Legislature(2001 - 2002)

02/28/2002 08:10 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 296-MUNICIPAL MERGER AND CONSOLIDATION                                                                                     
                                                                                                                                
CO-CHAIR MORGAN announced that the  first order of business would                                                               
be  HOUSE  BILL  NO.  296,   "An  Act  relating  to  mergers  and                                                               
consolidations of municipalities."                                                                                              
                                                                                                                                
Number 0097                                                                                                                     
                                                                                                                                
REPRESENTATIVE JIM WHITAKER,  Alaska State Legislature, testified                                                               
as the sponsor  of HB 296.  This legislation  deals with the most                                                               
basic  tenet of  democracy,  self-determination.   Representative                                                               
Whitaker informed  the committee that  a large community  can, by                                                               
virtue  of a  vote,  determine that  a  smaller community  should                                                               
become part  of the larger  community, no matter the  decision of                                                               
the smaller community.  "This  particular bill would correct that                                                               
affront to democracy and self-determination," he explained.                                                                     
                                                                                                                                
REPRESENTATIVE  WHITAKER  explained  that  Section 1  of  HB  296                                                               
merely cleans  up existing statute.   The current  statute allows                                                               
an indefinite  amount of time  for signatures to be  collected in                                                               
order  to  place  a  consolidation   effort  before  the  voters.                                                               
Signatures may  be collected over a  period of time, five  to ten                                                               
years, and  some of those  signatures may  be from people  who no                                                               
longer live in the area,  yet those signatures would still count.                                                               
This legislation  would change that by  requiring that signatures                                                               
for such be collected in a period of one year.                                                                                  
                                                                                                                                
Number 0368                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WHITAKER turned  to  Section  2 of  HB  296.   To                                                               
uphold the  basic tenet of self-determination,  that is community                                                               
self-determination, it  is unacceptable  that a  larger community                                                               
simply absorbs  an existing governmental entity.   Representative                                                               
Whitaker clarified  that this discussion isn't  about annexation.                                                               
This  legislation addresses  the situation  in which  an existing                                                               
city is  absorbed by a  borough, for example, and  a consolidated                                                               
government is formed.   This happens even when a  majority of the                                                               
smaller  entity  preferred [not  to  be  absorbed by  the  larger                                                               
governmental entity].   Therefore, the smaller  community's right                                                               
to self-determination has been taken away.                                                                                      
                                                                                                                                
REPRESENTATIVE  SCALZI recalled  the  request,  during the  Homer                                                               
annexation, that  smaller second class cities  become involved in                                                               
the dialogue during an annexation.   Therefore, he requested that                                                               
Representative Whitaker draw the distinction.                                                                                   
                                                                                                                                
REPRESENTATIVE WHITAKER reiterated that  annexation is a separate                                                               
subject and doesn't apply to  consolidation or unification, which                                                               
this bill addresses.  He  deferred to Tam Cook, Legislative Legal                                                               
Services, regarding the specific distinctions.                                                                                  
                                                                                                                                
Number 0596                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUESS inquired as to  whether [HB 296] will result                                                               
in the  problem of one  [local government] providing  services to                                                               
another [local  government] which  could create an  incentive for                                                               
voters   [of   the   smaller   community]   to   not   vote   for                                                               
[consolidation/unification].                                                                                                    
                                                                                                                                
REPRESENTATIVE  WHITAKER  agreed  that could  be  a  possibility.                                                               
However,  he  emphasized the  need  to  not,  in the  search  for                                                               
expediency  and efficiency,  trump a  basic tenet  such as  self-                                                               
determination.  Representative Whitaker,  in further  response to                                                               
Representative  Guess, said  he wasn't  aware of  any cases  like                                                               
Representative Guess had described.                                                                                             
                                                                                                                                
REPRESENTATIVE  GUESS  requested   that  Representative  Whitaker                                                               
review Section 3.                                                                                                               
                                                                                                                                
Number 0729                                                                                                                     
                                                                                                                                
REPRESENTATIVE  WHITAKER  requested  that Section  3  be  deleted                                                               
because  that section  [posed a  problem for  the Local  Boundary                                                               
Commissions (LBC)], and it wasn't a battle he felt could be won.                                                                
                                                                                                                                
CO-CHAIR MEYER  asked that  Representative Whitaker  elaborate as                                                               
to why he felt that he wouldn't  win the battle with the LBC over                                                               
Section 3.                                                                                                                      
                                                                                                                                
REPRESENTATIVE WHITAKER  remarked that [this battle]  isn't worth                                                               
fighting over.   The LBC  had significant objections  to [Section                                                               
3] in  relation to  the it's ability  to conduct  their business.                                                               
Representative  Whitaker  said that  he  didn't  want HB  296  to                                                               
become a review of the LBC and its powers.                                                                                      
                                                                                                                                
REPRESENTATIVE    SCALZI   requested    clarification   of    the                                                               
relationship of  annexation of  a second class  city to  a larger                                                               
city such as  in the Homer annexation.  How  does [HB 296] differ                                                               
from [the Homer situation], he asked.                                                                                           
                                                                                                                                
Number 0986                                                                                                                     
                                                                                                                                
TAMARA  COOK, Director,  Legal  and  Research Services  Division,                                                               
Legislative  Affairs  Agency,  Alaska State  Legislature,  stated                                                               
that the  Homer situation is  different in several regards.   She                                                               
explained that  there are two  ways in which to  accomplish local                                                               
boundary changes.  One way  to accomplish a local boundary change                                                               
is by proposal by the LBC  subject to legislative oversight.  The                                                               
second way is through local option.   In the Homer situation, the                                                               
first  method,  proposal  by  the   LBC  subject  to  legislative                                                               
oversight, was utilized.   However, Article X, Section  12 of the                                                               
Alaska State  Constitution does allow  for local  option boundary                                                               
changes.  The last sentence of  Article X, Section 12, says, "The                                                               
commission  or board,  subject to  law, may  establish procedures                                                               
whereby boundaries may be adjusted  by local action."  Therefore,                                                               
the statute  being amended in  HB 296  is a local  action statute                                                               
that  has   nothing  to   do  with   the  LBC's   authority  over                                                               
consolidation.                                                                                                                  
                                                                                                                                
MS.  COOK  also  pointed  out   that  there  are  procedures  for                                                               
annexation  that  are  separate  from  those  for  consolidation.                                                               
Representative  Scalzi  is  correct  in that  there  could  be  a                                                               
situation in  which annexation involves  including one  city into                                                               
another city, although those issues  are somewhat different.  The                                                               
statutes   [encompassed  in   HB  296]   deal  with   merger  and                                                               
consolidation,  which  always  involve municipalities  that  join                                                               
together.   [Mergers and consolidations] never  involve land that                                                               
is  unincorporated or  borough land,  which was  the case  in the                                                               
Homer situation.  Literally, merger  and consolidation means that                                                               
two municipalities  come together to form  a single municipality.                                                               
Ms.  Cook  explained, "This  particular  provision  is the  local                                                               
option  merger and  consolidation  statute.   The Local  Boundary                                                               
Commission could still,  if it chose to get involved  in a merger                                                               
or consolidation, submit a proposal and  do the route that we saw                                                               
in  Homer."    Therefore,  the constitution  specifies  that  the                                                               
legislature can pass laws that  deal with the procedure for local                                                               
option changes.   The LBC  does get  involved in that  it reviews                                                               
local  option merger  and  consolidation petitions.     Ms.  Cook                                                               
pointed out  that if the local  option route is taken,  a vote is                                                               
taken.   That [vote] is required  by statute.  Therefore,  HB 296                                                               
places  two   more  procedures   into  the   already  established                                                               
statutory framework.                                                                                                            
                                                                                                                                
Number 1201                                                                                                                     
                                                                                                                                
MS. COOK  explained that  Section 1 of  HB 296  changes [statute]                                                               
such that  only a  year is  allowed to  collect signatures  for a                                                               
merger and consolidation petition.   [Section 2] changes the vote                                                               
requirement that  currently exists  for merger  and consolidation                                                               
[petitions].   Currently, all the  people that would  be included                                                               
in the  new proposed municipality  vote and are counted  in order                                                               
to  determine   passage  [of  the  merger/consolidation].     The                                                               
significant change  in Section 2 is  that the votes of  the areas                                                               
will  be  tabulated  separately,  which  Ms.  Cook  viewed  as  a                                                               
legislative policy choice.                                                                                                      
                                                                                                                                
CO-CHAIR MEYER  inquired as  to whether there  is a  problem with                                                               
the current method of doing mergers and consolidations.                                                                         
                                                                                                                                
MS. COOK  said that she  wasn't familiar  with any facts  on that                                                               
matter.                                                                                                                         
                                                                                                                                
Number 1344                                                                                                                     
                                                                                                                                
DAN BOCKHORST,  Staff, Local  Boundary Commission;  Department of                                                               
Community   &   Economic   Development  (DCED),   testified   via                                                               
teleconference.   Mr.  Bockhorst noted  that the  LBC hasn't  yet                                                               
formally  considered HB  296.    However, he  noted  that he  has                                                               
discussed HB 296 with the  LBC Chairman, Kevin Waring, who agrees                                                               
with the views he will state today.   In regard to Section 1, Mr.                                                               
Bockhorst said that the department  considers it to be reasonable                                                               
and thus  endorses it.   In  regard to  Section 2,  Mr. Bockhorst                                                               
concurred with  Ms. Cook's  comments that Section  2 is  a policy                                                               
decision.   He pointed out that  Article X, Sections 3  and 7, of                                                               
the Alaska State Constitution impose  the duty on the legislature                                                               
to  determine  which municipal  governments  will  be merged  and                                                               
consolidated.   Therefore, the  department views  Section 2  as a                                                               
legitimate    public    policy   proposal    deserving    serious                                                               
consideration.                                                                                                                  
                                                                                                                                
Number 1470                                                                                                                     
                                                                                                                                
MR.  BOCKHORST  noted  that  the  current  law  provides  for  an                                                               
areawide vote.   That law has  been in place since  1972, and was                                                               
reenacted in  1985 when Title  29 was  comprehensively rewritten.                                                               
He  turned to  the policy  debate on  the merits  of providing  a                                                               
requirement  for separate  votes  in  each municipal  government.                                                               
The Alaska Supreme Court has  held that the constitutional policy                                                               
of  minimizing  the  number  of   local  government  units  -  as                                                               
established  in  Article  X,  Section  1,  of  the  Alaska  State                                                               
Constitution -  is served  when city  and borough  governments do                                                               
join.    Therefore,  the  more   difficult  it  is  to  merge  or                                                               
consolidate,  the less  the aforementioned  constitutional policy                                                               
is served.                                                                                                                      
                                                                                                                                
MR.   BOCKHORST  informed   the  committee   that  in   1991  the                                                               
legislature created an  ad hoc task force  on governmental roles,                                                               
which  was intended  to address  efficiencies and  effectiveness.                                                               
That ad hoc committee presented  its report to the legislature in                                                               
1992.   Among the conclusions  of the  ad hoc committee  was that                                                               
merger, consolidation,  and unification  of city  governments and                                                               
borough  governments  should  be encouraged,  when  possible,  in                                                               
order  to  achieve  more  efficient  and  cost-effective  service                                                               
delivery.     Since  HB  296   would  require  a  vote   of  each                                                               
municipality, it would  - to varying degrees - raise  the bar for                                                               
municipal  mergers  and  consolidations.     However,  Section  2                                                               
wouldn't  have created  particularly  extreme  situations in  the                                                               
recent proposals  before the  LBC.   The recent  proposals before                                                               
the commission have  been such that a single  city government and                                                               
a single borough government have  proposed consolidation.  In all                                                               
cases,  the  city  governments  have  encompassed  a  substantial                                                               
portion of  the borough population --  ranging from approximately                                                               
40 percent to 75 percent of  the population of the total borough.                                                               
The LBC  has dealt  with proposals for  the consolidation  of the                                                               
following:  the  City of Haines and the Haines  Borough, the City                                                               
of Ketchikan and  the Ketchikan Gateway Borough, and  the City of                                                               
Fairbanks and the Fairbanks North  Star Borough.  However, slight                                                               
changes in  those proposals could  have resulted in Section  2 of                                                               
HB 296  making it more  difficult to  merge or consolidate.   For                                                               
example, the  Ketchikan Gateway Borough  consists of the  City of                                                               
Ketchikan  and the  City of  Saxman.   If Section  2 had  been in                                                               
place and had  the City of Saxman been included  in the Ketchikan                                                               
consolidation  proposal, voter  approval from  each of  the three                                                               
municipal   governments  effected   would  have   been  required.                                                               
Because  of the  characteristics of  the City  of Saxman,  such a                                                               
situation would have  allowed 2-3 percent of the  voters to block                                                               
a consolidation,  even if the  remaining voters had  endorsed the                                                               
consolidation.                                                                                                                  
                                                                                                                                
Number 1723                                                                                                                     
                                                                                                                                
MR.   BOCKHORST  turned   to   Representative  Scalzi's   comment                                                               
regarding the merger/consolidation  of the City of  Homer and the                                                               
City of  Kachemak.  This is  a situation in which  the provisions                                                               
of  HB  296 might  make  it  more  difficult to  consolidate  the                                                               
aforementioned  local governments,  if the  local option  process                                                               
was used.   Under current law,  the consolidation of the  City of                                                               
Homer and  the City of Kachemak  would require a majority  of the                                                               
total  votes  cast.   Requiring  separate  voter  approval  could                                                               
result in  a situation in  which roughly  4 percent of  the total                                                               
number  of  votes  cast  in   that  proposal  could  prevent  the                                                               
consolidation.  However, he stressed  that there are alternatives                                                               
such as a proposal for  legislative review annexation of the City                                                               
of Kachemak to  the City of Homer.   In the past  there have been                                                               
instances  in which  city governments  have been  consolidated or                                                               
merged  through  annexation.    For example,  the  City  of  Port                                                               
Chilkoot was annexed  to the City of Haines in  1970.  An extreme                                                               
example of  a situation  in which  the separate  vote requirement                                                               
could impact  the outcome  of consolidation is  with the  City of                                                               
Kupreanof,  which joins  the City  of  Petersburg.   The City  of                                                               
Kupreanof receives services from the  City of Petersburg.  If the                                                               
separate voter approval requirement was  in place, less than one-                                                               
half  of  one   percent  of  the  total   voters  could  preclude                                                               
consolidation  of  the   City  of  Kupreanof  and   the  City  of                                                               
Petersburg.   However, the consolidation, in  effect, could occur                                                               
through a legislative review annexation.                                                                                        
                                                                                                                                
REPRESENTATIVE  HALCRO  related  his   understanding  that  in  a                                                               
situation  in which  one community  provides services  to another                                                               
community, a  small number  of voters in  the smaller  city could                                                               
block a consolidation or merger.   However, if the case is strong                                                               
enough, the city  providing the services could  propose its claim                                                               
to the LBC through the annexation process.                                                                                      
                                                                                                                                
MR.   BOCKHORST   answered  yes.      In   further  response   to                                                               
Representative  Halcro, Mr.  Bockhorst  agreed that  in the  most                                                               
egregious cases,  when a consolidation  is being refused  for all                                                               
the  wrong reasons,  there is  a safety  net [in  the legislative                                                               
review annexation].                                                                                                             
                                                                                                                                
Number 1926                                                                                                                     
                                                                                                                                
PETE  ROBERTS, President,  Citizens  Concerned About  Annexation,                                                               
testified via  teleconference.  Mr. Roberts  announced support of                                                               
HB  296  [in  order  to maintain]  self-determination  and  local                                                               
control.   He pointed out  that [the U.S.] legal  system includes                                                               
many built-in provisions to thwart  a large majority from rolling                                                               
over a smaller minority.  Mr.  Roberts said he feels Section 2 is                                                               
appropriate.   He pointed out that  Article I, Section 2,  of the                                                               
Alaska State Constitution says,  "All political power is inherent                                                               
in  the  people."   Mr.  Roberts  expressed  the need  to  review                                                               
boundary changes by decree.  There needs to be due process.                                                                     
                                                                                                                                
Number 2122                                                                                                                     
                                                                                                                                
CO-CHAIR  MEYER   noted  that  his  earlier   question  regarding                                                               
examples of this  problem had been answered  through the examples                                                               
specified by  Mr. Bockhorst  and through  the information  in the                                                               
committee packet regarding the Fairbanks North Star Borough.                                                                    
                                                                                                                                
CO-CHAIR MORGAN, in response  to Representative Halcro, announced                                                               
that there is a fiscal note.                                                                                                    
                                                                                                                                
REPRESENTATIVE  GUESS pointed  out that  the size  of the  fiscal                                                               
note would depend upon who is in charge of the election.                                                                        
                                                                                                                                
REPRESENTATIVE WHITAKER, in response  to Co-Chair Meyer, answered                                                               
that HB 296 is not an unfunded mandate.                                                                                         
                                                                                                                                
CO-CHAIR  MEYER  indicated that  under  HB  296 cities  would  be                                                               
required to do more work.                                                                                                       
                                                                                                                                
REPRESENTATIVE  WHITAKER replied  no,  and  explained that  there                                                               
would  be one  election with  separate counts  [for the  separate                                                               
local  governments].   He acknowledged  that such  might take  an                                                               
hour more of work.                                                                                                              
                                                                                                                                
REPRESENTATIVE GUESS  asked if  it was  Representative Whitaker's                                                               
belief  that this  change should  occur so  that one-half  of one                                                               
percent could actually block a merger.                                                                                          
                                                                                                                                
REPRESENTATIVE WHITAKER replied:                                                                                                
                                                                                                                                
     It  is  not  my  intent  to  allow  any  obstructionist                                                                    
     effort;  it is  my intent  to continue  to provide  the                                                                    
     right  to self-determination.    As a  result of  that,                                                                    
     there may be circumstances and situations wherein one-                                                                     
     half of one percent may be viewed by the other ninety-                                                                     
        nine point five percent as being obstructionist.                                                                        
      However, the rights of that one-half of one percent                                                                       
     have been maintained.                                                                                                      
                                                                                                                                
Number 2270                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUESS  moved that  the committee  amend HB  296 by                                                               
deleting  Section 3.   There  being no  objection, Section  3 was                                                               
deleted.                                                                                                                        
                                                                                                                                
Number 2303                                                                                                                     
                                                                                                                                
REPRESENTATIVE SCALZI  moved to report  HB 296 as amended  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSHB  296(CRA) was                                                               
reported from  the House Community and  Regional Affairs Standing                                                               
Committee.                                                                                                                      
                                                                                                                                
The committee took a brief at-ease from 8:43 a.m. to 8:45 a.m.                                                                  
                                                                                                                                

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