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Spending limit law passes

Posted: Friday, June 24, 2005

Future capital improvement projects costing more than $500,000 proposed in the North Peninsula Recreation Service Area will be submitted to voters even if an Alaska court should rule a proposition approved by service area residents last fall imposing just that ballot requirement is invalid.

While no court case to determine the validity of using the initiative process to limit appropriation powers is in the works, such a challenge could arise, according to borough attorney Colette Thompson.

With that in mind, Mayor Dale Bagley introduced Ordinance 2005-24, a measure designed to show the borough intended to comply with service area voters' wishes and seek their support at the ballot whenever service area projects costing in excess of $500,000 were proposed.

In a memo to the assembly, Bagley noted a legal ruling could render the initiative unenforceable. The ordinance adopted Tuesday, 8-0, would become effective only if that happened.

A group known as the Alliance of Concerned Taxpayers, or ACT, currently is circulating petitions for a similar but broader ballot initiative to extend the election requirement boroughwide.

It would cap at $1 million the amount that could be appropriated by the assembly without a public vote.

Approval of a project in excess of that amount, however, would require a 60-percent "yes" vote. Currently, the assembly may authorize spending up to $1.5 million.

James Price, a member of ACT, said Tuesday that the group already had collected a couple hundred signatures. They need about 1,530.

A court ruling invalidating the NPRSA initiative likely would affect the new initiative, as well, Thompson said.

If Ordinance 2005-24 is activated, it would not be binding on future assemblies for two years as initiatives are. That is, it could be changed by ordinance at any time.

"However, placing this ordinance on the books forces the assembly to address the voter approval requirement as preferred by voters regardless of whether the initiative is upheld by the courts," Bagley said.

Thompson explained why the ordinance was thought to be necessary. She said the legal review given the initiative process leading to a ballot proposition is "lighter" than that which might be focused on a voter-approved proposition by a court hearing a lawsuit challenging its validity.

"In reviewing this initiative, and the one that is on the street, we made it clear that there are significant legal issues associated with requiring voter approval for an appropriation of funds (that) make if very questionable that a court would uphold a determination that an initiative petition is an appropriate way to have a law like this adopted," Thompson said.

Those same legal issues do not apply in the case of general obligation bonds that must be approved by voters. GEO bonds are loans secured by the property of voters and the law is clear regarding the validity of such ballot propositions.

Thompson said it appeared the initiative limiting expenditures without a vote in the NPRSA "came close" to violating initiative procedures laid out in the Alaska Constitution, but she acknowledged there was no clear case law on which to rely. Thus, the borough could not deny service area voters the opportunity to decide on the initiative that appeared on the 2004 municipal ballot.

A court challenge however, should one be mounted either by a private citizen or by the borough, could become the basis for rendering a ruling on whether the initiative process can be used to limit the ability of the assembly to appropriate capital funds that are not subject to bond requirements.

No such challenge has been filed, and Thompson noted it was not clear how a court might rule on such a suit.

Assembly President Gary Superman said he hoped the borough would seek a ruling in court.

"It's important that we distinguish the parameters that we (the assembly) operate in up here because we go through the appropriation process all the time. We just came through a very large one (the budget)," he said. "So unless we want to continue to operate in, what I think is, the darkness — not knowing what our powers are and not knowing where the initiative powers begin, where they end and where they're applicable — I think we are going to continue to have the question hanging over us."

The ordinance showed the assembly was ready to respect the vote of the residents of the service area, he said, even if a court should one day rule the process by which they arrived at the appropriation limitation was invalid.



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