Legislature(2001 - 2002)

04/10/2002 01:35 PM CRA

Audio Topic
* first hearing in first committee of referral
+ 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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