By Naomi Klouda
Planning for the Homer area gasline distribution system to be built in the new year has moved through many stages, now toward a decision to be made by the Homer City Council and a Jan. 25 deadline for public comments.
City Manager Walt Wrede and community and economic development Coordinator Katie Koester have kept a busy schedule making presentations to the public. Last week they spoke at the Rotary Club and made a presentation to a real estate association, and recently addressed questions from Homer seniors. The idea is to get the information to the public on how the distribution system is to be phased in and the scope of planning steps ahead.
“We have made quite a few presentations to help people see what is ahead,” Wrede said. If property owners object to being part of the HSAD, as the district composed of 3,850 properties is called, they need to do it before closing hours on Jan. 25 at the clerk’s office.
Another important meeting ahead is ENSTAR’s presentation 5:30-7:30 p.m. Jan. 10 at Homer High School.
So far, fewer than 200 property owners have filed written objections. It would take about 1,950 objections, or 51 percent of all property owners, to kill the HSAD. Those who do object need to place their objections in writing on a form available at the Homer City Clerk’s office.
The trunk line from Anchor Point is to be constructed by next fall in its first phase, leading to Kachemak City. In the mean time, the Homer City Council has some decisions. Should they seek a loan from the Kenai Peninsula Borough to help fund the $12 million distribution system?
Or should residents take on funding themselves?
“If the council does nothing, they could let it take its natural course,” Wrede said to a group at the Homer Senior Center. “People could still get gas but you would use what the regulatory commission already approved.”
In that case, each home owner would be on his or her own and the hook ups would likely be spotty and more expensive. The larger the assessment area, the less it will cost individuals.
“This is a bold plan,” Wrede said. “But it has the potential to be beneficial for many people for many years ahead.”
What is certain is that public or government buildings will be hooked up first. The city produced a map showing the HSAD in two-year construction phases. The core of Homer downtown would be hooked up first, then outlying areas on the bluff and out East End Road would receive the line a year later. Neighborhoods around South Peninsula Hospital and schools will benefit from the first hookups. The City of Homer also will hook in, making the distribution line for nearby property owners immediately accessible. These buildings include city hall, the library, the public works buildings, the animal shelter and the airport. The anticipation is that natural gas will save $1.5-2 million per year in energy costs for all government buildings combined.
“You can imagine a line going quickly down Heath Street,” Wrede said.
Wrede foresees preventing a problem in the way the natural gas is made available to Homer residents after the City of Homer learned a hard lesson in its expensive water-sewer service.
Some in Homer do not have water-sewer services, will never have it and the consequence of that is a higher use fee for all people on the system. More users on a system make it less costly.
“The idea on the table now is that council would agree to obtain financing to fund it all up front. Then everyone gets natural gas and everyone goes in at the same price,” Wrede said.
With the HSAD set up, property owners would pay about $405 or at 4 percent interest per year over 10 years as their share in paying for constructing the distribution line.
So far, the objections from residents came mostly from people who own multiple properties. They would be assessed $400 per property per year.
“The downside is that people will be paying an assessment for each lot. That’s the way it is set up. Everyone pays the same, but each lot pays,” Wrede said.
The city has also heard concerns about low income property owners. As a consequence of this concern, the Homer City Council is considering creating a deferral that would not charge property owners until they sell property or transfer it to heirs. Then the $3,200 would become due.
But the money to fund deferrals would have to be on hand for the city, because the line distribution system will cost the City of Homer $12 million up front. A federal poverty line of $13,970 per year income for a family of one might be one of the ways to measure who would be eligible for a deferral.
The question is what standard would the city use for deferring assessments?
At the next city council meeting Jan. 14, the council will be looking at an ordinance to decide the deferral policy for low income residents. The public testimony period will be both Jan. 14 and Jan. 28 as the council considers this option.
Currently about 300 property owners are eligible for senior tax exempt from paying property taxes, which gives officials an idea of how many might qualify for a gasline assessment deferral. “What we don’t know is how many of those seniors would be eligible. It is probably less, but we don’t know,” Koester said.
Keren Kelley, executive director of the Homer Senior Center, also is looking at finding out more information for Homer’s elderly. The state has offered energy upgrade grants in the past, and programs may be available to help eligible people with the costs of converting from stove oil or electricity to natural gas.
One option for property owners is to have the distribution line available from the road and to delay hook up or phase it in as new appliances or boilers are purchased. The idea is to make natural gas available, but no one is being forced to purchase it, Wrede said.
In the future, the city may offer a workshop making information available on grants or loans available to people for converting their utilities. Kelley said the Homer Senior Center might also be a good resource for scheduling a workshop.
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