Borough seeks fair solution

MAT-SU -- When forced to choose between rendering ineffective a valuable tool and allowing it to be used haphazardly, on a whim, what's the best way to proceed?

Borough staff are working on developing a new ordinance pertaining to the creation of natural gas local improvement districts after a proposal brought forward to the Mat-Su Borough Assembly last week was shot down, but they may be seeking to pin down a moving target.

Borough assembly members have become increasingly split over approving natural gas local improvement districts in recent months, as new assembly members voice shared concerns with existing assembly members about potential inequities involved in creating the districts.

District five representative Jody Simpson has been staunch in her opposition to the local improvement districts, or LIDs, for her entire term in office, and reiterated her reasons at that meeting.

"I have been the sole assembly member who has consistently voted against gas LIDs if they haven't reached 100-percent [approval]," Simpson said. "I hold to the principle that it is inherently coercive and government does not have a role in funding a privately held organization."

Borough staff were directed several weeks ago to come up with an ordinance that remedied the situation, and the ordinance before the assembly last Tuesday was evidence of that work. Borough Manager John Duffy said finding a simple solution to the problem was not easy, and eliminating the LID process altogether may not be the best answer.

"Generally speaking, natural gas LIDs have proven benefits to borough residents," Duffy said. Eliminating high heating costs and improving overall safety by reducing the number of wood stoves work together to improve quality of life, he said, but that improvement has a downside. That, he said, is when the borough or local government offering the LID process is forced to take drastic measures such as foreclosure to recover funds for the improvements that property owners fail to pay.

"It's particularly distasteful when you have an individual who never wanted to be part of the LID in the first place," Duffy said.

Duffy said Enstar officials said they did not have a way to provide landowners with a long-term financing contract to pay for bringing the gas line to their property, as the borough currently provides.

Currently, if property owners in a subdivision, for example, were to ask Enstar to bring natural gas to several properties in their area, the property owners must foot the bill up front. If other property owners in their subdivision decide to extend the gas line to their property within a specified time period, those who originally paid for the line receive a pro-rated portion of that initial construction cost back from Enstar.

When the ordinance was up for public hearing at the assembly's April 15 meeting, some said asking property owners to pay in advance for a project that may cost tens of thousands of dollars would bring development to a crawl. Others said good riddance to a process that targets the poor.

Former assembly member Jay Nolfi, a regular at borough meetings, told the assembly the recently released list of tax foreclosures showed a list of foreclosures on people owing money on LIDs that was 73 names long.

"If only one of those is because of a gas LID, that name is one name too many," Nolfi told the assembly. Simpson confirmed with Tammy Clayton, the borough's finance director, that there have been foreclosures on properties as a result of natural gas LIDs.

Some said the borough was throwing away a powerful tool by insisting on an impossible-to-achieve 100-percent approval rating. Full approval, they said, could never be reached, simply because of the large amount of land owned by absent owners, governmental agencies and others who simply don't return requests for approval or denial of the LID. The borough is a non-voting landowner, Clayton said, and non-votes count as "no" votes.

Bill Breuer, the vice-chair of the borough's platting board, said he lived in the first subdivision to take part in the gas LID program.

"Dorothy Jones, that night, cast the deciding vote to allow us to have an LID," Breuer said. "At the time, many of us saw electrical bills that equaled, if not exceeded, our monthly mortgage."

When the assembly discussed the matter, the opinions were split. There was discussion about changing the approval rating to a number between the present 50-percent majority and the 100 percent proposed. But one thing was clear -- the current ordinance, if continued indefinitely, could create unexpected problems for landowners.

Assemblyman Talis Colberg said while he has been on the assembly, two assembly members have consistently voted against LIDs with less than 100-percent approval ratings. There was a chance others would agree with their argument and change their votes. That, he said, was why something must happen to address the underlying issue of LIDs, the idea that those who don't want them or can't afford them, are forced to.

"We're leaving a mechanism in place where someone goes through quite a bit of effort, only to come to the assembly … to find out there are four people now who are just going to be against it," Colberg said.

Other assembly members agreed, and the ordinance was postponed indefinitely, killing the proposal. Along with the motion to postpone the ordinance, assembly members directed staff to come back with an ordinance that addressed their concerns -- not an easy task, given that some proposed wiping out the LID process entirely, while others proposed simply increasing the percentage of "yes" votes it took to pass an LID.

Wednesday, Duffy said he's looking at one way to solve the issue that may strike a happy medium. He envisioned a borough-financed LID process that would allow gas lines to be extended only to property owners who asked for it. Those property owners, he said, could take part in the long-term financing structure available through the borough, and others could opt in later. If they do, Duffy said, a portion of their contribution would be returned to the original group on a pro-rata basis.

It's not free of problems, Duffy said, and would create an accounting nightmare for the borough, but it's an approach some assembly members expressed interest in last week. Duffy, last week, said a new proposal should be ready by the assembly's June 3 meeting.