Borough, ACT await ruling

Motions for summary judgement to be filed over taxes, spending limits

Posted: Tuesday, July 24, 2007

Competing motions for summary judgment are expected soon from the Alliance of Concerned Taxpayers and the Kenai Peninsula Borough, which are at odds and in court over sales tax rates and capital expenditure limits.

The Alliance, or ACT as the nonprofit, grassroots citizens group is called, sued the borough late last year seeking a declaration and injunction against the borough increasing its sales tax rate above 2 percent without the approval of 60 percent of the voters.

ACT also wants the borough enjoined from violating a 2005 initiative requiring 60-percent voter approval to spend in excess of $1 million on a capital improvement project. ACT claims the borough has ignored the limit more than once and is asking for an extension of the prohibition for two more years after a court decision is reached. The borough disputes the violation accusation.

In a memo to the assembly, Borough Attorney Colette Thompson said Kenai Superior Court Judge Harold Brown had granted requests from both sides to waive pretrial deadlines, as the matter should be resolved by summary judgment. Brown retired in June, however, and according to the Kenai Court Clerk's office, the case has yet to be reassigned to a new judge.

A trial date has been set for March 2008 should the judge not grant a summary judgment. Thompson said both parties were to file motions for summary judgment soon.

If procedures follow their normal course, there would be a period several weeks long during which each side would respond to the other's motion. Thompson did not say exactly when the borough expected to file its motion for summary judgment.

ACT was successful in 2005 in winning voter approval of two propositions: one placing the cap on capital project expenditures in excess of $1 million without prior approval by a supermajority of voters, and the other preventing the borough from increasing the sales tax from 2 percent without the same supermajority approval.

The Kenai Borough Assembly recently voted to boost the sales tax to 3 percent, but delayed the effective date until January in order to provide sufficient time to meet the Alaska Constitution's requirement that no legislative action reverse the effect of a voter-approved initiative for at least two years.

As for the capital projects cap, ACT has argued that the assembly acted improperly at least twice after the initiative went into effect — once when it voted to spend up to $2 million on a lease-purchase agreement to replace a CT Scanner machine for South Peninsula Hospital, and again when it awarded a $977,170 construction contract for replacing the Spruce Creek Bridge in Seward.

In both cases, the borough argues, the assembly was justified on legal and constitutional grounds: the scanner was not a capital improvement as that term is defined; and the Seward bridge was an ongoing project when the initiative was approved, and the appropriation was of an emergency nature. ACT's ballot measure made no provision for emergencies.

An effort to reach ACT's attorney, Ken Jacobus, for comment Monday afternoon was not successful.

Hal Spence is a reporter for the Clarion. He can be reached at

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