Homer Alaska - News

Story last updated at 3:37 PM on Wednesday, July 6, 2011

Dock improvements, trash site meet with governor's approval

By McKibben Jackinsky and Michael Armstrong
Staff Writers

Kachemak Bay and the lower Kenai Peninsula weren't spared from Gov. Sean Parnell's vetoes last week, but after Parnell announced his cuts last Tuesday, most projects remained.

The big loser? A $10 million project for a natural gas pipeline from Anchor Point to Homer and Kachemak City.

Parnell did leave $9 million for the Kenai Peninsula Borough's solid waste transfer facility at Baycrest Hill in Homer.

"I'm really sorry about that," Sen. Gary Stevens, R-Kodiak, said about the gas line veto. "I think the community did its best. I can't think of another project in which we had so much local input."

"It leaves us scratching our heads," said Homer City Manager Walt Wrede of trying to understand why Parnell vetoed the gas line. "We were disappointed — more than a little disappointed."

The pipeline was at the top of the city of Homer's capital project priority list, while the solid waste transfer facility was the main capital project priority for the Kenai Peninsula Borough.

Projects in the capital budget, Kenai Peninsula wide, including House Districts 33, 34 and 35, totaled $104 million, but Parnell's veto pen sliced off $39 million. Projects specific to the southern peninsula that will be funded are:

n Homer solid waste transfer facility, $9 million;

n Battle Creek Diversion (Bradley Lake), $6 million of $15 million in Legislature's version of the capital budget, with $9 million vetoed;

n Homer cruise ship dock and passenger facility improvements, $6 million;

n Homer apron taxiway pavement rehabilitation, $3 million;

n Ninilchik village bridge replacement, $2 million;

n Nanwalek and Port Graham airport master plan, $1 million;

n Diamond Ridge Fire Station and Equipment Building, $350,000;

• Ninilchik fairground improvements, $330,000;

• Nikolaevsk community natural gas pipeline, $197,000;

• Seldovia city business center environmental, $125,000;

• Port Graham Village Council biomass waste heat demonstration project, $75,000.

Borough Mayor Dave Carey noted that the peninsula did well in getting $104 million, particularly compared to the $30 million in sales taxes and $30 million in property taxes collected.

"That is the largest amount of money from the state this borough has ever received," said Carey. "It will provide many jobs, as well as stimulate local businesses that sell supplies for those different projects. In my opinion, this is an excellent economic stimulus package because it focuses on needed infrastructure and energy security."

Legislators, assembly members, Enstar and Kachemak City and Homer officials had worked hard to get the gas line passed. Parnell vetoed most of the project last year, saying he had questions about a state grant supporting a private construction project that crossed city boundaries. Wrede said he thought the Homer City Council and others address those questions in the 2011 session capital request.

"I thought we went out of our way to target those questions he had," Wrede said.

Rep. Paul Seaton, R-Homer, said he didn't understand why Parnell vetoed the gas line when it fit the governor's criteria for supporting capital projects — stimulating economic development and creating jobs now.

"This was ready to go," Seaton said. "This is an energy project that would have had huge economic value."

On the capital budget:

"We take in approximately $30 million on sales tax and $30 million on property tax. We received from the budget $104 million in project grants. That is the largest amount of money from the state this borough has ever received. It will provide many jobs, as well as stimulate local businesses that sell supplies for those different projects. In my opinion, this is an excellent economic stimulus package because it focuses on needed infrastructure and energy security."

-Kenai Peninsula Borough

Mayor Dave Carey

Seaton said he wondered why Parnell vetoed the Homer gas line when he left money in for other gas projects, such as funding to explore bringing a bullet line from the North Slope to southcentral Alaska.

"He left the $200 million to study getting gas to his house, the North Slope to Anchorage," Seaton said.

Through his spokesperson, Sharon Leighow, Parnell explained his veto.

"Gov. Parnell held to the spending level he set earlier in the legislative session," she said. "Energy projects were a priority — especially those that help achieve the state's energy policy of 50 percent electrical generation from renewable energy by 2025."

Although Homer Mayor James Hornaday said he was disappointed about the governor's veto of the gas line, he "was not really surprised."

"It just wasn't very well received when we talked to administration people," Hornaday said of reactions in Juneau.

He was pleased that other projects for the area were left untouched by the governor's pen.

"East End Road work, the cruise ship dock, Diamond Ridge (fire station and equipment building), that's very good," said Hornaday. "Hopefully a lot of local guys will get some work. We need that."

Stevens didn't think the veto was payback for Seaton and Stevens not supporting Parnell's proposed changes to the oil tax structure.

"The governor has taken the high road on other issues," Stevens said. "If the governor was out to get me, he would have hit a couple of projects here in Kodiak that survived."

Bill Smith, who represents the city of Homer on the Kenai Peninsula Borough Assembly, said Parnell's veto of the natural gas pipeline was "a punch in the gut, but we have to keep going."

"I'm quite disappointed," said Smith. "We did all our homework, did all the calculations to show the benefit to the state, that the community was investing in it. ... When (Parnell) leaves $1.5 million in for the Great Alaska Shootout (basketball tournament), what's up with that?"

A small project to get natural gas to Nikolaevsk did survive. The $197,000, with $250,000 from last year's project, will fund a pressure reduction station near the Armstrong Cook Inlet well pad on North Fork Road and lay pipe from there to Nikolaevsk.

"I wrote an email asking the governor to please keep it in consideration," said Kathy Kacher, who, along with Dan Dorvall and Stasha Kalugin, for the Nikolaevsk Community Council, recipient of the funding. "Obviously, he read it and agreed. ... This will get the reduction station in and a pipeline to the (Nikolaevsk) school."

John Sims, corporate communications and customer service manager for Enstar Natural Gas Company, said the cost for individuals to connect to the Nikolaevsk natural gas line will be approximately $1,200 per customer.

Homer's big project is $6 million for cruise ship dock and other improvements, paid for out of cruise ship passenger head tax money. That money addresses problems with kittiwake gull guano at the Deep Water Dock, paves the parking area near the dock, adds restrooms and a guardhouse, builds a pedestrian trail around the old chip pad and to the rest of the harbor, builds another trail from the Pioneer Dock to the Coal Point Park at the end of Fishdock Road and puts in two sets of public restrooms on Pioneer Avenue.

"We think there will be things that benefit all visitors to Homer — and locals, too," Wrede said.

"There's just some real basic needs that are going to be met out there," said Shelly Erickson, owner of Homer Tours and one of the companies providing buses for visiting cruise ships. "That grant is going to be taking care of some safety issues and liability issues."

Adding the $350,000 state grant to its capital budget, Kachemak Emergency Services will have $515,000 to build a 65-foot-by-44-foot, four-bay fire station at about Mile 2 Diamond Ridge Road. KES scaled back a bigger project to get a basic garage that can house an ambulance, tanker-pumper fire truck, rescue truck and brush truck. The fire station also will have a buried water tank.

"I'm grateful we got something. We've been trying for this for years," said KES Chief Bob Cicciarella.

Construction on the fire hall should start this summer, he said.

The $125,000 grant to the city of Seldovia will finish planning and engineering for a city business center to go in the old cannery at the ferry dock.

"This helps us finish all those pieces and tie up those loose ends to get this on the drawing board," said Seldovia City Manager Tim Dillon.

The village of Ninilchik received $2 million to replace a bridge that was damaged during flooding in 2002, and the Kenai Peninsula Fair Association received about $330,000 to improve the Ninilchik Fairgrounds.

"I've been walking on air since I got the phone call on Tuesday," Lara McGinnis, fair manager, told the Homer News July 1.

For starters, the financial boost will help complete a badly needed water system.

"We've had non-potable water for eight years now," said McGinnis of a situation that has required vendors to provide their own water. "Basically, DEC said if it was not done, they'd shut us down. The governor, Chenault, Olson and Sen. (Thomas) Wagoner knew how important it was."

The funding also will be used to begin constructing American with Disability Act-approved pathways.

"Somebody said to me that nobody can stretch money like the fair can. We're lucky we have a board that works," said McGinnis of support provided by the fair's nine-member board of directors headed by Marty Krohn of Homer. "Every member of the board puts in so many hours to make sure that money stretches."

Smith doesn't view Parnell's action as the final curtain for getting a natural gas line from Anchor Point to Homer and Kachemak City.

"The governor's staff is considering the future budget and I'm going to ask him to consider putting the pipeline in his budget, rather than waiting for the Legislature to do it," said Smith. "I'd like him to give us that due consideration unless he has some other thing that he's not telling us. I think it's time for him to step up and match his actions with the reality of the situation. This is a needed utility extension that gives cost relief to the south peninsula residents."

Wrede also said he hopes to keep moving forward on the gas line project. He said he'll sit down with Stevens, Seaton and Enstar to figure out how to proceed. Enstar also will keep moving ahead, Sims said.

"We are going to meet with the city of Homer ... and Rep. Seaton and hopefully try to work on some possibilities and some other means for getting a gas line down there," he said. "The project hasn't stopped just because the money hasn't gone through. We'll continue to look at ways to bring natural gas to Homer."

Leighow said Parnell understands that the gas line will reduce heating costs to consumers in Homer and Kachemak City.

"The borough and the city could pursue conventional financial or financing through AIDEA for this project," Leighow said. "Exploration for natural gas in the area could help offset the cost of the extension to reach a new supply. Reducing the cost of energy is a priority for all Alaskans."

McKibben Jackinsky can be reached at mckibben.jackinsky@homernews.com. Michael Armstrong can be reached at michael.armstrong@homernews.com.