Final acceptance of the City of Hoonah’s request to form a new Xunaa Borough was issued in a written decision by the Alaska Local Boundary Commission on Friday, along with a dissenting report of the 3-2 decision, setting the stage for residents of the area to vote on the petition during an election next June.
The new borough would be the 20th in Alaska and the first formed since Petersburg in 2013. Hoonah’s municipal government would be dissolved, and new boundaries would include Hoonah, Game Creek, Elfin Cove, Funter Bay, Horse and Colt Islands, and most of Glacier Bay National Park. Of an estimated 1,000 residents in that area, roughly 900 live in Hoonah.
Residents in the most remote areas would receive limited government services after expressing such a preference and most of the borough’s revenue would come from sales taxes paid by users of the private Icy Strait Point cruise port near Hoonah.
“The area adjoins the City and Borough of Yakutat and the Haines Borough to the north, the City and Borough of Sitka to the south, and the City and Borough of Juneau to the east, thus enclosing virtually the entire northern portion of Southeast Alaska within an organized borough, with the exception of the cities of Gustavus, Pelican and Tenakee Springs which were are excluded from inclusion in the Borough,” the official decision notes.
The report issued Friday reaffirms the 3-2 decision announced by the commission Nov. 12, which comes after Hoonah has made multiple attempts during the past three decades to form a borough. But the process for the commission isn’t over as at least one of the excluded communities plans to file a reconsideration request before a Jan. 15 deadline based on concerns in the dissent about the impacts to those residents.
All five commission members stated in their reports that one area of agreement is their preference for the communities to reach a unified arrangement involving governance within the broader area.
“The commission feels strongly that if, in the future, any or all three neighboring communities wish to become part of the Xunaa borough, that they should be allowed to do so, and that the addition of the communities of Hoonah, Gustavus, Pelican and Tenakee Springs would certainly meet all standards for inclusion into the Borough,” the official decision notes.
The dissent, noting the borough excluded “nearly one half of the region’s population and their municipalities,” expresses concerns that as legal and other disputes in the region arise “no one can reliably divine how this situation will play out in the hands of adjudicators, potentially years from now.”
“The communities and residents of the Glacier Bay region should now be strongly motivated to abandon past disagreements regarding borough formation,” the dissent states. “They could take advantage of a fleeting opportunity during any appeal to work together — on a level playing field caused by uncertainty of its outcome — to cooperatively design and develop a truly regional plan that best serves their common interests.”
Gustavus Mayor Sally McLaughlin said Monday her community has a long history of independence and thus isn’t interested in joining a borough, but a reconsideration request is being filed with the commission because of potential outcomes she asserts aren’t being fully considered.
“There’s the possibility that everything that we do once we leave our docks and go out into the waters just offshore of our beach could be taxed by Xunaa because those waters would be part of the borough,” she said. “There’s nothing in their petition that says they’re going to do that, but there’s nothing preventing them from doing that later.”
Another fundamental flaw, McLaughlin said, is Hoonah’s proposal — while allowing Gustavus, Pelican and Tenakee Springs the option to join — is structured in a way none of them would want to. She said she’s not absolutely ruling out the possibility Gustavus could join a Xunaa Borough someday, but major changes to the current plan would be needed.
“I think the only thing to make it attractive would be to start completely over and create a Glacier Bay borough or an Icy Strait borough,” she said. “Design a borough that meets everybody’s needs, not just a select few.”
The City of Hoonah, in a presentation arguing in favor of the new borough, states the community will benefit from increased revenue (including a 1% sales tax from May to September intended to take advantage of tourism), and more influence on resource decisions involving areas such as subsistence use and management of Glacier Bay National Park.
An FAQ published by Hoonah notes sustainable funding to support functions — “particularly for sustainability of the Hoonah School District” — is a primary motivation of the petition.
“In forming a borough and expanding corporate boundaries to include land and water resources far beyond Hoonah city limits, this will provide opportunity for additional revenue sources the City cannot currently utilize because they are outside the City’s boundaries,” the FAQ notes.
Hoonah is 7.3 square miles in size, while the new borough would include 4,246 square miles of land and 6,157 square miles of water. Hoonah officials state residents in the borough will not be subject to property taxes, with revenue instead coming from other taxes including the seasonal tax and “commerce primarily tied to commercial fishing grounds.”
Along similar lines, governing authority in communities outside of Hoonah would be limited, according to the boundary commission’s decision.
“Because of remote area residents’ preferences for independent living, only administration, taxation, planning, zoning, and education would be offered areawide,” the decision notes. “All other powers, i.e., police, fire, emergency services, solid waste collection and disposal, etc., would only be provided in the Hoonah Townsite.”
Among other issues debated during the process — and likely to be raised if the commission takes up a formal reconsideration — is whether the proposed borough petition met state statutory and constitutional requirements. Among those is a clause in the Alaska Constitution stating a factor in borough formation is “whether the proposed borough will embrace an area and population with common interests to the maximum degree possible.”
The three members voting in favor of the Xunaa Borough state that, despite their reservations about some communities being excluded, the standard specified by that language has been met.
“This requirement is to the ‘maximum degree possible’ not to the maximum degree,” the decision states. “In making these findings, the Commission is required to review the standards and apply them in a reasonable fashion. They are not to be strictly interpreted. Rather, the Commission must have some leeway with regard to whether a petition meets the standards, and the Commission must base its decision on appropriate evidence in the record.”
The decision further states “the petitioner made good faith efforts to include the communities of Pelican, Gustavus, and Tenakee Springs within the Borough boundaries.”
“Gustavus, Pelican and Tenakee Springs object to the Petition and they seek to prohibit the formation of the Borough but offer no alternative to forming a regionalized government,” the decision notes. “Rather, their position is to simply leave them alone or to demand the Commission reduce the size of the Borough boundaries so there is area left for them to someday form another government.”
• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.
