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05/19/19721 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.; 1 0 1 1 1 1 5 7 4, 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 =�' 0 0 1 1 5 7 7 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