Opinion ID: 1392493
Heading Depth: 3
Heading Rank: 2

Heading: alaska's constitution and statutes require an inquiry into whether it is reasonable or practicable for a borough to provide services before incorporation of a city is allowed

Text: Article X, section 1 of the Alaska Constitution states that the purpose of article X is to provide for maximum local self-government with a minimum of local government units, and to prevent duplication of tax-levying jurisdictions. Article X, section 5 of the Alaska Constitution provides in part: Service areas ... may be established ... by the assembly, subject to the provisions of law or charter. A new service area shall not be established if, consistent with the purposes of this article, the new service can be provided by ... incorporation as a city... . Alaska Statute 29.05.021(b) provides: A community within a borough may not incorporate as a city if the services to be provided by the proposed city can be provided on an areawide or nonareawide basis by the borough in which the proposed city is located... . Alaska Statute 29.35.450(b) provides: A new service area may not be established if, consistent with the purposes of art. X of the state constitution, the new service can be provided by an existing service area ... or by incorporation as a city.
Keane contends that AS 29.05.021(b) prohibits the incorporation of a city when formation of a service area is theoretically possible, or at least when formation of a service area is reasonable or practicable. Keane asserts that the Borough could reasonably and practicably provide the services desired by the Incorporators as evidenced by the LBC's statement acknowledging that the Borough could, on a service area basis, provide other services needed or desired by the residents of Pilot Point. [2] The LBC argues that Keane's interpretation of AS 29.05.021(b) is contrary to AS 29.35.450(b), constitutional law and the relevant interpretive regulation, 19 Alaska Administrative Code (AAC) 10.020(a), as well as the LBC's power to base its decision on fundamental policy considerations. The LBC contends that (1) Keane's interpretation would force a borough to provide services regardless of whether the borough wants to provide them, and (2) a borough cannot be required to establish a service area. The Borough argues that even if AS 29.05.021(b) is construed to require boroughs to create new service areas, it is exempt from its provisions because of its home rule status. [3] The Borough argues that article X, section 5 of the Alaska Constitution allows the creation of service areas only when other options, including incorporation of a city, are not available. Keane responds that article X, section 5 of the Alaska Constitution, when read in conjunction with article X, section 1, allows incorporation of a city only when a service area could not be created to provide the same services, because incorporation of a city will increase the number of local government units and tax-levying jurisdictions.
We conclude that AS 29.05.021(b) is not in conflict with either AS 29.35.450(b) or article X, section 5 of the Alaska Constitution. Alaska Statute 29.35.450(b), which follows the language of article X, section 5, is a limitation on the creation of new service areas. [4] It provides that a new service area may not be established if the new service can be provided by another means such as incorporation of a city. In contrast, AS 29.05.021(b) is a limitation on the incorporation of cities. It disallows incorporation when the desired services can be provided by a borough on an areawide or nonareawide basis. A home rule borough can provide services on an areawide or nonareawide basis without resort to a service area. [5] It is reasonable to interpret AS 29.35.450(b) and article X, section 5 as preferring incorporation of a city over the creation of new service areas. This interpretation is supported by legislative history and is not inconsistent with article X, section 1 of the Alaska Constitution. [6] Constructing a barrier to approving an excessive number of government units does not prohibit the creation of them when they are necessary. [7] Whether a service area or a city is established, another government unit is created. If numerous service areas are set up supplying only one or two services each, there is the potential for an inefficient proliferation of service areas. In contrast, once a city is established, it can provide many services, and other communities can annex to the city in the future. [8] Although the framers entertained the idea of unified local governments, they realized that the need for cities still existed. [9] Based on the above discussion, we interpret AS 29.05.021(b) as follows: when needed or desired services can be reasonably and practicably provided on an areawide or nonareawide basis by the borough, they should be. [10] As discussed supra, this inquiry is not limited to an evaluation of service areas. When it is established that the services cannot be provided reasonably or practicably, then the LBC is required to consider other available options. We also clarify that there is a statutory and constitutional preference for incorporation of cities over the establishment of new service areas. We believe these to be reasonable and practical interpretations of the Alaska Constitution in accordance with common sense. See Arco Alaska, 824 P.2d at 710.
Keane argues that even if a requirement of reasonableness or practicability is read into AS 29.05.021(b), the LBC provides no evidence which supports a conclusion that formation of a service area is not reasonable or practicable. Keane contends that a Borough's support of a petition for incorporation is not equivalent to a refusal to create a new service area. At issue is former 19 AAC 10.020, [11] a regulation which interprets AS 29.05.021(b) and assists the LBC in determining whether the formation of a service area is reasonable or practicable. It provided in part: (a) The commission will not allow the incorporation of a community located within an organized borough unless the petitioners demonstrate to the satisfaction of the commission that the services to be exercised by the proposed city cannot be reasonably or practicably exercised by the borough on an areawide or non-areawide basis. The commission will consider the requirement of this subsection satisfied if: ... . (2) the commission determines that the city is remote from the borough seat and is not connected to the borough seat by the state highway system. Keane asserts that the LBC raises for the first time on appeal to the superior court its finding of remoteness and attendant reliance on 19 AAC 10.020. The LBC asserts that it did not overlook the application of 19 AAC 10.020. It notes the applicability of 19 AAC 10.020 in its Findings and Conclusions: AS 29.05.011 sets out four standards for the LBC to apply to all petitions for city incorporation. A fifth standard, set out in AS 29.05.021(b), applies only to communities such as Pilot Point which are in organized boroughs. The Alaska Administrative Code, 19 AAC 10.010 and 10.020, gives the criteria which the LBC, in its discretion, should consider when applying the statutory standards, although the Commission is not limited to the listed factors. Remoteness was part of the record before the LBC. The fact that Pilot Point is not connected to the borough seat, King Salmon, by any road, and the fact that Pilot Point is eighty-five air miles from King Salmon, were mentioned in the Incorporator's petition as well as the DCRA reports to the LBC. The LBC argues that there was no need to discuss specifically in its decision remoteness or its effect on the criteria of 19 AAC 10.020(a)(2). The LBC is not required to set forth findings of fact in its incorporation decisions. Mobil Oil Corp. v. Local Boundary Comm'n, 518 P.2d 92, 97 (Alaska 1974). In Mobil Oil, we stated that [t]he special function of the [LBC], to undertake a broad inquiry into the desirability of creating a political subdivision of the state, makes us reluctant to impose an independent judicial requirement that findings be prepared. Id. We stated that we were able to determine the basis of the LBC's decision from our own review of the entire record. Id. Keane responds that where a decisional document shows on its face that an important factor was not considered, the court should remand the matter for further consideration. See, e.g., Southeast Alaska Conservation Council, Inc. v. State, 665 P.2d 544, 549 (Alaska 1983). We agree. The LBC's decision allowing incorporation provides: Given the lack of any city close to the community of Pilot Point, annexation to an existing city is impractical. While the Lake & Peninsula Borough could, on a service area basis, provide other services needed or desired by the residents of Pilot Point, the Borough Assembly formally supports incorporation of the city. Therefore, service area formation does not appear to be a viable option at this time. The LBC argues the applicability of 19 AAC 10.020, notes its importance in the consideration of the statutory standards for incorporation, and acknowledges the facts that support a finding of remoteness. Nonetheless, we cannot ascertain from the record whether the LBC made a reasonableness or practicability determination, and if it did, whether it found a lack of the two based on a remoteness theory. The LBC does not refer to the facts concerning a remoteness determination in its conclusions. Its decision appears to be based solely on the fact that the residents of Pilot Point wanted to incorporate and that the Borough Assembly formally supported the incorporation. [12] There is no indication that a determination of the reasonableness or practicability of a service area was considered. Therefore, we remand to the LBC to make findings consistent with this opinion.