New harbor funding decisions looming
City officials need to look at how project will be paid for very soon
Plans for the new small boat harbor in Valdez are moving ahead and city administration is preparing to present funding options to elected officials next week.
City manager John Hozey said he is looking to present three different funding options to the Valdez City Council in a yet-to-be-scheduled special meeting he is hoping will occur next week.
In a telephone interview Monday, Hozey said he is working on a proposal to council that will give elected officials three funding options for the new harbor, which will cost approximately $60 million for the entire project, which he said is really two projects rolled into one.
“In round numbers,
There is about a $19 million funding deficit for the project, which has seen $21 million in federal funding, in addition to state grants and other city funds already allocated for the new harbor.
The first federal phase of the project, which will come about with a partnership between the city and the Army Corp of Engineers, is shy $4,966,800.
“We have to come up with the four million,” Hozey said.
The first two funding options currently eyed to be presented to the council include issuing bonds or changing the City Charter to allow for spending down the city’s permanent fund.
“The third way would be to try to scrape together the money,” he said.
The first two options require a popular vote due to the fact that all city bonds require voters pass a ballot initiative to give approval and the City Charter currently does not allow spending money from the permanent fund outside of an already voter-approved yearly budget contribution.
“Currently, there is no provision in the Charter language governing the Permanent Fund which allows for expenditure of more than 1.5 percent of the Permanent Fund’s market value as determined on the last day of the year,” Sheri Pierce, the city’s clerk and election official said in an email. ”Therefore, a Charter change would be needed to provide a mechanism to spend more than that amount. That Charter change would require approval by the voters. This would not authorize any expenditure amount for the harbor, only create a mechanism to spend more than currently allowed. So, if this passed, the voters could be presented with a Charter amendment on the May ballot to fund the harbor from the Permanent Fund.”
The council will need to reach a decision before July 21 if it hopes to bring either of the first two funding issues to voters in the municipal elections this fall.
“Both questions could not appear on the ballot in October, as one would rely on the other,” Pierce said. “In other words, if the mechanism to spend more than allowed failed, the second proposition would not be possible.”
Pierce clarified that two carefully worded ballot propositions could appear at the same time.
“You could put the Charter change question regarding creating a mechanism to spend more than 1.5 percent of the Permanent Fund and a bond authorization on the same ballot in October,” she wrote.
Hozey said he is hoping to schedule the meeting with council to occur in the days after this Monday regular meeting, which will include a work session on the city’s upcoming mid-year budget adjustment.