The vote came late in Monday's meeting with very little discussion, but earlier, during a period of open public comment, the conversation grew heated.

"I want to say I appreciate your standing up for the taxpayers," said Kevin Hogan, owner of the Auction Block on the Homer Spit, to Hornaday. "It does not appear that there is any rational reason for prices this high and ... it puts Homer in a severe disadvantage in terms of competitiveness. You're charging prices like this simply because you can."

Mike Dye, chief financial officer of the Land's End Resort, testified that the new rates, which will mean increases for the majority of water and sewer customers, come at a particularly bad time. He then accused council member Dennis Novak of having a conflict of interest in the matter.

"I learned that potentially Dennis Novak does not pay city water and sewer here and I'm not sure how that's not a conflict of interest. I was pretty infuriated by that when I heard ... I hope it's not true," he said.

Novak responded that his business, the Bay View Inn, is not hooked up to the system because "it doesn't reach that far."

"I have other expenses that you don't have because I have to support my own system," said Novak to Dye. "Do I think it's a conflict of interest? I'll leave that for somebody else to judge."

Hornaday quickly ruled that Novak did not have a conflict of interest in the matter and the other council members declined to hold a vote on the subject.

Then, in a rare move, Hornaday turned the gavel over to Novak, the Mayor Pro Tem, and addressed the council as a private citizen.

"Homer has the highest taxes and the highest water and sewer rates. Homer is losing population and ... we are driving individuals and businesses out of Homer when we should be encouraging both to come," he said.

Echoing sentiments expressed in a May 26 memo that accompanied his veto, Hornaday said the citizens of Homer have not had enough time to recognize the impact of the new rate structure and suggested it be put on the October municipal election ballot.

Council member Bryan Zak, who cast the sole vote against the new rates, agreed.

"I think we've heard enough testimony from folks here tonight and from letters ... not to increase the rates right now," he said.

Under the new rate structure, which is scheduled to go into effect on the first full month of service after July 1, all users will pay a flat monthly "customer charge" of $25 for water and $20 for sewer, plus a fee based on gallons used.

For most users, the plan will mean an increase in rates. Residential users who use more than 1,000 gallons per month, for instance, will pay between $11.78 and $28.90 more.

"We have looked at water and sewer rates for a long time and one thing is consistent ... the timing is bad," said council member Beth Wythe. "It draws me to the conclusion that there is never a good time to cause someone a financial hardship. We are charged with securing your investment, however, and to make sure that the finances of the community are solid."

At its Monday meeting, the council also:

- Postponed until June 22 a resolution authorizing $150,000 to be spent on a new boiler at the old Homer Middle School building, a city-owned building currently leased to the Kachemak Bay Campus, Kenai Peninsula College-University of Alaska Anchorage. Although Public Works Director Carey Meyer called the old boiler a "dinosaur" and said the council is taking its chances relying on it to heat the building, several council members expressed reluctance to spend the money.

"I have difficulty with putting any more money into that building," said council member Beth Wythe. "It's losing $100,000 a year."

- Designated, via a proclamation from Hornaday, June 20, 2009 as "Kids' Outdoor Day" and committed to "ensuring all children have the opportunity to connect with nature at an early age and build upon that connection throughout their developing years."

The proclamation also voices support for the "Children's Bill of Outdoor Rights," which states every child should have the right to, among other things, catch a fish, go camping, splash in water, follow a trail and discover Homer's outdoor heritage and history.

- Postponed until June 22 a resolution amending the Karen Hornaday Park Master Plan, until more public input on the sweeping plan can be gathered.

"I'm not opposed to the master plan but it's going to sit beside the master plan for the Spit and harbor development plan that has no money and the Town Center master plan that has no money. People need to understand that there's no way we're bound by the five or 10-year plan here. It falls in line with everything else," said Zak.

- Appropriated $13,000 to continue a contract with Deerstone Consulting, the company that has been working with the city to implement its Climate Action Plan and provide a system for tracking CO2 emissions.

- Approved an ordinance doubling the number of allowable Library Advisory Board members who reside outside the city limits from one to two.

- Postponed until June 22 a resolution supporting a $3.5 million project to build an "anaerobic pump," at the sewer treatment plant. The pump, a relatively new technology designed to convert solid waste into methane gas, would receive 80 percent funding from the federal Department of Energy.

- Awarded a contract in the amount of $142,984 - $50,000 of which comes in the form of a legislative grant - to Arno Construction for construction work on the Reber Trail.

- Appropriated $10,000 to repair a damaged buoy at the Deep Water Dock.

Aaron Selbig can be reached at aaron.selbig@homernews.com.