Legislature(2001 - 2002)
02/07/2002 08:12 AM 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
ALASKA LEGISLATURE
JOINT MEETING
SENATE AND HOUSE COMMUNITY & REGIONAL AFFAIRS COMMITTEES
February 7, 2002
8:12 a.m.
SENATE MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Alan Austerman
Senator Randy Phillips
Senator Georgianna Lincoln
Senator Pete Kelly
HOUSE MEMBERS PRESENT
Representative Carl Morgan, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Andrew Halcro
Representative Drew Scalzi
Representative Lisa Murkowski
Representative Gretchen Guess
HOUSE MEMBERS ABSENT
Representative Beth Kerttula
COMMITTEE CALENDAR
Local Boundary Commission Annual Report
Homer Annexation
City of Homer Presentation
PREVIOUS ACTION
No previous action to record
WITNESS REGISTER
Kevin Waring
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550 W. 7 Street Suite 1790
Anchorage, AK 99501
POSITION STATEMENT: Gave the Local Boundary Commission Report
Dan Bockhorst
Department of Community and Economic Development
550 W. 7 Street Suite 1790
Anchorage, AK 99501
POSITION STATEMENT: Answered questions regarding Local Boundary
Commission action
Allan Tesche
th
550 W. 7 Street Suite 1790
Anchorage, AK 99501
POSITION STATEMENT: Answered questions regarding Local Boundary
Commission action
Tamara Cook, Director
Legislative Legal and Research
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions regarding Local Boundary
Commission action
Mayor Jack Cushing
491 E Pioneer Ave
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
John Fenske
Homer City Council
1832 Sterling Highway
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
Curt Marquardt, Mayor Pro temp
Homer City Council
1849 Highland Drive
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
Ray Kranich
Homer City Council
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
Michael Yourkowski
Homer City Council
3059 Kachemak Drive
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
Rick Ladd
Homer City Council
P.O. Box 3364
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
Gordon Tans
Attorney for Homer
Homer, AK 99603
POSITION STATEMENT: Testified on Homer annexation
ACTION NARRATIVE
TAPE 02-1, SIDE A [Senate CRA tape]
CHAIRMAN JOHN TORGERSON called the joint meeting of the Senate and
House Community & Regional Affairs Committees to order at 8:12 a.m.
Present were Senators Lincoln, Kelly, Austerman, Phillips and
Chairman Torgerson and Representatives Halcro, Scalzi, Guess and
Co-Chairs Meyer and Morgan. Representative Murkowski arrived at
8:25 a.m.
The first order of business was the Local Boundary Commission
Annual Report.
KEVIN WARING, Chairman of the Local Boundary Commission, asked
Commissioner Allan Tesche, appointee from the third judicial
district and Dan Bockhorst, commission staff, to join him at the
witness table.
He announced that there are two vacancies on the commission at
present. The seats in both Northwest and Southeast Alaska are
vacant.
The commission did file its annual report with the Legislature, as
required by law, and it addresses three principle areas. The first
chapter gives an overview of the commission and its basis under law
as well as activities and functions. The second chapter summarizes
the commission's activities over the last year and gives some
information about pending proposals. Chapter three discusses
several important public policy issues that relate to local
government in Alaska.
He said his report would be briefer than usual to give more time to
the discussion of the Homer annexation.
The Alaska Constitution established the Local Boundary Commission
(LBC) to ensure that proposals relating to boroughs and city
boundary issues will be dealt with objectively and from a statewide
perspective. The state constitution and statutes give the
commission responsibility for reviewing and acting upon proposals
for the following:
· Incorporation of cities and boroughs
· Annexation to cities and boroughs
· Detachment from cities and boroughs
· Reclassifications of cities
· Dissolution of cities or boroughs
· Merger and consolidation of cities and boroughs
In addition to those responsibilities, the commission has other
powers and obligations that are defined in statute and include the
duty to make studies and recommendations on local governmental
boundary issues.
Commission members are not paid, rather they serve as volunteers
and receive no compensation for their time spent on LBC business.
The Department of Community and Economic Development (DCED)
provides staff support to the LBC.
The LBC met 15 times in the last calendar year. To minimize costs,
they would deal with several issues at each meeting and would
conduct meetings via teleconference whenever practical.
Collectively, the members spend hundreds of hours dealing with
documents, attending hearings and doing LBC business.
In the past year, the commission acted on several proposals that
were submitted. They approved petitions for the consolidation of
the City of Ketchikan and Ketchikan Gateway Borough, for the
consolidation of the City of Fairbanks and Fairbanks North Star
Borough, for the incorporation of the City of Talkeetna as a Home
Rule City and for the annexation to the City of Homer. The outcome
of some of those is clear. The voters in Ketchikan and Fairbanks
chose not to approve those consolidation proposals so they won't go
forward. The Talkeetna voters will hold a vote in March and the LBC
approved an annexation to the City of Homer that is significantly
smaller than the original petition of more than 25 square miles.
In April of 2001, residents of Adak approved incorporation of a
Second-Class City of Adak after the LBC approved their petition in
2000. LBC decisions have frequently been litigated, but for the
fifth year in a row, there is no standing litigation against any of
their decisions.
The LBC continued to review, update and revise the regulations in
the Alaska Administrative Code, which are the regulations that
govern their business. The last time the regulations underwent
comprehensive review was ten years ago and since that time there
have been significant changes in state statute that affect the
commission's activities. They suggested some housekeeping
regulations to address ambiguities and to streamline some
procedures for non-controversial proposals.
They also proposed a new requirement for a local public hearing on
legislative review annexation proposals to be held before they are
submitted to the LBC. This requirement would apply to proposals
such as the one the City of Homer initiated.
They held four public work sessions on the proposed changes in
their regulations in the year 2000 and this year they published
notice of the regulations and invited public comment. They held two
public hearings on the regulations and then approved a set of
revised regulations that are now being reviewed by the Department
of Law.
The following significant petitions are pending before the
commission:
· A vote on the petition to consolidate the City of Haines and
the Haines Borough will be held in Haines in March.
· A petition to dissolve the existing City of Skagway and
concurrently incorporate a Skagway Borough.
· The City of Wasilla has submitted a local action petition for
annexation of about 300 acres adjacent to the city. This type
of petition will be settled by local property owners and
residents and would not come to the legislature if it is
approved.
· The City of Palmer has submitted an annexation petition.
· There are ongoing discussions about borough incorporations of
significant annexations in Wrangell and Petersburg.
The following policy issues are discussed in Chapter 3 of the
annual report and were raised as normal commission responsibilities
to address local governmental boundary problems or issues:
· The Unorganized Borough and its failure to meet the
constitutional requirements set out in Article 10 of the
Constitution and the disincentives that are now in state law
that tend to discourage borough incorporation and borough
annexations
· There are ambiguities in state law that affect the authority
of newly incorporated municipal governments to levy property
taxes during the transitional period when they are setting up
to do business
· The adverse impact of the Alaska Housing Finance Corporation's
Small Communities Housing Loan Program on some boundary
changes
UNORGANIZED BOROUGH
SB 48 would establish a new method for incorporation of boroughs in
areas of the unorganized borough that satisfy the standards in law
for borough incorporation. The LBC has been supportive of the
concept embedded in the legislation.
Statutes now authorize funds for borough feasibility studies by
local groups wishing to examine the pros and cons of borough
incorporation, but funds have never been provided for such studies.
The Prince of Wales Island region and the Delta Greeley region have
both expressed interest in conducting borough feasibility studies
and the LBC recommends the legislature appropriate funds in the
approximate amount of $50,000.00 annually for such studies.
There is $600,000.00 available to newly incorporated cities and
boroughs to assist in their set up costs, but there are no
transition funds available for the consolidation or merger of
governments. There are local groups looking at consolidation that
have expressed the wish that there be some lesser amount available
to them to help bridge the extra costs of consolidation.
AMBIGUITIES IN STATE LAW
At present, state statutes are unclear about municipal authority to
levy property taxes during the period immediately following
incorporation, boundary changes, dissolutions or reclassifications.
Specifically, the pertinent sections of the statutes do not clearly
authorize or prohibit municipal governments that incorporate or
change boundaries after January 1, but come into being during that
calendar year, to assess, levy and collect taxes. The commission
believes it would be beneficial to local governments to make the
ground rules clear. Those issues are fully addressed on pages 28
and 29 of the annual report and they offer some draft legislation
that was developed with the state assessor and some municipal
assessors that would resolve this uncertainty.
ALASKA HOUSING FINANCE CORPORATION SMALL COMMUNITIES HOUSING
ASSISTANCE PROGRAM
This program sometimes affects public acceptance of municipal
boundary changes because the rates are more favorable for rural
residents and this stimulates resistance to annexation among
property owners and home mortgage holders that would face higher
loan rates if they are annexed. AHFC board of directors has adopted
regulations that have resolved this issue as it affects mergers and
consolidations but there is still no solution for the situation for
annexation and incorporation proposals. They continue to work with
AHFC to find a solution that is financially acceptable.
CO-CHAIRMAN TORGERSON called for questions.
REPRESENTATIVE SCALZI asked what prompted the concern regarding
levying property taxes after January 1.
DAN BOCKHURST said Homer provides an example. If approved, the
annexation for the City of Homer, it will occur on March 9. There
are some who assert that if property assessment value is fixed as
of January 1 of each calendar year then that date also establishes
a date by which a municipal entity has power to levy property
taxes. If the area isn't in the corporate boundaries of the City of
Homer on January 1 2002, then the question arises as to whether the
City of Homer has the authority to levy property taxes for the
period of time between March 9 and the end of the calendar or
fiscal year. There is an Attorney General opinion that municipal
governments have a duty to levy taxes on property that is annexed
after January 1 but in time for the municipal government to place
that property on the tax role. In many cases there is dispute and
confusion among city and borough governments on this question and
some insist that the territory must be within the jurisdiction on
January 1 in order for it to be taxable for that period of time.
The commission's proposal would provide a mechanism to resolve that
ambiguity.
MR. WARING added it is easy to see what a fair outcome would be;
that whichever government is providing services at the time should
be entitled to a comparable share of the revenues. That outcome can
be achieved with clarification in the statutes. The alternative is
inevitably some litigation of the issue. Statutory clarification is
a better resolution.
CO-CHAIRMAN TORGERSON commented he thought the commission already
has broad based authority to accomplish this in their order for
annexation or detachment. There may be a 45 day legislative review
process but that is when the order becomes effective, not the
effective date of stipulations that the commission may add to
annexation. He said he's not sure they need legislation. Rather,
"you just need to step out and do it."
MR. WARING said the legislation statutorily states that the
commission has that discretionary authority to place conditions on
boundary changes. He agreed they do have broad authority, but they
are generally conservative about venturing beyond what they see in
statute and regulation. They would feel more comfortable with a
statutory statement that the Legislature agrees this is something
they should do.
ALLEN TESCHE, LBC representative from the Third Judicial District,
said his view of state statutes governing taxation is that they are
specific and clear as to the process that should be followed. He
too agrees that they would prefer having clear guidance from the
Legislature on that issue rather than simply taking a position and
waiting to see what the courts decide. Personally, he would rather
see the issue addressed as a policy matter at the legislative
level.
CO-CHAIRMAN TORGERSON said he disagreed but the question is whether
they have the authority to put in the order when taxes would start
being collected and when they wouldn't. The LBC isn't arguing
whether they have the authority, they just choose not to exercise
the authority.
MR. TESCHE said they question whether they have the authority in
the first place and that is where the problem starts. He's not
comfortable with the proposition that they have the authority.
CO-CHAIRMAN TORGERSON asked when Nancy Golfstead resigned from the
LBC.
MR. WARING thought is was in July.
CO-CHAIRMAN TORGERSON asked if there were four commission members
when the report was adopted.
MR. WARING said they had four members when the report was adopted
and at the time of the most recent Homer public hearing. Mayor
Wasserman resigned from the LBC about a month ago.
CO-CHAIRMAN TORGERSON asked whether the request for the budget
amendment of $50,000.00 for help with borough incorporations is in
the budget request to the Legislature or just a request to the
committee.
MR. WARING said it isn't in any formal budget request.
REPRESENTATIVE SCALZI asked for background information and
justification for the suggested regulation to require a local
public hearing on legislative review annexation proposals before
the petition is reviewed by the LBC.
MR. WARING said legislative review annexations are usually the
controversial annexations; the non-controversial ones are routinely
handled without coming to the legislature.
The LBC put in a new requirement that a local government submitting
a legislative review annexation petition to the LBC should first
have a formal local public hearing before it is forwarded to the
commission. This did not grow from the controversy in Homer and
they did look at pros and cons. On one hand, this is an irrelevant
requirement for many local governments with modest petitions for
annexations. It is another layer of governmental requirement that
would yield no great benefit to the petitioner or the commission.
However, periodically there are petitions that would benefit from
full local discussion. The LBC thought it would be worthwhile to
put in this requirement to ensure when there are pros and cons they
are discussed locally. They don't want the LBC to become the
audience for things that should be worked out at the local level
such as whether or not the petition should be filed.
REPRESENTATIVE SCALZI asked if public comments move with the
petition to the LBC.
MR. WARING said not necessarily; the local government must document
that it passed a resolution authorizing the petition before it is
accepted by the LBC. However, the information that is generated at
the public hearing would not necessarily pass with the petition but
it would be in the LBC staff file. The commission is obviously in
the situation of being able to request any information it believes
would help it make a decision and lacking that information they can
draw their own conclusions.
There were no additional questions on the annual report.
CO-CHAIRMAN TORGERSON announced the next topic would be the Homer
annexation.
MR. WARING informed committee members he would be speaking from a
paper prepared 2/7/02 titled Summary of Local Boundary Commission
Recommendation for Homer Annexation.
Article X, Section 1 of Alaska's Constitution defines how local
government is dealt with in this state. It says the purpose of this
section is:
... to provide for maximum local self-government with a
minimum of local government units, and to prevent
duplication of tax-levying jurisdictions.
Annexation at the city level is the means by which we get to that
result. It is the tool used to prevent proliferation of local
governmental units, to minimize the number of taxing jurisdictions,
to facilitate maximum local self government. It is a common tool as
evidenced by the more than 40 annexations for the City of Anchorage
between 1920 and 1975 when it was unified. Many Alaskan cities have
had repeated annexations. It enables local governments to expand
their jurisdictions and minimizes the number of tax levying
jurisdictions.
The City of Homer submitted a petition to the LBC for annexation of
25.64 square miles and the LBC instead approved a petition for
annexation of 4.58 square miles. He stands by the commission's
decision and it is clear that the commission did not rubber stamp
the petition. They took the information into account and reached a
very different result than the City of Homer originally sought.
There are three elements to an annexation decision by the Local
Boundary Commission:
· There is a structured process defined in regulation and law
· There are standards set out in law and regulation that the
commission follows
· There is a record of the facts as documented in the official
record of the proceedings
The process was carefully set out, the law was applied and
documentation of the reasons is found in the 42 page document of
the commission's statement of decision. The rationale on each
standard is laid out so it is clear how the commission reached its
decision. It is a structured and methodical process and the
decision is not the result of an arbitrary or casual process.
The City of Homer annexation was a lengthy and through process with
all the procedural requirements observed. Attachment A summarized
the key steps in the Homer annexation proceedings.
There are fourteen standards established in law for LBC decisions
on city annexations. They make certain the respondents know that
those are the ground rules under which the commission makes
decisions and it is best to focus arguments and information on
those standards. Attachment B lists the fourteen relevant standards
and their basis in statute and regulation. In the statement of
decision, each of those standards is dealt with in turn.
Based on the facts in record, the commission found that their
recommended annexation of 4.58 square miles satisfied all legal
standards. Some key background for the recommended annexation is as
follows:
· The City of Homer was incorporated in 1964 and has had no
change in its upland boundaries in all that time.
· Since 1964 the population has grown four fold. The population
of the greater Homer area has grown about ten fold.
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· The City of Homer now ranks 11 in population and 61 in
terms of land area among Alaska's 146 city governments. After
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annexation, it would be ranked 7 in population and 48 in
land area.
· The City of Homer already provides services used by residents
of the area recommended for annexation. Fire protection, EMS,
library, parks and recreation, bulk water supply, water/sewer
service to select area, and transportation facilities are
provided. It is difficult to determine who is a resident and
who is not and find an equitable way to make sure those who
benefit from or have access to the services also share the
costs.
· Annexation will increase real property taxes in the annexed
area by 2.75 mills and extend the city sales tax to it
The record consists of a City of Homer petition, 14 responsive
briefs, written comments on the petition by 168 parties, the City
of Homer's reply brief, DCED's Preliminary Report and written
comments on it from 32 parties, DCED's final report and statements,
testimony, and public comments made at the local public hearing.
In addition to the printed record, the LBC obtained first hand
observations by touring the area by automobile and helicopter.
He said he wouldn't list all 14 standards but would respond to
questions. The commission did reach a unanimous decision that the
4.58 square mile area did meet all the requirements. They viewed
their decision as conservative.
Finally, the commission addressed two legal issues raised during
the annexation proceedings:
· Application of HB 13 passed last year and codified as AS
29.35.450(c). This is the law that requires a local vote on
the change of a service area boundary before a borough
government can alter a service area boundary. The commission
heard arguments and they concluded that particular statute did
not nullify the commission's authority to approve the
annexation or to alter the affected service area boundaries.
They believe it is in agreement with four Alaska Supreme Court
cases that have addressed this issue. The Department of Law
advised that provision does not impede the commission's
decision to approve annexations and alter the boundaries of a
service area. It is his understanding the Legislative Legal
and Research Counsel also advised the Legislature that they
concur. This issue has arisen in a number of other annexation
petitions and they reached a similar finding.
TAPE 02-1, SIDE B
· The argument that the LBC should truncate the terms of elected
local officials in the City of Homer and require a new
election. The rationale was that, due to the size of the
annexation, it would add approximately 18 percent to the
existing population of the city. The commission elected not to
truncate the terms based on the fact that:
o Homer Council members are elected at large and do not
represent a specific district
o The terms of the mayor and two council members will
expire in October 2002, two more council terms will
expire in October 2003 and the last 2 council terms will
expire in 2004
They could find no basis for the commission taking that initiative
and that would be a stretch of its authority.
In summary, the commission unanimously approved the petition on the
merits and the application of the standards. They believe they took
a conservative approach in defining the area that was included in
the annexed area. Homer has not grown as a compact tight town; it
is very stretched out following terrain and developable land. The
LBC decided the area that is the most immediately adjacent to the
existing community and most heavily developed warranted annexation.
The LBC didn't feel the city demonstrated that the larger
annexation was warranted.
The sentiment of the LBC is that this annexation is long overdue.
The point is to put the apparatus of a city government in place to
oversee the period of development rather than to come afterwards.
That hasn't happened in this case and probably some of the
objection to the annexation stems from the fact that people develop
a stake in the status quo and this is a change in the status quo.
CO-CHAIRMAN TORGERSON called for questions.
SENATOR PHILLIPS asked about the allegation that one commissioner
had a serious conflict of interest in this particular case.
MR. WARING said the petition was filed in March 2000. The LBC
operates under both the Executive Branch Ethics Act and their own
bylaws that deal with ethics issues. In June of 2000, Commissioner
Tesche filed notice that he and others in his firm had provided
some legal services to the City of Homer. At least some of the
advice that was given related to land use issues. They held a
public hearing, consulted the Attorney General's office and looked
at both the Executive Branch Ethics Act and the LBC bylaws before
determining that the financial involvement was not substantial
enough to disqualify or put any cloud on Commissioner Tesche's
participation or to constitute a conflict of interest in the Homer
case. The issue continued to be raised at subsequent points and the
commission continued to think there was no substantial conflict of
interest because there was a very modest level of previous
involvement by the commissioner.
SENATOR PHILLIPS asked whether the LBC has a system whereby
commissioners are able to recuse themselves from voting if they
have a conflict of interest.
MR. WARING said whenever there is any possible cloud of this sort,
it is disclosed to the commission and they go through the hearing
process described previously.
SENATOR PHILLIPS asked whether Mr. Tesche disclosed his conflict
right away.
MR. WARING said it is the responsibility of a commissioner to
disclose to him as Chairman as well as the Attorney General any
possible conflict and there are serious consequences if anyone
fails to do so.
SENATOR PHILLIPS said he was interested in how it was done.
MR. TESCHE responded in accordance with the Executive Branch Ethics
Act and the separate ethics standard that applies to the
commission, he was ethically required to offer a letter to the
Chair that set forth the pertinent facts of the previous legal work
that he did for the City of Palmer that might be the subject of
potential criticism. He did submit such a letter and he did request
a determination from the commission as to whether he could continue
to participate on the merits of the application. In open session
and without his participation, the commission made appropriate
rulings on both requests and determined there was not a conflict
that would require him to recuse. A copy of that correspondence is
available to the committee members if they so desire. He said they
could then see what the disclosure was and that would probably
answer questions concerning the decision made by the commission.
MR. WARING announced he had a copy of Commissioner Tesche's
original letter, the commission's action, subsequent correspondence
on the issue and his reply.
SENATOR PHILLIPS asked for verification that the commission
reviewed the material and determined there was not a conflict of
interest.
MR. WARING said they made a decision after a public hearing and
notice to interested parties.
REPRESENTATIVE HALCRO asked what type of appeals process was
available once the commission amended the City of Homer's petition
from 25 square miles down to 4.58 square miles.
MR. WARING replied there are two stages for anyone disagreeing with
the LBC decision. One is the reconsideration process, which is
fairly limited in its scope. There are specific criterion that deal
with a claim of misrepresentational fraud or if there were serious
errors in the commission's process or their understanding of the
law that warranted the commission reconsidering the decision or if
there was information available in the period after the hearing
that would have significant bearing on the basis of the
commission's decision. Taking that into consideration, they might
reopen their decision. Six or seven parties requested they do that
but they chose not to do so.
There is opportunity for litigation if someone is convinced the
commission improperly applied the standard, did not have a basis in
the facts, or if the decision made did not follow the process
properly. There is also the legislative review of the LBC decision,
which provides an opportunity for the legislature to determine that
they made a decision based on merit.
SENATOR HALCRO asked whether the City of Homer asked the LBC to
reconsider their decision to amend their petition.
MR. WARING said no they did not.
SENATOR HALCRO found it striking that the city didn't ask for
reconsideration when their petition for annexation was reduced by
83 percent.
MR. WARING suggested those questions might best be addressed to the
city but they were accepting of the decision at the public hearing.
SENATOR LINCOLN asked whether the commissioner from the First
Judicial District participated through the entire process.
MR. WARING replied she participated through the hearings and the
decision. Commissioner Wasserman resigned before the vote not to
reconsider, but since the vote was three zero not to reconsider,
the resignation made no difference in the outcome.
SENATOR LINCOLN said she assumes there was no participation from
the commissioner from the Second Judicial District.
MR. WARING said that is correct.
SENATOR LINCOLN then asked if the LBC conducted a total of four
meetings on the Homer annexation.
MR. WARING replied there were two commission meetings. The LBC
staff attended some of the other public informational meetings to
explain the pros and cons, the applicable statutes and the process
by which the commission does its business. The commission did not
meet on that until the final meeting is December.
SENATOR LINCOLN asked if any meetings were conducted by
teleconference.
MR. WARING told her the reconsideration was teleconferenced. There
was Homer participation in some of the procedural steps and there
was a great deal of interest from residents regarding the suggested
regulation change requiring a local public hearing. This was an
idea from a Homer resident and the commission agrees.
The commission has open meeting requirements and exparte
conversations are not their way of doing business. As a matter of
course, the commission does not discuss cases among themselves
until they are at the public hearing.
SENATOR LINCOLN referred to a map of the area and asked him to
speak to why the commission added two sections more than
recommended by DECD.
MR. WARING pointed out that the area outlined in red shows the
staff's recommendation. At the hearing, owners from the adjacent
160 acres requested that their property be added to the annexed
area. They thought it would improve their opportunity to develop
their property. The second area that was added lies along the coast
and is sloped land. The city requested that area be added so they
could have jurisdiction to protect the scenic qualities of the
area.
SENATOR LINCOLN referred to the map again and asked about a pie
shaped piece that is not included in the boundary.
MR. WARING replied that the commission does the best they can, but
there will always be disagreements and because of the ground
conditions at Homer, it is impossible to draw a bright line between
developed and not developed.
He then asked if she was referring to the area outlined in green.
SENATOR LINCOLN said she was referring to a portion of that area
that looks very populated. She then pointed to another area and
asked about that.
MR. WARING apologized that he was referring to a different area
when he answered the question.
SENATOR LINCOLN said she was trying to follow his answer.
MR. WARING explained the area encircled by the green blue line is
the existing City of Kachemak, which predates the City of Homer.
The City of Homer has grown to the point it butts against the City
of Kachemak and one of the reasons the LBC did not approve the area
proposed by the City of Homer is that it would have completely
encircled the City of Kachemak. Generally, commission regulations
do not favor creating in-holdings of that sort. It is already
incorporated as a city, it is not an area that the City of Homer
sought and it did not ask to be included in the petition so the
commission did not consider it.
REPRESENTATIVE SCALZI ensured all present that the scrutiny of the
questions in no way impugns on the integrity of the work done by
LBC staff but they certainly don't want there to be any appearance
of a rubber stamp.
He asked about the standard that says, "the area proposed for
annexation does not include entire geographical area with no
population…" For clarification he said, "The area that has no
population, from the top of West Hill over to Skyline, which
includes the reservoir, I would assume although the city has
territorial powers there granted by the borough, that area was
included because of the watershed more so than any similarity
between the populated area."
MR. WARING agreed that is the city's water supply and they do have
some concern about the long-term adequacy of their water supply.
The area doesn't include the watershed as much as the reservoir
itself. There is some development going on in that area and they
thought it was simpler and sounder to give the city jurisdiction
over that area.
REPRESENTATIVE SCALZI asked for confirmation that the LBC did
recognize the area was largely unpopulated and that does not meet
standard number five.
MR. WARING replied their reading of standard five is different and
it is very natural for annexations to include unpopulated areas.
That is part of the point of annexations. The standards for
boroughs and cities are very different; borough standards accept
the fact that there will be large unpopulated areas within borough
jurisdiction. The standards for cities are different; they are
meant to be places of settlement now or in the near future and the
requirement is that there not be large unpopulated areas. However,
they do provide for reasonable growth over a ten year period.
REPRESENTATIVE SCALZI asked if he would concur that the standards
are very subjective.
MR. WARING responded there is judgment needed and they try to be
consistent. He doesn't concede that the judgments are arbitrary;
the judgments are informed.
MR. TESCHE said the key point is judgment. When considering the
relatively small piece of property being questioned and when
historic growth patterns of the more developed areas of Homer are
considered, it is reasonably foreseeable that within the next five
to ten years there will be additional development such that one
could say that particular property is no longer rural in character.
It is more a question of judgment on the particular facts rather
than a truly subjective standard based on feelings or perceptions.
REPRESENTATIVE SCALZI referred to standards eight and nine:
· The City of Homer has provided a suitable transition plan for
extension of City services.
· The boundaries approved by the commission include all areas
necessary to provide essential city services on an efficient,
cost-effective level.
Obviously, the commission thought those standards were met. He then
had a question about the approximately $1.6 million in increased
revenue the city would get according to the final review plan. He
asked whether the commission considered the mill rate adjustment
that would take place in relation to the services that would be
added or are currently being used. "In other words, I didn't see
anywhere in the transition plan that would be a reduction rate of
the mill rate on how those things would be, the new services would
be paid for."
MR. WARING said the applicable standards regarding the fiscal
issues are that the LBC must find that the combined area possesses
the financial, economic and human resources to fund and provide
services. They don't measure whether the new revenue will exactly
match up with the cost of the services to be provided; their
decision is more general. They looked at Homer and determined that,
by Alaskan standards, it is a sophisticated, financially sound and
economically healthy community. They had no problem reaching their
conclusion.
REPRESENTATIVE SCALZI said he agrees and has no problem with that
either. If the services have already been provided, even though
there would be some new ones, those people outside the city would
be taxed, which would bring $1.6 million in new revenue. The
commission must also consider the position of those being annexed
as well as that of the city. He would think there would be some
scrutiny as to where those new funds are going to go, not just that
they are enough to pay for the services.
MR. WARING said this is a nuance area. There is no requirement in
law that there is any one-to-one parity between revenues paid and
services gotten. There are also pro and con arguments. One party
might argue they are just catching up and finally able to bill
those people who have been using the services in years past. The
counter argument is that nothing of significance is being gotten
for the new taxes and therefore they are unfair. The commission
decided, based on the Constitutional standard referred to
originally, it makes more sense to put within one government the
people that share interest in the provision of and paying for
governmental services.
REPRESENTATIVE SCALZI asked if the formation of the fire service
district played a big part in the LBC decision regarding what
services are now being paid for that were not before.
MR. WARING replied the formation of the new fire service area was
formed after the annexation petition was filed.
REPRESENTATIVE SCALZI reminded Mr. Waring the question was how much
of a factor did that play because obviously it was formed and there
was a mill rate of 1.75 that was going to be collected. What
percentage of that played into the decision to either reduce the
boundaries or alleviate the city's burden of services that were not
being paid for?
MR. WARING said their decision as to where to draw the boundary
lines was not affected. However, a section in Article X of the
Constitution clearly specifies that service areas are not to be
formed where there is an existing local government or city or
service area that is capable of providing the services. The city
was already providing the services. Clearly the city did have the
capability, it had provided services and it was continuing to
provide services.
REPRESENTATIVE SCALZI asked if they know there is argument that the
city should not have provided those services without a contract
outside their jurisdiction. There is a necessity of a relationship
between the entities outside and those inside to have some type of
contractual agreement so the fire service area was actually a
benefit to the city in that sense.
MR. TESCHE wanted to revisit the question, "How much of a factor
did that fire service area pose?" Speaking for himself he said, the
formation of the fire service area suggested to him that there was
a recognition that services were being provided outside the
jurisdiction. A local decision was being made that they should be
paid for it in some fashion through a service area. Without going
into all the mechanics of that service area formation and all the
ramifications in terms of contracts, it did provide him assurance
that services were being provided that people were going to pay for
through that service area as proposed.
On the other issues raised earlier about how you ensure the city
will provide equal value for the taxes collected in a new area, he
said he has two comments. First, the record did not suggest any
history within the city of Homer of unequal treatment of local
citizens in terms of delivery of services. It did not suggest the
kind of history that would give him concern that if the annexation
were approved; the people in the newly annexed area would be given
"short shrift" in terms of the taxes they pay. The other assurance
is that the 800 or 900 residents in the newly annexed area are all
voters that can participate in a political process to assure they
will be treated fairly.
CO-CHAIRMAN TORGERSON made the dry remark, "I'm glad you think that
way."
REPRESENTATIVE SCALZI asked how well they scrutinized the figures
provided by the city regarding the collection of the funds and did
they feel confident that those figures were valid.
MR. WARING said they felt confident there was the financial
capacity to fund city services and to raise revenues to provide the
level of service that local voters would choose. This is a decision
to be made at the local political level.
REPRESENTATIVE SCALZI asked which essential services were being
provided to the residents outside the city that they will have to
catch up paying for.
MR. WARING said there were some services available to and paid for
by residents outside the city such as library, recreation and water
supply. Services that would become available would be city planning
and zoning, public safety and the contract services such as fire
and EMS services. An area that is steadily growing but not
necessarily in an even way presents the task of deciding where the
line should be drawn.
REPRESENTATIVE SCALZI said he understood he just wanted to clarify
for the record. The question was about the services. He asked him
if he would concede that the borough is providing the planning and
zoning services. Perhaps not to the extent that the city provides,
but the water and sewer are paid for through enterprise funds or
the sale of water outside the city. The fire and EMS are now taken
care of with the fire service area so the ones they are not paying
for now are the library, parks and recreation and public safety
when there is not a trooper available.
MR. TESCHE offered that he prioritized the services. Number one was
police protection, second was the harbor, the library and museum
services ranked third and public works was four. This included the
parks and an improved method for water and sewer. Animal control
was last on the list.
REPRESENTATIVE SCALZI said he would add the airport. The things
that come into play in a city obviously benefit those outside and
there is lots of argument in favor. However, he wanted to get to
the specifics and take out the subjective.
Representation was one of his concerns. During a contentious phase
such as this, the representation has to be addressed whether
annexation is approved or not. He then asked whether the LBC is
also aware that there is a thirty day requirement for residency
before you can vote and a one year residency requirement before you
can run for office. If the annexation goes through, those in the
affected area will not be able run for office out of that annexed
area in the upcoming general election.
MR. WARING said he was not aware of that particular requirement.
REPRESENTATIVE SCALZI asked if he would agree that the
representation issue is of concern when about 23 percent of the
comparative mass of the population is going to change. The Kenai
Peninsula Borough code calls for a new election any time the
population changes by more than ten percent in any one given area.
MR. WARING thought that might be representation by districts and
this discussion is about at large seats so different considerations
might apply to districts with shifting populations. During the
proceedings they heard no legal arguments or legal support that led
them to believe they could truncate terms. They did have common
sense arguments that there will be many new residents and it's not
fair, but the commission was given no reason in law. Alternatively,
they were given the analysis and advice of the Department of Law
and subsequently the advice of the Legislators counsel that this
was probably going beyond the commission's power.
REPRESENTATIVE SCALZI said they recognize that for the considerably
larger original territory for annexation, that issue would be of
greater concern, but for the smaller area, it was of concern as
well. From his perspective it was a judgment call. The impact in
terms of the people coming in had to be balanced against the
representation of the people in the City of Homer that placed those
council members and mayor in office.
TAPE 02-2, SIDE A
9:50 a.m.
MR. TESCHE said it was of concern and they made a judgment call by
balancing the competing interests.
REPRESENTATIVE SCALZI said, "But you were unaware of the one year
residency clause."
MR. BOCKHORST explained the DCED was aware of the residency clause
and did address it in its reports and recommendations to the LBC.
They conferred with the City of Homer on the issue and reported to
the LBC that they both had the same interpretation; the one year
residency requirement takes affect in terms of when the person
became a resident of the area. They don't have to be annexed and
included within the city boundaries for one year. As long as they
lived in that annexed area for one year prior to the election they
would qualify as a candidate for that office.
CO-CHAIRMAN TORGERSON asked if the commission put that in their
report to the legislature.
MR. BOCKHORST replied it was their report to the LBC and does not
appear in the decisional statement.
CO-CHAIRMAN TORGERSON asked if they agreed they had the authority
to truncate terms.
MR. WARING admitted they discussed that in their decisional session
but did not find the facts compelling enough for the commission to
take an unprecedented action of that sort.
CO-CHAIRMAN TORGERSON repeated the question, "Do you believe you
have the authority to truncate terms?"
MR. WARING admitted he didn't know.
REPRESENTATIVE MEYER said his comment relates to HB 13. The bill
pertains to voter approval of formation, alternation or abolishment
of certain service areas. In the commission opinion, this bill does
not apply to this annexation but it does apply in other
annexations. He asked why it doesn't apply in the Homer annexation.
MR. WARING said the LBC does not think it applies to annexations at
all but it does condition the authority of a borough to alter
service area boundaries that are established within the borough. A
borough may not alter those service areas without a local vote.
They were aware of HB 13 from last session and the DCED might have
taken a position on the bill but the LBC did not because, as they
interpreted the bill, it did not intersect with their
responsibilities. It was about a requirement that local governments
would have to meet in order to alter service area boundaries within
their jurisdictions. It is in the part of Title 29 that deals with
local governmental powers and is not in the part of Title 29 that
deals with the commission or its responsibilities.
REPRESENTATIVE MEYER said he must have misheard. He thought Mr.
Waring said it does apply to some annexations, which led to his
confusion.
REPRESENTATIVE MURKOWSKI referred to the conclusion of the Balanced
Best Interests portion of the Statement of Decision.
The commission concludes that the balanced best interest
standard is satisfied in the most favorable manner at this
time by limiting the expansion of the City of Homer's
boundaries to the 4.58 square miles approved for annexation
by the commission.
She asked why "at this time" is italicized.
MR. WARING replied it is simply an acknowledgement of a dynamic
situation.
REPRESENTATIVE MURKOWSKI didn't want to make the assumption they
would change their decision next year. She was curious about the
factors the commission would consider that might cause them to
revisit the issue and start over.
MR. WARING stated it was not meant to say there might be
circumstances under which they would undo their decision. He
reminded members there is a regulation that says a petitioner may
not submit a similar petition to the commission for two years.
REPRESENTATIVE HALCRO asked what the public process notification is
for those people in the reduced area because their potential tax
burden is changed with the amended petition.
MR. WARING replied it is the process they went through. All the
parties that were in the original petition area were noticed and
this was a decision made within the boundaries of an area already
noticed.
REPRESENTATIVE HALCRO pointed out there was no answer to his
question. When the annexed area was changed from 25 square miles to
4.58 square miles, the property taxes of those inside the reduced
area were obviously affected. There is a formula of personal tax
liability that will have changed since there is a change in total
area. Did the people inside the area of the amended petition
receive notice about how this would affect their tax liability?
MR. WARING said they had the opportunity throughout the entire
proceeding to know they were candidates for annexation and he's not
sure the commission ordinarily notices a second time if the annexed
area changes.
MR. TESCHE informed members the preliminary staff report had the
original recommendation to reduce the scope of the annexation and
contained the rationale.
REPRESENTATIVE HALCRO asked Mr. Bockhorst to explain how the public
had the opportunity to know of and comment on the proposed
reduction of the area and its affect on taxes.
MR. BOCKHORST explained that in the course of filing the original
petition, the city sent out estimates of the revenues it would
receive and expenditures it would incur as a result of annexation
of the entire 25.64 square mile area with about 2200 people. LBC
staff took into consideration the financial consequences of the
smaller annexation and included detailed information about the
effects the smaller area would have on revenues and expenditures of
the city. They did this in both their preliminary and final
reports. The property tax rates used in their calculations were the
same rates that were in effect in the City of Homer. In particular
they recognized their recommendation was conservative and focused
on the more populated and fully developed areas of the territory
proposed for annexation.
REPRESENTATIVE HALCRO asked how the revised information is made
available to the public.
MR. BOCKHORST replied they are required by law to prepare a
preliminary report and make it available for public review at least
four weeks before the hearing. The information in the final report
must be public at least three weeks prior to the LBC hearing. The
reports were widely circulated at the public library, city hall, on
the Internet and to interested parties.
REPRESENTATIVE SCALZI said the city took public comments on the 25
mile annexation during the initial phase and there were four or
five alternative plans for reducing the boundaries. There were
suggestions of differential tax mill rates and discussions of phase
ins. Mr. Bockhorst let the community know what was available to the
City of Homer but they maintained the 25 square miles for the two
years of the review. There was a very short time to analyze the
smaller area yet there was no incentive during the process for the
City of Homer to reduce those boundaries. The argument against
resubmitting the petition with the reduced area is that it would
take another year or so before the petition would be considered.
Viewed on a statewide basis, the Legislature has to view what will
happen next time this same thing happens and in doing so they want
to send the correct message. Does this encourage cities to go out
for land grabs that are larger than they think is palatable to
their area when they know the end result will be left up to the
LBC? This process creates hostility in the community affected.
MR. WARING agreed the city did have an opportunity to amend its
petition. Because the commission does not pass judgment on the
petition, whatever the city initiates or maintains is the petition
that comes to the LBC at the public hearing. The LBC decision
reflects their judgment that the city failed to substantiate a good
part of their petition. The lesson to be learned is that there is
no gain from submitting a petition that is not well grounded,
argued and justified. The LBC is mandated to accept a petition as
submitted and has no latitude to alter it until the end stage. He
said he thinks they need to speak by its actions rather than making
pronouncements about how local governments should handle these
issues that are essentially political.
MR. TESCHE added there is a concern that local governments could
engage in a bargaining process and ask for a lot in hopes of
getting something more reasonable. As a means of moderating that
type of activity, he is pleased with the addition of the regulation
requiring a public hearing in the area.
CO-CHAIRMAN TORGERSON referred to the following new regulation and
proposed changes:
In accordance with AS 29.05.021, a community may not
incorporate as a city if essential city services can be
provided more efficiently and effectively by annexation to an
existing city or can be provided more effectively or
efficiently by existing organized borough on an area wide
basis, a non area wide basis, or through an existing borough
service area.
His stated his interpretation of the addition to the new regulation
is contrary to their decision on HB 13 application in the Homer
area and asked for an explanation.
MR. WARING respectfully disagreed. In that case, there was a
service area created after the petition was filed and legislative
counsel volunteered the opinion that may be unconstitutional
because it is in conflict with a provision in the constitution that
defines when and under what circumstances service areas are
preferred. He shares the view that it may be an unconstitutional
service area.
CO-CHAIRMAN TORGERSON said that's not his point; it's that the LBC
is changing their own regulations to say you now must consider
existing borough service area boundaries with respect to essential
services that are being applied to the area. "That is 180 degrees
out of your decision as it applies to HB 13, except for the vote
part."
MR. WARING responded that is about incorporations not annexations
and it is a limitation on incorporating a new city government in an
area where there is already a mechanism in place.
CO-CHAIRMAN TORGERSON remarked the same standards should apply. He
called for additional questions and advised he would like to hear
from the legislative legal counsel as soon as he put forth his own
opinion on the matter. (Representative Scalzi agreed with him.)
He said both the City of Homer and the LBC have acted legally but
he isn't so sure with regard to the moral standard. He continued:
Your decisions have sent a chill through people that
reside close to a city about how the application of this
decision as it reflects from the process that, in this
case, could have been done a lot better. This pitted
neighbor against neighbor, community against community,
which a lot of times annexations do but this was even
more so.
The application of HB 13 may be not direct on point
because we didn't amend the right part of the statutes,
which may be our fault but clearly there was an
expectation among people that HB 13 would have an effect
on when people have gotten together and formed their own
service areas on what the power would be and you're part
of government. I understand it's the part of government
that's in our constitution so maybe you have a little
higher burden than a regular government but you also have
that burden for people in annexed areas and I believe you
missed that in this case.
Truncation of terms, I can't believe we're not asking for
that to happen. Eighteen months before anybody is
eligible for running for council, now we've heard maybe
the city will be okay with doing that but its not part of
the record. And then they say that here's a little bit
but that's not part of your record, it wasn't part of
your deliberations. You basically said you'll have a
chance to influence the next election by throwing money
at it or however you want to influence the election but
you are not part of that. You can vote people in or out
but you're not part, you can't run to represent your own
area. Your legal opinion was wrong in that case.
More so, what we don't have is a direct link of services
to dollars. This now gives the message the money grab is
on. It could happen anywhere in the state. As I said
earlier, you sent a chill through the people of Alaska
because of not handling some of these decisions that now
I think will be handled legislatively. If you give more
credence to my constitutional amendment that I have in,
then I'm probably going to broaden it a little bit. I
hate to do that but if that's what it takes then maybe we
can get the bill and get enough votes to get it passed.
It's not an easy job but I think you missed the mark on
some of this as it applies to this annexation.
CO-CHAIRMAN TORGERSON called Tam Cook forward to place her legal
comments on the record. He advised members he wrote her a letter on
January 2, 2002 and asked clarification on the following four
issues:
1. Does the newly adopted language in HB 13 (passed in 2001)
apply to this "detachment"?
2. When will the city be required to hold elections to provide
representation for the newly annexed population?
3. Is the LBC able to make a determination that will result in a
city's receiving more tax funds than it will expend for
services in the new area?
4. Who is responsible for ensuring that the City of Homer
complies with the service expansions and funding they have
proposed to the LBC?
TAM COOK, Director of Legislative Legal Services, stated she would
agree with the Department of Law and with the conclusion of the
LBC; HB 13 doesn't apply in the case of annexations. She expressed
surprise that anyone would think it would apply. The Constitution
is clear that the LBC has the right to present any proposed local
boundary change and to consider any local boundary change. The
statute with respect to service areas can't restrict that
constitutional authority of the LBC.
C0-CHAIRMAN TORGERSON asked if she would say it was within the
authority of the LBC to hold an election if they deemed it
necessary.
TAM COOK replied she didn't know the answer to that and clarified
he was referring to truncation of terms and allowing a new election
for those who would be in office longest after the annexation. She
thought the LBC might have discovered it had some sympathy if that
had been its decision in court. The court could have said this is
an implied LBC power in order to carry out its responsibility to
handle changes to local boundaries. If they felt this was
necessary, perhaps the court would have given the LBC deference.
She also agrees the LBC didn't have to do that to accomplish the
change as a matter of law. She knows of no law that says there was
an obligation to truncate terms. She's in sympathy that the LBC
feels it doesn't choose to go beyond what is necessary to
accomplish its prime purpose of adjusting boundaries.
REPRESENTATIVE HALCRO raised the question of the existing service
area that was created after the petition was filed and asked about
the statutory prohibition against that sort of action. He asked if
she is familiar with this.
TAM COOK replied there is something in the Constitution that says
you can't create a service area if the service can be provided by
an existing city. This is limitation on the creation of service
areas.
RREPRESENTATIVE HALCRO asked for a practical application to HB 13
in addition to Ms. Cook's legal opinion. He recalled reading one
argument against HB 13 was there was a particular service area
created after the petition was filed and therefore the decision was
made that the service area was made to avoid being encompassed in
the city.
MR. WARING said he is familiar with that case and whether the
service area had preexisted or was created after the petition was
filed wouldn't matter for the reasons Ms. Cook mentioned.
REPRESENTATIVE SCALZI asked Ms. Cook to give an example so everyone
is very clear on what would happen if a vote was required on a
borough wide service area, and how it would affect an annexation
and why that should not apply.
TAM COOK replied the problem with any kind of statutory structure
that attempts to impose a vote of the people on a service area
basis or other basis, that would have the effect of preventing a
boundary change is not allowed in the Constitution because it
allows the LBC to present any proposed boundary change. It vests
that power in the LBC and it also vests the power of the
legislature to disapprove any proposal it chooses to disapprove
even if that proposal is overwhelmingly approved by a vote of the
people.
REPRESENTATIVE SCALZI asked if in layman's terms this means the
Constitution trumps statutory authority.
TAM COOK said, "In this case." There's only a limited degree to
which the Legislature can, by statute, curtail the constitutional
right of the LBC in the area of local boundary adjustments.
C0-CHAIRMAN TORGERSON asked if the legislative action is subject to
judicial review if they turn down the annexation.
TAM COOK replied, if the Legislature were to adopt a resolution
disapproving a proposal, she can't conceive of a set of facts that
would get that heard before a court in an effective way. That is
not to say that suit couldn't be brought. However, assuming the
resolution is properly passed it's hard for her to believe the
legal action on that point would be successful.
REPRESENTATIVE HALCRO referred to her January 9, 2002, response to
the Chairman discussing when the next elections could happen and
when the new people embraced by the city limits could expect to
vote. Mr. Brockhorst indicated residents in the new annexed area
would be eligible to run for office in October 2002 but Ms. Cook
didn't address that in her opinion.
TAM COOK replied she never considered a durational residency
requirement. That is different than the right to vote issue but the
statute does allow municipalities to establish a reasonably short
durational residency requirement in order to run for municipal
office. Such a requirement cannot be imposed on the right to vote;
that is established as a matter on Constitutional law and is a much
shorter duration.
CO-CHAIRMAN TORGERSON announced the City of Homer would give a
presentation.
10:26 a.m.
MAYOR JACK CUSHING stated Homer has traditionally been a very
generous service provider to the greater area but with declining
revenue sharing it is becoming more difficult to be generous to the
greater community.
He is in his fifth term as mayor and favors the petition as do the
majority of council members. Voters have been electing people who
support the petition, which makes their views clear.
The city originally asked the LBC about the process in the mid
1990's and they started the public process at the local level. The
original area was even greater than 25 square miles.
He asked members to read the four page letter he submitted.
JOHN FENSKE, Homer City Council member, testified in support of the
annexation.
KURT MARQUARDT, Homer Mayor Pro-Temp, is a second term council
member and is in favor of the annexation.
RAY KRANICH, Homer City Council member, testified in favor of the
annexation.
MICHAEL YOURKOWSKI, Homer City Council member, testified in favor
of the annexation.
TAPE 02-2, SIDE B
10:37 a.m.
RICK LADD, Homer City Council member, testified in favor of the
annexation. He stated he would stand down this fall if annexation
is approved allowing voters the opportunity to reelect him or a new
council member.
GORDON TANS, attorney for the City of Homer, declared the
Constitution of the State of Alaska was written with the principle
of statesmanship in mind. The LBC was conceived to relieve some of
the controversy generated by local boundary changes. He encouraged
members to make their decision in the spirit of statesmanship that
the Constitution framers had in mind when they entrusted this
decision to Legislators.
MAYOR CUSHING explained they decided not to adjust their original
boundary size petition, preferring to hear what the LBC determined.
CO-CHAIRMAN TORGERSON called for committee questions.
REPRESENTATIVE MEYER asked why the City of Homer chose to annex by
going directly to the LBC rather that with a vote of the people. He
noted this is much the same as the Hillside police issue and that
it seems as though this route was chosen because there are people
receiving services who are not paying for them. For example, 25
percent of the water use is not paid for. He then asked if these
services couldn't simply be terminated.
MAYOR CUSHING pointed out this is not an unusual choice. They chose
to annex using a direct petition to the LBC just as 95 percent of
the incorporated areas in Alaska have done in the past. In response
to the second question, he said they have never maintained the
folks receiving water haven't paid for that service. The contention
is this has allowed those properties outside the boundaries to
unfairly compete with in-town properties.
REPRESENTATIVE MURKOWSKI commended Council Member Ladd for offering
to resign his seat to deal with the truncation issue. She
referenced Mr. Tans' legal opinion of 1/31/02 that a voluntary
resignation would not work because a vacancy would be filled by an
appointment rather than triggering an election. A new election
would only be possible if everyone on the council resigned at the
same time. She then asked what would happen if Mayor Cushing gave
up his seat.
MR. TANS explained that a different situation is being presented
than he had in mind when he wrote the letter. It is his
understanding that Councilman Ladd intends to resign effective as
of October when the next election occurs and his replacement is
sworn in. The effective date of his resignation is not now but
rather then, which would allow an election to occur.
CO-CHAIRMAN TORGERSON asked Mr. Ladd how much longer he has on his
term.
MR. LADD said he has one year beyond this coming October and, after
his resignation, he would submit his name as a candidate in that
new election.
CO-CHAIRMAN TORGERSON asked Mr. Tans when someone would be
appointed and when would there be a new election.
MR. TANS said someone would be appointed only until the next
election. Because Mr. Ladd's resignation is effective on the date
of the next election, there is no opportunity or a need to appoint
someone in the interim.
CO-CHAIRMAN TORGERSON asked what would happen if he changes his
mind about resigning and the ballots have been printed.
MR. TANS said once the council accepted his resignation it would be
too late to change his mind.
CO-CHAIRMAN TORGERSON agreed with Representative Murkowski that a
decision to resign is commendable adding it is an issue in this
case and it's also an issue that no one in the annexed area can
run. He then asked the mayor for confirmation that he is working on
an ordinance to change that. The residency requirements would be
changed so individuals in the affected area may run for the October
election.
MAYOR CUSHING agreed and added they are trying to be proactive by
ordinance so it is not up to interpretation of existing ordinance.
MR. TANS expressed surprise at that interpretation saying the
proper interpretation of the current code is probably the
following:
If you are a resident of a particular piece of land for a
year and that land now becomes part of the city, you have
effectively satisfied the residency requirement of living
within the boundaries of the city for a year.
He said he's never heard it suggested that individuals living in
the annexed area could not run for elective office in October. The
ordinance that is being introduced has already been prepared and is
intended to clarify and remove any doubt.
CO-CHAIRMAN TORGERSON said he appreciates the ordinance because the
issue has been raised.
REPRESENTATIVE HALCRO asked why the Kenai Peninsula Borough opposed
the annexation petition and how the city's relationship is with
them.
MR. TANS said:
The borough assembly did not take a position against the
annexation. The mayor and some of the assembly members
did vote for a resolution opposing the annexation but it
did not pass. We don't understand quite why the mayor
reversed position so late in the game, indeed after the
Boundary Commission made its recommendation, but
nevertheless he did. I don't think it's going to affect
the relationship that the city and the borough must work
out to transfer the responsibilities of the service area.
It's not going to be that difficult.
REPRESENTATIVE HALCRO asked why they opposed the annexation at
the eleventh hour.
MR. TANS replied he wouldn't dare to speak for Mayor Bagley
but he did write a short letter of memorandum to his assembly
and one of his points was that he was disappointed that the
procedure didn't allow a vote of the residents in the area.
REPRESENTATIVE SCALZI agreed with Mayor Cushing's statement
that the City of Homer has been very generous in providing
services and he understands the need to receive revenue for
services provided. However, the process has been a point of
contention. He asked the mayor why they didn't reduce the
boundaries.
MAYOR CUSHING explained he broke the 25 square mile boundary
into 14 separate units and examined the tax base and revenues
that would be generated from the units. The units were broken
into areas of similar geography and character so the council
and the public could identify the areas. His impression was
that the majority of the council wanted to keep the boundaries
large. Each of the council members had their own reasons and
much of that was from the public input they were receiving.
Also, they didn't change their petition because they didn't
want to start the process over and lose a year.
REPRESENTATIVE SCALZI then directed the question to Mr.
Yourkowski, asking why he didn't support reducing the
boundaries.
MR. YOURKOWSKE replied his concerns were land use and
planning. Individuals outside the city wanted issues such as
the asphalt batch plant that is outside the limits addressed.
The input he received was that the entire 25 square mile
annexation was justified.
REPRESENTATIVE SCALZI then asked Mr. Ladd why he didn't favor
shrinking the boundaries of the annexation petition.
MR. LADD replied he wasn't on the council at that time.
REPRESENTATIVE SCALZI asked which council members planned to
resign if the annexation is approved.
Mayor Cushing and Council Members Ladd, Kranich and Yourkowski
stated their intentions to resign their seats then become
candidates for the October election. Mr. Tans said he is up
for election this fall and looks forward to the election.
REPRESENTATIVE SCALZI asked whether the other two council
members wanted to comment on the resignation issue.
MR. MARQUARDT said he is up for election this fall.
CO-CHAIRMAN TORGERSON announced the next meeting would be
2/09/02 at 9:00 a.m. Those opposing annexation would give a
15-minute overview followed by public testimony that would be
limited to three minutes.
There being no further business, the joint meeting of the
House and Senate Community and Regional Affairs Committees was
adjourned at 10:50 a.m.
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