Navarre Defends Proposed Loan to Homer

As we’ve reported, the Southern Kenai Peninsula cities of Homer and Kachemak City are looking at a potential $13 million loan from the Kenai Peninsula Borough to forward the ongoing natural gas project. Borough Mayor Mike Navarre was a guest on KSRM’s Sound Off this morning, and defended the proposal…


Mayor Navarre: “The whole gasline project in Homer is going to provide benefits to Homer, but also to the borough. I mentioned the better interest rate on our invested dollars, the other part of it is that, we own the hospital down there. The potential savings on an annual basis for the energy difference in costs is going to be $250,000-$300,000 a year. For the five-schools we have that we could hook up to gas, we save maybe as much as $1 million a year, those are paid for currently by taxpayers throughout the borough as our contribution to the school district, so there are significant benefits to the borough and the residents of the borough throughout the borough, and if we can find a way to facilitate that and help,  it really becomes a win win.”



Navarre also said that the proposed loan would be a good investment for the borough…


Navarre: “And in this particular case, what Homer had asked if there was a chance that we could do it and we started looking at the funds that we have invested and said, ‘You know what? We could get a better return at virtually no risk, because it’s another local government entity, where we can increase the interest rate return on our investment, and at the same time help Homer,  because it’s more flexible terms.’ If they go to the bond bank or something, they could get similar rate, but they would have pre-payment penalties and things like that, so that if the property owners down there, when they’re building out that system, decide that they want to pay things off early, they wouldn’t have that opportunity.”

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