City Loans Money for New Harbormaster Office
The task force in charge of developing plans and building the new harbormaster office in Homer now has the funds to move forward. But at least one Homer City Council member wanted to clear up a few things before that money was approved.
The city received $1.5 million from the state for the building, but they had to provide $500,000 in matching funds. Unfortunately, based on the current design plans there was still an additional $300,000 needed to get the new harbormaster office built. The Port and Harbor Building Task Force went to the city council to request the money.
During the council’s meeting earlier this month, Council Member Gus Van Dyke was the most concerned about supplementing those costs. He wanted to see more changes to the designs to bring the price tag down from its current $2.3 million. Van Dyke hadn’t changed his tune during Monday night’s meeting.
“It is the fact that there’s $2 million for a building; it’s $300,000 over budget. Why in the hell can’t that… building be built for the money that was there? Why do we have to take another $300,000 to do it?”
He also raised concerns about where the money would come from. Van Dyke mentioned he didn’t want this loan to hurt the budget for this year. But City Manager Walt Wrede clarified that point. He said the operating budget will not be affected.
“It’s a reserve fund that the auditors want us to have. It amounts to about six months-worth of our normal annual expenditures. It is in fact coming from a reserve fund and not from the operating budget,” he said.
And since it’s a loan and not a grant the money will be paid back with interest over the next five years. He said the money would have been invested, one way or another and this makes good financial sense for the city and the harbor.
“Our investment policies are pretty conservative. They tend to focus on liquidity and not losing the principle. So we’ve got a lot of money invested in things like CDs, Fannie Mae and things like that, that are bringing us 1.5 percent, 2 percent. But the money would be invested somewhere and so the thought here is why not invest it in our own port and harbor fund and make some kind of a return,” he said.
Plus, Wrede said there may still be a way to save money and keep the building costs within the $2 million range. That’s something the task force is looking into.
The agreement the city put together also says it’s “up to” $300,000 so the full amount may not even be needed. Council member Barbara Howard said this sort of funding is necessary sometimes. She pointed out the city did a similar deal with the animal shelter.
“Sometimes we just need to have a little of what I would call ‘bridge financing’,” she said.
And besides, Council Member David Lewis said the original estimate for the new harbormaster building was something along the lines of $33.5 million.
“It has been cut down to the bare bones as far as I think we can go and still have a building that is going to be useable for the port and harbor for the next 20 to 30 years. And I don’t see us shrinking. I see it growing, and this has to be a building that can grow and be useable throughout those years,” Lewis said.
He said in the long-run this makes sense to spend that upwards of $300,000 because the city won’t have to do this project all over again in another few years. By the end of the discussion City Clerk Jo Johnson took a roll call vote. When she got to Van Dyke, he gave a reluctant “yes.” And with that, the measure passed unanimously.