1972-05-19 Regular Meeting1 0 1 •? 1 1 41 3 7 5
KODIAK ISLAND BOROUGH ASSEMBLY
SPECIAL MEETING - hWY 19, 1972
I CALL TO 0R➢ER
The meeting was called to order by Presiding ^fflcer Norman Sutliff at 7:30 P.M.
in the Courtroom of the State Office Buis ding, Kodiak, Alaska.
ZI ROLL CALL
Present Absent
Mr. Wilton White, Borough Chairman
Mr. Norman Sutliff, Presiding Officer
Mr. Richard Sims
Mr. Don Arndt
Mr. Fred Brechan
Mr. Harry Clowes
Also present: Mr. Bob Greene, School Superintendent, Jim Branson, School Board
President, approximately fifteen people in the audience and Roy Madsen (late
arrival) and George Vogt (late arrival).
III PURPOOF SPECIAL MEETING
A. Mr. Sutliff noted that the reason for the meeting was review of the Status
of the implied suit against the School Bond Issue, meeting called by the
School Administration. Mr. Greene was asked to give a resume of information
recently received from the bonding attorney. Information was received that
the bond sale could not proceed until the suit had been taken care of one
way or another and three alternatives were given: (1) statement from Attorney
Vogt that his client does not intend to continue with the suit which would
block the sale of the bonds, (2) a counter suit bringing this issce Into the
courts for a determination and (3) Borough Assembly action that would call
for a declaratory judgment, a resolution passed by the Assembly trac trey do
not feel that the implied suit has any ,justification and ask for a ' -ent
to so rule.
The Borough Chairman gave a background of the action taken by t: m - .:— .:h
so far in the preparation of the bond sale. It was pointed out - a.: 1_::ce
paper work had been prepared and was mailed to the bonding attc:
accordance with their request. At the titre the letter from Attc rr.ey
Vogt was received by Forrest Walls indicating a possible suit, "r.
stated that they would go ahead with the preparation of the pacersc:x
the sale of the bonds. He indicated further that the bonds wca.:: -a :e
be flagged indicating treated action and that this might have a te&'- - :n
the sale of the bonds and also on the interest rate. Mr. Walls ..a= eed r.
along this line with the preparation of the supporting documents. -1
conservation two days ago with Walls, it was pointed out that - .trip s
very short between the awarding of the bid and the Borough needed t
if the bonds were ready for sale. Mr. Walls: indicated at that t_-e rr_rt
could not proceed with the sale of the bonds in light of the fact ' a
conservation with Mr. Vogt revealed that he was planning to file •re
Mr. Walls named the three alternatives as listed above by Mr. 0reere.
It was suggested that the Borough Attorney contact Mr. Vogt to deer - 1
he was going to file suit..; if not it would be suggested that a : °t•Pr
stating be sent to the Borough. However since Mr. Vogt was out • .r
until 4:30 P.M. this date the Borough Attorney was unable to corta t _
that was the reason for this special meeting.
Since the Borough Attorney had a class this evening until 9:00 2. ".
Mr. Vogt was on his way to the meeting, it was suggested that th3 - e -
recess until Mr. Vot arrived.
Mr. Vogt arrived at 8:32 P.M. and the meeting reconvened.
Mr. V o g t stated that he had been in contact with the Bonding Atto r.P.; . _
previous week and Mr. Vogt was doing research on question as to w:..er er
not this type of case could be won and the practical effect of st:c re
that the State would have to pick up the Bonding Issue. However -v : - .it
wanted to voice this that explicitly as can't file a law suit on that +171
of a premise. Mr. Vogt was checking into this, however it was the -cr.:_r.;
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KIB SPECIAL ASSEMBLY MEETING - MAY 19th, 1972 Page 2
Attorney's feeling that there might be problems here in that it might be
the contract right that he would be attempting to enjoin, contract obligation
would be the obligation of the Borough to pay for the bond issue, rather
than enjoining the taxing for education. This is the point that Mr. 7egt
has been checking into and he was waiting for some of his research material
to be returned. The Bonding Attorney had asked for a letter from Mr. Vogt,
however Mr. Vogt felt that the Bonding Attorney was a bit more cautious than
was necessary as he had explained that he would not be fi a preliminary
injunction in any case, Mr. Vogt noted further that this was the only
question in his mind before he would file the action but he could very well
wait until the bonds are sold if he were sure of the result of the research.
Mr. Vogt did state that the suit will be filed, have one question to decide
if possible the theory would be to file in such a manner that the bond issue
is not disturbed, operating on the supposition that the State would have
to pick up the cost.
Mr. White, Borough Chairman, gave a resume on the action taken to date, the
time schedule in that the date for the awarding of the construction bid is
June 6th and noting the three alternates that the Bonding Attorney had set
forth.
Mr. Vogt indicated that the question in his mind that needs answering at
this time is whether he needs a bond issue about to be issued in order to
given him something to focus on with an injunction or can he merely focus on
the collection of the taxes to pay for the bond issue or the expenditure of
funds acquired from such bonding issue. Mr. Vogt indicated that he would
be calling one or two offices of the Attorney General and obtain their
opinions on this matter.
The Borough Chairman agair expressed the concern of the Borough on the time
element involved in the award of the construction bid.
Mr. Madsen, Borough Attorney, arrived at 8:45 P.M. and was informed on the
three alternatives as previously stated in the meeting. Mr. Vogt pointed
out that this suit is being filed on behalf of a child by an adult, Mr.
Madsen explained the pursuit of the first course of action; he felt it soul:
not be prejudicing his client's case if Mr. Vogt would write a letter to
Forrest Walls stating that they are not contesting the bond issue as such -
their contention is that present procedure for establishing educational
facilities in the state is unconstitutional due to inequalities written its
it by the way it is being accomplished. This does not necessarily go to tr-
validity or the authority of a Borough or other municipality to issue and
sell bonds for a school purpose but is going toward the state legislature's
constitutional responsibility.
Mr. Vogt indicated that he had discussed this with the bond counsel and not
that the problem he had not researched out was whether this suit would enj.l.
the Borough from complying with a contract obligation. He would hesitate
to write a letter until he is sure where he is going and one that night
waive the right to file.
Mr. Madsen noted that he would like in order to save time, to have the
authorization of the Borough Assembly to proceed to negotiate with Mr. Vogt
and if they do not arrive at any satisfactory agreement that the Borough
Assembly authorize Mr. Madsen to file an action for an injunction in the
alternative of a declaratory judgment, would file on both as part of the
sane law suit and the action for an injunction would be an attempt to enjoin
the bringing of this suit and that the plaintiff be required to put up a
substantial bond due to the possible damage that the delay may have caused
to the Borough if the construction cannot be awarded. It would be reascrac --
for a substantial bond to be posted.
. Mr. Sims moved that the Borough Attorne and the Born '• Chairman be authcri
t ti28"'a cotmer suit cn beh- of the Borough unless we receive a letter
through negotiation from P'ir. Vogt satisfactory to Forrest Walls indicating
that the Bore y will not be brou t into a law suit seconded b ''u'. E no =�'
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KIB SPECIAL ASSEMBLY MEETING - MAY 19th, 1972 Faze 3
Mr. Madren noted that this should be done before Jura 6th and in answer
to question concerning the sellirg of the bonds further stated that
anticipation notes can be issued, they are good for one year and can be
renewed at that time. This would allow interim money from the banks for
the construction work. This should be done as soon as possible in order
to have work started for this season's construction work. Perhaps a 'otter
from Mr. Vogt stating that the suit will not be filed at this time is all
that is necessary to satisfy the bond counsel; want to get past the point
of the sale of the bonds and the date of June 6th.
Mr. Madsen further explained that the Bonding Counsel has the obligation
to state that to their knowledge there is no action pending on the sale
of the Bonds along with their statement that all the paper work and
supporting documents are in order and that the Borough has the authority to
issue such bonds. Probably the reason they are being hesitant is that
the Bond Counsel has not received in writing before a threat that there
is a suit to be filed.
The question was called for and the motion passed by unanimous roll call
vote. Mr. Madsen again noted that it is only far that the plaintiff be
required to post a bond to reimburse the Borough for revenue lost.
There being no further action the meeting was adjourned at 9:15 P.M.
ATTEST: APPROVED:
.- 7 /
^ L
Norma L. Holt, Borough Secretary
(in absence of Mr. Walker, Borough
Clerk- Treasurer)
r ft
Wilton T. '.vhite, Borough Chairman