Our Honest Opinion: Anchorage, Alaska Ballot Measures

Comment: These voter issues appear on the Municipality Of Anchorage (MOA) April 3 election ballots being distributed this week by mail.  Since some of the measures affect energy companies and those affected by them, we have taken time this week to prepare comments.  Note that this is an opinion page.  While we have HONESTLY dedicated ourselves to being as factual as possible, based on the public information we have reviewed, we do — as always — encourage reader involvement.  You can comment on our opinions by scrolling down to the comment section.  More importantly, if we’ve in any way misstated or misinterpreted a fact or process please provide us with polite, well considered additions/corrections so that our searchable archives might remain as reliable as possible for today’s and future readers.  Respectfully,  -dh

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Dear Readers:

Below, we labor to HONESTLY comment on the April 3 election’s 12 Ballot Propositions in Anchorage, Alaska.

Proposition 1.  Vote yes if you want to prevent a man or boy (i.e. also applies to women) from dressing as a woman or girl and entering a locker room, shower area, bathroom or other facility in which women or girls may be in various stages of undress.  The current code allows undressed women and girls to be exposed to man or boy who proclaims that he identifies as a woman or girl.  So ladies, if you HONESTLY do not mind asking a man entering your bathroom – or your daughter’s — dressed as a women or girl, for proof that his identity as a female is, “…sincerely held, core to his gender-related self-identity and not being asserted for an improper purpose”, then vote “no”.  Just realize that voting “no” keeps a municipal law that removes the right and freedom of companies and organizations — including “abused Women’s shelters” — from restricting traditionally female facilities from men who claim they identify as women or girls.

Dave Donley. Northern Gas Pipelines photo by Dave Harbour

Propositions 2, 3,4,5,6,7,8 would allow the MOA to sell bonds and spend millions on public facilities.  We all want a great city and that implies good roads, water and sewer infrastructure and facilities.  But can we HONESTLY afford new debt THIS YEAR in the middle of a fiscal crisis?  Has the government heard we’re in a fiscal crisis?  Have the politicians heard that for the first time in memory our state is losing population as thousands of productive, working Alaskans have been laid off or fired?  But you haven’t heard much about government employees being laid off, have you?  (If there were no bond sales this year perhaps we wouldn’t need as many government ‘planners’).  Nor have you heard about eliminating MOA or state employee positions or trimming benefits or wages?  Instead, you’ll hear, “well we’re paying off old bonds so we can afford (Translation: “so you can afford) the new debt and pay maximum property taxes.”  The MOA budget is over $1/2 billion, and the School District budget is over $3/4 billion. These bond propositions add over $95 million in new debt.  Repaying the debt adds to the annual budget.  In a recent ADN Op-Ed column, Anchorage School Board Member Dave Donley said, “ … the staff of the district’s planning department is paid from school bonds. A recent review by a national school organization identified the ASD construction project planning overhead as excessive”.  So voting for the Proposition 2 School District “Capital Project” bond sale indirectly supports the District’s high operating budget and property taxes.  We haven’t analyzed MOA bonds for capital projects in depth enough to know if capital money is diverted by the City from capital bond proceeds to expand its operational spending by calling it “bond related”.

HONESTLY, in a time of fiscal crisis when we are losing employed citizens why don’t we just vote “no” on this new bond debt?  Let’s tell the Assembly and School Board to get the money by trimming costs or postponing work.  Do the projects with existing resources…or not.  Make do!

Proposition 9 lets Whittier Police enforce parking laws in Girdwood Valley.  HONESTLY, that’s Girdwood’s business. Vote yea or nay!

Proposition 10 allows the MOA to sell its Municipal Light & Electric (ML&P) utility to Chugach Electric Coop (CEA).  We support an HONEST and TRANSPARENT sale of ML&P but we oppose the corrupted process leading to Proposition 10.  We will vote “No” until the MOA employs a transparent, valid, robust, national competitive bidding process (i.e. RFP or RFB) and until a super majority of both MOA voters and CEA ratepayers (and ML&P ratepayers) know exactly how the transaction will affect them.

• Here’s why: Anchorage’s Charter (i.e. our local “constitution”), wisely requires a 3/5, or 60% “yes” vote to sell the utility. Those voting “yes” ON THIS BALLOT PROPOSITION are making it easier for the politicians to sell this asset by only requiring a majority “YES”  vote to sell.  If it’s such a good deal, why wouldn’t 60% of us vote “YES” to sell and why wouldn’t 60% of CEA ratepayers vote “YES” to merge or sell?  No one has given us an HONEST and logical reason for eliminating the protection given by supermajority votes!
• Chugach Electric’s rules require a supermajority of their members (i.e. including me) to authorize a utility “merger”. At first there was a move to “merge” the two utilities.  But CEA decided to change a word.  “Let’s call it a ‘sale’ of ML&P to us and we won’t need a supermajority vote”, they thought.  So the prudent rule for a supermajority approval was eliminated by changing a word.  Does that sound like an HONEST way to protect the CEA members from making a potentially disastrous acquisition – or just a way for the CEA management and board to have an easier time making the biggest deal of CEA’s lifetime?
• The ML&P Commission was created to oversee the MOA electric utility and advise the Mayor and Assembly on utility matters that include services, rates, etc. After all, getting a handle on complex issues like power generation, transmission, distribution, budgeting and rate making require tremendous regulatory, technical, economic and legal understanding of a utility.  You’d think that if the MOA’s political leaders wanted to sell the utility, they’d most heavily rely on the Commission.  The highly respected Chairman of the ML&P Commission, Judy Brady (i.e. a former Anchorage Chamber Chairman and state Commissioner of Natural Resources and Executive Director of the Alaska Municipal Bond Bank), at their January 24^th meeting tendered her resignation and provided a thoughtful rationale justifying her decision.  She noted that the ML&P Commission had not been even informed of the plan to sell ML&P until a day prior to the public announcement.  Her rational included, in part, concern over the process employed in the ML&P-CEA transaction and its lack of transparency.  Vice Chairman Tim Vig noted his similar concerns.  If the very MOA commission charged with being on top of ML&P issues was ignored what makes you and I think we have the expertise to HONESTLY and competently vote “yes” on this enormous decision?
• We HONESTLY BELIEVE THAT What Is Essentially Sole Source Negotiation involving public money and assets — especially for a multi-million or billion dollar deal — violates the public interest. After the MOA and its subsidized Anchorage Economic Development Corporation (AEDC), ML&P and CEA began to study the issue of a merger/sale, several other utilities submitted expressions of interest to the MOA.  But those suitors were turned away so that CEA and the MOA with relaxed constraints on supermajority constituent support could pursue an, in effect, sole source negotiation.  One must applaud the ML&P Commission’s volunteer leaders for having the intellectual HONESTY to publicly announce their discomfort with the lack of proper process and transparency in this matter: true public servants.
• Competition could keep the process honest.  The special interests supporting the sale, including the MOA, CEA and AEDC (i.e. not including a supermajority of constituents) have romanced the Anchorage Chamber board and other community organizations into endorsing the sole source ML&P sale. However, no real, HONEST criticism has been involved in the many presentations, town meetings and publications surrounding this vote.  So if the Mayor and Assembly and CEA and AEDC all tell business leaders what a great efficiency will be achieved with the sale…and no one objects…why shouldn’t they have endorsed the sale?  Why?  Because it is beyond the expertise of normal citizens – even business leaders – and only the true competition involved in a highly publicized, complex and competitive bidding process to sell ML&P can provide sufficient transparency to give hundreds of thousands of ratepayers and taxpayers comfort!
• RCA to the rescue…not (Scroll down to last ‘bullet’ for additional, 3-20-18 comment)! It is not HONEST for special interests advocating this proposition to say or imply that, “after ML&P and CEA negotiate terms of the sale the Regulatory Commission of Alaska (RCA) will make sure consumer interest are protected.”  Yes, after they negotiate some yet to be confirmed terms, CEA and ML&P will likely petition the RCA for an expanded CEA service area and related matters.  The RCA adjudicates petitions for certificates of public convenience and necessity and service areas, rates and quality of service based on the legal record the parties establish.  Certainly that record will contain the enthusiastic support of CEA, ML&P, Unions, MOA, AEDC, community organizations and councils that have been romanced by the special interests.  In short, the RCA is unlikely to have any significant consumer, business, government opposition.  Who of you readers with legal and regulatory expertise would appear at an RCA public hearing to supply reliable, technical, economic testimony dissecting the negotiated sale conditions and present alternative consumer perspectives to the RCA–or recommend the RCA attach conditions to approval of the parties’ petition?  The special interest parties know this.  They know that once CEA has overcome its supermajority rule with a word change and once the MOA has overcome its Charter-required supermajority requirement for the utility sale, they are pretty much ‘home free’ with the RCA.  And note this: After the RCA approves the parties’ petition for an expanded electric monopoly in Southcentral Alaska, CEA will then prepare a “rate case” for their expanded service area that may or may not keep faith with all the promises advocates have made in their speeches.  (Trust me; really?)  Ratepayers won’t even know for sure the true impact on them until the new rates take effect.  By then, it will have been too late – impossible — to object to the April 3, 2018 municipal election, majority vote passage of this ballot proposition.
• The CEA and MOA FAQ sheets and presentations have tried to neutralize potential arguments. We’ve addressed some of the issues above.  But there are many more that would be more properly vetted were a transparent, competitive, robust bidding/proposal process to be nationally advertised and adopted.  For example, while ML&P ratepayers will no longer be paying off its debt, CEA’s ratepayers will inherit the $524 million debt.  While ML&P and its ratepayers might have had difficulty paying the MOA an annual “dividend”, CEA’s ratepayers will deposit $170 million into the MOA’s trust account.  CEA ratepayers will pay an ADDITIONAL $170 million to the MOA over 30 years — not necessarily destined, as near as we can tell, for the trust account.  CEA is also agreeing to have its ratepayers pass on to MOA another $142 million over some period of time as, “payments in lieu of taxes”.  Looks like any financial challenge the current city officials might have supporting its big budget could  solved quickly should this deal quickly be consummated.   It is facts like this  that a more detailed public discussion, in conjunction with a robust, national, competitive RFP/RFB process that might help current ML&P and CEA ratepayers — and MOA taxpayers — better understand how the transaction is likely to specifically affect them, and in CEA’s case, the “capital accounts” of members.
• Our further comment on 3/20/18:  
  

  Ray Kreig on Mike Porcaro’s 3-23-18 KENI Radio Show re: author’s view of ML&P sale. https://clyp.it/fhbf5swd

  AEDC, funded by Anchorage’s Assembly and Mayor, tries to give comfort to citizens voting to trash the supermajority vote requirement and sell ML&P to CEA.

  “Trust us”, they seem to say, “and don’t worry; we’ve got your back.”

  In their March 7, 2018 board position, President Bill Popp and Chairwoman Raquel Edelen say, in part:

  “If Proposition 10 is approved by Anchorage voters, AEDC will be closely following the development of the final agreement that will ultimately be presented through 3 public processes for final approval. The 3 processes will require approval by:

  -The Anchorage Assembly (Note: Why would they vote against their own finally negotiated agreement?)

  -The Chugach Electric Association Board of Directors. (Note: Why would they vote against their own negotiated agreement?)

  -The Regulatory Commission of Alaska. (Note:If the above two parties support any finally negotiated agreement between themselves and AEDC supports and is supported by the Anchorage Assembly and Mayor what party will appear before the Commission to oppose or even question the agreement — except with softball or amateur consumer questions? The CEA board represents all its members. The Assembly represents its citizens. The only other visible institution in this matter is AEDC and their mission and proclivity is not to represent electric consumers. The organization “markets Anchorage”.

  There are many problems with this proposed sale: lack of meaningful competition; lack of robust consumer representation before the CEA board and Assembly; lack of transparency in the process; reliance on RCA whose legal record will be dominated by the above parties; pre negotiated terms that leave little room for honest negotiation; and much more as we describe in this post.

  Thank you for your comment. I hope voters critically analyze this matter but fear that the campaign to enrich the city coffers and special interests at the expense of ratepayers has been so well planned, so well concealed and so well executed that there is precious little time remaining for well intended voters to adequately study this complex matter before election day has come and gone.

  Thank you for your own contribution and for registering an opinion here.

  -dh

“Oh boy, I get tax relief.” Well, hold on, there’s more to that story!

Proposition 11, shifts more tax burden from residential taxpayers to business taxpayers as taxes increase.  The MOA rationale is not very transparent.  We  prefer a greater degree of HONESTY when presenting such voter propositions.  Following is the MOA rationale and our commentary:

WHEREAS, the majority of Anchorage’s revenues come from property taxes

8 and payments in lieu of property taxes, which are paid by Anchorage residents,

9 businesses and property owners;

10

11 WHEREAS, property owners have indicated a desire for property-tax relief; (Comment: all taxpayers always have a desire for tax relief.  This is a way of redistributing more of the tax burden from residential

12   property owners {i.e. many voters} to businesses {i.e. fewer voters} and to government owned or nonprofit enterprises, like utilities that pass their “payments in lieu of taxes” on to ratepayers {you} anyway.  In short, it’s a shell game politician employ to place more tax pain in areas that don’t directly affect the greatest number of voters.  Before we say, “Oh boy,I get tax relief,” note that a. taxes will be going up, and that b. businesses will pass on to us the costs required to make up the difference.}

13 WHEREAS, it has been asserted (This is a passive term meaning nothing) that the municipality relies too heavily on

14 property taxes—and on residential property taxes in particular (i.e. so taxes will increase anyway but let’s transfer more of the pain to businesses that will pass it on to consumers anyway)—to fund government

15 services;

16

17 WHEREAS, raising the residential real property exemption would reduce

18 residential real property taxes, (i.e. but make businesses and ratepayers and shoppers pay more);

19

20 WHEREAS, state law requires changes to the residential real property

21 exemption to be approved by voters (i.e. including non-taxpayers who will vote “yes” and residential taxpayers who will vote “yes”, and businesses and utilities that will be out voted but pass costs along to ratepayers and shoppers anyway);

22

23 THE ANCHORAGE ASSEMBLY ORDAINS:

24

25 Section 1. Pursuant to state law and the Anchorage Municipal Charter, a ballot

26 proposition in substantially the following form and substance shall be submitted to

27 the qualified voters of the Municipality at the next regular municipal election:

28

29 PROPOSITION NO. ______

30 LARGER RESIDENTIAL REAL-PROPERTY TAX EXEMPTION

31

32 This proposition would increase the residential real-property tax

33 exemption to provide that 20% of a residential real property’s value

34 may be exempt from taxation, up to a maximum of $50,000.

35 Currently, 10% of a residential real property’s value may be exempt

36 from taxation, up to a maximum of $20,000

Conclusion: vote yes or no, but at least understand the technique politicians are using to get more money to keep government ‘WHOLE’ during this fiscal crisis at the expense of taxpayers and consumers.

Proposition 12 “…expands the boundaries of the Anchorage Fire Service Area 8 (AFSA) to include the parcels and areas in the northeast area Eagle River 9 Valley that are currently not in a fire service area.”

Dave Harbour is former chairman of the Anchorage Chamber of Commerce and chairman of the Alaska Council on Economic Education. He is also a former member and chairman of the Regulatory Commission of Alaska. -Webmaster

Extending service area boundaries would allow for taxing real property in the new area and allow MOA residential taxes to pay for fire service in that expanded area.  Now, property owners who experience fire have to personally pay for the service when the fire department visits them out of their lawful fire service areas.  Some will vote “yes” and some “no” depending on whose ox they HONESTLY believe is being gored.  This one we leave to the interpretation of each voter.

Conclusion

We don’t mean in this analysis to suggest that anyone involved in these propositions is “dishonest”, since “honesty” has been our theme.  We are sure that all of the elected and appointed and company officials are doing their best to HONESTLY represent their own interest.  But we have hoped to illustrate that each of those interests is a “special interest”.  In large, public policy issues like the ones represented by these ballot propositions, it behooves taxpayers and ratepayers to be as fully and HONESTLY briefed on how decisions impact THEM as possible, not just how effectively and HONESTLY advocates are representing each of their own special interests.

 We hope you have found this information useful — and valid — as you prepare to vote.  Remember, comment below as you wish, and be sure to pass on additions/corrections that enable us to maintain a highly reliable, searchable archive!  If you do suggest changes, what is most useful is offering specific, recommended word changes. Thanks again!    -dh