Friday, May 11, 2012

With ‘skin in game,’ Homer hopes for Parnell approval on gasline

Michael Armstrong

After a weekend of teeth grinding by city of Homer officials when the Alaska Senate failed to include in its capital budget sent to the House an $8.1 million grant to build a natural gas pipeline from Anchor Point to Homer, locals breathed a sigh of relief when the House of Representatives added the grant and both houses approved the revised capital projects budget.

“I’m really pleased,” Rep. Paul Seaton, R-Homer, said Monday. “It’s really tough to get an $8 million project on the House side when it’s not in the budget coming over.”

Of the city’s top-15 items on its capital improvement project list, only two other items survived. One, a $1.1 million grant to fix the Homer High School track, also was a Kenai Peninsula Borough priority. The Legislature also approved a $100,000 grant to dredge the Nick Dudiak Fishing Lagoon, a popular local and tourist fishing spot on the Homer Spit.

Not making the cut were sewer treatment plant and harbor improvements.

“It’s good news over all,” said Homer City Manager Walt Wrede. “We’re disappointed in some ways. There’s always something we wish were in there, but I think the gas pipeline is a big deal.”

One obstacle remains in getting funding for a long-awaited natural gas service line to Homer: getting Gov. Sean Parnell to sign off on it — or, not veto it. In the first year the grant was passed by the Legislature, Parnell cut all but $450,000, which built a pressure reduction section and a line from the North Fork Road to Chapman Elementary School on the Sterling Highway in Anchor Point. Last year, Parnell vetoed the whole grant.

Officials sought a grant that would avoid another veto. Parnell said he wanted to see some “skin in the game” with local contributions. Part of the project, to be built by Enstar, will be financed with a $1 per million cubic foot tariff on Homer gas customers. Anchor Point does not pay the tariff. The city of Homer also passed resolutions supporting the tariff, as well as changes to creating special assessment districts and using rights-of-way for a gas line, all actions showing a local commitment.

“I’m hopeful,” Wrede said of Parnell approving the grant. “I think there’s a good chance. (Parnell is) sending out positive signals. I’m optimistic the third time is going to be the charm.”

Local officials also made a calculated decision not to ask for any other big-money projects. In making his veto last year, Parnell noted Homer got grants for a new solid waste transfer facility and cruise ship passenger facility improvements.

The lower peninsula did well in projects outside the city, including $2.5 million for Sterling Highway road rehabilitation, $1.2 million for borough road improvements, $1 million for Seldovia harbor improvements, $100,000 for a Kachemak Emergency Services fire truck storage building on Diamond Ridge Road, $2 million for a Ninilchik fire station and $244,000 for improvements to the Anchor Point Senior Center parking lot.

The city had hoped that Homer Harbor Deep Water-Cruise Ship dock improvements would have been included in a proposed bond for port projects around the state. That didn’t happen.

Harbor improvements could have been funded by a harbor improvement fund if the city had put together proposals that had a 50-percent funding match. Wrede said the city wasn’t prepared to make that application because it would have had to identify the 50-percent match from the harbor depreciation fund — something the city didn’t feel comfortable doing, he said.

The city is preparing a proposal to fund harbor improvements, and apply for the 50-percent funding match for next year, that would come out of a bond resolutions and increased harbor fees. The city has to make sure a bond sale would go through and mariners will support fee increases.

As for the gas line, the next step for the city council is to seriously discuss if it wants to finance a build-out — if Parnell doesn’t veto the grant — and how the council wants to go about doing that.

Read more: