Council stands by permanent fund decision

Fund to pay off library construction loan

Homer’s loan for the construction of its library will officially be paid off in full, now that members of the Homer City Council have voted to liquidate the city permanent fund that was created after the city received a windfall from the Exxon Valdez Oil Spill settlement.

Council members voted unanimously at the Monday meeting not to rescind a previous ordinance, 17-23, that liquidated the fund and appropriated part of it to paying off the Homer Public Library construction loan, and the other part to help fund a new police station. The U.S. Department of Agriculture Rural Development Loan is to be paid off with about $1.2 million, while the rest of the permanent fund, about $1.1 million, will be earmarked for “actual construction of a Police Station,” according to that original ordinance.

Homer can save $464,314 that would have built up as interest charges from paying off the library loan by using part of the permanent fund to pay it off in full, according to council packet documents.

A memorandum to rescind the allocation ordinance was brought forward after City Manager Katie Koester told the council that, after talking to the city’s broker, she found out the permanent fund’s value had increased, leaving the city with unrealized gains of close to $400,000. The council members had voted to gut the fund before they knew that. They were originally informed that the fund had received $25,087 in interest payments and dividends in 2016, or about 1 percent in earnings.

“I appreciate Katie bringing forward the full disclosure of proper information so that we could have a proper discussion, so that’s a good thing,” said council member Heath Smith. “But I don’t think anything’s really changed. I mean, we can talk about keeping it so that it continues to grow over a short period of time. I think the intent of this council and the recognition of our community is that we need an upgraded police station, and we’re going to be moving in a direction to try and make something happen that can get approved at the ballot.”

The council also tabled a resolution that would have authorized Stanec Architecture to prepare 10-percent concept designs for three options for the new police station. Those options are a $9 million facility at the corner of Heath Street and Grubstake Avenue, a $6 million facility at the same location, and modified plans for the HERC building that would remove the shooting range. The Police Station Building Task Force recommended the Heath Street lot as the preferred site, but the council added the HERC site as an option.

The council will hold a work session on how to proceed with plans for a new police station before its next regular meeting on Aug. 14 to get a better idea of a direction to take. Council member Donna Aderhold said the members came to an agreement during the Committee of the Whole meeting to postpone voting on the concept designs to give the council more time to get on the same page.

“I think we all agree that … the police station building is probably one of our most important… things we need to deal with,” Aderhold said.

Smith said during the Committee of the Whole meeting that he would still like to see a conceptual design so that the council can have a better idea of what the city would get for $6 million or $9 million.

“Until we see it, we don’t know what we’re getting,” he said. “So I do see some value in seeing a conceptual design that shows us what we can get at that (price) tag.”

At the same time, Smith said he is only comfortable bringing something to city residents that the city can afford to pull off.

“I think we can get to where we want to get, but we need to probably do it in phases,” said council member Shelly Erickson. “And as we can afford it, instead of one big lump sum, which is hard.”

The council also took the following action at Monday’s meeting:

• Passed resolution 17-073(S) awarding a contract to East Road Services Inc. for the construction of the Soundview Sidewalk and Pedestrian Improvement Project. The project will cost $442,083, and the improvements will include a concrete curb and gutter as well as an asphalt sidewalk between Mullikin and the driveway to West Homer Elementary School, signage, crosswalks and radar warnings.

• Passed ordinance 17-26(S), which appropriates $10,268 from the Fire Donations Fund, as well as authorizes spending $7,827 from a State of Alaska Fire Department Equipment Upgrades Grant, to buy a new ATV and rescue skid unit for the Homer Volunteer Fire Department.

Reach Megan Pacer at megan.pacer@homernews.com.

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