City of Seward, Council, Economics, Featured

Council Passes Amended Electric Rates, Grants Seward Resort Renegotiated Lease, Spares Boys and Girls Club Cuts

by Kelley Lane for Seward City News-
City Clerk Brenda Ballou swears in newly elected Council Members Jeremy Horn and Suzanne Towsley and re elected Sue McClure. Photo: Kelley Lane.

Monday night’s three-plus hour City Council meeting began promptly at 7pm in Council Chambers with Police Lieutenant Doreen Valadez leading the full house in the Pledge of Allegiance. Next on the agenda was the official swearing in of newly elected officials. David Squires, previously a council member, was sworn in as Seward’s new mayor. Newly elected council members Suzanne Towsley and Jeremy Horn and re-elected member Sue McClure recited the council oath. Acting City Clerk Brenda Ballou administered the oath. Contract negotiations to hire Ballou formally as City Clerk from her previous role as Deputy City Clerk are underway. 

The Citizen Comment portion of the evening included eight different Seward locals speaking on topics dear to their hearts. Among them was Aaron Brill, of Silverton Mountain Guides, who spoke about his company’s three year history of heli skiing business based out of Seward. The US Forest Service is considering a limited opening of inland lands to a heli skiing operation through a lottery system. Brill requested Seward’s support in the form of attendance at a meeting to be held on Thursday night at the Seward Library and Museum. Phil Kaluza talked enthusiastically about the potential for heat pumps, which use electricity to compress heat from the outside air into warm forced air, to provide an economical heat source in Seward. He suggested that selling more electricity would be good for Seward’s local utility, and that the systems could pay for themselves by saving heating fuel costs. Tim McDonald said City Council should “farm out the shipyard” [the Seward Marine Industrial Center (SMIC). “It’s an extremely valuable asset that should be high performing,” he said. McDonald explained that he would like to see SMIC set up in a similar way to how Alaska’s permanent fund is structured, including the annual dividend awarded to residents.

Deborah Altermatt, retiring City Council Member, joined Mayor David Squires at the lectern to be awarded a plaque recognizing her service on Seward City Council. Altermatt graciously accepted and posed for pictures while the audience applauded.

Chamber of Commerce Director Cindy Clock took the floor for her report, including the news that “Seward is hot right now.” This information came from Carol Tomlin and Jen Leahy, also of the Chamber. Leahy represented Seward at the Alaska Travel Industry Association’s annual meeting this fall. Clock shared that the Alaska destination guide will be published this January, after seeing a one year hiatus due to statewide budget cuts. Clock also encouraged nominations for the annual Chamber Awards. There will be three categories including person and business of the year. Clock closed her presentation with mention of an idea in the works for a “Taste of Seward” event to become part of the Seward Mermaid Festival. The first Seward Mermaid Festival was held in May of this year and will become an annual event. 

Assistant City Manager Ron Long reported that the city spent $13,700 dollars on new loader tires. In harbor news, the City will be closing the 330 ton travelift in November to complete work enabling it to handle wider vessels in the future. Finally, Long announced that the Board of Fish will hold a meeting in Seward in 2019.

Rhonda Hubbard spoke on behalf of United Fishermen of Alaska by giving an educational presentation. According to Hubbard, commercial fishing is “Alaska’s largest private sector employer.” She then quizzed council members on their knowledge of commercial fishing with multiple choice questions. Council and the public learned there are approximately 9,000 individual permit holders in Alaska and 21,000 registered crew members. Seward in particular is the 12th port in the US in terms of volume of seafood processed, and 16th by economic value. Hubbard commended local restaurants for serving seafood processed through Seward, mentioning Council Member Erik Slater in particular. Slater operates both the Seward Alehouse and Chinooks Restaurant.

Resolution 2017-056 concerns the new 10 year lease between the City of Seward and the US Dept. of the Army for the property known locally as the “Rec Camp,” and as the “Seward Resort.” Ron Long and City of Seward Finance Director Kris Erchinger provided backstory on the topic. They described the struggle to find “an actual person” that they could negotiate with, which has happened over the last two years. In recent history, the nearly 12 acre property has been leased for $15,000 per year. The new lease will up this amount to $22,000 and will increase by $4,000 each year afterwards, so that in ten years (2026) the annual lease amount will be for $58,000. Council Member Casagranda asked whether Seward Resort guests pay the Seward bed tax. Erchinger answered that they do not, because “one government entity can’t tax another government entity.” Casagranda continued her query by asking whether PILT (payment in lieu of taxes) could be negotiated. Erchinger responded that “the lease rate has been  $15,000 per year, and they feel that this [new lease] rate is upping their contribution.” Erchinger cited past negotiations with the Department of the Army in which the Army officials emphasized the Seward Resort’s economic impact of bringing visitors to Seward. The resolution passed unanimously, instituting a new 10 year lease, with the option to renew for two additional ten year terms.

Deborah Altermatt, retiring City Council Member, receives an appreciative plaque from incoming Mayor David Squires. Photo: Kelley Lane.

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Resolution 2017-056, the City of Seward biennial budget, was the hottest item of the night. Five Sewardites took turns standing at the lectern to address concerns with the proposed budget. Maggie Wilkins and Christy Terry voiced their support of the Seward Boys and Girls Club, an after school program based out of Seward Elementary. They requested that Council reinstate $10,000 in funding to the Boys and Girls Club. This would maintain the City’s support of the program at $25,000, as it has been for the last two years. “The need for after school programing is greater than the availability” said Wilkins, adding that the organization spent $5,000 in scholarship funds in 2016 in order to serve all families regardless of their ability to pay. Council Member McClure responded that she would like to reinstate the funding, but would like to do so with the agreement of other council members. Council Member Towsley responded to McClure and the request for continued funding by saying, “I am thrilled that my first time talking on council is to be in support of the Boys and Girls Club.” The funding was reinstated, with the full agreement of council, but the budget will be debated and voted upon one final time at the November 27th Council meeting.

Resolution 2017-068 pertains to the new electric utility rates, which have been discussed at length in recent months. The changes contained in the resolution include a lowering of seasonal rates from 25% to 15% offsets between winter and summer time periods. The seasonal offsets were created by council two years ago to assist year round residents with the increased cost of living presented by high winter utility bills. Electric Utility Manager John Foutz was on hand to explain the proposed changes and answer questions.

The new rates include disconnection and reconnection charges in the amount of $150.50 for people who choose to disconnect their home or business from electricity during a portion of the year. Another change is the implementation of a $28.75 monthly user charge for all customers who use fewer than 150 kWh per month. This measure attempts to collect funds to cover the costs of having the infrastructure in place for consumers to use or not use electricity at any given time. Foutz addressed the “pass through” charges that come from Chugach Electric, the original supplier of Seward’s electricity. In recent months, Chugach Electric has been charging higher fuel surcharges, which combined with summer seasonal rates to raise consumer bills dramatically. According to Foutz, approximately half of all electric bill monies collected go to cover the costs of purchasing power from Chugach Electric. The other half funds the cost of maintenance, employees, and infrastructure in Seward, including the power line that transports power to Seward.

City Clerk Brenda Ballou assists new Mayor David Squires with incoming official paperwork. Photo: Kelley Lane.

The changes in rates were debated with additional questions about the need for a “CPI” (consumer price index) increase of 1.7 % over the next two years. Council Members Keil and McClure stated that they felt the changes successfully incorporated the public’s requests for better readability and fairness. Council Member Casagranda made a motion to remove the CPI increases, explaining that seasonal rates were meant to address the CPI issue. Foutz said in 2009, when he began in his current position, there was a need for a 26% increase in rates in order to maintain the utility due to deferred maintenance. This was instituted over 5 years. Assistant City Manager Ron Long said that CPI increases were necessary in order to avoid “a big rise [in rates] that’s politically unpalatable.” The motion failed, leaving CPI in the resolution. The original resolution was voted upon, with Towsley, Casagranda and Horn voting no, and the resolution passing 4-3, with Keil, McClure, Slater and Squires voting yes.

The meeting continued with other new business which was attended to swiftly. Council Member Keil was nominated and elected to be the new Vice Mayor. Sue McClure was chosen to be the new representative to the Kenai Peninsula Economic Development Division, which meets six times per year, usually in Soldotna. Council Member Casagranda was granted assent and funding to attend the Alaska Municipal League meeting. “I support it. There’s learning and networking that happens,” Council Member Slater said.

Council closing comments were brief. Many voiced their support of the Boys and Girls Club. Mayor Squires welcomed the newest council members, saying “it will get better in the coming months,” referring in part to the length of the evening’s meeting. The public, including Maggie Wilkins and Christy Terry responded with their thanks for Council’s support of the Boys and Girls Club. Carol Griswold requested that future City Manager reports include employee turnover numbers. She asked whether the head tax collected on cruise ship passengers could be used to build public restrooms, in a similar way to what Homer has done. The meeting adjourned and those present departed to streets coated in ice, a dramatic change since the start of the meeting.

The next City Council meeting will be held on Monday, November 27th at 7pm in Council Chambers at City Hall, 410 Adams Street.

 

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