MEMORANDUM 06-168

TO: Mayor Hornaday and Homer City Council

FROM: Walt Wrede

DATE: September 30, 2006

SUBJECT: Ordinance 06-53

Ordinance 06-53 entitled “ AN ORDINANCE OF THE HOMER CITY COUNCIL AMENDING HOMER CITY CODE BY CREATING A NEW TITLE 15 “ SPECIAL SERVICE DISTRICTS”, CREATING THE OCEAN DRIVE LOOP SEPCIAL SERVICE DISTRICT, A DIFFRENTIAL PROPERTY TAX ZONE TO LEVY PROPERTY TAXES TO FUND SPECIAL SERVICES PROVIDED IN THE DISTRICT, AND A CITIZEN ADVISORY COUNCIL”, is scheduled for introduction on September 25, 2006 a and public hearing and second reading on October 9, 2006.

I have sponsored this ordinance because I view it as a positive step forward in resolving some of the outstanding issues and points of contention regarding the seawall project that remain between the City and the property owners. I view this ordinance as another good faith effort by the City to help the property owners help themselves in their effort to control erosion on their properties. The City began this effort by providing a public financing mechanism for construction of the seawall and some project management services.

This ordinance proposes a mechanism by which the property owners will be assessed a property tax to pay their proportionate share of the costs associated with maintenance, repair, improvements, insurance and other associated costs. A community advisory body is established to give the property owners, as a group, and the City a formal mode of communication with each other. It also effectively establishes the City as the responsible party to see that maintenance and repair will occur.

As you know, the seawall project was completed several years ago but many issues remain to be resolved. These include, but are not limited to, a pending appeal to superior court by the property owners over the legality of the LID, the lack of any funding source or property owner plan to provide for on-going maintenance and repair, and disagreement over fundamental issues such as who owns the wall and who is financially responsible for it.

In my view, this ordinance is a positive step forward because it offers solutions to many of the outstanding points of contention. For example, this ordinance:

• Organizes the property owners into a formal group that the City can effectively communicate with; something the property owners have not been able to do themselves.
• Provides a mechanism by which the property owners who benefited directly by construction of the seawall will pay their share of the costs of maintenance, repair, improvements, insurance, and other associated costs.
• Provides for a coordinated and responsive approach to maintenance and repair
• Provides a mechanism for the City to participate and pay its proportionate share of the costs as a benefiting property owner.
• Provides for meaningful participation by the property owners in budget and construction decisions through formation of an advisory body.

I believe it is very important to note that if the Council adopts this ordinance and makes these additional services available to the property owners, it is in no way a statement regarding ownership of the wall. This ordinance is silent on that topic. Special tax districts can be formed by a City whenever it provides a special service in a limited area that is not provided generally in the city, regardless of who owns the property or the improvement. It remains the City’s position that the seawall is a private improvement, constructed on private land, for the primary benefit of the private property owners behind the wall, but it is not necessary to come to a resolution of disagreements on these points before adopting this ordinance.

It is probably also important to note that this ordinance can be repealed by the Council at a later date if a better idea or some type of “global” settlement that resolves all of the issues emerges. It can also be repealed if it is decided at some time in the future that it is no longer cost-effective to maintain the seawall, or that it is no longer beneficial for the City to continue to provide this special service. At this point, it is my view that the Council should adopt this ordinance so that we can offer the property owners a positive solution to many of the outstanding points of contention and initiate some movement in resolving this matter.

RECOMMENDATION: Adopt Ordinance 06-53