Open Letter RE Community Grants: KGB Mayor LandisBy Glen Thompson May 18, 2018 Dear Mayor Landis, At the Regular Assembly Meeting of May 7, 2018, the Ketchikan Gateway Borough Assembly (“Assembly”) introduced Ordinance 1859, adopting the FY2019 Borough Budget, and set that ordinance for public hearing at the Regular Assembly Meeting of May 21, 2018.
Draft Ordinance 1859, as presented to the Assembly for introduction, included $139,740 in community grant appropriations out of the General Fund to eleven non-profit entities that can be classified as Social Service agencies. Merriam-Webster defines Social Service as:
When the Assembly officially introduced Ordinance 1859, it also increased the community grant appropriations for those Social Service agencies by $19,441 to a total of $159,181; a nearly 14% increase. The agencies and their community grant appropriations in Ordinance 1859 as introduced are listed below:
Although the services provided by those agencies are undeniably valuable, the legal authority by which the Ketchikan Gateway Borough (“Borough”) uses as justification for appropriating grants to agencies that provide Social Services is extremely ambiguous at best, if not illegal altogether. Article IX, Section 6. (Public Purpose) of the Alaska Constitution states that:
The Borough is a second-class borough: an unchartered general law municipality that only has powers that are conferred and allowed by Alaska law. As such, the Borough may only appropriate and expend funds when specifically exercising one of its powers in accordance with law. At the Regular Election of October 2, 1990, the voters of the Borough approved Ballot Proposition No. 3, granting the Borough “a new areawide power to provide economic development on an areawide basis”. Current and former Borough officials contend that this areawide economic development power, along with other general powers granted by law, provides the Borough with the authority and discretion to issue grants to any entity at will. This is evidenced in a memorandum from former Borough Attorney Scott Brandt-Erichsen dated May 4, 2017, where he opined:
To my knowledge, this opinion is still the standing legal opinion of the Borough regarding these grants. I am unaware of any superseding opinion issued by former Borough Attorney Brandt-Erichsen or his successor. To that end, there are some significant legal issues that need to be addressed by the Assembly. Article X, Section 1. (Purpose and Construction) of the Alaska Constitution prescribes the mandate for local governments to exist:
The article does grant “liberal construction” of the powers given to local government units. However, we must note that the whole purpose of the article is “to provide for maximum local self- government”. Merriam-Webster defines self-government as:
Article I, Section 2. (Source of Government) of the Alaska Constitution declares:
The simple definition of “political” is “relating to the government”; this is evidenced in Article I, Section 2. In this provision, the term “government” and “political power” are identical with both belonging to, and being exercised on behalf of, the people. Therefore, both terms are interchangeable for the purposes of application in other provisions of the constitution; this includes the “maximum local self-government” allowed in Article X. The Alaska Legislature, in accordance with the Constitution, recognizes and imposes limitations on the powers the Borough may exercise without the specific approval of the people (the vote rs) of the Borough. The powers of municipalities are governed in Alaska Statute Title 29. (Municipal Government), Chapter 35. (Municipal Powers and Duties). Specifically, AS 29.35.210(c) and (d) provides that:
Further, AS 29.35.300(b) states:
As noted earlier in this letter, the voters of the Borough did approve the adoption of economic development powers for the Borough on an areawide basis at the Regular Election of October 2, 1990. All the grants in question are being justified as an exercise of the Borough’s economic development powers. Prior to this year, the grants were appropriated out of the now-depleted Economic Development Fund, and for the upcoming fiscal year will be paid from the General Fund. Alaska Statutes are quite vague on the definition of municipal economic development powers. However, another statute in a different title and chapter does define “economic development” as “development . . . for profit or to increase tax revenue, tax base, or employment”. Even if we just use that definition as very general statutory guidance, not even one of the grants in question meets the standard for economic development. Now, with evidence that these grants are not authorized by the Borough’s economic development powers, we need to address the concept that the Borough may contract for any services that are used to accomplish any “community purpose, facility, or service for the good of the municipality to the extent the municipality is otherwise authorized by law” AS 29.35.010(9). The extent to which the Borough is otherwise authorized by law to take actions for good of the municipality is clearly limited by statute: only exercise powers that have been expressly authorized by the voters in an election. Since these grants do not meet the standards of economic development, trying to find a loophole or some other legal obscurity to vindicate the issuance of these grants sets a very dangerous precedent. Under that notion, the Borough could award a million-dollar grant to SECON for building roads even though the Borough does not have road powers, which is widely known. Doing so would be more justifiable as economic development than the grants in question; however, it would still be illegal. Even though the Social Service grants can’t be as clearly identified as unauthorized expenditures as a grant to build roads, it absolutely does not make them any more appropriate or legitimate. Trying to use the “liberally construed” clause as both a defense of the Assembly’s actions in doing what it desires, and as an excuse to not exercise other functions is a blatant violation of various provisions of the Alaska Constitution and Alaska State Statutes. The law governing municipalities provides for multiple classifications of general law municipalities and the powers granted to the different classifications. If there was a catch-all power given to general law municipalities, there would be no reason for the different powers and the method by which those powers are granted or adopted. Obviously, that was not the intent of the Constitution or the Legislature. These laws execute the clear mandate of the Alaska Constitution that “All political power is inherent in the people. . . . founded upon their will only”. Moreover, if the intent was for any municipality to exercise any power it so desired, what is the purpose of home-rule municipalities? There would be no advantage or incentive for a municipality to use the process to obtain home-rule status. There would have been no reason for the legislature to create the process in the first place. Again, obviously, that was not the intent of the Constitution or the Legislature. Whether or not the Assembly likes it, the Borough, as a second-class borough has a legal burden, as detailed in law and covered extensively in this letter, to seek and receive the explicit consent of the people of the Borough to exercise a power that is not clearly granted otherwise. “A liberal construction shall be given to the powers of local government” applies to power which the Constitution reserves only to the people, who can delegate that power to the governing body of their elected representatives. The process by which powers are delegated is unequivocally established in law. Attempting the continuation of these grants knowing that they do not meet the definition of economic development and that the Borough shall not exercise powers that are not specifically granted in law or by the people would be an intentional circumvention of the lawful process regarding this issue. To resolve the current situation, I respectfully request that the Assembly adopt an Ordinance that places a ballot proposition before the voters at the Regular Election of October 2, 2018, requesting: 1) Approval of limited social service powers to continue provide community grants; and 2) Approval of the funding source for such grants; i.e. specific tax appropriation or general fund. I request that the Assembly postpone until after the Regular Election of October 2, 2018, the appropriation of all grants to any entity providing social services, with one exception: It is not my intent to blindside or pull the rug out from under any recipient who has previously received these grants. As such, I would encourage the Assembly to provide a prorated grant appropriation, based on the level of appropriation in Fiscal Year 2018, to any entity that received a grant from the Economic Development Fund in Fiscal Year 2018 and has again applied for a grant in Fiscal Year 2019. As former Borough Attorney Brand-Erichsen stated in his opinion, the Assembly’s approval of these grants is a political decision. I strongly encourage the Assembly to make this decision based on sound policy, transparency and accountability, and in accordance with the law. It may not be easy politics, but it certainly is good governance. Unfortunately, if the status quo remains, and the people are not allowed by the Assembly to determine whether to delegate limited social services power to the Borough, the only remedy that remains is legal relief. However, I am certainly holding out hope that the solution proposed in this letter is the preferred resolution to this issue. Thank you for your time and consideration. Sincerely, Glen L. Thompson CC:
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Received May 17, 2018 - Published May 18, 2018 Related Viewpoint: Viewpoints - Opinion Letters:
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