MEMORANDUM 09-38

TO: Mayor Hornaday / Homer City Council

FROM: Walt Wrede

DATE: March 23, 2009

SUBJECT: City Hall Legislative Grant

At the last Council meeting, Representative Seaton asked the Council to consider whether it could endorse a reappropriation of the remaining funds in the new City Hall Legislative Grant to construction of a new classroom facility at the college. Mayor Hornaday and Mayor Pro Tem Novak requested that a discussion be scheduled for the Committee of the Whole on March 23.

The purpose of this memorandum is to briefly outline the advantages and disadvantages of doing this from the City’s perspective. I hope this memo can help to “jump- start” and facilitate the discussion.

ADVANTAGES

• Representative Seaton and Senator Stevens worked hard to support the proposed City Hall / Town Center Project. They secured $ 2 Million for the new City Hall construction and $2.5 Million for the college to purchase and refurbish the existing City Hall. Because of the vote on the bond issue and the Council’s decision to put City Hall on slower track, both legislative grants are now in limbo. Representative Seaton understandably would like to put the money he has already secured to work in his district on an identified high priority project.
• Capitol project funding will be very difficult to secure this legislative session. Representative Seaton understandably is anxious to use money he has already secured for his district so that at least some capitol money is available this year.
• The Council is on record as supporting the consolidation and expansion of the Kachemak Bay Campus. Reappropriating this funding will help to accomplish that goal, even though college occupation of the existing City Hall appears to be no longer part of the plan.
• The Finance Department has determined that the City can reappropriate the grant funding without penalty or having to pay the money it already spent back to the State.

DISADVANTAGES

• Although reappropriating this funding to the college is an attractive idea, giving up that much capitol money in this economic environment is a very big step. The City cannot expect to see much in the way of capitol funding from the State in the near future. Stimulus funding is uncertain at best right now and it will not be sustainable or reoccurring. Who knows where the Federal budget will end up and of course, earmarks are now out of favor. The City’s own tax revenues are in decline. The City has an obligation to take care its own infrastructure and the delivery of public services. Council must keep its own priorities in mind when making this decision.
• The Council has placed construction of Town Center and a new City Hall on a slower track but it has not abandoned the project altogether. Council has also reaffirmed that it still wants to see the College eventually occupy the existing City Hall. Reappropriating this money would pretty much close the door on this plan for the foreseeable future.
• The Council may want to consider trying to reappropriate this funding for another use that it considers to be a higher priority for the City. For example, Council could attempt to use the money for Town Center Infrastructure construction. This would keep the Town Center Plan moving forward and could serve as a small economic stimulus package in its own right. The City could get this project ready to go relatively quickly and put people to work fast. This would stimulate the economy and promote economic development in the downtown core, consistent with adopted City Plans.
• The Council could also consider reappropriating the Main St. funding as well to other priorities like the Town Center Project or projects on the CIP or Stimulus List.