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City works to answer questions on gas line

Posted: October 23, 2012 - 4:10pm

As property owners ponder whether to support the Homer Natural Gas Special Assessment District, the city held its first two neighborhood meetings to help inform people about the district that, if passed, would build a 73-mile, $12.7 million natural gas distribution line throughout the city of Homer from Baycrest Hill to the Homer Spit.

“Our job is to get as much information as we can out to the public,” said Homer City Manager Walt Wrede at a meeting Tuesday night. “It affects everybody. It’s really big.”

A second meeting was held Wednesday and a third meeting  will be from 5 to 7 p.m. Oct. 29 in the Homer High School Commons.

In July, the Homer City Council initiated the special assessment district. That action started the process to create the assessment district. A list of the 3,289 lots in the district has been compiled, and certified letters will be sent out in November to those property owners notifying them of the plan and their opportunity to object. Each lot gets a vote to object. A person who owned 10 lots, for example, would get 10 chances to object.

“You need to object if you don’t want this,” Wrede said. “If you have multiple lots, you need to object multiple times.”

If more than 50 percent of the lots object, the assessment district fails. 

A property owner who doesn’t return an objection form is considered to support it. People have until Jan. 25 to object, when the city council holds public hearings and votes to approve or reject the assessment district.

Wrede called the assessment district “all for one, one for all.” Each of the 3,289 lots is assessed $3,283 a lot. Financing will be available, paid out over 10 years at about $400 a year. If passed, Enstar Natural Gas would start construction of the first phase of the distribution system in the downtown and core city area in spring of 2013, when it also starts construction on the Homer Trunk Line, the line bringing natural gas from Anchor Point to Homer. The trunk line runs down the Sterling Highway to West Hill Road, up West Hill to Fairview Avenue and then along Fairview Avenue to East End Road and its end in Kachemak City. The second phase of the distribution line would be built in 2014 to the hillside area and the Spit.

At the meeting, city staff sat around tables to help citizens understand the project. City Clerk Jo Johnson had a fat binder full of properties in the assessment for people to check if they are included. She also provided information on the objection process. Some lots, such as conservation areas or those without access, haven’t been included. A map showed where the 2-inch distribution line would go — along almost all city streets — and when the line would be built. People moved around the room, asking questions.

“This is a pretty major event in this town,” said Jody Murdoch after looking at the map. Murdoch owns Aurora Gems on Pioneer Avenue and recently tore out an old boiler. He’s heating with efficient infrared electric heat until he can hook up to natural gas, he said. “With what we’re saving, it’s worth the price of admission.”

Wrede said the city’s main role in the project would be to organize financing. It could be paid for with a private bond, financing through the Kenai Peninsula Borough or through the Alaska Industrial Development and Export Authority. Financing involves risk for the city, since it can’t start collecting assessments until the lines are built.

Wrede said that the city officially doesn’t take a position on approving or rejecting the gas line assessment district. He offered these arguments for and against it:

• Pro: “People would get access to gas quicker,” he said. “They would probably get it a lot cheaper than if they did it on their own.”

• Pro: With the entire city in the district, it’s simpler to administer and has a lower per-unit cost. If the area-wide assessment doesn’t pass, property owners still could form smaller assessment districts. Property owners also could pay Enstar to bring the line to their lots, as some did in Anchor Point. Property owners along the trunk line also could connect.

• Pro: As a cleaner burning, lower carbon fuel, natural gas fits in with the city’s Climate Action Plan.

• Con: At $12 million in financing, the city is taking a big risk, Wrede said. “Is it worth the risk? You’re going to have to judge and tell your council member,” he said.

• Con: Property owners with multiple lots will get hammered with multiple assessments, Wrede said. 

• Con: Even if a building owner doesn’t hook up to natural gas, the lot would still be assessed. Retirees or people on fixed incomes might not be able to finance natural gas conversions.

What would it cost to convert? Wrede said the city considered helping building owners calculate that, but there are so many variables he felt that could provide wrong information. The only other fixed cost is that of bringing a service line from the distribution line, about $1,200 for the meter and the first 100 feet.

“Everybody needs to do the research,” Wrede said in calculating a conversion.

Other questions asked included the effect on property assessments — not much, Wrede said the borough assessor said — and exactly where the line would go. Enstar would bore under roads to bring the service line to lots across the street from the distribution line.

“We know we don’t have all the answers right now,” Wrede said. “We’re going to try to get you the answers.”

A website also has been set up for the project, with maps, frequently asked questions and other information. That site is at cityofhomer-ak.gov/natural gas. Email questions to naturalgas@homer.ci.ak.us or call 435-3198.

Michael Armstrong can be reached at michael.armstrong@homernews.com.

 

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