By Naomi Klouda
The Homer City Council took a final look at financing details to begin the natural gasline assessment at Monday night’s meeting and the money to build it is coming from the Kenai Peninsula Borough.
The council unanimously passed the gasline Ordinance 13-03. It now authorizes the city to issue a natural gasline distribution special assessment bond in the principle amount not to exceed $12.7 million to finance the design and construction. Money would come through a loan from the Kenai Peninsula Borough. It would be paid back by homeowners in the special assessment over 10 years.
Before passing the measure, Councilman Beau Burgess asked what would happen if certain property owners don’t buy into the special assessment? Can the borough compel the city to foreclose properties that are in arrears?
City Attorney Tom Klinkner responded that no, it doesn’t.
Liens against property is a matter of Alaska statute. The enforcement would come from the City of Homer, not the borough.
The City needs to make its best efforts that the borough gets repaid, City Manager Walt Wrede explains. “We’re just compelled to make sure the borough gets paid back by whatever method.”
A big hurdle was overcome in a final decision on where this upfront funding for building the distribution line was to come from.
The City of Homer and borough had been in discussions since last summer about the possibility of the borough providing a low-interest loan. But the city still proceeded with a Request for Proposal process and received three bids. A proposal review team was formed that included Council members Francie Roberts, Beau Burgess and Kachemak City Mayor Phil Morris, along with Finance Director Regina Mauras and City Clerk Jo Johnson.
“The committee unanimously concluded that it was in the City’s best interest to work with the borough because it offered the best terms and conditions,” Wrede told the council.
The advantages is the lowest interest rate – 4 percent. This allows the city to pass along a good interest rate to property owners, Wrede said.
And, from the borough’s perspective, it’s an advantage as well. The borough gains more from the 4 percent interest than it does when keeping the money in reserve.
“We are essentially taking taxpayer money and reinvesting it right back into two borough communities,” Wrede said.
Contingency plans are built into the loan contract to allow for construction delays. The first payment to the borough, an interest-only payment, wouldn’t be due until April 1, 2014. This gives time for the city to have drawn down from the $12.7 million for the first construction phase. In the second phase, set for Enstar to be finished with the entire HSAD distribution, another interest-only payment can be made.
“If the job slips for any reason, then we have the option of an interest-only payment in 2015,” he said. “But if they are quicker, than we would pay a full principle payment.”
No transfer from the general fund would be necessary.
But contract talks between the city and Enstar, however, aren’t finished yet. The council postponed a resolution that creates the go-ahead for a construction contract with Enstar for $12,160,632. Wrede wanted it postponed because the two parties continue a “vigorous discussion” on contract terms. He recommended taking it back up again at the March 11 meeting.
• Resolution 13-022: The reason for the request to gain figures on the jack-up rig, by Mayor Beth Wythe and Councilmember Beau Burgess, is to “better understand the economic benefits” associated with the Endeavour in terms of sales taxes, moorage and other fees, contracts with local businesses and employment of local workers. This resolution allows the adminstration to begin an analysis.
• Homer’s summer parking problems may get relief in downtown Homer after a measure passed Monday night. It creates free day RV parking at the old intermediate school, called the HERC building, and in the parking lot at the Homer Chamber of Commerce Visitor Center. The idea is to help visitors access downtown Homer in easier ways than in the past.
Karin Marks, who served on the chamber committee, told the council it gives businesses in downtown Homer greater opportunities than in the past.
• Three Homer Volunteer Fire fighters earned a commendation for their above-and-beyond efforts during a fire on the night of Jan. 10 at 2294 Mt. Augustine Drive. Barrett Moe, Tim Blackmon and Dylan Faulkner donned self-contained breathing apparatus in preparation of an offensive fire attack. Under the direction of Moe, they removed the burning contents of a shed by hand while extinguishing the fire. The actions were at a critical point in the incident, said Chief Bob Painter in the commendation letter, that kept the fire from extending to the roof space of the adjacent home. A spreading fire would have lead to extensive damage to the main residence and the occupants’ belongings from fire and water damage.
“(They) are directly responsible for the preservation of the structures and personal belongings,” Painter wrote.
• The council’s visitor this week was Esther Hammerschlag to talk about the Homer Prevention Project. This is the program to address underage and adult drinking binges, to make for a healthier community.
All Health and Human Service grant recipients are required to address drinking and adult heavy binge drinking. Also, they are required to follow a five-step process developed by the Strategic Prevention Framework. HPP has now finished its phase of sending in its strategic plan for state approval. It identified targeting Adverse Childhood Experiences and emphasizing the legal consequences of binge drinking.
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