Legislature(2001 - 2002)
04/10/2002 01:35 PM Senate CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 296-MUNICIPAL MERGER AND CONSOLIDATION
CHAIRMAN TORGERSON announced there was a proposed amendment that
some people wanted to address. He didn't intend to pass the bill
that day but wanted to start taking testimony.
REPRESENTATIVE WHITTAKER, bill sponsor, explained HB 296 does two
things. First, with reference to mergers, consolidations, and
petitions to bring about a merger or consolidation, the bill
requires a 365 day time period rather than an open ended time
period when signatures can be collected on a petition. Second, a
community's right to self-determination is defended in Section 2.
It does that by requiring that majorities of each municipal unit
associated with a consolidation or merger approve separately
before a merger or consolidation may occur.
Much to their surprise, after passing the bill through the House,
they became aware that the language needed clarification thus the
proposed amendment \F.2.
CHAIRMAN TORGERSON asked for a motion to adopt the amendment.
SENATOR AUSTERMAN made a motion to adopt amendment #1, version
\F.2.
CHAIRMAN TORGERSON said he objected for discussion purposes.
He called Tamara Cook forward to discuss the amendment.
TAMARA COOK, Director of Legislative Legal and Research Services,
explained the amendment corrects what was originally intended but
not achieved in the original draft. It might also add another
aspect to the bill that she never comprehended. The real concern
with respect to municipalities that consolidate or merge with a
city that is within the municipal boundary is that the vote be
approved separately by the city within the borough and by the
borough population that is outside of the city. That was not
achieved in the original bill. A merger or consolidation can
include any number of entities. For example, a borough might have
more than one city proposed to be merged with that borough
included in a petition. Under amendment #1, the result would be
that if any one of the cities disapproved the entire package then
the package would fall. This would place a burden on the
individuals that are putting together a merger petition to
ascertain whether the individual cities support the merger.
CHAIRMAN TORGERSON asked for verification that a merger
consolidation would mean the entire sum; it wouldn't be a borough
or city trying to take some land from the borough and not the
entire borough.
MS. COOK replied a merger occurs when two municipalities join and
one gives up its identity and is taken over by the other. A
consolidation occurs when two or more municipalities come
together and both may change their identities and form yet a
different municipality. For example, two second-class boroughs
might consolidate and form one first-class borough. Another
example would be a city that merges with a borough and ceases to
be a city but becomes a part of the borough without changing the
classification of the borough.
CHAIRMAN TORGERSON asked what would happen if two cities want to
merge but there is some borough land in between their boundaries
so three governments involved.
MS. COOK replied she didn't know how two cities could merge in
that case without something being done with the borough land
between them. If the borough wasn't merging with the cities
rather it was retaining its own identity; it wouldn't properly be
a municipality that was merging. You'd be faced with one or the
other cities annexing that part of the borough land to make that
merger work.
CHAIRMAN TORGERSON said he was quite familiar with this because
of the Homer annexation issue, but there are two ways to join
municipalities. One would be through the petition process, the
other would be a direct request to the Local Boundary Commission
(LBC), and this legislation doesn't affect their power.
MS. COOK agreed; this bill only amends the statutes that deal
with local option mergers and consolidations. The local option
mergers are authorized according to procedures established by the
Legislature and they involve a local effort to achieve a boundary
change. Those sorts of boundary changes don't go to the
Legislature for ratification in the way that LBC initiated
changes do.
SENATOR AUSTERMAN used the Kodiak Island Borough as an example.
It has six or seven communities within the borough and the City
of Kodiak and the borough talked about consolidation at one time.
If someone wanted to include the other six village communities
and one or two of those villages decided they didn't want to be
included, would this cause the entire process to fail?
MS. COOK said yes, if proposed amendment #1 were adopted and
enacted into law, any one city that voted against the merger
would keep the merger from occurring at all. It would not
preclude the sponsor of the merger effort from filing another
petition that excludes the dissenting city.
SENATOR AUSTERMAN asked if there would be a way of writing the
amendment to allow the merger to go forward without the
dissenting city rather than going through the entire process a
second time and excluding the dissenting city.
MS. COOK said it could be drafted that way.
CHAIRMAN TORGERSON asked if it could be drafted both ways so the
petitioner could choose the option. He suggested this because
there could be a petition that included one city that was the
"cash cow" of the area and everyone wanted to be a part of that
city and voted favorably. There's potential for much discontent
if the city with the highest assessed value voted no, but the
merger went forward without them. For this reason, he would
prefer that the merger would go forward at the option of the
petitioner or that the willing parties could merge.
MS. COOK replied that is a possibility. She said he keyed in on
the policy problem associated with taking the approach suggested
by Senator Austerman. If you set up a system where it is
automatic that one municipality would not be included in a merger
or consolidation you might set up a situation where a merger
consolidation should not go forward if a critical party declined
to participate. Certainly it could be drafted to be at the option
of the petitioner but if you take the approach of proposed
amendment #1, there is nothing that precludes another petition
from occurring and leaving out the area that disapproved. There
is also nothing that precludes a petitioner from filing a number
of separate petitions if they are confronted with this
possibility and the petitioner feels a merger would be workable
in any number of configurations. She didn't know that the
petitioner needed the flexibility, but it could be done.
SENATOR PHILLIPS said there was a similar situation in the
municipality of Anchorage regarding service area concepts. He
asked whether there would be the possibility of having a
"Hillside situation" in other parts of the state where one area
of a community or area was using services of another's without
paying for it. [Hillside residents were using city police
services without paying for those services.] He asked whether the
same set of circumstances would be applied here.
REPRESENTATIVE WHITTAKER replied they did not intend that the
bill be confused or viewed as being relative to service areas.
SENATOR PHILLIPS then said the Homer annexation issue might be
relevant. One area would enjoy benefits without paying for those
benefits because they didn't want to be consolidated.
REPRESENTATIVE WHITTAKER said it is not their intent to be
obstructionists; it is their intent that each community has the
right to determine its own path.
CHAIRMAN TORGERSON didn't think this was similar to either
Hillside or the Homer annexation.
SENATOR PHILLIPS was "trying to formulate a situation in the
state where one group of people that are outside the boundaries
are taking the benefits of everyone else who are paying for it-
roads and police service whatever-parks libraries, swimming
pools."
REPRESENTATIVE WHITTAKER said that is the gray area between
annexation and consolidation and merging and it is not a perfect
black and white situation. However, the situation he is referring
to is probably more appropriately an annexation issue as opposed
to separate municipal entities.
CHAIRMAN TORGERSON added the issues in the areas of Haines,
Ketchikan and Saxman and perhaps North Pole are more appropriate
examples. He asked Ms. Cook what would happen if a city and a
borough consolidated and there were other cities outside.
MS. COOK replied the other cities could continue to function as
cities. When you're dealing with a situation where the
municipality takes the step to go to Home Rule then unification
is appropriate. The merger and consolidation comes up more in
situations where there are a variety of municipalities that are
not prepared to take the step of going to a Home Rule situation.
They don't want to adopt a charter.
SENATOR AUSTERMAN said his preference is that the amendment
allows the different options to take place whether everyone is in
or out or whether two are in and one is out or five are in and
one is out. He didn't want all or nothing, which would require
that the process start over entirely if one area disapproved.
CHAIRMAN TORGERSON asked whether the petition had to be approved
by the LBC before it goes to a vote.
MS. COOK thought it did need LBC approval first.
CHAIRMAN TORGERSON said he agrees the petitioner should have an
option of how many communities must approve, but care should be
taken so that if a community between two other communities drops
out, the petition becomes invalid.
MS. COOK said the department and the LBC review a merger and
consolidation petition like all other local action boundary
changes. The LBC has to hold a hearing and make a finding that
the petition is appropriate and the reconfigured municipality
meets the standards for incorporation for that type of
municipality. Furthermore, they must make a best interest
finding. She also thought the LBC has the authority to make
changes to a petition to accomplish those purposes if it so
chooses.
SENATOR AUSTERMAN asked whether the effective date would be 90
days after the Governor signed the bill.
REPRESENTATIVE WHITTAKER said that is correct, but he is
concerned with the Haines situation. The intention of the bill is
to protect an area such as those outside the City of Haines. If
they choose not to be part of a merger or consolidation they
should have that right. If changing the effective date would give
them that right, then it is incumbent upon the Legislature to
give them that right.
SENATOR AUSTERMAN said they have been going through the process
for a long time and to change now isn't necessarily the correct
thing to do either.
CHAIRMAN TORGERSON asked Ms. Cook if changing the effective date
is a technical change.
MS. COOK replied the Senate could add an effective date to a bill
and that is a technical change within the Uniform Rules. However,
the House can decline to vote to pass the effective date and
still enact the bill. It's viewed as a technical change when one
house or the other adds an effective date because it doesn't
prevent the defeat of that effective date separately by the
second house.
CHAIRMAN TORGERSON said the threshold for them is the two-thirds
vote, not a simple majority.
MS. COOK said a special effective date must be adopted by two-
thirds vote of each house.
CHAIRMAN TORGERSON asked Mayor Black to give a brief explanation
of the Haines situation.
MAYOR DAVE BLACK explained they have gone through the process
twice. The first time they were at odds with the borough over
some litigation between the city and some private parties and the
borough didn't support the city in their original petition. The
consolidation failed by just three votes. Since that time, they
have reestablished a rapport between the borough and the city.
Haines Borough is a third class borough and the City of Haines
represents about 75 percent of the vote.
The vote on the second consolidation petition has been a 27 month
process and the vote should be scheduled soon. With the passage
of this legislation, they find the potential to derail the
intentions of both the City of Haines and the Borough Assembly of
Haines.
CHAIRMAN TORGERSON verified that the Mayor was not in favor of an
immediate effective date.
MAYOR BLACK replied it wouldn't affect them at all unless there
was a date or moratorium that stopped the due process they have
diligently followed for the last 27 months.
CHAIRMAN TORGERSON asked whether he anticipated a special
election.
MAYOR BLACK replied they did anticipate a special election.
CHAIRMAN TORGERSON asked Ms. Cook for confirmation that this
legislation would take effect 90 days after the Governor signed
the bill.
MS. COOK confirmed it would be effective 90 days after the bill
was signed or 90 days after enactment if the Governor elected not
to sign it.
MAYOR BLACK stated they would like to be specifically exempted if
this legislation is enacted and it might apply to their current
petition.
CHAIRMAN TORGERSON announced a short at ease at 2:15 pm.
CHAIRMAN TORGERSON gaveled the meeting back to order at 2:16 pm
and called for teleconferenced testimony.
PETER GOLL, representing himself, testified from Haines in
support of HB 296. He was Chairman of the House Community and
Regional Affairs Committee in 1985 and 1986 when the municipal
code revision took place. At that time, they overlooked the local
option of consolidation. This bill and issue is limited to local
option as far as the utilization of municipal services by people
not living in a municipality. When that issue becomes sever, it
is an opportunity for annexation and legislative oversight.
However, with a local option such as in Haines, there is no
opportunity for legislative oversight and they depend on the will
of the people to determine how their government will be
structured. He supports the legislative as a correction of an
oversight that should have been addressed in 1985 or before.
The legislation with proposed amendment #1 is vital because
without it citizens could find themselves moved into a municipal
structure without their consent and without the opportunity of
legislative oversight as exists with an annexation.
In this case, the municipality has 75 percent voting margin over
a group of other individuals in the non-city part of the Haines
Borough. That 25 percent has the right to be heard independently.
The issue of representation is key here.
He thought the effective date is important and is necessary if
the intent of the bill is to cover everything that goes forward
from passage. Otherwise, the bill will pass and the intent will
not be implemented.
CAROLYN WEISHAHM, resident outside the City of Haines, testified
that the Borough Assembly has vacillated on the present petition
to consolidate. A year ago they voted to oppose the petition and
although they are now supporting the petition, the support is not
unanimous. She urged passage of the bill with proposed amendment
#1 and with an effective that would include the upcoming
consolidation. Consolidation as it currently exists doesn't
encourage meaningful dialog for all residents whose lives would
be greatly affected by the consolidation.
SIDE B
2:25 pm
TIM JUNE testified via teleconference and voiced his support for
HB 296 and the proposed amendment #1. The city population was
about 1,250 three years ago when the city annexed about 600
people. In that annexed area there were about 80 percent that
were opposed to the annexation, but they are now part of the
city. There are now about 1800 people in the city and 600
outside. The two borough assembly members that voted against the
consolidation are representatives from the outside area and they
would lose that representation if the consolidation moves forward
because there would be no districting.
RON WEISHAHM, representing himself, testified from Haines in
support of HB 296 amended to reflect its original intent and
revised so a consolidation must pass both in the city and outside
the city. In consideration of Haines, the law should be enacted
when signing by the Governor. There is good reason why no
consolidation effort in the state has ever passed, but passage of
this legislation could change that. "If consolidation is not
brought up to standard by amending HB 296 then I ask for your
best effort to abolish consolidation as a method of joining
communities."
SENATOR PHILLIPS asked the sponsor whether his intent was to
change policy or to take care of the situation in Haines.
REPRESENTATIVE WHITTAKER replied he had not been aware of the
situation in Haines initially.
CHAIRMAN TORGERSON said the LBC brought up several points in
their letter and he asked Ms. Cook to read the questions and
respond to them.
MS. COOK responded to the following points:
· The change would disenfranchise borough voters who are
also residents of the city proposed for consolidation from
voting in a borough election. Response: She had no
particular reaction to that statement. For example, the
residents of the City of Haines are also residents of the
Borough of Haines and they would not be permitted to vote
with respect to their status as borough residents.
· The proposed amendment repudiates the principle of "one
person, one vote" and the principle of majority rule.
Response: She thought that too was philosophical and
dependant upon your point of view. Certainly everyone
involved gets to vote, it's just that this requires that
approval occur in smaller categories than in existing law.
In that sense, it could perhaps be argued that it dilutes
the one person, one vote principle.
· The proposed amendment may contravene the provisions of
the federal Voting Rights Act. Response: Her understanding
of the act is that it is intended to prevent
discrimination based on race so she wasn't sure how that
would play out in this type of election unless they are
suggesting that an urban area consists more predominantly
of one racial group than the rural part of the borough.
That point was too attenuated for a reaction.
CHAIRMAN TORGERSON said the last point wasn't really a question
and not appropriate to ask her to answer. It stated, "Application
of the change on an expedited basis to a pending election would
be unfair."
He asked Ms. Cook to draft the amendment for Senator Austerman
that gives the petitioner the option of accepting all or nothing
in the petition as discussed earlier.
He said it was his intent to hold the bill and bring it back for
final action the following week.
SENATOR PHILLIPS asked whether he wanted to decide the effective
date at that time as well.
CHAIRMAN TORGERSON wasn't sure he wanted to see an effective date
but he would follow Senator Austerman's lead on that point.
SENATOR PHILLIPS thought since it was unrelated to the situation
in Haines, and since they were trying to establish public policy
in the future, January 1, 2003 would set new rules for anybody in
the future.
CHAIRMAN TORGERSON said you would simply say it doesn't affect
any petitions that are pending.
SENATOR AUSTERMAN thought that should be included in an
amendment.
CHAIRMAN TORGERSON asked Ms. Cook to draft two amendments, one
for himself and one for Senator Austerman.
Proposed amendment #1 was left on the table and HB 296 was held
in committee.
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