Minutes of the Work Session

Denali Borough Assembly

McKinley Park Community Center

January 14, 2004


CALL TO ORDER    Presiding Officer Gerald Pollock called the work session to order at 6:30 pm.


ROLL CALL               Assembly members present were: Jim Caswell, Gerald Pollock, Sid Michaels, Baxter Mercer, Bob Shelton, David Evans, Neal Laugman, and Jennifer Skinner.   Cynthia Trytko was absent. Mayor Talerico was also in attendance.


1.) Ordinance 03-08, Version D, an ordinance amending the Denali Borough Code of Ordinances, Title IV, Chapter 24, titled management of borough real property.


MICHAELS made comments about the Lease Rate on page 4. He gave an example of having 5 acres and the appraiser appraises the land, what would the annual lease rate be?   MICHAELS stated that he thinks that a lease schedule would have a base of how to figure out the annual lease rate.


Gail Pieknik, Borough Clerk, explained that from what she understood from the letter from Borough attorney, Jim Gorski, that the appraiser would determine the going percentage rate.  Also that it will be in the contract.  The Borough will determine the percentage rate at the time of the lease by what the going rate is in Alaska. 


Frank Talerico stated that Gail is right.  He explained that the appraiser will come out and appraise the land at what the best possible price would be.  Then the Borough decides the annual percentage rate of the appraised value.


MICHAELS explained that the Borough needs to have something that says how we are going to set the annual rate.  At this point, there is no guideline for setting that annual rate.  It only states that the Borough land will be based on fair market value, it doesn’t say how you are going to get the schedule done.


Mayor Talerico explained that it should be in the contract.


MICHAELS concern was that it doesn’t state anywhere in the ordinance how we are going to set the annual rate.  His example was maybe the current bank rate or something.  It should state in the ordinance where we are going to get the percentage rate from.


Discussion ensued.


LAUGMAN asked about referencing the actual lease contract.


Frank Talerico stated that the Alaska Railroad uses a minimum and maximum figure.  He stated that as of right now 6 percent is low and 8 percent is high. 


MICHAELS thought 7 percent would work and each one could be negotiated on a case by case basis. 


EVANS stated that he is mostly concerned with having a successful lands program.


Mayor Talerico stated that it would be nice to have some kind of guideline.


CASWELL is concerned with Section K of the ordinance.  It may create problems with negotiating a contract.  This may leave a loophole that someone could use against the Borough for negotiating.


MICHAELS would like to see a schedule so people will have an idea of what a lease is going for.


Mayor Talerico would like to see a minimum and a maximum.


CASWELL is in favor of having something outside the ordinance that can be reviewed annually.


MICHAELS feels that a Rate Schedule could be drawn up outside of the ordinance and the ordinance would need to defer to that schedule. The ordinance could state that a Lease Schedule will be drawn up by the Mayor and presented to the Assembly for approval and this would be reviewed from time to time by the Mayor and approved by the Assembly.


ADJOURNMENT      POLLOCK declared the work session adjourned at 7:02 pm.






                             Presiding Officer





                          Borough Clerk