Annexation issue confronts assembly

Posted: Friday, January 11, 2002

When the boundaries of the new Kachemak Emergency Service Area were drawn last year, Miller's Landing was inadvertently excluded. Putting that territory back into the service area, however, has proved anything but a simple matter, in part because Miller's Landing has been approved for annexation to the city of Homer by the Local Boundary Commission.

Action on an ordinance to place Miller's Landing within the boundaries of the service area was postponed Tueday night by the Kenai Peninsula Borough Assembly until its Jan. 22 meeting while legal questions surrounding annexation's effect on service area boundaries and the future of property taxation within the annexation are answered or resolved.

One debate centers on whether Alaska law requires voter approval to change the boundaries of a service area -- necessary, under that law, to eliminate parts of the emergency service area and the borough's Road Service Area should annexation be approved by the Legislature.

However, the Alaska attorney general's office recently issued an opinion that said Local Boundary Commission regulations supersede the provisions of the voter approval law.

"That's an open question," borough attorney Colette Thompson said Tuesday.

Another question exists over when the city could begin taxing its new areas should annexation succeed.

"The city of Homer has indicated preliminarily that there could be taxation of that area for the city of Homer beginning with the date that the annexation is approved, if it is approved," Thompson said. "In our view, and in talking with the assessor, the (borough's) tax assessment date is Jan. 1 of each year, so the borough would have jurisdiction this year, and if annexation is approved, the city of Homer would have jurisdiction in January 2003."

There was a question whether residents in areas now in the service areas, but which could be part of Homer by March or April, could be double taxed, paying both the service area levies and the city property tax. At first, Thompson said, she thought that might actually be possible. However, she has since changed her mind.

If annexation is approved and goes into effect, the areas would be part of the city, she said. Even if annexation is challenged in court, a court injunction would either enjoin annexation, in which case residents would pay service area taxes, or not enjoin annexation, in which case residents would be part of Homer and pay only Homer taxes.

"I don't think double taxation would be an issue with respect to the boundaries," she said.

However, with those matters still up in the air, the assembly voted to postpone action on Ordinance 2001-48, which would place Miller's Landing back into the service area. Assembly President Tim Navarre questioned whether the assembly should bother making that move before learning which way the Legislature will go on Homer's annexation.

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