for every dollar that the industry contributes to the project, the Borough will contribute two dollars. Payment requests shall be submitted with a completed payment request form, an example of which is attached as Exhibit C. C. The Grantee acknowledges and understands that the funds provided under this agreement are from the Borough’s Economic Development Fund, and as such, may only be used for purposes within the scope as described in Exhibit A. The Grantee agrees to only use the funds for these permitted purposes, to defend the Borough as provided below in Section 5 (J) in the event of a challenge to the appropriate use of the funds, to cease spending any of the funds in the event of notification by the Borough that a case has been filed challenging the expenditure of these funds, and to return any unexpended funds should such challenge be successful. D. The Grantee hereby agrees that it will use all funds paid to it under this agreement solely for the Project as described in Exhibit A. The Project will be completed no later than December 31, 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 55 of 93 2016, unless allowed an extension by the Borough. This agreement may only be amended in writing, signed by the authorized representatives of each party. E. The Grantee shall maintain records sufficient to account for all funds provided under this agreement. F. The Grantee will return all unexpended grant funds to the Borough 45 days from the date for completion of the Project set out in this agreement. Section 4. Obligations of the Borough A. The Borough shall make payments in accordance with the schedule in Exhibit B. B. The Borough’s participation in the Project is limited to provision of grant funds. C. The Grantee is an independent contractor. D. The fact that the grant has been awarded does not obligate the Borough to operate or maintain the work undertaken or any facilities constructed under the Project. E. The Borough shall identify a Grant Administrator. The Grant Administrator for this grant is: Chris French, AICP Ketchikan Gateway Borough 1900 First Avenue, Suite 126 Ketchikan, Alaska 99901 Telephone: (907)228-6638 Fax: (907)228-6698 E-mail address: chrisf@kgbak.us Section 5. Obligations of the Grantee. A. The Grantee shall comply with all terms of this agreement. B. The Grantee shall identify the Grantee Representative. For this agreement, the authorized Grantee representative shall be: Chelsea Goucher, Executive Director Greater Ketchikan Chamber of Commerce 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 56 of 93 2417 Tongass Avenue, Suite 223A Ketchikan, AK 99901 Telephone: (907) 225-3184 Email address: chelsea@ketchikanchamber.com C. The Grantee will assure that, to the extent consistent with the purpose of the appropriation, the facilities or services provided with the grant will be available for use of the general public. D. The Grantee will retain, for a period of six years after the Project has been completed, all contracts, invoices, materials, payrolls, personnel records, conditions of employment, and other data relating to matters covered by the grant. E. The Grantee will allow the Borough, on request, access to all Project related records, including but not limited to financial records, for the purpose of audit or other procedures to verify compliance with the terms of this agreement. F. The Grantee must, in its semi-annual report, list the defined scope of work as outlined in the grant agreement and relate completed activities to the deliverables and actions or progress for each task. A final report is due within 45 days of Project completion. G. The Grantee shall comply with all applicable local, state, and federal laws relating to the Project. H. The Grantee shall remain current on all payments for insurance required by this agreement, payroll taxes, workers compensation, and Federal taxes. I. The Grantee shall remain current on all payments due to the Borough for sales, personal, and real property taxes; utility charges; and fees of any type. J. The Grantee, its successors, and assigns, will protect, save, and hold harmless the Borough and its authorized agents and employees, from all claims, actions, costs, damages, or expenses of any nature whatsoever by reason of the acts or omissions of the Grantee, its subcontractors, assigns, agents, contractors, licenses, invitees, employees, or any person whomever arising out of or in connection with any acts or activities authorized by this agreement, including any claim that the grant violates federal or state law. The Grantee further agrees to defend the Borough and its authorized agents and employees in any litigation; including payment of any costs or attorney’s fees for any claims or actions commenced thereon arising out of or in connection with acts or activities authorized by this agreement. This obligation shall not include such claims, costs, damages, or expenses which may be caused by the sole negligence of the Borough or its 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 57 of 93 authorized agents or employees. However, if the claims or damages are caused by or result from the concurrent negligence of (a) the Borough and its agents or employees, and (b) the Grantee, its agents or employees, this indemnity provision shall be valid and enforceable only to the extent of the negligence of the Grantee, or Grantee’s agents or employees. Section 6. Default and Termination. A. Should the Grantee be in a condition of default, upon written notice of default having been provided by the Borough, the Borough may immediately cease making payments under the Grant. B. Should the default not be cured within 30 days of the date of notice of default the Borough may terminate the grant agreement and pursue remedies including 1) withholding any further payments under the grant; 2) seeking recovery of any funds improperly expended; and 3) pursuing any other remedies in law or equity. Section 7. Miscellaneous. A. It is understood and agreed that this agreement is solely for the benefit of the parties to the agreement and gives no right to any other party. No joint venture or partnership is formed as a result of this agreement. B. The laws of the State of Alaska shall govern the construction, validity, performance, and enforcement of this agreement. Venue as to any action, claim, or proceeding arising out of, or based upon this agreement, including, but not limited to, any action for declaratory or injunctive relief, shall be the appropriate court sitting in the City of Ketchikan, First Judicial District, State of Alaska. C. The Borough, by written notice, may terminate this agreement, in whole or in part, for substantial breach of this agreement. On termination for breach, the Borough may seek to recover all monies previously paid to the Grantee under this agreement. D. The effective date of this agreement is the date this agreement is signed by the Borough. E. Any notice, demand, request, consent, approval, or other communication that either party desires or is required to give to the other party or any other person shall be in writing and either served 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 58 of 93 personally or sent by prepaid, first-class mail at the addresses set forth below. Either party may change its address by notifying the other party of its change of address in writing. Notice shall be deemed to have been duly made and given when delivered, if served personally, or upon the expiration of forty-eight hours after the time of mailing, if mailed as provided in this section. F. Waiver or Forbearance. The issuance of a payment under this grant by the Borough, with or without knowledge of any default on the part of the Grantee, is not a waiver of any provision of this agreement. No failure on the part of the Borough to enforce a provision of this agreement, nor the waiver of any right under this agreement by the Borough, unless in writing, will discharge or invalidate the application of such provision. No forbearance or written waiver affects the right of the Borough to enforce any provision of this agreement in the event of any subsequent default. G. In the event any provision of this agreement is adjudicated or held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. BOROUGH: Ketchikan Gateway Borough Attention: Chris French AICP 1900 First Avenue, Suite 126 Ketchikan, Alaska 99901 GRANTEE: Greater Ketchikan Chamber of Commerce Chelsea Goucher, Executive Director 2417 Tongass Avenue, Suite 223A Ketchikan, AK 99901 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 59 of 93 IN WITNESS WHEREOF, the parties have executed this agreement. KETCHIKAN GATEWAY BOROUGH _____________________________________ Dan Bockhorst Borough Manager ATTEST: __________________________ Kacie Paxton Borough Clerk CERTIFIED FUNDS AVAILABLE: By: _________________________________ Account # 721-10-000-6090 APPROVED AS TO FORM: __________________________ Scott A. Brandt-Erichsen Borough Attorney GRANTEE SIGNING AUTHORITY By: ________________________________ Title: ______________________________ 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 60 of 93 BOROUGH ACKNOWLEDGMENTS STATE OF ALASKA ) ) ss. FIRST JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this _____ day of ________________, 20___, before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn, personally appeared Dan Bockhorst, to me known to be the Borough Manager of the Ketchikan Gateway Borough, a second class borough, the entity which executed the above and foregoing instrument; who on oath stated that he was duly authorized to execute said instrument on behalf of said entity; who acknowledged to me that he signed same freely and voluntarily on behalf of said entity for the uses and purposes therein mentioned. WITNESS my hand and official seal the day and year in the certificate first above written. ________________________________ NOTARY PUBLIC FOR ALASKA My Commission Expires: __________ (Seal) STATE OF ALASKA ) ) ss. FIRST JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this _____ day of ________________, 20___, before me, the undersigned, a Notary Public in and for the State of Alaska, duly commissioned and sworn, personally appeared Kacie Paxton to me known to be the Borough Clerk of the Ketchikan Gateway Borough, a second class borough, the entity which executed the above and foregoing instrument; who on oath stated that she was duly authorized to execute said instrument on behalf of said entity; who acknowledged to me that she signed the same freely and voluntarily on behalf of said entity for the uses and purposes therein mentioned. WITNESS my hand and official seal the day and year in the certificate first above written. (Seal) ________________________________ NOTARY PUBLIC FOR ALASKA My Commission Expires: __________ 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 61 of 93 CORPORATE CERTIFICATE I, __________________ certify that I am the ____________________ named as Grantee in the foregoing instrument; that Chelsea Goucher, who signed said instrument on behalf of Greater Ketchikan Chamber of Commerce, Ketchikan, Alaska, is the Executive Director for said organization; that said instrument was duly signed for in behalf of said corporation by authority of its governing body and is within the scope of its corporate powers. ___________________________ (Signature) (Corporate Seal) CORPORATE ACKNOWLEDGMENT STATE OF ALASKA ) ) ss. FIRST JUDICIAL DISTRICT ) THIS IS TO CERTIFY that on this ____ day of _______________, 20___, before me, the undersigned, a Notary Public in and for the State of _________________________, duly commissioned and sworn, personally appeared Chelsea Goucher known to be the Executive Director of the Greater Ketchikan Chamber of Commerce, a corporation formed under the laws of the State of Alaska, the corporation which executed the above and foregoing instrument, and who on oath stated she was duly authorized to execute said instrument and affix the corporate seal thereto on behalf of said corporation, and that the seal affixed thereto is the corporate seal thereof, and acknowledged that she signed the same freely and voluntarily on behalf of said corporation for the purposes therein mentioned. WITNESS my hand and official seal the day and year in this certificate above written. ______________________________ NOTARY PUBLIC FOR ALASKA (Seal) My Commission Expires: _____________ 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 62 of 93 EXHIBIT A (Scope of Work) for the Greater Ketchikan Chamber of Commerce Maritime Consortium Work Plan - $116,000 Task 1 - Maintain Ketchikan Maritime Industry Website, Cluster Map and Database • Grantee shall perform ongoing maintenance to the Ketchikan Maritime Industry website, cluster map and database. Task 2 - Ketchikan Marine Industry Marketing and Ongoing Analysis: • Use the content developed in Task 1 to promote maritime work and demand for maritime services, both within Ketchikan and the Southeast Alaska region; • Use the content from Task 1 to analyze market conditions and periodically update market demands; • Identify and provide detailed analysis of marine industry investment opportunities; • Develop strategies for meeting internal and external market demands; and • Identify physical infrastructure needs which must be addressed in order to meet market demands and catalyze business growth/expansion. Task 3 - Inventory of Programs to Fund Capital Projects • Grantee will create and maintain an inventory of state, federal, and private grant programs available to fund maritime related projects and services, and provide information regarding the criteria that apply. Task 4 - Maritime Policy Development and Coordination: Note: The effort to diversify and strengthen Ketchikan’s economy is inherently a long-term activity that requires sustained, locally driven direction and leadership with industry partnering with government to achieve competitive advantages in the global marketplace. • Develop policy recommendations, with sufficient supporting detail, which will help support growth and diversification of Ketchikan’s marine industry sector; • Continue working with elected officials to develop resolutions, and/or otherwise implement policies; 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 63 of 93 • Draft and support local municipal resolutions encouraging the Alaska Workforce Investment Board (AWIB) to designate the marine industry sector as a priority industry; • Pursue a State led maritime and marine technology investment program incentivizing ship, port, and harbor operators to expand, build, and maintain maritime assets in Alaska; and • Develop informational material supporting and informing policy development. Task 5 - Matching Funds: Up to $50,000 • Up to $50,000 in funds from the grant may, subject to concurrence of the Borough Manager, be used to match private or other funding opportunities such as federal and/or state grants, philanthropic opportunities supporting maritime industry development tools/programs. EXHIBIT B - Payment The Borough will make a payment upon receipt and verification by the Grant Administrator of the submission of an invoice and copy of contracts associated with the scope of work described above. Invoices must demonstrate how funds have been expended and require a certified payment. The reimbursement request must list the defined scope of work as outlined above and relate completed activities to the deliverables and actions or progress for each task. Upon verification of expenses for compliance with this agreement, payment will be provided through the Borough’s standard finance practices. Payments from Task 5 will be made in accordance with payment schedules called for by the particular matching grant program for which they are to be utilized, and further, such payments for Task 5 shall be subject to the Borough Manager’s written concurrence with the proposed grant match. 12-01-2014 Manager's Report Exhibit A 12-01-2014 Borough Assembly Packet Page 64 of 93 Assembly - Regular Meeting Date: Submitted By: Department: Approved for Submittal: 12. a. 12/01/2014 Kacie Paxton Clerk Mike Houts, Finance Director Approved as to form: Scott Cynna Gubatayao, Assistant Manager Brandt-Erichsen, Dan Bockhorst, Manager Attorney Information TITLE Executive Session to Discuss Legal Strategy in Pending Litigation with the State of Alaska Regarding the Constitutionality of the Mandatory Local Contribution to the Basic Need for Education Funding and Related Matters RECOMMENDED ACTION I move to recess into executive session pursuant to AS 44.62.310(c)(3) and KGBC 2.10.160(b)(2)(b) to discuss legal strategy for pending litigation regarding State education funding and related matters. SUMMARY OF ISSUE At its meeting of October 7, 2013, the Assembly voted to pursue litigation against the State of Alaska challenging the constitutionality of the Required Local Contribution component of the Basic Need portion of the education funding formula, and related matters. At the Assembly meeting of November 4, 2013, the Assembly approved an award of the contract for legal services for this case to K & L Gates. The suit was filed in January 2014, and the Fairbanks North Star Borough joined as an amicus curiae party in February 2014. Briefing to the superior court was completed in May and oral argument on cross motions for summary judgment was held in the superior court on June 2, 2014. On November 21, 2014, Judge William B. Carey issued a 26-page decision invalidating the Required Local Contribution statute on the grounds that it violates the dedicated funds clause of Alaska's Constitution. Judge Carey did not find that the State's education funding scheme violates the appropriations and veto clauses of the Constitution. Further, Judge Carey did not find that the Borough is entitled to a refund of its FY 2014 Required Local Contribution. A copy of Judge Carey's decision is included with this agenda statement. Parties have an opportunity to seek reconsideration and appeal the November 21 decision. The recommended executive session will allow discussion of legal strategy regarding the matter. Fiscal Impact Attachments Order on Motion in KGB v State 12-01-2014 Borough Assembly Packet Page 65 of 93 IN THE SUPERIOR COURT FOR THE STATE OF ALASK-\ 1 FIRST JUDICIAL DISTRICT AT KETCHIK-\N 2 3 4 5 KETCHIK-\N GATEWAY BOROUGH, AGNES MORAN, JOHN CROSS, JOHN HARRINGTON, AND DAVID SPOKEL Y Plaintiffs, 6 7 8 9 v. STATE OF ALASKA. AND MICHAEL JLA.NLEY, COMMISSIOl'IER OF ALASK-\ DEPARTl\IIENT OF EDUCATION AND EARLY DEVELOPl\IIENT 10 11 12 ) ) ) ) ) ) ) ) ) ) s::WLE~ in the Trial Courts 0 ' Alaska First District at Ketchikan NOV 2 1 2014 C!srn of the Trial Courts §w_ _ _ _ _ _ DeP~tty ) ) ) ) Defendants. __________________________ ) Case No. IKE-14-16CI ORDER ON MOTION AND CROSS MOTION FOR SUM111ARY JUDGMENT 13 INTRODUCTION 14 The Ketchikan Gateway Borough, et. al. (the Borough) challenges one facet of Alaska's 15 education funding law- the required local contribution (RLC). The Borough argues that the 16 17 18 RLC is unconstitutional because it violates three provisions of the Alaska Constitution: Article XI, Section 7, the dedicated funds clause; Article IX, Section 13, the appropriations clause; and 19 Article II, Section 15, the governor's veto clause. The Borough moves for summary judgment on 20 these claims. The State of Alaska and Michael Hanley (the State) oppose the Borough's motion 21 and has filed its mvn motion for summary judgment on the claims. For the following reasons, the 22 Borough's motion is partially granted and the State's motion is partially granted. 23 24 25 ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, 1KE-14-16 CI Page 1 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 66 of 93 ISSUES 1 2 3 I) Is the RLC a dedicated fund in violation of the dedicated funds clause of the Alaska Constitution 1 when it requires some localities to make payments to their local school 4 districts for the purpose of meeting that district's Basic Need for education funding? 5 2) If the RLC is in violation of the dedicated funds clause, does it qualify for the 6 exemption that clause allows for pre-Statehood dedicated funds? 7 3) Does the RLC violate the appropriations clause2 and governor's veto clause 3 of the 8 Alaska Constitution because the RLC payments flow directly from a locality to its 9 10 school district and thus takes place outside of the legislative appropriation process? 4) If the RLC is unconstitutional, should the court order a refund of the Borougb's 2014 11 RLC payment under theories of assumpsit or restitution? 12 STATEMENT OF FACTS 13 14 The State of Alaska is constitutionally mandated to "establish and maintain a system of 1s public schools." 4 Title 14 of the Alaska Statutes governs school administration 5 Alaska 16 manages its public schools through a system of school districts. 6 Alaska has 53 school districts. 17 Each of Alaska's I 9 organized boroughs constitutes a borough school district. Likevvise, each 18 of Alaska's 15 home-rule and first-class cities within an unorganized borough constitutes a city 19 school district. The court will use the term "municipal district" to refer to a school district 2o located in one of the previous two areas, i.e., a school district located within an organized 21 borough or a home-rule or first-class city. Finally, the remaining 19 school districts are within 22 23 24 25 :Alaska Cons!. art. XI, § 7. "Alaska Cons!. art. IX,§ 13. 3 Alaska Cons!. art. ll, § J 5. 4 Alaska Cons!. art. Vll, § I. 5 See AS 14.03.010 (establishing a system of public schools within the state). 6 See AS 14.!2.01 0. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, IKE- I 4- I 6 CI Page 2 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 67 of 93 1 the areas of unorganized boroughs that are exclusive of home-rule or first-class city districts. 2 Those final school districts are divided into State created regional educational attendance areas 3 (REAA). 7 The Ketchikan Gateway Borough School District (KGB School District) is located 4 within a municipal district. s Alaska Statute Title 14, Chapter 17 outlines the State aid for which a public school is 6 eligib!e 8 Each public school district is funded through three primary sources: state aid, a 7 required local contribution, and eligible federal impact aid 9 The composition of this funding s depends on whether the schools within the district are located within a municipal district or a 9 REAA. 10 The calculation of necessary education funding for a given fiscal year always starts 10 with a computation of a school district's "Basic Need." This occurs regardless of where the 11 school district is located (whether it is in a municipal district or REAA). 12 The Basic Need formula is set by statute. 11 To calculate a district's Basic Need, the 13 district starts by calculating the adjusted daily membership (ADM) of each school in the 14 district 12 The ADM is then multiplied by the district cost factor, a factor set by statute. 13 Then 15 the ADMs of each school in the district, as adjusted based on the prior calculations, are then 16 added together. The sum is then multiplied by several factors, which look at the special needs 17 funding the district as a whole requires. These factors take into account things that make the 18 cost of education more or less expensive in a district. Among the factors are: the cost of any 19 vocational or technical instruction provided by the district, the number of correspondence 20 7 REAAs are established under AS 14.08.031(a). The court recognizes that although the State is constitutionally mandated to "establish and maintain a system of public schools," it is not mandated to fully fund public schools. See AS 14.17, noting several times thai public ;chool districts are ""eligible" for, not entitled to, State aid. ·AS l4.l7.4JO(b). 8 22 23 10 24 25 Jd. "See AS 14.17.410. 12 See AS 14. J7.450 for the calculation used to reach a dislrict's ADM. The calculation is based on the number of students in average daily attendance during a student count, plus other weighted factors. 13 AS 14.17.460. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaska, lKE-14-16 Cl Page 3 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 68 of 93 1 students, and other associated economies of scale 14 Those calculations yield a school district's 2 Basic Need. 3 As stated previously, there are three sources of funding that may be used to fulfill a 4 school district's Basic Need: State aid, eligible federal impact aid, and a required local s contribution. 15 6 Every school district is eligible for State aid for the operation of its district. 16 State aid is 7 paid from the Public Education Fund. This fund consists of funds appropriated for education by s the Alaska State Legislature. 17 If the Public Education Fund contains insufficient funds to make 9 full payments of the calculated State aid requirement, the Alaska Department of Education and 10 Early Development is required to reduce each district's Basic Need on a pro-rata basis. 13 11 The RLC is at the heart of this lawsuit Municipal districts must fund a portion of their 12 school districts' Basic Need. 19 This is accomplished through an annual RLC payment from the 13 municipal district directly to its school district 20 RLC payments do not change the amount of 14 Basic Need required to fund a district's schools. Therefore, when a municipal district pays the 15 RLC, the district's Basic Need is partially fulfilled, which in tum reduces the State's Basic 15 Need obligation. 17 The amount of a municipal district's RLC payment is 2.65 mills of the full and true 18 value of taxable real and personal property 21 in the municipal district in the second prior fiscal 19 20 14 AS l4.l7.4IO(C)and AS 14.17.420. AS l4.17.4!0(b). 16 AS 14.17.410. 17 AS 14.17.300. IS AS l4.17.400(b). 19 AS 14.17.41 O(b) and !4. 12.020( c). AS 14.12.020(c) in particular highlights the mandatory nature of the RLC. It provides: "[a municipal district] shall provide the money that must be raised from local sources to maintain and 15 21 22 23 operate the district.., See Brandt-Erichsen Aff.1[ 10 (Feb. 6, 2014). 20 21 25 Taxable real and personal property in the district means such property within the city of Ketchikan and the Borough because the city and the Borough constitute the district. Taxable real and personal property "means all real and personal property taxable under the laws of the state." AS !4.17.990(7). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, 1KE-14-16 Cl Page 4 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 69 of 93 year of the fiscal year at issue. 22 The RLC is capped at 45% of a municipal district's Basic 2 Need in the preceding fiscal year 23 If a municipal district fails to make its RLC payment, State 3 aid for education funding "may not be provided" to a municipal district. 24 In addition, the 4 municipal district will be disqualified from receiving supplemental funding under AS 5 14.17.490. 6 The expected fiscal year (FY) 2014 Basic Need for the KGB School District is 7 $25,947,546 25 Using the statutory formula set forth above, the Borough's FY 2014 RLC is 8 $4,198,727. 26 The Borough paid its RLC to the KGB School District on October 9, 2013 27 On 9 that same date, the Borough sent a letter to Commissioner Hanley and attached a copy of the 10 check it sent to the KGB School District. 28 The letter noted that the Borough was making its ll RLC payment "under protest" and recited the Borough's belief that the RLC was 12 unconstitutional. 29 13 On January 13, 2014, the Borough filed suit against the State alleging that the RLC 14 violates the Alaska constitutional prohibition against dedicated funds 30 and arguing that the 15 RLC unconstitutionally circumvents the constitutional provisions setting forth the legislature's 16 appropriation power31 and the governor's veto power. 32 The Borough filed a Motion and 17 18 19 20 21 22 23 24 25 22 AS 14.17.410(b)(2). AS 14.17.410(b)(2). 24 AS 14.17.410(d). 25 See Brandt-Erichsen Aff. ~ 3(Feb. 6, 20 14). 26 !d. Because of certain optional property tax exemptions, the actual taxable value of real and personal property in the Borough was lower than the full and true value of that property. Therefore, the RLC equates to an actual mill levy of3.19 on the FY 2014 taxable property within the Borough. The Borough paid an additional $3,851,273 to the !:;GB School District in optional local contributions and in kind contributions allowed by AS 14. J 7.410(c). -'-' The Borough paid the RLC, and other expenditures, through an area wide property tax levy of 5 mills and an area wide sales tax levy of2.51!10. !d " !d. 29 !d. 30 Alaska Const. art. XL§ 7. 23 31 Alaska Const. art. IX,§ 13. 32 Alaska Canst. art. II. § J 5. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borous:h v. State of Alaska, lKE-14-16 CI Page 5 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 70 of 93 1 Memorandum in Support of Motion for Summary Judgment on February 6, 2014 seeking the 2 relief outlined in the introduction section. The State filed an Opposition to Ketchikan Gateway Borough's Motion for Summary 3 4 Judgment and Cross Motion for Summary Judgment on March 28,2014. 5 The Borough filed its Reply on April 28, 2014. On that same date, the Fairbanks North 6 Star Borough tiled a Reply in Support of Plaintiffs' Motion tor Summary Judgment and 7 Opposition to Defendants' Cross Motion for Summary Judgment. The State filed its Reply Brief in Further Support of Cross Motion for Summary 8 9 Judgment on May 23, 2014. Oral argument on the dueling motions lor summary judgment was held on June 2, 2014. 10 ll DISCUSSION Alaska Civil Rule 56( c) provides that summary judgment should be granted if"the 12 13 pleadings, depositions. answers to interrogatories, and admissions on file, together with the 14 affidavits, show that there is no genuine issue as to any material fact and that any party is entitled 15 to a judgment as a matter of law'' The moving party "must show that there are no genuine issues 16 of material fact and that it is entitled to judgment as a matter oflaw. In detem1ining whether 17 there is a genuine issue of material fact, all reasonable inferences of fact from proffered materials 18 must be drawn against the moving party and in favor of the non- moving party''33 Once a 19 moving party has met its burden, the party seeking to avoid summary judgment must "set forth 20 specific facts showing that [it] could produce admissible evidence reasonably tending to dispute 21 or contradict the movant's evidence, and thus demonstrate that a material issue of fact exists." 34 22 23 33 24 25 Reeves v. Alyeska Pipeline Serv. Co., 926 P.2d 1130. l 134 (Alaska 1996) (citations and internal quotations omitted). 34 Slil/ v. Cunningham, 94 P.3d II 04, I 108 (Alaska 2004) (quoting Philbin v. Matanuska-Susitna Borough, 991 P.2d 1263,1265-66 (Alaska 1999)). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaskq, 1KE-14-16 Cl Page 6 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 71 of 93 In this case, the material facts are not in dispute. In their cross motions lor summary c judgment each party presents multiple legal arguments. 2 3 a) The RLC is a "proceed[] of any state tax or license" because it a source of public revenue. I' There are two steps the court must engage in determining whether the RLC violates the 5 dedicated funds clause. The first requires the court to determine whether the funds at issue are 6 " ,, "proceeds of any state tax or license" so as to be subject to the dedicated funds clause. If the 8 answer is yes, the court must then determine whether those funds are dedicated to a particular 9 purpose. 10 The Borough argues that the RLC is a "proceed[] of any state tax or license" because it ll is a source of public revenue. The State disagrees, arguing that the RLC is not a source of 12 rewo"' ;obj ed <o <he dedi'""' fimd; d '= biT'"" tl;e RLC '""'; O; of Icc«i, "" ;Cek, I 13 money. The comi finds that the RLC is a "proceed[] of any state t<L'X or license" and is therefore 14 subject to the constraints of the dedicated funds clause. lS 16 Article IX, section 7 of the Alaska Constitution states, 17 The proceeds of any state tax or license shall not be dedicated to any special purpose, except as provided in section 15 of this article or when required by the federal government for state participation in federal progran1s. This provision shall not prohibit the continuance of any dedication for special purposes existing upon the date of ratification of this section by the people of Alaska. 18 19 20 This section "prohibits the earmarking of state funds for predetermined purposes. " 35 21 The Alaska Supreme Court has held that "there is no doubt that [the clausel was intended to 22 prohibit any and all dedications." 36 23 24 35 25 36 See Southeasi Alaska Conservation Council v. State, 202 P.3d 1162, ll67 (Alaska 2009). Sw!e v. Aiex, 646 P.2d 203,210 (Alaska 1982). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, lKE-14-16 CI , Page 7 of26 Alaska Court System 12-01-2014 Borough Assembly Packet il ~ Page 72 of 93 The two primary motivations for enacting the clause were I) to promote the "scope and l 2 3 flexibility" afforded by having a general fund instead of specifically eannarked funds, and 2) to prevent the abdication of legislative responsibility that earmarking creates" 37 Most of the litigation surrounding the dedicated funds clause has focused on the 5 meaning of the phrase "the proceeds of any state tax or license." 6 The section as originally drafted by the framers stated that "all revenues shall be 7 deposited in the state treasury without allocation for special purposes." 38 This language was 8 later changed to the current "proceeds of a state tax or license" language. But the Alaska 9 Supreme Court in State v. Alex found that "the change did not seek to exempt some sources of 10 revenue from the prohibition" and that the consistent use of the words revenue, funds, and taxes ll interchangeably during the drafting process indicated that the section was intended to prohibit 12 the dedication of any source of revcnue 39 In Alex, the Alaska Supreme Court held that royalty assessments on the sale of salmon 14 15 which were collected by private aquaculture associations under power granted to the 16 associations by a state statute were "proceeds of any state tax or license''40 The statute at issue 17 in Alex provided for an assessment on the sale of salmon by commercial fishermen to 18 processors 41 The assessments were levied for the purpose of providing revenue for the 19 associations 42 The associations were private entities set up to enhance the efficiency of salmon 20 21 ~~ !d. at 209. 22 3& Id 39 23 24 25 Jd at 210. The Attorney General's Opinion also stated, after studying the debate of the constitutional convention on the section, that the section "can be given its intended effect and serve its repeatedly expressed purpose only if the words <proceeds of any tax or license' arc interpreted to mean \Vhat their framers clearly intended, i.e., the sources of any public revenues.'·- 1975 Formal Op. Atty. Gen. No.9, at 24 (May 2, 1975). "Alex. 646 P.2d at210. 41 !d at 205. 42 !d. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska. I KE-14-16 CI Page 8 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 73 of 93 ij I!II l I II production and processing in a given region 43 Commercial fishennen brought suit against two I I 2 I of unconstitutional because. among other reasons, the statute violated the dedicated funds clause 3 4 the private aquaculture associations and the state arguing that the assessments were I' 44 In siding with the fishermen, the Alaska Supreme Court rejected the state's contention 5 that the assessments were not "proceeds of a state tax or license''45 In reaching that conclusion, 6 the court examined the history of the dedicated funds clause. As stated, the court noted that the 7 language of the clause changed from its original draft to the current "proceeds of a state tax or 8 license" language, but the court in Alex found that "the change did not seek to exempt some 9 sources of revenue from the prohibition'' and that the consistent usc of the words revenue, 10 fimds, and taxes interchangeably during the drafting process indicated that the section was ll intended to prohibit the dedication of any source of revcnuc. 46 The court cited the definition an 12 Attorney General's Opinion gave to the phrase which "the proceeds of any state tax or license" 13 to include "the sources of any public revenues" including a "tax, license, rental, sale, bonus14 15 royalty, royalty, or whatever. .. " 47 Accordingly, given the court's broad interpretation of the 16 phrase, the court held that the salmon assessments required under the statute constituted 17 "proceeds of a state tax or license" within the meaning of article IX, section 7, and were 13 therefore an unconstitutional dedication 43 19 The Alaska Supreme Court has had several opportunities to reexamine the dedicated 20 funds clause over the years, and has consistently held that the explicit exceptions contained in 21 the clause and in the an1endment to the clause indicate "that the prohibition [against dedicating 22 23 24 25 " !d. at 206. "!d .1) !d. 46 !d "'!d. at 210. ,, !d. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatcwav Borough v. State of Alaska, JKE-14-16 CI Page 9 of 26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 74 of 93 funds] is meant to apply broadly.d 9 The court has even gone so far as to note that "the reach of 1 the dedicated funds clause might be extended to statutes thaL while not directly violating the 2 clause by dedicating revenues, in some other way undercut the polices underlying the clause." 3 50 4 In addition to the clause at issue in Alex, the Alaska Supreme Court has held that 5 revenues from the Alaska Marine Highway System, 51 the sale of future income from a 6 settlement claim, 52 revenue from assessments on the sale of salmon,' 3 proceeds from the sale of 7 state land, 54 and funds generated by a local bed tax 55 are all "proceeds of a state tax or license." 8 The Borough relies heavily on Alex and argues that the RLC is ''materially 9 indistinguishable'' from the assessments in that case. In both cases, the Borough argues, a state lO statute required payments to fund a particular source. In Alex it was to the private aquaculture ll associations and in this case it is to the Borough School District. Furthermore, the Borough 12 points out that in Alex the funds were never deposited into the State treasury but rather flowed 13 directiy from the fishermen to the associations. The court in Alex, the Borough argues, was not l4 concerned with the fact that the fi.mds never entered the State's coffers and this court should not 15 be concerned over the direct payment of the RLC to the School District here either. 16 17 The State argues that the RLC does not run afoul of the dedicated fi.mds clause because 18 the RLC does not qualifY as a "proceed[] of any state tax or license." Although the State 19 acknowledges the broad meaning prescribed to the phrase under case law, the State argues that 20 the RLC is not a source of public revenue. The State contends that this is the case because of 21 what would happen if the RLC were no longer required. The State points out that the statutory 22 4 '! 5G 23 5 .Suurheast Alaska Consen·arion Council v. State, 202 P.3d 1 !62 (2009). jd_ S'onneman v. Hickel, 836 P.2d 936 (Alaska l992). 1'vfyers v. Alaska Hous. Fin. Corp., 68 P.3d 386 (Alaska 2003). 53 Alex. 646 P.2d al210. ~.:Southeast Alaska Conservation Council. 202 P ..3d at 1177. 55 City ofFairbanl:.s v. Fairbanks Con\Nlntlon & Visitors Bureau, 818 P.2d 1153 (Alaska l99l ). ; 52 24 1ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, I KE-14-16 Cl j Page 10 of26 Alaska Court System 12-01-2014 Borough Assembly Packet 1 I' Page 75 of 93 I 1scheme selling up the RLC "does not create a pot of money that is available f()r the legislature 1 l 2 3 to appropriate if it is not provided directly to school districts. " 56 Because the funds never go to the legislature and because the funds would not otherwise be available to the legislature if the 4 statute did not order the funds to be paid directly to the school district, the funds are not, in the 5 State's eyes, a source of public revenue that is subject to the dedicated funds clause. The State 6 also points to the Borough· s concern and objections regarding the RLC and argues that if the 7 RLC were a "proceed[] of any state tax or license," and not local revenue as the State contends, 8 then the Borough would not characterize the RLC as taking local money and the Borough 9 would not feel as though the State is .vronging the Borough by requiring this contribution. 10 The State distinguishes the RLC from the assessments at issue in Alex by arguing that 11 unlike in that case, where a set tax was established, 5 7 the statute here merely provides a fommla for the calculation of the RLC and leaves municipalities subject to the requirement t!·ee to raise 13 the funds as they see fit, whether through taxes or other means. The State points out that the 14 15 statutes at issue in previous dedicated funds clause cases all involved a two part scheme - both 16 the requirement of funds and the method of how to raise those funds 58 Such a system is not 17 present here because there is only the requirement that the Borough pay the RLC, but no 18 constraints on hov,; the Borough must raise the funds to fulfill that obligation. 19 Finally, the State contends that the purpose of the dedicated funds clause would not be 20 served by its application to the RLC. The State cites comments made by delegates at the Alaska 21 22 State's Opp. and Cross i\1otion for Summary Judgment at 1 1. The statute in A/e1; established a set tax at ''two or three per cent of the fair market value of the fish" that had to be paid to the aquaculture associations. Alex, 646 P.2d at207. .-.s See Southeast Alaska Conservation Council, 202 P.3d at ll77 (grant of state lands to the Univcrsit:yr of Alaska and directing \vhere those funds would go); Sonneman v. Hickel, 836 P.2d 936 (Alaska 1992) (establishing a specific fund for revenue raised by the Alaska Marine High\vay System): i\'(vers v. Alaska Hous. Fin. Corp., 68 P.3d 386 (Alaska 2003) (requiring the sale of future settlement revenue and the dedication of that revenue to a specific source). jt, 57 23 24 25 ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaska, 1KE- 14-16 Cl Page 1 I of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 76 of 93 Constitutional Convention reflecting delegates' concern that without the dedicated funds 1 2 3 clause, eannarking would occur and would curtail the legislature's exercise of budgetary controls. The State argues that such a danger docs not exist with the RLC. The RLC actually gives the legislature more control over its budget by leaving more money in the State's budget 5 because without the RLC. the State would have to contribute more to the funding of State 6 education programs. 7 The State's attempts to characterize a statute that requires certain municipal districts to 8 raise a substantial amount of funds and contribute those funds to a state program as a statute 9 that does not concern "proceeds of any state tax or license"' as defined by the Alaska Supreme 10 Court arc unpersuasive. As noted, the Alaska Supreme Court has consistently given that key phrase a broad definition, even citing with approval an Attorney General's Opinion that 12 concluded the dedicated funds clause was intended to cover "the sources of any public 13 revenues" including a "tax, license, rental, sale, bonus-royalty, royalty, or whatever ... " 59 14 15 (emphasis added). 16 The RLC plainly consists of public revenue. The State's assertion that the RLC is not a 17 source of public revenue because the statutory scheme only requires that the funds be raised, 18 but does not tell the municipal districts how to raise those funds, ignores reality. Notably, the 19 RLC is only applicable to municipal districts. As stated, municipal districts consist of organized 20 boroughs and home-rule or first-class citics. 60 Organized boroughs and cities have local taxing 21 22 power 61 It is hard to conceive of a way. and the State docs not propose any, whereby a municipal district could raise the funds necessarv- to fulfill its RLC obligation without resorting ~ ~ 23 24 25 59 Afe._.c 646 P.2d ar 210. wAS 14.JLOIO. 61 Alaska Cons!. art. 10, § 2. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, I KE-14-16 Cl Page 12 of 26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 77 of 93 to taxes. Indeed, that is what the Borough has done in this instance. 62 Funds raised through the 1 exercise of a municipal district's taxing power are clearly a source of public revenue as broadly 3 defined by the Alaska Supreme Court. 4 Even absent the fact that most.. if not all, municipal districts resort to local taxes to raise 5 the fund necessary to meet their RLC obligation, the RLC is a source of public revenue. If one 6 supposes that a municipal district's RLC fi.mds come directly from the district's colTers, and are 7 not raised by taxes, those funds are still "proceeds of any state tax or license" because the funds a 9 consist of money raised, in some way or another, by municipal districts. That is local money and that is public revenue. Under the Alaska Supreme Court's expansive definition of the 10 phrase "proceeds of any state tax or license," this is sufficient to implicate the constraints of the 11 dedicated funds clause. 12 The Alaska Supreme Court's analysis in State v. Alex is especially useful here. As in 13 that case, here vve are concerned with a state statute that directs that a certain amount of funds 14 15 be paid from one state organization to another. In Alex, the payee was a private organization set 16 up by state statute and the method of raising revenue was explicitly defined, but that only 17 makes the case for finding the statutory scheme here as dealing with "proceeds of any state tax 18 or license" all the more compelling. Here, rather than a private organization receiving funds 19 raised by individuals, we have one unit of government (the municipal district) raising funds at 20 the direction of another unit of government (the State) and paying those funds to a public 21 institution (the municipal district's schools). These facts only further illustrate the public nature 22 of the funds at issue. The State's attempt to distinguish Alex on the grounds that unlike in that 23 24 25 ~--·-~------------- 62 S'ee Brandt-Erichsen AtT c;flO (Feb. 6. 2014). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v_ State of Alaska, I KE-14-16 CI Page 13 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 78 of 93 case, municipal districts have the choice of how to raise the funds necessary to meet the RLC is 2 unpersuasive for the reasons discussed above. City ()( Fairbanks 63 is also helpful in resolving this question. In that case, the Alaska 3 4 Supreme Court held that a local initiative that expanded the pennissible uses of funds derived 5 from a bed tax to uses other than tourism was constitutional under the dedicated funds clause."' 6 The bed tax funds were clearly "proceeds of any state tax or license" and thus the question 7 before the court was whether the initiative set aside specific amounts of the funds for a specific 8 purpose in a way that was mandatory 65 As in that case, here we are presented with an entirely 9 local source of money. The fact that the funds in City of Fairbanks were the product of a local 10 bed tax did not matter in the court's detem1ination that the tax proceeds were "proceeds of any 11 state tax or license." Thus, the fact that the RLC is, essentially, a solely local matter and local 12 source of fi.mds, does not weigh in the court's consideration of whether the RLC consists of 13 funds subjected to the dedicated funds clause. 14 Finally, the nuanced questions analyzed by the Alaska Supreme Court in past dedicated 15 16 funds clause cases further illustrates the clarity of the issue here. Past cases dealing with this provision presented more complex issues such as whether the sale of future settlement income66 18 or whether the proceeds of land use or sales transferred from the state to a state university 67 19 qualified as "proceeds of any state tax or license." Here, the court is focused on local revenue 20 raised to fi.1lfill a municipal district's required contribution to that district's education facilities. 21 22 This is a much clearer issue than Mvers or Southeast Aiaska Conservation Council. t(!r example. In contrast to those cases where there was a multilayered statute involving items that 23 63 24 25 818 P.2d 1153 (Alaska 1991). "/d. at I 158. 65 !d 66 ;\Iyers v. Alaska Hous. Fin. Corp., 68 P.3d 386 (Alaska 2003). c; Southeast Ala.Yka Conservation Council v Swte, 202 P.3d 1162 (2009). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Boromzh v. State of Alaska. 1KE-14-16 Cl Page 14 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 79 of 93 were later transformed into money (settlement revenue or land sales), here there is clear 1 2 3 direction from a state statute requiring mw1icipal districts to contribute money to their school districts. There is no need to parse the statute as was required by lvfyers or Southeast Alaska 4 Conservation Councii, for example, because the scheme here much more clearly and directly 5 involves local money. As stated, this local money qualifies as "proceeds of any state tax or 6 license'" and is thus subject to the restrictions of the dedicated funds clause. 7 8 9 b) The RLC is a dedicated fund because the funds arc earmarked for a specific purpose and cannot be used in any other way. As stated, after the court detem1incs that the RLC is a "proceed[] of any state tax or 10 license,'" the court must then detcm1ine whether the RLC is dedicated to a specific purpose. ll This question is easier to answer than the first issue. Yes, the RLC is dedicated to a specific 12 purpose. This is evident even from a cursory reading of the statute. The statute explicitly 13 requires that municipal districts pay the RLC directly to their respective school districts 14 annually. 68 15 The statute clearly dedicates the RLC to municipal school districts. Like the bill in 16 Southeasr Alaska Conservation Council that explicitly committed land and proceeds to a 17 specific fund, the Myers case which did the same but with settlement revenue, and Sonneman v. 18 Hickel which established a special fi.md for Alaska Marine Highway Revenue, 69 the RLC is l9 committed by statute to a specific fund - the municipal school district's budget. Neither side 20 21 22 substantially addresses this point at all. likely in recognition that most of the debate in this case involves the definition of"procced[J of any state tax or license." 23 24 25 "'AS 14.17.410. m 836 P.2d 936 (Alaska 1992). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaska, 1KE-14-16 Cl Page 15 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 80 of 93 The tact that the RLC never passes through the State treasury is inconsequential. It l actually provides further support for the dedicated nature of the RLC. For example. in Cily of 3 Fairbanks, the Alaska Supreme Court noted that the initiative that removed restrictions fix the use of the proceeds of the bed tax was best thought of as "an 'undedication' than a 5 dedication-"' 0 Also relevant to the court's analvsis was its finding that the initiative at issue 6 "did not infringe on flexibility in the [city's J budget process." 71 Here, unlike in Ciry of 7 Fairbanks. the RLC funds arc not available for use throughout the Borough but rather are 8 earmarked for specific use at the Borough's schools. This setting aside of funds infringes 9 0 - greatly on the Borough's flexibility in budgeting and further illustrates the dedicated nature of these funds. 11 c) The RLC is a dedicated fund but it is not exempted from the dedicated funds clause because it was not in existence at the time the Alaska Constitution was ratified. 12 l3 The dedicated funds clause provides an exemption for pre-Statehood dedications. The l4 15 clause states: "This provision shall not prohibit the continuance of any dedication for special 16 purposes existing upon the date of ratification of this section by the people of Alaska'' 72 One 17 Alaska Attorney General Opinion concluded. after analyzing the minutes from the Alaska 18 Constitutional Convention, that any repeal or repeal and re-enactment of a dedication after 19 ratification "takes the dedication from under the protection of the grandfather clause ... " 73 20 70 8 I 8 P.2d !!53. I 158-59 (Alaska !99! ). ld 71 Alaska Const. art. IX,§ 7. 73 1959 Op. Any. Gen. No.7, at l-:2 (March 1 l, 1959). l'he Borough cites to several more recent Attorney General Opinions !hat !ike1-vise hold that a grand fathered dedicated fimd must have existed before Statehood and that such pre-existing dedications lose their grandfather status. once repealed (even if repealed and re-enacted). See 1992 Informal Op. Atty Gen. vol. l at 33 (Jan. !2, !990, re-datcd Jan. I. !992): !992 lnfom1al Op. Atty. Gen. vol. I at 31 (Sept. I I. !989, re-dated Jan. !. !992). it 23 24 25 ORDER ON CROSS MOTIONS FOR SUMMARY .JUDGMENT Ketchikan Gateway Borom?:h v. State of Alaska. lKE-14-16 Cl Page 16 of 26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 81 of 93 The State argues that even if the court found that the RLC were a dedicated fund, it 1 would be exempted from the dedicated funds clause under the exemption for dedicated funds 2 existing at the time of ratification. The State argues that similar statutory provisions requiring a 3 4 local contribution to a locality's school district have been in existence since the Territorial 5 days. Therefore. if the court found the RLC were a dedicated fund, it would qualify for the 6 exemption from the dedicated funds clause. 7 The Borough argues that the RLC cannot be grandfathercd in as a pre-existing 8 dedication because 1) the RLC was enacted after Statehood (enacted in 1962) and 2) even if 9 pre-Statehood laws were dedications (which the Borough rejects) all previous similar 10 Territorial laws were repealed when the RLC was enacted. ll The Borough then discusses the Territorial laws proposed by the State as being similar 12 to the RLC 74 The Borough argues that under the law analyzed by the State, municipalities were 13 free to contribute as much as they deemed fiscally responsible and then the Territory would 14 reimburse the municipalities. This is in contrast to the RLC, in the Borough's view, because the 15 16 RLC compels a set an1ount and docs not let municipalities usc their independent judgment as to 17 how much to contribute to local schools. 18 Even if the Territorial laws were dedications, the Borough argues that their grandfather 19 status was extinguished when they were repealed and replaced by the education funding 20 scheme (including the RLC) enacted in 1962. The Borough cites to the aforementioned Alaska 21 Attorney General opinion for support and asks the court to reject the State's argument that the 22 RLC is protected by the clause· s exemption tor pre-ratification dedicated funds. 23 24 25 74 II Both parties attached copies of the Territorial la\.VS discussed. ORDER ON CROSS MOTIONS FOR SUMMARY .JUDGMENT Ketchikan Gateway Boroue!h v. State of Alaska. lKE-14-16 Cl 12-01-2014 Borough Assembly Packet Page 17 of26 Alaska Court System Page 82 of 93 The court agrees with the Borough on this issue and finds that the RLC does not qualify : li for the exemption for dedications in existence before the Alaska Constitution was ratified. For 4 I one, the Territorial laws were more pem1issive with regards to local contribution requirements I than the RLC here. For example, the Tenitorial laws allowed the localities to detennine how 5 much to contribute to education and then the Territory would reimburse a percentage of those 6 expenditures. That is contrasted here with the set mandatory amount of the RLC. Thus, the 7 RLC has not been in existence since Territorial days. 3 8 9 Second, and more importantly, those laws were repealed and replaced by the RLC and other education funding law in 1962. Alaska Attorney General Opinions conclude that pre- 10 Statehood exemptions under the dedicated funds clause are extinguished when the law is 11 repealed, even if it is later re-enacted. 75 There are no cases that address this exemption portion 12 of the dedicated funds clause, and therefore the Attorney General Opinions are the most 13 persuasive authority available to this court on this issue. The logic employed in those opinions 14 15 makes sense when applied to this situation as well. Merely because localities have always been 16 statutorily mandated to contribute to the funding of their schools should not mean that the RLC 17 which was enacted after Statehood, should be exempted from the dedicated funds clause. In 18 sum, because the RLC was not in existence before Alaska's constitution was ratified and 19 because the pre-Territorial education funding law was repealed and replaced in 1962 (which 20 included the statue enacting the RLC), the RLC does not qualify for the exemption found in the 21 dedicated funds clause. 22 d) The RLC does not violate the legislative appropriations clause or the governor's veto clause because the funds are not involved in the appropriations process 23 24 25 ' 5 1959 Op. Any. Gen. No.7, at 1-2 (March II, 1959). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatcwav Borough v. State of Alaska, I KE-14-16 Cl Page 18 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 83 of 93 The court wi II address the remammg two claims ~ that the RLC violates th l Iappropriations 2 clause and the governor's veto clause ~ together because the parties presen 3 iIvirtually identical arguments 4 II violate either of these constitutional provisions because the RLC does not enter the state treasury with respect to both claims. The court finds that the RLC does no1 sjl (and its failure to do so likewise does not violate these clauses) and because the RLC is not a I 6 • • I appropnatlon. Article IX, section 13 of the Alaska Constitution, the appropriations clause, states: : II 10 No money shall be withdrawn from the treasury except in accordance with appropriation_ made by law. No obligation for the payment of money shall be incurred except a.: authorized by law. Unobligated appropriations outstanding at the end of the period o time specified by law shall be void. ll The notes of decisions concerning this clause have to do with items such as specia -6 I -- 12 funds 1 and the scope and manner of municipal appropriations. 11 There are no cases analogous t9 13 the situation at hand. Black's Law Dictionary gives the following meanings to the 14 appropriation: "A legislative body's act of setting aside a sum of money for a publiJ 15 purpose ... The sum of money so voted." 78 Similarly, Black's includes the following definition o I 16 tern~ II appropriations bill: "A bill that authorizes governmental expenditures.'·'-9 The Alaska Suprem ICourt has defined an item in an appropriations bill as "a sum of money dedicated to a particula 17 18 I purpose. " 80 19 The only mention of the appropriations clause in the context of a dedicated fund that th / 20 21 22 23 24 I court could t!nd was a citation to a comment made by a state official in the dissent of kfyers. Th ~~ ;, Cw·r-Goustein Prop.. v. Swre.-899 P.2d 136 (Alaska 1995) (holding that private funds, deposited into an Ii ac.im:ms:_ratJVC agencys acc~unt ~nd subject to the agcncy·s :nstructwns, ~o not c?nstttute unrestncte? ·:program ~~ce1pts · that must be dcposned m the state treasury and subject to the legJs!ature- s power of appropnatJOn). ,, A4unicipa!ity ofAnchoragr:: v. FJ·ohne, 568 P.2d 3 (Alaska 1977) (interpreting the charter of the municipality of 1 ~\nchorage 25 as allowing the municipality to make appropriations outside of the ordinance process). BLACK·s LAW DlCTlONARY !23 (lOth ed. 20!4'1. 70 j BLACK·s LAW DICTIONARY !96 (lOth cd. 2014). I ,s II"' Alaska Legis/arive Council v. Knowles, 21 P.3d 367, 373 (;\ Iaska 200 I). I ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT I Ketchikan Gatewav Borough v. State of Alaska, I, Page 19 of26 I KE-14-16 CI Alaska Court System 12-01-2014 Borough Assembly Packet Page 84 of 93 5 6 7 The g~vemor may veto bills passed by the legislature. l-Ie may, by veto, strike or re~uct 1 Items m appropnat10n bills. He shall return any vetoed bilL w!lh a statement of l11s objections. to the house of origin. 8 9 The Alaska Supreme Court has interpreted this clause as a safeguard against "conupt o 10 hasty and ill-considered legislation," and as a power granted "to preserve the integrity of the 11 executive branch of government and thus maintain an equilibrium of governmental powers." 8' 12 The governor's veto power applies only to monetary appropriations, as defined above 83 13 The case law interpreting this clause has focused on the different meaning ascribed to tlr 14. term appropriation when dealing with a citizen's initiative versus a bill originating in th 15 16 legislaturc, 84 and whether a governor properly exercised the veto 85 As stated, there are n 17 analogous cases in which the Alaska Supreme Court has discussed a challenge to a 18 scheme on the grounds that it violates the governor's veto clause in the context of a suit als 19 challenging the statute or action on the grounds that it violates the dedicated tl.mds class too. AI 20 23 24 2 51 1 A4yers v. /Uaska Hous. Fin Corp_, 68 P.3d 386, 399-400 (Alaska 2003) (Justice Bry11cr and Justice Fabe dissenting). "State v. A.L.I. V.E. Voluntary. 606 P.2d 769, 772 (Alaska 1980) (internal citations omined). 83 Alaska Legis/alive Council ex ref. Alaska State Legislature v. KnoFdes, 86 P.3d 891, 895 (Alaska 2004) (holding that a bill which transferred land and the income derived from that land to the University of Alaska \Vas not an appropriation subject to the governor's enhanced veto power (requiring a three-fourths vote of the legislature to override the veto under article 11, section 16) because the bill presented a non-monetary asset transfer v,'hich is not an appropriation as defined by the court). ~,J Alm;ka Legislative Council ex. ref. Alaska State Legislature, 86 P.3d at 894~95 (Alaska 2004). ;:;s S"impson v. 1Hurko.,.<v·ski. 129 P.3d 435 (Alaska 2006) (holding that the governor's line item veto of a budget appropriation was authorized by the constitution)~ Alaska l.egislative Council, 21 P.3d 367 (Alaska 2001) (holding that the governor sufficiently stated his objections to vetoed items in appropriations bill). ::; 22 fundin~ I ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, 1KE-14-16 CI Alaska Court system 12-01-2014 Borough Assembly Packet IPage 20 of26 Page 85 of 93 II il I I of I 1 2 the cases interpreting this clause concerned more direct cases of bills coming fi·om th ~ ~ !legislature or ballot initiatives that directly required the outlay of state funds. None of them deal vvith the negative appropriation argument we have here. where the Borough argues that the fac 3 that the RLC is never subject to the appropriations clause or governor's veto clause thereby 4 s l1 violates those provisions. I 6 Unlike the arguments advanced related to the dedicated fi.mds clause, both parties presen 7 virtually no case law to support their arguments related to the appropriations clause or th· 8 governor's veto clause. The Borough argues that the RLC violates the appropriations clause an 9 the governor's veto clause because when it compels a direct transfer of public fi.mds from th · 10 Borough to the Borough School District it effectively circumvents the legislature and the .L.L legislature's ability to appropriate the funds to the school district or to other means and the 12 governor's ability to veto items in appropriations bills. 13 The State argues that the appropriations clause and the governor's veto clause do no 14 apply for the same reason the dedicated funds clause does not apply- the RLC is not a source o 15 16 public revenue. The State argues that the RLC is local money, over which the legislature has n 17 authority to appropriate and thus the governor has no authority to exercise his veto over. Th 18 State contends that the legislature may only appropriate funds from the State treasury 19 because the RLC is comprised of Borough funds, the legislature has no power over it 20 therefore the appropriations clause is not violated. The State points out that the governor', 21 authority to strike out or reduce an item in an appropriation bill is limited to appropriations tha are authorized by the legislature. Because the RLC is not an appropriation from the legislature 23 the governor has no authority over the funds and the governor's veto clause docs not apply. Th 24 State docs not address the case law referenced by the Borough. 25 . I i1 ORDER ON CROSS MOTIONS FOR SUMMARY .JUDGMENT Ket-chikan Gatewav Borough v. State of Alaska, lKE-14-16 CI Pagc21 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 86 of 93 The RLC is clearly not an appropriation as defined by the Alaska Supreme Court or by 1 2 3 Black's Law Dictionary. It is plainly not a "sum of money so voted." 86 Simply because th icgislature enacted the RLC statute does not mean that the RLC is an appropriation as the tem1 i.. 4 commonly used. As stated, the appropriations clause and govemor's veto clause only apply t 5 appropriations. Because the RLC is not an appropriation, those clauses do not apply. The Borough's argument that the RLC violates these constitutional provisions because of 6 7 the Jack of opportunities for the legislature to appropriate the funds another way, or for th 8 govcmor to veto an appropriation of the funds, is unpersuasive. The appropriations clause an 9 governor's veto clause clearly require an appropriation before they apply and the argument tha 10 the Jack of an appropriation violates those provisions is too tenuous for the court. 11 The court docs not adopt all of the State's arguments on these clauses, though. The RLC 12 can still be a source of public revenue for purposes of the dedicated funds clause while als 13 being considered a source of funds that is not an appropriation for purposes of the appropriation.: 14 15 clause and governor" s veto clause. To hold otherwise would mean that any outlay of local fund· 16 at the direction of a state statute violates these two clauses. Thus, the court's holding that the 17 RLC is a source of public revenue for purposes of the dedicated funds clause is not incongruou 18 with its holding here, that the RLC is not a source of funds subject to the appropriations clause o 19 govcmor' s veto clause. 20 21 22 Lastly, the RLC does not run afoul of the purposes of either of these provisions. Bot! strive to ensure that public funds are not spent without legislative approval or without a fina check on an errant legislature. Here, while although there is a statute that directs municipal 23 districts to spend funds, the statute was enacted through the legislative process and protected by 24 25 36 BLACK'S LA\V DtCTIONARY !23 (lOth ed. 2014). ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaska, lKE-14-16 Cl Page 22 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 87 of 93 all of the safeguards that provides. Thus, the RLC was not enacted without legislative oversigh 1 2 3 4 5 and the purposes of the appropriations clause or governor· s veto clause have been met. Tu impose additional burdens on the funding scheme here by virtue of its absence from th appropriations process would be unnecessarily duplicative. e) The Borough is not entitled to a refund under either a theory of assumpsit or restitution 6 This court has explained, supra, that the RLC is a dedicated fund. The Borough argues 7 the RLC reduced the amount the state must pay to support the Borough schools and therefore 8 9 was emiched by the RLC paymcnt 87 The state responds that it received no enrichment because 10 the RLC never passed through state coffers and in fact triggered a statutory obligation of the state ll to additionally fund Ketchikan Gateway Borough School District. 88 12 "Assumpsit will lie whenever the defendant has received money which is the property of 13 the plaintif[ and which the defendant is obliged by natural justice and equity to refund. " 89 14. Assumpsit is a quasi-contract cause of action to enforce a duty to repay 90 Alaska recognizes 15 actions in assumpsit and its common counts. 91 In order to later bring an action in assumpsit. the 16 17 18 19 20 21 23 24 25 s-; Pl.'s Reply in Support of MoL for Summary Judgment and Opp. to State's Cross iv1ot. for Summary Judgment at 16. 88 State's Opp. and Cross Motion for Summary Judgment at 11.at 2 J-22. 39 Bayne v_ US., 93 U.S. 642, 643 ( l 876) (Assumpsit is underpinned by principles of quasi-contract and unjust enrichment): Stale of Alaska Commercial Fisheries Entr;.' Comm 'n v. Carlson. 270 P.3d 755,765 (2012). 90 See American Surety Co. ofNe-.,v York v. A1u!tnomah Co., 171 Or. 287,325 (Or. 1943): RESTATEl'vlEN1 (THmD) OF RESTITUTION AND UNJUST ENRICHMENT § 70 (20 I I). 9 i State v IYakejle!d Fisheries. Inc .. 495 P.2d 166, 172 (1972), "The common Javl'· has long recognized a cause of action in assumpsit to recover overpayment of taxes" (overruled on olher grounds bJ' Principal A-fut. Life Ins. v. Swre Div. of Ins., 780 P.2d I 023, I 030 (A Iaska I 989)). See also Stone v. White, 301 U.S. 532, 534 ( 193 7), "(l]t has been gradually expanded as a medium for recovery upon every fom1 of quasi-contractual obligation ln \vhich the duty to pay money is imposed by Jaw, independent of contract, express or implied in fact." ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gatewav Borough v. State of Alaska, l KE-14-16 CJ 23 of 26 III Page ~ Alaska Court System 12-01-2014 Borough Assembly Packet Page 88 of 93 paying party must fonnally protest at the time of payment. 92 Similarly, restitution is a remedy 1 2 that corrects unjust enrichment 93 Both pled theories of assumpsit and restitution rest on the doctrine of unjust enrichment. 4 Unjust enrichment occurs when one side is benefitted at a loss to the other. Alaska case law 5 recognizes three clements of unjust enrichment: 6 7 8 9 1. A benefit confened upon the defendant by the plaintiff: 2. Appreciation of such benefit: and ~. Acceptance and retention by the defendant of such benefit under such circumstances that it would be inequitable for him to retain it without paying the value thcreof 94 Classifying the RLC payment as an unjust enrichment to the state tums on the first prong. 10 Factually, one must determine whether the state received a benefit from the Borough's RLC 11 payment. On one hand, the Borough made the RLC payment directly to the Borough School 12 District. The money never passed through state coffers. This would support the state's argument 13 that there was no unjust enrichment because there was no type of enrichment at all. Further, the 14 payment of the RLC caused the state to release the remaining funding to the school district. The 15 Borough impliedly argues that without the RLC payment. the State of Alaska would have been 16 forced to contribute money in the place of the RLC payment to fully fund schools, and the 17 Borough's RLC payment lessened the state's obligations 95 18 This argument fails fix two reasons. First, neither party has argued that the Alaska 19 Constitution's education clause compels the state to fully fund all public schools in Alaska 96 20 ---92 Principal Mutual, 780 P.2d at I030. See also Era Aviation. Inc. v. Carnphell, 9 I 5 P.2d 606, 612 (1996) ("To later bring an action in assumpsit a payer must specifically notify the State, whether b;' the \VOrds 'paid under protest' or othcnvise, that it intends to seek reimbursement"). 9 ~ REST;\TFMENT (THIRD) OF REST!TUTlON AND UNJUST ENRJCHMENT § j cmt. a (2011). 94 Alaska Sales and Service, Inc. ))_ A4i!let, 735 P.2d 743, 746 (Alaska 1987). 95 "Because the state's obligations have been lessened by the Borough's payment under protest of an unconstitutional assessment, the Borough is entitled to a refund." PL's Reply in Support of Mot. for Summary Judgment and Opp. to State's Cross l\·1ot. for Summary Judgment at 16. ')ii See State's Opp. and Cross ivTotion for Summary Judgment at !8-2 J: Pl.'s Reply in Support of Mot. for Summary Judgment and Opp. to State's Cross Jv1oL for Summary Judgment at 10. -~~~~--~- 21 22 2l 24 25 ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaska, lKE-14-16 Cl 12-01-2014 Borough Assembly Packet Page 24 of26 Alaska Court System Page 89 of 93 Second, without this showing one cannot conclude the state received any benefit from KGB's 1 2 3 payment If on one hand the state has a duty to fully fund public schools, then perhaps the payment of the RLC to the Borough School District would indeed give the state an indirect benefit However, if the state has no duty to fully fund public schools and requiring a local 5 contribution viol ales no constitutional provision beyond the dedicated funds clause, then 5 payment of the RLC does not provide the state a tangible benefit 7 8 9 Because the Borough has failed to offer argument that the state has a duty to fully fund public schools and because the RLC payment was paid to the school district and not the state, a claim of unjust enrichment fails and the state need not pay the borough the amount of the RLC 10 payment under an action in assumpsit or restitution, ll 12 13 14 15 CONCLUSION For the reasons stated above, the Ketchikan Gateway Borough's motion for summary judgment is GRANTED in part because the court finds that the RLC is a dedicated fund i violation of the dedicated funds clause of the Alaska Constitution, The Borough is entitled to 16 declaratory judgment to this eiTect 17 The Borough's motion for summary judgment is DENIED, in part, because the cou 18 finds that the Borough is not entitled to fimds equivalent to the 2013 RLC payment unde 19 theories of assumpsit and restitution, 20 21 Further, the State of Alaska's cross motion for summary judgment is GRANTED, i 22 part, because the RLC docs not violate the governor's veto clause or the Icgislativ(; 23 appropriations clause of the Alaska Constitution, The State's cross motion for summary 24 judgment insofar as it relates to the dedicated tunds clause is DENIED. 25 IT IS SO ORDERED. ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Boromzh v, State of Alaska, !KE-14-16 Cl Page 25 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 90 of 93 1 2 3 4 5 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT Ketchikan Gateway Borough v. State of Alaska, lKE-14-16 CI Page 26 of26 Alaska Court System 12-01-2014 Borough Assembly Packet Page 91 of 93 Assembly - Regular Meeting Date: Submitted By: Department: Approved for Submittal: 12. b. 12/01/2014 Kacie Paxton Manager's Office Mike Houts, Finance Director Approved as to form: Cynna Gubatayao, Assistant Manager Dan Bockhorst, Manager Information TITLE Executive Session to Discuss Legal Strategy in Potential Litigation with the State of Alaska Regarding the Borough's 2014 Full Value Determination RECOMMENDED ACTION I move to recess into executive session pursuant to AS 44.62.310(c)(3) and KGBC 2.10.160(b)(2)(b) to discuss legal strategy in potential litigation with the State of Alaska regarding the Borough's 2014 full value determination. SUMMARY OF ISSUE On October 20, the Borough Assembly authorized an administrative appeal of the 2014 full value determination of the Ketchikan Gateway Borough. The appeal sought a $38,170,564 reduction in the 2014 full value figure based on the following: 1. The increase by the State Assessor to the taxable value for the State-owned Ketchikan Shipyard as reported by the Borough was unjustified and improper; 2. The failure of the State Assessor to trim outliers from the sales-ratio study used in the 2014 full value determination resulted in further flaws in the full value determination. 3. An inadequately small sample size in the sales ratio study used in the 2014 full value determination caused additional deficiencies in the State Assessor’s determination. 4. The State Assessor should have identified the failure to provide notice of assessment and an opportunity to appeal the valuation of the possessory interest in the Ketchikan Shipyard as an error requiring adjustment and change in assessment procedures. 5. The process contemplated by under AS 14.17.510, AS 29.35.170(a), AS 29.45.105, and 29.45.110 establishes a system of two classifications of municipalities which is arbitrary and capricious, and violates both due process and equal protection guarantees. In addition, it deprives the State of revenue to which it is entitled. 6. All Boroughs are required to assess real property within their boundaries under AS 29.35.170. Assessment by the State Assessor without first requiring assessment by a municipal assessor is an improper assessment practice which deprives those assessments of review. 7. Taken together, this process of dividing municipalities into two classes for assessment of full and true value violates due process and equal protection rights of citizens and municipalities due to: The fact that municipalities that assess real property are treated differently from those that do not for purposes of the standard to which full and true value assessments are held regarding review and notice of major errors, and what might constitute a major error. The fact that boroughs that are assessed by the State Assessor do not undergo review for 12-01-2014 Borough Assembly Packet Page 92 of 93 major errors or adjustment based upon ratios. The fact that the standards of Assessment which are applied to full and true value assessments by municipal assessors are far more strict than those for assessments by the State Assessor under AS 14.17.510. The fact that only municipalities which have municipal assessors are subject to recapture penalty provisions under AS 29.45.105(d). The fact that students in school districts that have municipal assessors, and the taxpayers in those districts, are subject to greater expenses due to the less rigorous assessments by the State Assessor resulting in lower per capita and per student assessments, thus costing more taxpayer money under AS 14.11.008, AS 37.05.560, and 14.11.025. 8. The lack of scrutiny of the State Assessor's assessments of full and true value in borough and city school districts that lack a municipal assessor, made pursuant to AS 14.17.510, result in a loss of State revenues under AS 14.17.410(b)(2) and higher state expenditures under AS 14.11.008, AS 37.05.560, and 14.11.025. 9. The inclusion of the Alaska Association of Assessing Officers as an ex parte participant in appeals under AS 29.45.105(c) violates due process. 10. Municipal assessments which follow the same level of analysis as those made by the State Assessor for those municipalities that lack an assessor are presumptively free from major errors in assessment procedures under AS 29.45.105. Because of ambiguities in the appeal process, as an exercise of caution, the Borough also filed an appeal to the Superior Court regarding the matter on November 3. On November 7, the Borough received a three-page “final decision” of the Commissioner of the Department of Commerce, Community, and Economic Development (DCCED) regarding the Borough’s appeal of its 2014 full value determination. The final decision addressed the ambiguities in the appeal process such that the Borough made a motion to dismiss the appeal filed in Superior Court on November 3. The Commissioner’s final decision also reduced the Borough’s 2014 full value determination by $2,207,000. The full value determination relates to the amount of the Borough's Required Local Contribution for schools under AS 14.17.410. On November 21, Judge William B. Carey ruled in favor of the Borough in its pending challenge of the State education funding scheme with a decision invalidating the Required Local Contribution on constitutional grounds. The issue before the Assembly at this point is whether to appeal the Commissioner’s final decision regarding the 2014 full value determination. Fiscal Impact Attachments No file(s) attached. 12-01-2014 Borough Assembly Packet Page 93 of 93
