The Homer City Council has unanimously approved the controversial Homer Special Assessment District – or HSAD. The collected funds will be used to pay for construction on a natural gas trunk line and distribution lines for the city of Homer.
It’s official. Property owners with lots inside the designated HSAD will be expected to pay roughly $405 annually for the next 10 years. City officials have said the first payments will be due in 2015, which is when the project with Enstar Natural Gas Company is expected to be completed.
The entire project’s price tag is set at a cost not-to-exceed $12.7 million and Enstar Project Manager Chet Frost has said construction will be well underway by the beginning of March.
During its Monday night meeting, the Homer City Council once again heard from residents who were venting their frustrations over the creation of the district. Some of the most vocal opponents have been condo owners. Under Alaska law, each condo is assessed individually rather than as a large single lot.
“I’m going to suffer the economic penalty of being a condominium owner because I’m a loser and because of the way you’re interpreting this law,” Ken Castner said. He is a one-third owner of the Kachemak Title Building.
Castner said his total assessment will be in the neighborhood of about $25,000. He also made it clear he would like to see the courts decide if the city is interpreting the law correctly.
Others were concerned with the fact that property owners would be funding construction and then handing control of the lines over to Enstar, which prompted one resident to say he wanted to see the city lease them to the company instead. While others repeated the call for more money put toward renewable energy sources.
Council member Beau Burgess pointed out, again, that the city is investigating tidal technology, but he says there must be another option to see lower costs immediately and natural gas is the best choice.
Council member David Lewis said although he will be assessed just like everyone else and understands the costs associated with converting, he said the return is going to be worth it. Lewis also said he has heard from many people who support this move.
“Being on the City Council, I feel that I need to look at what is best for the city as a whole. And gas will be good for the city,” he said.
The next phase deals with funding. The city will need to borrow money for the project. After putting out a call for bids, City Manager Walt Wrede said he received three proposals from lenders. He did not mention if a potential agreement with the Kenai Peninsula Borough made the cut.
Council members delayed a final vote and public hearing for the funding component until Wrede can go through the options and make a recommendation. That conversation is expected to happen at the next council meeting, scheduled for Feb. 25.