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Pet. for Inc. of City & Boro of Yakutat v. Lcl. Bdry. Comm'n. (4/28/95), 900 P 2d 721
<![CDATA[
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0607, fax (907) 276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
PETITIONERS FOR INCORPORATION )
OF CITY AND BOROUGH OF ) Supreme Court No. S-5760
YAKUTAT, )
) Superior Court No.
Appellant, ) 1JU-92-1126 CI
)
v. ) O P I N I O N
)
LOCAL BOUNDARY COMMISSION, )
)
Appellee. ) [No. 4192 - April 28, 1995]
______________________________)
Appeal from the Superior Court of the
State of Alaska, First Judicial District,
Juneau,
Michael A. Thompson,
Judge.
Appearances: James T. Brennan, Hedland,
Fleischer, Friedman, Brennan & Cooke,
Anchorage, for Appellant. John B. Gaguine,
Assistant Attorney General, and Charles E.
Cole, Attorney General, Juneau, for Appellee.
Beth Phillips, Birch, Horton, Bittner &
Cherot, Anchorage, for Amicus Curiae Chugach
Alaska Corporation.
Before: Moore, Chief Justice,
Rabinowitz, Matthews and Compton, Justices,
and Bryner, Justice, pro tem.*
BRYNER, Justice, pro tem.
I. INTRODUCTION
A group of Yakutat residents designating themselves as
the Petitioners for the Incorporation of the City and Borough of
Yakutat (Petitioners) filed a petition for incorporation of the
City and Borough of Yakutat. The Local Boundary Commission (LBC)
voted to approve the petition, but altered the northwestern
boundary of the proposed borough. Petitioners appealed to the
superior court, challenging the LBC's decision to redraw the
proposed borough's northwestern boundary.
After the superior court affirmed the LBC's decision,
Petitioners filed this appeal. Petitioners claim that the LBC
exceeded its authority by altering the boundary of the proposed
borough without first determining that the proposed borough, with
its boundaries unaltered, would fail to meet the statutory
standards for incorporation. The LBC responds that it has the
discretion to revise the boundaries of a proposed borough without
initially finding that acceptance of the original boundaries
would result in failure to meet the standards for incorporation.
Alternatively, the LBC asserts that its approval of the petition
in this case with the northwestern boundary of the proposed
borough modified amounted to an implicit finding that the
originally proposed boundary would have violated statutory
standards.
II. FACTS AND PROCEEDINGS
On December 26, 1990, Petitioners filed with the
Department of Community and Regional Affairs (DCRA) a petition
proposing the incorporation of a home rule borough and the
concurrent dissolution of the City of Yakutat.1 The petition
generally described the boundaries of the proposed borough as
extending along the Gulf of Alaska from Cape Spencer at the
southeastern boundary to Cape Suckling at the northwestern
boundary.
The DCRA accepted the petition as correct in form and
content. In August 1991, the DCRA issued a Draft Report on the
petition and on proposed model borough boundaries that the DCRA
had prepared for the Prince William Sound, Yakutat, and Cross
Sound/Icy Straits regions.2 The report recommended against
approving the proposed Yakutat Borough on the basis that it
failed to meet the statutory and regulatory standards, and
instead recommended that the LBC adopt a model borough combining
the Prince William Sound region with the Gulf Coast region, south
to Cape Fairweather, including Yakutat.
The DCRA revised the Draft Report in response to public
comment. Its Final Report recommended that the LBC reject the
petition. Alternatively, the DCRA advised that if the LBC
approved the petition, it should alter the northwestern boundary
of the borough to conform to the location proposed in the model
borough, the 141st Meridian.
After conducting extensive public hearings and holding
three decisional meetings on the petition and on the model
borough boundaries, on March 17, 1992, the LBC voted to approve
the petition with its northwestern boundary altered from its
originally proposed location at Cape Suckling to the DCRA's
proposed location at the 141st Meridian.3 On April 13, the LBC
issued a Statement of Decision implementing its March 17 vote.
The LBC subsequently denied Petitioners' request to reconsider
the alteration of the northwestern boundary.
Petitioners thereafter appealed the LBC's alteration of
the northwestern boundary to the superior court. Superior Court
Judge Michael A. Thompson affirmed the LBC's approval of the
petition and its alteration of the boundary. Petitioners then
appealed to this court.
III. DISCUSSION
A. The LBC Must Determine that the Petition is
Statutorily Insufficient Before Amending Boundaries.
Petitioners assert that the LBC has no authority to
alter the boundaries of a proposed borough unless it initially
determines that the borough, as proposed, would fail to meet
applicable standards for incorporation. Petitioners base their
claim on AS 29.05.100(a), which prescribes the LBC's powers and
duties in reviewing a petition for incorporation:
If the Local Boundary Commission
determines that a proposed municipality fails
to meet the standards for incorporation, it
shall reject the petition. If the commission
determines that the proposed municipality
meets the standards, it shall accept the
petition. If the commission determines that
the proposed municipal boundaries can be
altered to meet the standards, it may alter
the boundaries and accept the petition.
Petitioners point out that the first two sentences of
this provision set forth the LBC's functions in mandatory terms:
if a proposed borough fails to meet the standards for
incorporation,4 the LBC "shall"reject the petition; if the
proposed borough meets the standards, the LBC "shall"accept the
petition. Given the mandatory wording of the first two
sentences, Petitioners maintain that the final sentence of the
provision, which allows the LBC to alter boundaries, applies only
when the LBC determines that boundary changes are necessary to
enable a proposed borough to meet the standards for
incorporation. Petitioners contend that the LBC failed to follow
the statutory procedure in amending the northwestern boundary of
the proposed Yakutat Borough, because the LBC never determined
that the borough, with its northwestern boundary at Cape Suckling
as originally proposed, would fail to meet the statutory
standards for incorporation.
The LBC responds that it possesses "the broad power of
accepting the petition, rejecting the petition, or altering the
petition so that it would meet the statutory standards." The LBC
notes that its authority to alter boundaries is established by
the third sentence of AS 29.05.100(a), which states, "[i]f the
commission determines that the proposed municipal boundaries can
be altered to meet the standards, it may alter the boundaries and
accept the petition." The LBC reads this sentence as giving it
unrestricted discretion to alter the boundaries of a proposed
borough, provided that the altered boundaries meet the standards
for incorporation. However, the LBC makes the mistake of reading
the third sentence of AS 29.05.100(a) in isolation and out of
context. "[T]his court interprets each part or section of a
statute with every other part or section, so as to create a
harmonious whole." Rydwell v. Anchorage School Dist., 864 P.2d
526, 528 (Alaska 1993) (citing Forest v. Safeway Stores, Inc.,
830 P.2d 778, 781 (Alaska 1992)). When the third sentence of AS
29.05.100(a) is read in conjunction with the preceding sentences
of the provision, the LBC's proposed interpretation makes little
sense.
The first two sentences of AS 02.05.100(a) provide that
the LBC "shall"deny petitions for incorporation that do not meet
applicable standards and that it "shall"grant petitions that do.
Use of the word "shall"in these sentences is significant, for it
indicates the legislature's intent to mandate that the LBC accept
petitions that meet the statutory standards and reject those that
fail. Fowler v. City of Anchorage, 583 P.2d 817, 820 (Alaska
1978) ("Unless the context otherwise indicates, the use of the
word 'shall' denotes a mandatory intent.") In context, then, the
third sentence of subsection (a), by providing that the LBC "may"
alter boundaries "to meet the standards,"was apparently intended
to allow the LBC a measure of discretion that would otherwise be
denied by the first two sentences -- the discretion to avoid
mandatory rejection of a non-conforming petition when the
petition's failure to meet applicable standards could be cured by
altering its proposed boundaries.
The specific wording of the statute's third sentence
supports this contextual meaning. In the language of the third
sentence, which permits the LBC "to alter the boundaries and
accept the petition"if the "boundaries can be altered to meet
the standards,"the legislature's choice of the purposive phrase
"to meet the standards"plainly suggests that any alteration of
boundaries must be for the purpose of achieving compliance with
the standards for incorporation. This purpose necessarily
presupposes a threshold determination by the LBC that the
originally proposed boundaries would not meet the applicable
standards.
Moreover, if the third sentence of AS 29.05.100(a) were
interpreted to give the LBC discretion to amend proposed
boundaries without a preliminary finding of statutory
noncompliance, then the first two sentences of the statute would
become superfluous, since their use of the word "shall" would
essentially be stripped of its commonly understood mandatory
effect.5
In short, we find unpersuasive the LBC's proposal to
read AS 29.05.100(a) as empowering it to alter boundaries of
proposed boroughs without any preliminary finding of
noncompliance. This conclusion, however, requires us to consider
the breadth of the LBC's power to reject a petition as failing to
meet the statutory standards for incorporation.
In the present case, Petitioners fault the LBC for
proceeding to determine what would be the "most appropriate
boundary" for the proposed Yakutat Borough without first deter
mining if the boundaries proposed in the original petition for
incorporation were minimally sufficient to meet the statutory
standards for incorporation. Petitioners' position is
essentially that, prior to a finding of noncompliance, the LBC's
sole legitimate power under AS 29.05.100(a) is to review a
petition for compliance with statutory standards and to accept
the petition when it does meet those standards; in Petitioners'
view, if a petition's boundaries, as proposed, are minimally
sufficient to meet statutory standards, the LBC is barred from
any consideration of the most appropriate boundary. We find this
to be an unduly constricted view of the LBC's powers under AS
29.05.100(a).
The scope of the LBC's powers under AS 29.05.100(a) is
to be determined in light of the constitutional provision that
the statute implements. Article X, section 3 of the Alaska
Constitution provides, in relevant part:
The entire State shall be divided
into boroughs, organized or unorganized.
They shall be established in a manner and
according to standards provided by law. The
standards shall include population,
geography, economy, transportation, and other
factors. Each borough shall embrace an area
and population with common interests to the
maximum degree possible.
(Emphasis added.)
To avoid conflict with the constitutional mandate that
each borough "embrace an area and population with common
interests to the maximum degree possible,"the provisions of AS
29.05.100(a) dealing with the rejection, acceptance, and
alteration of proposed boroughs must be interpreted to require
that the LBC apply the statutory standards for incorporation in
the relative sense implicit in the constitutional term "maximum
degree possible." In other words, AS 29.05.100(a) must be
construed to mean that, in deciding if the statutory standards
for incorporation have been met, the LBC is required to determine
whether the boundaries set out in a petition embrace an area and
population with common interests to the maximum degree possible.
Thus read, AS 29.05.100(a) authorizes the LBC to
accept a petition for incorporation, as proposed, only when the
originally proposed boundaries maximize common interests; when
they do not, the statute precludes a finding of compliance and
requires the commission either to reject the petition outright
or, if compliance with statutory standards can be achieved by
altering boundaries, to exercise its discretionary power to
redraw the original proposal. An informed decision as to whether
boundaries proposed in a petition for incorporation maximize the
common interests of the area and population and thus meet the
applicable statutory standards presupposes a thorough
consideration of alternative boundaries and a decision as to what
boundaries would be optimal. For this reason, in discharging its
duties under AS 29.05.100(a), the LBC is inevitably called upon
to undertake precisely the type of inquiry that Petitioners
allege to be improper: an inquiry into the "most appropriate
boundaries"for the proposed borough.
In summary, by requiring that each borough "embrace an
area and population with common interests to the maximum extent
possible," article X, section 3 of the Alaska Constitution
necessarily vests the LBC with power to find non-compliance when
the boundaries originally described in a petition for
incorporation do not maximize common interests. Thus, although
AS 29.05.100(a) requires a preliminary finding of non-compliance
before the boundaries of a proposed borough may be altered, the
LBC, in passing on the issue of compliance, has broad authority
to decide what the most appropriate boundaries of the proposed
borough would be.
B. The LBC Impliedly Found that the Yakutat Borough,
as Proposed, Would Fail to Meet the Standards for
Incorporation.
This leads us to the issue of whether the LBC's
findings in the present case comport with the requirements of AS
29.05.100(a). It is undisputed that the LBC made no express
finding of non-compliance before deciding to alter the northwest
boundary of the proposed Yakutat Borough. Petitioners contend
that the lack of an express finding requires reversal of the
LBC's decision. However, in Valleys Borough Support Committee v.
Local Boundary Commission, 863 P.2d 232, 234-35 (Alaska 1993), we
determined that the LBC had "impliedly found"that a petition for
borough incorporation failed to meet applicable standards.
Concluding that this implied finding was rationally based, we
went on to uphold the LBC's decision. Id. at 234. As the LBC
correctly argues in the present case, Valleys Borough establishes
that a finding of non-compliance under AS 29.05.100(a) may be
made either expressly or by implication. Thus, the critical
question here is whether an implied finding of non-compliance can
be gleaned from the record.
To resolve this question, it is useful to consider the
circumstances under which we determined that an implied finding
had been made in Valleys Borough. In Valleys Borough, the LBC
voted to reject outright one of two competing petitions for
borough incorporation. Id. at 233. In explaining the basis for
its rejection, the LBC had stated that the area within the
support committee's petition was "not cohesive enough at this
time to [be] within the same organized borough." Id. On appeal
we deemed the LBC's phrase, "not cohesive enough" to be a
reference to the statutory standard for incorporation set forth
in AS 29.05.031(a)(1), which requires the LBC to find that the
population of a proposed borough "is interrelated and integrated
as to its social, cultural, and economic activities." Id. at
234. On this basis, we held that the LBC had impliedly found a
lack of compliance with AS 29.05.031(a)(1). Id.
The obviousness of the implied reference to AS
29.05.031(a)(1) in Valleys Borough was established by language
from this court's earlier ruling in Mobil Oil Corp. v. Local
Boundary Commission, 518 P.2d 92, 98 (Alaska 1974), quoted in
Valleys Borough, 863 P.2d at 234, where we characterized the
LBC's task as involving "[a] determination whether an area is
cohesive and prosperous enough for local self-government." The
phrasing of the LBC's finding was thus a close paraphrasing of
this court's own description of the standards for incorporation.
The situation in the present case is analogous. The
findings contained in Conclusion #3 of the LBC's Statement of
Decision in this case make it plain that the LBC shifted the
northwest boundary of the proposed Yakutat Borough from Cape
Suckling to the 141st Meridian because the commission believed
that the affected area lacked sufficient cohesiveness to the
remaining area of the borough and enjoyed greater ties and common
interests with the Prince William Sound area.6 Indeed, the basis
for the LBC's action is evident from the title it gave to
Conclusion # 3 of its Statement of Decision: "THE MOST
APPROPRIATE BOUNDARIES FOR THE CITY AND BOROUGH OF YAKUTAT EXTEND
FROM THE 141ST MERIDIAN IN THE WEST TO THE SOUTHERN BOUNDARY LAST
PROPOSED BY PETITIONERS, A LINE DRAWN FROM THE TOP OF MOUNT
FAIRWEATHER TO CAPE FAIRWEATHER."(Emphasis added.)
Because the LBC based its decision that the 141st
Meridian was the most appropriate boundary for the proposed
borough on criteria reflecting the common interests of the area
and its population, and because the LBC plainly meant its
decision to ensure that the area and population to be included in
the approved borough would be maximally cohesive, the decision
itself was tantamount to a declaration that the originally
proposed boundaries did not comply with the standards for
incorporation -- that they failed to "embrace an area and
population with common interests to the maximum degree possible."7
In this respect, the LBC's decision in the current case
corresponds closely to its Valleys Borough finding that the
petition was not "cohesive enough . . . to [be] within the same
organized borough." We hold here, as we did in Valleys Borough,
that the LBC impliedly determined that the petition, as
submitted, failed to meet the standards for incorporation.
C. The LBC Did Not Rely On Improper Criteria in Amending
the Proposed Boundary.
Petitioners lastly argue that, even if the LBC's
decision were construed as determining that the originally
proposed borough boundaries failed to meet the statutory
standards for incorporation, the LBC based its decision on non-
statutory criteria and therefore erred. In advancing this
argument, Petitioners rely primarily on the LBC's consideration
of the possible future creation of a Prince William Sound Borough
and of interests voiced by Chugach Alaska Corporation, a regional
Native corporation based primarily in Prince William Sound whose
boundary under the Alaska Native Land Claims Settlement Act is
drawn at the 141st Meridian.
Petitioners' arguments, however, reflect the mistaken
premise that the LBC must approve any minimally acceptable
petition for incorporation and has only limited authority to
consider or adopt "the most desirable"borough boundaries. Given
the Alaska Constitution's mandate that boroughs be cohesive "to
the maximum degree possible,"8 the LBC acted well within the
purview of its authority in considering the desirability of
future incorporation of neighboring areas such as Prince William
Sound and the interests of affected land owners and users such as
the Chugach Alaska Corporation.9 We find no merit to
Petitioners' claim of improper reliance on non-statutory
criteria.
IV. CONCLUSION
As we have emphasized on previous occasions, "the Local
Boundary Commission has been given a broad power to decide in the
unique circumstances presented by each petition whether borough
government is appropriate." Mobil Oil, 518 P.2d at 98-99. We
have similarly emphasized that "[t]he standards for incorporation
set out in AS 07.10.030 were intended to be flexibly applied to a
wide range of regional conditions." Id. at 98. Here, "we
perceive in the record a reasonable basis of support for the
Commission's reading of the standards and its evaluation of the
evidence." Id. at 99. Accordingly, we affirm the LBC's
acceptance of the incorporation petition, as modified.
AFFIRMED.
_______________________________
* Sitting by assignment made pursuant to article IV,
section 16 of the Alaska Constitution.
1 The Alaska Constitution provides that "[t]he
entire State shall be divided into boroughs, organized or
unorganized." Alaska Const. art. X, 3. The Alaska
Constitution established the LBC to address municipal boundary
issues, including borough formation, annexation, and boundary
studies. Alaska Const. art. X, 12.
2 During 1991, the DCRA, at the direction of the
LBC, was preparing model borough boundary reports that covered
the entire unorganized borough in Alaska. The Yakutat area was
part of two model borough boundary studies. Initially, the DCRA
recommended that Yakutat be included within the same model
borough boundaries as the Prince William Sound area, but later
recommended that Yakutat be included with Hoonah and the Cross
Sound/Icy Straits communities.
3 The LBC conducted extensive public hearings on the
petition and on the model borough boundaries on January 17-19,
1992. The LBC also held three decisional meetings in Anchorage
on February 5 and 26, and March 17, 1992, on the Yakutat Borough
petition. On February 5, the commissioners decided to consider
the Yakutat petition before deciding the model boundaries for the
area. On March 17, a motion was made to approve the petition
with the southern boundary adjusted to Cape Fairweather and the
northwestern boundary of Cape Suckling. By a 3-2 vote, the
motion was amended to adjust the northwestern boundary to the
141st Meridian. The LBC decided, by a 4-1 vote, to approve the
petition to incorporate the City and Borough of Yakutat as
amended.
4 AS 29.05.031(a) articulates the standards for
borough incorporation:
An area that meets the following
standards may incorporate as a home rule,
first class, or second class borough:
(1) the population of the area is
interrelated and integrated as to its social,
cultural, and economic activities, and is
large and stable enough to support borough
government;
(2) the boundaries of the proposed
borough conform generally to natural
geography and include all areas necessary for
full development of municipal services;
(3) the economy of the area
includes the human and financial resources
capable of providing municipal services;
evaluation of an area's economy includes land
use, property values, total economic base,
total personal income, resource and
commercial development, anticipated
functions, expenses, and income of the
proposed borough;
(4) land, water, and air
transportation facilities allow the
communication and exchange necessary for the
development of integrated borough government.
5 See Alaska Transp. Comm'n v. Airpac, Inc., 685
P.2d 1248, 1253 (Alaska 1984) ("There is a presumption that every
word, sentence, or provision was intended for some useful
purpose, has some force and effect, and that some effect is to be
given to each, and also that no superfluous words or provisions
were used.") (quoting 82 C.J.S. Statutes 316 (1953)).
6 Although the individual findings in Conclusion # 3
are not listed by number in the Statement of Decision, they are
obviously distinct, and we refer to them by numbers corresponding
to their listed order. Pertinent here are findings # 7, 9, 10,
11, and 18:
Finding # 7: Land ownership by
Yakutat residents in the area west of the
141st meridian is minimal compared to the
size of the area.
Finding # 9: The Emergency Air
Service contract for the Icy Bay logging camp
is held by a Yakutat air company; however,
major landowners in the disputed territory
believe that activity in the area, and the
development of its resources, will look to
Prince William Sound rather than Yakutat.
Finding # 10: The transportation
links to the area west of the 141st meridian,
limited to boat and unscheduled flights, are
somewhat more attenuated than in the other
parts of the borough.
Finding # 11: The petitioners
established use of the western area by
Yakutat residents; however, it is used to a
much lesser extent than the area to the east
of the 141st. For example, information in
the petition indicated only 2% to 26% of
households used various areas west of the
141st for subsistence purposes.
Finding # 18: The LBC did not
consider model borough boundaries in reaching
its decision on the Yakutat borough petition
as model boundaries for the area have not yet
been adopted. However, the LBC did consider
the impact of the Yakutat proposal on the
adjacent regions.
7 Alaska Const., art. X, 3 (emphasis added).
8 Alaska Const., art. X, 3.
9 In their reply brief, Petitioners challenge the
authority of the LBC to promulgate regulations such as 19 AAC
10.060(a)(1), which expressly authorized the LBC to consider
"land use and ownership patterns"in determining compliance with
the statutory standards set out in AS 29.05.031(a). See, e.g.,
Warner v. State, 819 P.2d 28, 32 n.3 (Alaska 1991); State v.
Anderson, 749 P.2d 1342, 1345 (Alaska 1988). We need not decide
the issue, since even in the absence of the challenged
regulations, the LBC clearly had authority to consider
information and arguments such as those presented by the Chugach
Alaska Corporation in addressing the statutory standards
articulated in AS 29.05.031(a). In particular, we note that AS
29.05.031(a)(1) gives the LBC power to consider whether "the
population of the area [included in the proposed borough] is
interrelated and integrated as to its social, cultural, and
economic activities."
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