• 14 percent of the 3,855 property owners in the SAD objected
By Naomi Klouda
Now that numbers are in for the Special Assessment District to fund parts of the natural gas line, the Homer City Council proceeded in accepting an ordinance to move forward.
But Ordinance 13-02 isn’t passed yet, and homeowners urged the council to slow down and do more work at Monday night’s city council meeting. The measure goes up for more public testimony and a vote on Feb. 11.
“I am concerned that the SAD is being rushed too fast,” Richard Gustafson told the council. “You can’t tell me how many voted yes; you can tell me how many voted no. From Nov. 1 to now, it seems like it’s on a fast track. Where is this energy going to come from? Are we going to drill in Kachemak Bay? What’s going to happen to our water resources? It’s time to step back and think this out.”
At issue is the “backward” way of determining support for the assessment. A written letter voicing objections counted while a person in favor of the SAD remained silent in this process.
Joyclyn Graham said if the logic in a non-response is taken for yes, then elections would be decided by the 80 percent who stay at home instead of turning out at the polls.
Of the 3,855 parcels in the district, the owners of 14 percent objected to setting up the special Gas Assessment District. That amounted to 540 objections. In order for the SAD to be cancelled, about 1,790 parcel owners would have needed to object. The deadline for objections has now passed, Jan. 25.
At the end of the objection period, the Homer City Clerk’s office tallied and characterized all the objections:
• 44 percent objected on the basis of costs to the home owner and the city.
• 16 percent said they felt insecure about future supplies of natural gas.
• 2 percent cited safety concerns.
• 6 percent objected because they live on a fixed income.
• 10 percent said they would prefer renewable energy like solar, wind and tidal.
• 2 percent want to see the SAD put to a public vote.
• 3 percent doubted gas would come to their area.
• 4 percent were condo owners who object to the assessment.
• 10 percent of the objecting property owners live out of state.
A big issue is the way the SAD impacts condo owners. Ken Castner, one-third owner of the Kachemak Title Building on Smoky Bay, protested at Monday’s meeting that he is being assessed five times for one building that isn’t a condo. It’s an office building. This amounts to a $30,000 assessment, he said.
Castner argued a “moral point” that the city isn’t being fair to charge that assessment.
“The city decided they were going to do this, all for one and one for all. It was going to be by lot – a big lot, a little lot, doesn’t matter,” Castner said. “Ten buildings, one building – it doesn’t matter until you get to my lot and say, ‘ah ha, that is a condominium – you have to charge that guy more.’”
Condo owners around town also have voiced strong objections to the way they are assessed by units, not lots. The 118 condo owners in town will each be charged $3,200, according to an interpretation by City Attorney Tom Klinkner. He stated that condos are taxed according to units, and that utility assessments follow that precedent.
Councilman Bryan Zak has been the most persistent in questioning the city attorney’s opinion.
“I think we are running up the wrong way. The cost to serve that lot isn’t any more than any other lot,” Zak said. “The attorney gave us advice, and I’m not so sure the attorney is correct on this.”
City Manager Walt Wrede told the council at the work session prior to the meeting that this is an established area of law and he is sure the attorney is right.
“You are required to assess them that way. When it comes to fairness issues, if a condo is located in a business building, that raises questions about fairness, too,” Wrede said. “The value of the land is supposed to be assessed as though it is private property. The law sees them as separate lots.”
Since there are 118 condos in town, Wrede said an exemption could impact the total cost of the project. “Tom (Klinkner) is pretty firm that the council doesn’t have that option.”
But condo owners argue there is nothing written in municipal law governing how condos are assessed for utilities. There is only the state ruling on how condos as properties is assessed for tax value, they argue.
Zak, who like Castner questioned the “moral fairness” of certain assessments, vowed to continue seeking a solution and another attorney opinion for the condo owners.
Many who objected wrote lengthy letters voicing concerns. The clerk’s office compiled more than 1,000 pages of letters and objection forms. Several asked what exactly is Enstar paying for?
Roark and Deborah Brown summarized it this way: “Enstar is given $12-16 million distribution system; Enstar is given an $8 million pipeline to Homer financed with public money; Enstar charges individual homeowners and businesses to hook up to the distribution line that we built and gave to them; Enstar adds thousands of customers to their rolls, along with $22 million plus in assets.”
Low income deferments:
The council looked at an ordinance to offer deferrals on the assessment for natural gas (the $3,200 cost divided over 10 years) to people eligible as low income. This would exempt them from paying the assessment until the property is sold or changes hands.
City Planner Rick Abboud estimates only 3-5 percent of the city’s property owners would qualify. The 2012 poverty guidelines for Alaska state that a family of one would have an income of no more than $13,970 per a year. A family of two would have no more than $18,920.
Larry Slone cautioned the council to carefully define what constitutes income. He also suggested the council consider tying the assessment to property values, so that a $1 million home would be paying more than one considerably more modest.
• Introduced: Ordinance 13-03 asks to create a bond to fund $12.7 million to finance the design and construction of the natural gas distribution system. The funding would come from a commercial lender or from the Kenai Peninsula Borough. The loan would be repaid through the $3,200 per lot in property assessments over a 10-year period. Up for vote on Feb. 11
• Passed: a resolution to award the art work for four public restroom facilities. These are new facilities slated to be built next summer. Commissions went to Joshua Nordstrom, $4,200; Melisse Reichman $4,610; and Sheila Wyne of Anchorage $10,000.
Nordstrom is commissioned to create two Sandhill crane tile murals for the restroom at the WKFL Park. Reichman will be making a “Roaming the Land” tile mural and another work for the restroom to be built at Bartlett Street and Pioneer. Wyne is commissioned to do a Danny J tile mural for the End of the Road Park and another one for the Deep Water Dock restroom.
• The city is being asked to make emergency relief for three families whose homes were flooded. Homer experienced warm conditions and substantial rainfall the weekend of Jan. 11-13, prompting the National Weather Service to issue a flood warning for the Kenai Peninsula. As a consequence, an unprecedented amount of storm water entered the sanitary sewer system and the sewage treatment plant. The result was that one main trunk line backed up for a period of time on several occasions. Three houses in low lying areas received damage when raw sewage backed up.
To compensate for the damage to the three homes, City Manager Wrede is asking for an emergency appropriation of $10,500 to give each home $3,500.
• Passed: A resolution asking the Alaska Legislature to re-appropriate $2 million the city received for Main Street. The council would instead like to use the money for a new harbor office building or to the New Skyline Drive Fire Station. Councilman Beau Burgess made this request to help property owners on Skyline bring down their insurance costs by building the fire station.
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