By SHANNON HAUGLAND
Sentinel Staff Writer
The city is once again in the bulk water export business.
With a 4-3 vote, the Assembly on Tuesday approved an agreement with Arctic Blue Waters Alaska Inc. for purchase of 2 billion gallons of Blue Lake water in the first five years of the contract.
Voting in favor of the purchase agreement were Rebecca Himschoot, Crystal Duncan, Thor Christianson and Kevin Knox. Kevin Mosher, Valorie Nelson and Mayor Steven Eisenbeisz voted against.
In other business, the Assembly decided against having an advisory public vote to approve sale of the former Sitka Community Hospital building and grounds. Instead, public hearings on the sale will be held March 16 and 30.
The vote was 5-2 to follow the administrator’s recommendation on the sale process, calling for issuance of a request for proposals that will incorporate concerns expressed at the two public hearings. City Administrator John Leach listed a number of other opportunities for public participation before the sale is final.
Leach added that the Assembly will have the authority to reject all offers as well as approve the actual sale ordinance. Thor Christianson and Valorie Nelson favored an advisory vote, and voted against the motion adopting the administrator’s recommendation.
Arctic Blue Waters Export
Arctic Blue Waters Alaska Inc. and the city agreed to a five-year water sale contract with options for up to four five-year extensions. There are several performance benchmarks along the way, including a requirement to submit plans for getting the water from the after-bay of the hydroelectric plant to the export vessel.
The company will make a non-refundable $15,000 payment to the city within 15 days of signing of the contract. This amount may be used as water purchase credits at the agreed-upon price of half a cent per gallon.
“Hopefully, this time we get water moving,” said Gary Paxton Industrial Park Director Garry White today. The city has made a number of similar deals with prospective purchasers over the years, but no bulk export of water of any sizable amounts have has ever occurred.
Since the Assembly’s last meeting on the water contract, the GPIP board provided answers to questions raised by the Assembly relating to protections for the city, the length of the contract and access to the resource by other water companies. A majority of the Assembly members were satisfied with the answers but three were not.
Nelson questioned whether Arctic Blue was being given an edge over other prospective buyers. She said the city recently received an email from other interested parties.
Mosher said he would prefer to hold off on the contract until the city sees engineering plans on the delivery system.
“It seems like we should have the plans now,” Mosher said, adding that he was also concerned about the prospect of tying up Sitka’s water resource as long as allowed by the contract.
White said the contract is only the first step, since Arctic Blue is not able to secure funds for planning, engineering or infrastructure without it.
The city must approve the design and construction plans as well, and can add more safeguards when the plans are presented, City Attorney Brian Hanson told the Assembly. The general plan calls for pumping fresh water from the afterbay of the Blue Lake hydroelectric plant. The delivery will be done with a floating 24-inch line to a ship in the bay. The city will maintain control of the tidelands.
The city has already approved a separate water contract with Eckert Fine Beverages for use in distilling a high-end vodka to be bottled in California. The consensus of the majority at Tuesday’s Assembly meeting was that the city has nothing to lose with the Arctic Blue Water sale, and comes out ahead with the up-front fee even if no water is exported. The company’s representative, Fred Paley, has been trying to export Sitka’s water through a number of deals for about two decades.
Hospital Sale
When the Southeast Alaska Regional Health Consortium purchased the Sitka Community Hospital healthcare business, the city retained ownership of the hospital buildings and grounds, and leased them to SEARHC.
Last year SEARHC approached the city asking to purchase these assets, most of which are being leased to SEARHC for long-term care and outpatient and rehabilitation services. SEARHC said it would like to upgrade and expand the facility. SEARHC has plans to build an apartment building nearby on land it already owns on HPR.
The majority of the Assembly favored going with Leach’s recommendation, with Nelson strongly in favor of having an advisory vote by the public.
Christianson clarified today that he also favored a vote, and said that in the past a binding vote would have been required for large sales of city property.
“That kind of stuck with me, but I didn’t have super-strong feelings about it,” he said.
Duncan works for the Alaska Native Medical Center, has an office at SEARHC but does not work for SEARHC. No one objected to her participation on the issue.
Public hearings on the hospital sale were scheduled for 6 p.m. March 16 and 30 at Harrigan Centennial Hall. The city clerk said the public can attend in person or by Zoom.
“It is important to note that the hearings would focus on the sales action only, and not who the potential buyer may be,” Leach said.
The appraisal of the property has not been completed, but Leach said the draft RFP would incorporate both public input and fair market value as determined by the appraisal. He listed the multiple points open for public comment, including the sales ordinance that will be put before the Assembly.
From the public, Richard Wein, advised the Assembly to consider a long-term lease and to maintain city ownership of the property.
Other Business
Most items were approved without much discussion, including:
– a new standard marijuana cultivation facility license application for AKO Farms at 213 Price Street
– a transfer of ownership application from Anna M. Cleaver dba Weed Dudes to Weed Dudes Incorporated dba Weed Dudes at 1321 Sawmill Creek Road Suites J and K
– a liquor license renewal application for The Channel LLC dba Channel Club at 2906 Halibut Point Road.
– reappointment of Chris Ystad to a two-year term on the Gary Paxton Industrial Park Board, and Robert Sam to a three-year term on the Historic Preservation Commission as the Sitka Tribe of Alaska representative.
– appointment of Stephanie Hawney to an unexpired term on the Health Needs and Human Services Commission and Geraldine Laux to a three-year term on the Local Emergency Planning Committee.
– setting fines for overtime parking in the harbors.
– a report on the annual outside audit of the city’s finances.
