Deadline Looms for Natural Gas Assessment District

Ariel Van Cleave

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     Leading up to this week’s deadline to submit objections to the city’s special assessment district, Homer officials have hosted neighborhood meetings, public hearings and created a page on the city website to explain how the plan would work. Still, some residents have lingering questions.

     Alaskan cities are able to create their own rules when it comes to developing special assessment districts. That’s according to state law. Homer’s special assessment district will be used to pay for construction on a natural gas trunk line into town. It includes 3,855 lots and Homer Economic Development Coordinator Katie Koester said the city will collect roughly $405 each year for individual lots beginning in 2015. 

     “The assessments will not be levied against property owners until the project is complete,” she said. “But the city is going to have to be paying for that construction over those first two years…. For those first few years the city will be making interest-only payments and those will need to come from a general fund or some other source.”

     City Manager Walt Wrede is looking into loans for the upfront costs of construction, which are currently set at a cost not-to-exceed $12.7 million dollars. Homer could get a loan through the Kenai Peninsula Borough or may choose to work with a private lender. Affected property owners do have a say in whether or not the HSAD is approved. 

     Koester said those with land in the district can send an objection in written form to the city clerk’s office by Friday, Jan. 25 at 5 p.m. There are two ways the plan could be scrapped and another put in its place: property owners in 50 percent of lots send in an objection, as of Jan. 18 at 10:30 a.m., the city has received 316 objections. Or, the city council could change its mind and choose to amend the plan.

     “Then, basically, the process would start all over again back from zero. The council could initiate another special assessment district that looked slightly different, that had different boundaries, or neighborhoods could come forward and petition the council for special assessment district,” Koester said.

     Another point of contention with the HSAD is the way condos have been assessed. Baywatch Condominium Association President David Duke said during the Jan. 14 city council meeting that condo owners in a 12 unit building will pay nearly $40,000. Koester said this is the case because Alaska law considers condominium owners to be individual parcels rather than a single lot.

     “Each condominium is separately owned and under Alaska state statute, a condominium is considered real property and for the purposes of assessments, are assessed separately,” she said.

     In Chapter 34 of Alaska’s property code, the law states that a condo with an individual owner “constitutes for all purposes a separate parcel of real estate.”

     The Homer City Council will hold another public hearing to take comments about the HSAD on Jan. 28 at 6 p.m. Members are expected to take action on the plan at that point. Officials with the Enstar Natural Gas Company have said they hope to begin construction Feb. 1 with gas flowing through the trunk line 6 months later.

 

Contact: 
ariel@kbbi.org
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