Rental car companies that use the Kenai Municipal Airport to attract customers, drop off cars and otherwise make use the city facility without being located at the airport will no longer get a free ride.
The council passed Ordinance 2028-2003 Wednesday night, which requires off-airport rental car companies which use the airport to pay 10 percent of their gross revenues to the city. Before the ordinance was passed, only the three rental car companies with offices located at the airport were required to pay the fee.
Council members said it was only fair that car companies which make money off of passengers traveling through the airport should have to pay for that privilege. Council member Joe Moore pointed to a picture of a rental van parked in the city's parking lot which displayed a Soldotna phone number in its windshield.
"Anyone from outside of the city who wants to use our lot for business should be paying us," Moore said.
Avis-Alaska Vice President and General Manager Gary Zimmerman testified that the 10 percent charge would level the playing field for on-site operators who already pay for the space they rent at the airport, as well as the 10 percent charge.
"It helps us on a competitive basis," Zimmerman said, pointing out that both Anchorage and Fairbanks charge off-site rental companies to use their airports.
The only opposition to the ordinance came from council member Jim Bookey, who said he doesn't believe the fee will make up for how much the city will end up spending to enforce the new charge.
"I don't see the dollars being there," Bookey said.
Kenai Chamber of Commerce President-elect Tim Navarre and Executive Director Colleen Canady voiced their concern that the new fee might place an excessive charge on businesses that operate without the benefit of being located directly in the terminal.
However, even Canady and Navarre's objections were more of a caution, and no actual off-site operators spoke at Wednesday's meeting in opposition to the ordinance. It passed by a vote of 6-1, with Bookey casting the only dissenting vote.
In other action Wednesday, the council:
n Approved a $55,000 transfer from the city's general fund for the purpose of purchasing new cataloging software for the Kenai Library. The city's library commission on Tuesday recommended the purchase, saying the old software is outdated and could crash at any time.
Several members of the commission spoke on behalf of the purchase, including Kenai's Bob Peters, who told the council that the purchase of the software now makes sense both practically and financially, as the software is currently on sale. Waiting until the current system crashes would be a big mistake, Peters said.
"If it goes that long, it's for sure going to cost more," Peters said.
Kenai Finance Director Larry Semmens said the purchase would not put the city in a financial hole because $61,000 was originally budgeted for a matching grant the city never received. Since money was available, the council decided it was in the best interest to go ahead and buy the software now, although some members said they had a problem with being forced to dip into the general fund balance to do so.
"I do not like being held hostage to technology," said council member Linda Swarner.
n Heard a report from Bill Coghill of Mikunda Cottrell & Co. on city finances. Coghill said a recent audit shows the city has kept good track of its finances, and reported that the city has total assets of $133 million, with $2.6 million in total debt.
n Met in a work session with Sen. Tom Wagoner and Rep. Kelly Wolf prior to the regular council meeting. Wagoner told the council that --as predicted --the city should not expect to see any municipal revenue sharing from the state this year. Council members asked Wolf and Wagoner if there are any plans in Juneau to increase the state's revenues through using the permanent fund or creating new taxes, and both said that also is not likely.
"Crunch time, we're not there yet," Wolf said.
Wagoner agreed that the state is not yet in a position where taxes or the use of permanent fund money is warranted.
"We're not at crunch time yet," Wagoner said.
After Wolf and Wagoner left, council members said they were not exactly pleased with what they perceive as a continued reluctance on the part of state legislators to find new revenue streams.
"There didn't seem to be any solutions except the status quo," said council member Blaine Gilman. "We can't do it by cutting alone."
Mayor John Williams agreed. He said that until the state's constitutional budget reserve is exhausted, legislators will continue to ignore the state's growing fiscal problems.
"I will guarantee you, this is an election year and there ain't going to be anything happening this year," he said.
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