Shallow gas issues top assembly agenda

Posted: Tuesday, December 16, 2003

A resolution asking that state lawmakers amend a pair of statutes that currently allow the waiver of local land-use ordinances to clear the way for shallow gas development is back on the table for today's meeting of the Kenai Peninsula Borough Assembly.

House Bill 69, which became law this year, effectively gave the commissioner of the Department of Natural Resources the power to ignore local ordinances when development of a gas resources was deemed to be an overriding state interest.

Some 22,000 acres of land surrounding Homer was leased to Lapp Resources Inc. earlier this year. Most residents of the Homer area only became aware of the sale after a comment period had come and gone, largely because no advertising was done in the local newspapers.

Under a 1996 law, advertising for an upcoming shallow gas sale is required in a newspaper of general circulation, and ads did appear in the Anchorage Daily News. However, no ads were printed in the Homer News or the Homer Tribune, two widely read local weeklies.

For many landowners, it was a startling revelation to discover they held no rights to the subsurface mineral deposits beneath their homes. Those were retained, in most cases, by the state at the time Alaska joined the union. Only a relative few landowners were able to secure subsurface rights.

For residents who may have understood their lack of subsurface control, the realization that a decision to drill was now up to just one person, and that drilling could mean road-building, drill rigs, pumping stations, utilities and even workers' camps on their property, was too much to take.

At heavily attended public meetings in Homer, residents told public officials they wanted the laws amended at the very least. Many called for the state to buy back the gas leases and start over, this time with a well-publicized and public process.

A resolution proposed by Milli Martin of Diamond Ridge seeking amendment of the state laws was pulled from the agenda of Nov. 18.

Tuesday, the matter will be reintroduced as Resolution 2003-129. Only this time, the resolution formally asks Gov. Frank Murkowski and the Alaska Legislature to buy back the South Peninsula shallow gas leases, particularly those within the Homer Bridge Creek watershed and other environmentally sensitive areas around Homer.

It then goes on to ask that state statutes be amended eliminating the power to waive local land-use regulations without advance public notice and hearings, and requiring the DNR commissioner to meet "clear and high standards" before waiving any local law.

Further, the resolution asks that the statute governing public notice be amended to require notice of a lease application to be published in local news media as well as a newspaper of general circulation, and that additional advertising must occur if more than one year elapses between a lease application submission and final action by on the application by the director of the Division of Oil and Gas.

Several public hearings on ordinances are scheduled for today's borough assembly meeting, including Ordinance 2003-19-28, appropriating $1.5 million for preliminary design of the Central Peninsula General Hospital expansion project. If approved, the contract would go to the Soderstrom Architecture and Planning Inc., a company based in Portland, Ore.

There are several other proposed ordinances up for public hearing that would appropriate funds. Ordinance 2003-19-25 would provide $32,000 to purchase a van for the Nikiski Senior Service Area; Ordinance 2003-19-26 would appropriate an Alaska Office of Homeland Security and Emergency Services grant of $30,000 to the borough for preparation of an all-hazard mitigation plan; and Ordinance 2003-19-27, another state homeland security grant amounting to $206,485, for emergency first-responder equipment and training exercises.

Also on the agenda is Reso-lution 2003-130, introduced by assembly members Pete Sprague of Soldotna and Betty Glick of Kenai, that would place before the voters in a special election a proposition authorizing the borough to directly fund school district cocurricular activities in addition to operating funds currently allowed by law.

Borough officials estimated the annual cost of such funding at a little over $2.1 million, requiring up to a half-mill tax levy.

In a memo to the assembly, Sprague said precedent for this kind of educational funding is to be found in the voter-approved .1-mill tax levied in support post-secondary education.

Today, federal and state laws restrict direct funding of borough schools through borough tax revenue. That limitation is known as "the cap."

"While the legal department has indicated that providing such direct funding outside of the operational 'cap' on funding may be legally defensible, it also indicated that this is a gray area," Sprague said. "Specific adoption by the borough of separate authority to fund cocurricular activities outside the cap would strengthen the borough's legal ability to directly fund cocurricular activities as a separate power."

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