Yukon Flats Regional Government

Feasibility Study

Prepared For:

The University of Alaska Fairbanks Engineering Science Management and Civil Engineering Departments…

and…

The Residents of the Communities of the Yukon Flats

Presented By:

Peter Hewko,

Kathy Campbell,

Mark Parrott, P.E.,

Michael Schmetzer, P.E.,

Michele Desrochers, P.E.,

UAF Masters Candidates

Overview• Introduction• Regional Profile • Standards for Incorporation• Borough Structure Options• Decision Analysis• Steps to Incorporation• Project Management Requirements• Borough Operational Costs• Potential Revenue Sources• Financial Assessment• Conclusions

Yukon Flats Boundaries

Introduction

• Satisfies two primary purposes– Provide the Counsel of Athabascan Tribal

Governments (CATG) with a preliminary planning document

– Satisfy graduate degree requirements of authors

Considerations

• Issues Forcing the Discussion– Threat of Annexation

• Originates with FNSB and NSB

– Oil and Gas Potential• Land Exchange• Fish & Wildlife Service Interests• Assessment of Potential Resources

Benefits and Detractors

• Impact to Traditional Way of Life

• Self-Determination and Control

• Decline of State Oil Revenue

• Cost of Education

• Cost of Local Government

• Economic Growth Potential

Community• Population Approximately 1300• Area 53,000 square miles• 9 Communities• Council of Athabascan Tribal Government• Native Corporation

– Doyon, Limited– Tanana Chiefs Conference

• Proposed Borough Boundaries Identical to Existing Rural Education Attendance Area 13

Proposed Yukon Flats Borough

Regional ProfileDemographic Summary

Population Change over Time

800

900

1000

1100

1200

1300

1400

1940 1950 1960 1970 1980 1990 2000 2010

Year

Po

pu

lati

on

Regional ProfileArctic Village

• Population: 146• Population increasing• Median Family Income: $19,000

Regional ProfileBeaver

• Population: 67• Population Decreasing• Median Family Income: $29,792

Regional ProfileBirch Creek

• Population: 43• Population Increasing• Median Family Income: $13,750

Regional ProfileChalkyitsik

• Population: 84• Population Increasing• Median Family Income: $16,875

Regional ProfileCircle

• Population: 99• Population Decreasing• Median Family Income: $11,250

Regional ProfileFort Yukon

• Population: 594• Population Decreasing• Median Family Income: $32,000

Regional ProfileRampart

• Population: 21• Population Decreasing• Median Family Income: $23,438

Regional ProfileStevens Village

• Population: 76• Population Declining• Median Family Income: $11,563

Regional ProfileVenetie

• Population: 188• Population Increasing• Median Family Income: $21,429

Standards for Incorporation

• Alaska Constitution, Article X

• Alaska Statutes

• Alaska Administrative Code

• Bottom Line - Yukon Flats area appears able to meet all requirements

Borough Structure Options

• Three Classifications of Boroughs– Home Rule Borough– First-Class Borough– Second-Class Borough

Existing Boroughs in Alaska16 organized boroughs

• Home Rule (8 of 16)– Sitka, Juneau, Anchorage, Yakutat, Lake and

Peninsula, Denali, Northwest Arctic, North Slope.– Over half of Alaska’s population– Four of Five most recent boroughs

• 2nd Class (7 of 16)– Bristol Bay, Ketchikan, Gateway, Kodiak, Kenai,

Mat-Su, Fairbanks, Aleutians East

• 3rd Class – No Longer Allowed by Law (1 of 16)– Haines

Decision to Form Borough• Multiple Criteria

– Quantitative Impacts• Costs• Revenues• Etc.

– Qualitative Impacts• Quality of life• Political• Social• Etc.

How do we consider all issues and “calculate” an answer?

Decision Analysis• Analytic Hierarchy Process (AHP)

– Identify the decision– Identify the criteria applicable to the decision– Prioritize the criteria– Develop pair-wise comparison matrices of

each alternative with each criteria– Determine if the consistency level is

acceptable– Calculate final ranking

Decision Analysis

• Decision– What type of government structure is best for Yukon

Flats?

• Alternatives– Unorganized Borough– Home Rule Borough– 1st Class Borough– 2nd Class Borough

• Criteria– Surveys

Decision AnalysisSurvey to Prioritize Criteria for AHP

• Demographic Information Requested– Name– Location of residence– Title or affiliation– Description of personal interest in topic of

borough formation

Decision AnalysisSurvey to Prioritize Criteria for AHP

• Prioritize the following in order of importance:– Cost of new borough government– Local planning, platting, and land use powers– Avoidance of annexation– Local control and financing of Public Education– Tribal Government– Tax $$$ from TAPS– Tax $$$ from future gas line– Tax $$$ from future Yukon Flats oil and/or gas

development

Decision AnalysisSurvey to Prioritize Criteria for AHP

• Identify other critical issues or criteria associated with borough formation in the Yukon Flats

• Do you believe the area would benefit from the creation of a borough government? Why or why not?

Decision Analysis• Criteria Considered Ranking

– Tribal Government 0.27– Annexation 0.23– Cost of Government 0.16– Tax on TAPS 0.12– Tax on Future Gas Line 0.06– Tax on Future Oil & Gas 0.05– Property Tax 0.04– Public Education 0.03– Area-wide Powers 0.02– Planning, Platting, and Land Use 0.02

Decision Analysis• Pair-Wise Comparison

Annexation

Unorganized Borough Home Rule First Class Second Class

Unorganized Borough 1.00 0.11 0.11 0.11

Home Rule 9.00 1.00 1.00 1.00

First Class 9.00 1.00 1.00 1.00

Second Class 9.00 1.00 1.00 1.00

 

Total 28.00 3.11 3.11 3.11

Decision Analysis• Calculation of Weights of Pair Wise Comparison

Normalized Annexation

nmax = 4.000 CR= -1E-16

Unorganized Borough

HomeRule

First Class

SecondClass

Row Average

Unorganized Borough 0.035 0.035 0.035 0.035 0.035

Home Rule 0.321 0.321 0.321 0.321 0.321

First Class 0.321 0.321 0.321 0.321 0.321

Second Class 0.321 0.321 0.321 0.321 0.321

Decision AnalysisDevelopment Options

Borough Option Final Ranking

Unorganized 0.26

Home Rule 0.27

1st Class 0.24

2nd Class 0.24

Recommended Borough Structure

• Home-Rule– Provides Greatest Degree of Self-

Determination– Charter Powers Offer Flexibility– Unified Home Rule with absorption of City of

Ft. Yukon would probably be most efficient

Path to Incorporation

• Preliminary Study– Can enough money be raised to support a local

government?– Will people support a local borough government?

• Written Charter– Local Charter Commission– Retain Legal Expertise

• Submit Charter to the Local Boundary Commission

Path to Incorporation

• Hold Election– Vote on issue of borough formation– How to pay for local government– Elect mayor– Elect assembly members

Path to IncorporationProject Management Requirements

• Experienced & Committed PM

• Qualified Resources

• Facilities

• Schedule

• Funding

Cost Estimate for Local Government Study, Cost Analyses, and Preparation of Written Charter

Budget Category 2005Primary Functional Requirements Local Government Consultant $60,000Attorney's Fees $40,000Travel - Consultant/Atty to Fort Yukon $10,000Travel - Charter Members to Fort Yukon $60,000Per Diem $17,000Printing and Publications $5,000Telephone and Postage $5,000 Subtotal $197,000 Contingency 25% $49,250

ESTIMATED EXPENDITURE $246,250

Borough Operational Costs

• Education

• Utilities

• Government

Borough Operational CostsEducation

• Yukon Flats REAA 13– Average Daily Student Count is 307– Assume Same Needs

• Approximate annual cost is $6.5 million

• 4 mills, Phased over 4 years

Borough Operational CostsUtilities

Borough Operational CostsUtilities

• High Electricity Costs – Offset by Power Cost Equalization• Telephone, School Internet• Varied Water Sources

– Washeteria– Jugs– Community and Private Wells– Rivers, Lakes

• Sewer– Primarily Honeybuckets and Lagoons– Outhouses– Septic Tanks

• Landfills• Initial Operations and Management Budget of $1.7 million

Borough Operational CostsGovernment

• Seat of Government

• Mayor and Assembly

• Legal

• Finance

• Planning and Public Works

• Tax Assessment

• Total Initial Cost of $1.3 million

Potential RevenueState and Federal Sources

• Alaska New Borough Organizational Grant• Federal-Related PILT• Federal PILT for Schools• Power Cost Equalization• Property Tax – Oil & Gas Property• Potential Oil & Gas Revenues• North Slope Natural Gas• Shallow Coal Bed Methane• Grant Land Entitlement• Miscellaneous Federal Grants

Potential RevenueLocal Revenue Sources

• Property Tax– Real and/or Personal Property– Oil and Gas

• Sales Tax Options– General Sales Tax– Aviation Fuel Sales– Alcohol License Fees– Commercial Fisheries

• Employment Tax– Annual Head Tax

• Mineral/Timber Severance Tax• Industry-Related Payment in Lieu of Taxes• Gaming

Operational Cost Analysis

Property Tax Mill Rate

Year 8 12 16 20

2005 $470 $1,830 $3,191 $4,551

2010 -$1,894 -$712 $470 $1,652

2015 -$2,526 -$1,488 -$451 $585

All values in $1000

Operational Cost AnalysisBudget Surplus Invested at 7.5%

Property Tax Mill Rate

Year 12 16 20

2005 $1,867 $3,239 $4,612

2010 $2,336 $11,663 $20,991

2015 -$3,236 $16,579 $36,395

2020 -$15,914 $18,205 $52,324

2030 -$73,467 $8,766 $91,000

All values in $1000

Conclusions

• Local Borough Government Feasible– Home Rule

• Property Tax

• Invest Initial Surplus for Future

• More In-Depth Study Recommended

Special Thanks To

• Bruce Thomas• Dan Brockhorst• Jim Mery• Jim Whitaker• Pete Hallgren

• Robert Perkins• Bob Carlson• Leroy Hulsey• Yuri Shur• David Barnes

Photo Acknowledgements

Bill Hess

Mark Parrott

Questions

Thank You