A Kenai Peninsula Borough ordinance to loan $13million dollars to the cities of Homer and Kachemak City was approved last night with a vote of 6-1 (Kelly Wolf), with one excused (Charlie Pierce) and one absent (Hal Smalley).
Assembly Member Charlie Pierce excused himself from last night’s discussions of the Borough loan to Homer and Kachemak City at the Assembly Meeting. As the Division Manager for Enstar Natural Gas, and a partial beneficiary of the proposed loan, Mr. Pierce cited a perceived conflict of interest.
Vice-Chair Bill Smith…
Smith: “There have been a number of questions about: ‘How does the Borough have enough money to loan this out?’ And we have our fund balance that is maintained annually, and I believe our fund balance on our current fiscal year is about $21 million, but the Borough holds funds from various entities across the Borough, and rather than putting them in the bank and getting .0001 per cent interest, we have a fund manager that manages these funds for us in the national market.”
Smith reiterated Borough Mayor Mike Navarre’s comments that the Borough would benefit from a higher rate of return by loaning the money to the local cities, rather than investing elsewhere.
Several amendments to the ordinance were made, creating negotiable interest rates and increasing the upper limit available to Kachemak City from $300,000 to $600,000.