Alaska Supreme Court Opinions made Available by Touch N' Go Systems and Bright Solutions

Touch N' Go, the DeskTop In-and-Out Board makes your office run smoother. Visit Touch N' Go's Website.
  This site is possible because of the following site sponsors. Please support them with your business.

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Weber v. Kenai Peninsula Borough (10/15/99) sp-5191

Weber v. Kenai Peninsula Borough (10/15/99) sp-5191

Notice:  This opinion is subject to correction before publication in the 
Pacific Reporter.  Readers are requested to bring errors to the attention 
of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 
99501, phone (907) 264-0608, fax (907) 264-0878.


							)	Supreme Court No. S-8404
  					Appellant,	)
							)	Superior Court No.
			v.				)	3KN-94-00242 CI
				Appellee.		)    [No. 5191 - October 15, 1999]

Appeal from the Superior Court of the State of 
Alaska, Third Judicial District, Kenai,
Jonathan H. Link, Judge.

Appearances:  Robert M. Weber, pro se, 
Wasilla.  Holly B. Montague, Assistant Borough 
Attorney, Kenai Peninsula Borough, Soldotna, 
for Appellee.

Before:  Matthews, Chief Justice, Eastaugh, 
Fabe, Bryner, and Carpeneti, Justices.

BRYNER, Justice.


Robert Weber appeals from a superior court order 
upholding the Kenai Peninsula Borough's decision to finance a 
privately owned gas-line extension by creating a utility special 
assessment district.  Weber raises constitutional challenges to the 
assessment district's creation and to his property's mandatory 
inclusion in it.  Because the borough created the assessment 
district for the purpose of financing a gas line that provides 
public benefits and because the construction specially benefitted 
Weber's property, we hold that the borough acted constitutionally. 
 Accordingly, we affirm.
In May 1993 property owners in the East Scout Lake Loop 
area of the Kenai Peninsula Borough (the borough) petitioned to 
form a utility special assessment district to finance a gas line 
extension.  After a public hearing on the petition the borough 
assembly established the East Scout Lake Loop Utility Special 
Assessment District (assessment district) to finance the gas line. 
At another public hearing, the borough appropriated $220,000 to 
fund the project.  The borough hired Enstar, a public utility that 
is a privately-owned, for-profit corporation, to construct the gas 
line.  The borough's agreement with Enstar provided that Enstar 
would assume ownership of the gas line.  The borough then 
authorized Enstar to proceed with construction.  Upon completion of 
the gas line in 1993, the borough confirmed the assessment roll, 
established the funding mechanism for the assessment district, and 
set $1,330 as the amount to be paid by each property owner within 
the district. 
The approved assessment roll included Weber's property, 
which was then owned by Weber's predecessor in interest, Karen 
Mills.  Mills appealed the borough's decision to the superior 
court, which affirmed the assessment.  In the interim, Weber had 
replaced Mills as the property's owner.
Weber appeals the superior court's decision.

A.	Standard of Review 
Because the superior court acted as an intermediate court 
of appeal, we independently review the borough's decision.1   We 
apply our independent judgment to constitutional issues.2   But when 
a question of law involves the borough's expertise, we review the 
decision under the rational basis standard.3   Likewise, we apply 
the rational basis standard when the borough's application of the 
law to the facts implicates administrative expertise or involves 
fundamental policy determinations.4   Under this standard, we defer 
to the borough's determination as long as it is supported by the 
facts and has a reasonable basis in law.5 
B.	The Borough's Creation of a Special Assessment District 
to Finance the Construction of a Gas Line Was for a 
"Public Purpose"as Required by Article IX, Section 6 of 
the Alaska Constitution.

Article IX, section 6 of the Alaska Constitution 
provides, "No tax shall be levied, or appropriation of public money 
made, or public property transferred, nor shall the public credit 
be used, except for a public purpose." In the superior court, 
Weber argued that the borough's creation of the special assessment 
district violated this provision because it benefitted only Enstar 
and served no public purpose.  Relying primarily on our decision in 
Suber v. Alaska State Bond Committee,6  the superior court ruled 
that the creation of the assessment district was valid because the 
gas line served a legitimate public purpose.  Weber contends that 
the superior court misinterpreted Suber. 
In Suber we considered the constitutionality of a 
mortgage adjustment plan intended to aid mortgagors and mortgagees 
of one- to four-family dwellings that had been damaged by the 
March 27, 1964, earthquake.7   There we upheld the state's program 
on the basis that the "paramount purpose of the Program is the 
relief of those saddled with economic hardship.  Any private 
advantage, such as to those holding mortgages on the damaged or 
destroyed homes, is incidental and subordinate."8 

Weber argues that Suber is inapplicable to this case 
because the private benefit to Enstar was "the sole benefit"-- and 
not merely an incident -- of the utility assessment.9   He relies 
exclusively on the fact that Enstar not only received all 
assessment proceeds, but owns and operates the gas line.  Weber 
emphasizes that the borough created the assessment district 
specifically to pay Enstar for its costs in building the gas line. 
But these assertions do not compel the conclusion that the gas line 
was constructed for a purely private purpose or that Enstar alone 
benefitted from the special assessment. 
We presume that a municipal legislative assessment 
decision is valid.10   We thus assume that the creation of the 
assessment district is constitutional unless Weber proves 
otherwise.  As we held in City of Wasilla v. Wilsonoff,11  we will 
reverse a special assessment decision only upon proof of "fraud or 
conduct so arbitrary as to be the equivalent of fraud, or [where a 
decision is] so manifestly arbitrary and unreasonable as to be 
palpably unjust and oppressive."12   	

Weber has presented no evidence that the borough's 
decision to construct the gas line was motivated by considerations 
other than the public interest.  In fact, the borough did not 
initiate the formation of the assessment district; rather, the 
landowners -- by over a seventy-percent vote -- petitioned the 
borough to create the assessment district.  Weber has not shown 
that the borough created the assessment district to assist Enstar. 
 To the contrary, the record shows that the borough based its 
decision on the public's stated need for a new gas line.	
The fact that Enstar is a private company is irrelevant 
to whether the gas line serves a public purpose.  In Milheim v. 
Moffat Tunnel Improvement District,13  the United States Supreme 
Court held that "the test of the public character of an improvement 
is the use to which it is to be put, not the person by whom it is 
to be operated."14   And we similarly held in Lien v. City of 
Ketchikan 15  that "[t]he test of whether a public purpose is being 
served does not depend on the . . . nature of the [entity] that 
will operate the . . . property, but upon the character of the use 
to which the property will be put."16 

In Lien we held that the City of Ketchikan's funding of 
the construction of a community hospital served a public purpose.17  
 We concluded that the city did not alter that purpose simply by 
turning the hospital's operation over to a religious order.18   
Specifically, we recognized that "[t]he moneys used to construct 
the Ketchikan hospital were spent for a public purpose, since a 
community hospital serves the general welfare.  That purpose does 
not become non-public when the hospital is turned over to a 
[private organization] for operation, rather than being operated by 
the city itself."19   Though Lien involved a non-profit religious 
order rather than a for-profit corporation, its reasoning applies 
Lien thus establishes that Enstar's status as a private 
corporation and its ownership of the gas line do not foreclose a 
finding that the gas line will provide a public service.  The issue 
turns not on who is being paid but on what will be provided.20   And 
there are no rigid categories establishing public versus private 
purposes; in each case, the analysis of public purpose must be made 
within the context of specific facts.21  

Because the existence of a public purpose turns on a 
case-specific factual determination involving agency expertise, we 
must defer to the borough's view of the public good.22   We will 
overturn the borough's decision only if it is "arbitrary or without 
any reasonable basis in fact or is so unreasonable as to transgress 
the limitations of our constitution such that it is plainly 
foolhardy or without any discernible benefit."23   

Under this deferential standard, we have accepted a broad 
range of purposes as legitimate public purposes.24   Here, it was not 
"plainly foolhardy"25  for the borough to conclude that Enstar's 
natural gas line will provide a "discernible benefit."26   To the 
contrary, the record reveals that the borough reasonably could have 
concluded that the gas line would provide public benefits.  The 
construction of the gas line enables any property owner within the 
assessment district to access natural gas through Enstar.  As the 
superior court observed, gas line proponents cited several benefits 
of having a natural gas line, including comfort and safety, the 
economy of natural gas, as well as increased property values. 
Granted, the borough never made an express determination that it 
was establishing the assessment district for the public good.  But 
neither the public purpose clause nor our case law requires that it 
do so.  Weber's contention that only Enstar benefitted from the 
improvement is no more than "mere conjecture,"27  and we reject it 
We thus conclude that the borough's creation of the 
assessment district does not violate the public purpose clause of 
the Alaska Constitution.
C.	The Gas-Line Construction Specially Benefitted Weber's 

Weber next argues that because his property received no 
special benefits, the assessment was a taking without just 
compensation in violation of the due process clauses of the United 
States and Alaska constitutions.  He relies on the 1898 case of 
Village of Norwood v. Baker,28  in which the United States Supreme 
Court held that property in a special assessment district must be 
specially benefitted by the subject of the assessment.29   Alaska has 
adopted this special benefit requirement.30   But Weber fails to show 
that his land was not benefitted by the gas line.  
Proponents of the gas line wrote to the borough about the 
benefits of having access to the gas line.  These benefits included 
having a safe,31  convenient,32  reliable,33  environmentally clean, and 
economical source of fuel.  Weber, in contrast, submitted only a 
tax valuation of his property indicating a net decrease in the 
property's value since the gas line's construction.  He offered as 
evidence a "Public Information"printout indicating that the 
borough appraised his property at a value that decreased gradually 
from $37,800 to $32,900 for the years 1993 through 1996 but then 
increased in 1996 to an amount that was still less than its pre-
gas-line value.

This evidence fails to overcome Weber's heavy burden of 
proof.  In Kissane v. City of Anchorage 34  the court held that an 
assessment amounts to an unconstitutional taking only when it 
"clearly results in . . . flagrant and palpable inequality between 
the burden imposed and benefits received . . . ."35   Evidence that 
Weber's property suffered a decrease in value is irrelevant to his 
takings argument absent a showing that the decrease is causally 
related to the existence of the gas line.  Weber provides no 
evidence of any causal connection.  
In addition to the tax valuation, Weber also argues that 
he personally does not want to access the natural gas and thus will 
reap no benefit from the project.  But the question of benefit 
applies only to the property itself.36   Weber's personal gain or 
loss is irrelevant to the takings issue; it is enough that he is 
able to access the gas line and enjoy its benefits if he so 
wishes.37   Accordingly, we hold that Weber has failed to establish 
an unconstitutional taking.38 
We AFFIRM the superior court's judgment.


1 	See CH Kelly Trust v. Municipality of Anchorage, Bd. of 
Equalization, 909 P.2d 1381, 1382 (Alaska 1996).
2 	See Walker v. Walker, 960 P.2d 620, 622 (Alaska 1998).
3 	See Rose v. Commercial Fisheries Entry Comm'n, 647 P.2d 
154, 161 (Alaska 1982).   
4 	See Hammer v. City of Fairbanks, 953 P.2d 500, 504 
(Alaska 1998).
5 	See Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 
746 P.2d 896, 903 (Alaska 1987).
6 	414 P.2d 546 (Alaska 1966).   
7 	See id. at 548-51.
8 	Id. at 552.
9 	Weber also disputes the lower court's characterization of 
the assessment as a lien on the property rather than a charge to 
the landowner by noting that if the landowner does not pay the 
special assessment the borough can foreclose on the property.  This 
fact is irrelevant to whether a public purpose is served by the 
borough's financing of a gas line.  Nor is the fact that Weber owns 
a coal business, which may vie with the natural gas utility for 
business, relevant to the public purpose query.
10 	See Property Owners Ass'n of the Highland Subdivision a 
Portion of USMS 769, Ketchikan, Alaska v. City of Ketchikan, 781 
P.2d 567, 572 (Alaska 1989); City of Wasilla v. Wilsonoff, 698 P.2d 
656, 657 (Alaska 1985).
11 	698 P.2d 656 (Alaska 1985).
12 	Id. at 658 (quoting Kissane v. City of Anchorage, 159 F. 
Supp. 733, 737 (D. Alaska 1958)); accord Property Owners, 781 P.2d 
at 573.
13 	262 U.S. 710 (1923).
14 	Id. at 719.
15  	383 P.2d 721 (Alaska 1963).
16 	Id. at 722.
17 	Id.
18 	Id.
19 	Id.
20 	See id. at 722.
21 	DeArmond v. Alaska State Dev. Corp., 376 P.2d 717, 721 
(Alaska 1962)("Whether a public purpose is being served must be 
decided as each case arises and in the light of the particular 
facts and circumstances of each case."); accord Wright v. City of 
Palmer, 468 P.2d 326, 330 (Alaska 1970); Walker v. Alaska State 
Mortgage Ass'n, 416 P.2d 245, 251 (Alaska 1966).
22 	See Wright, 468 P.2d at 331; accord Comtec, Inc. v. 
Municipality of Anchorage, 710 P.2d 1004, 1006 (Alaska 1985).
23 	Comtec, 710 P.2d at 1006 (internal quotations omitted) 
(quoting DeArmond, 379 P.2d at 721, and Wright, 468 P.2d at 331).
24 	See, e.g., Lake Otis Clinic, Inc. v. State, 650 P.2d 388, 
394 (Alaska 1982) (holding that the state's reimbursement to a 
guarantor who paid off a private, non-profit hospital's 
construction loan served a legitimate public interest); Wright, 468 
P.2d at 330-31 (holding that the city's issuance of general 
obligation bonds to finance a community development plan providing 
for the purchase of a site and the construction of a manufacturing 
and processing facility that would be leased to a private 
corporation did not violate the constitution's public purpose 
requirement because it would help boost the city's failing 
economy); Walker, 416 P.2d at 252 (the Alaska State Mortgage 
Association provides citizens with health, safety, welfare, 
comfort, security and economic benefits and thus serves a 
legitimate public purpose); Suber v. Alaska State Bond Comm., 414 
P.2d 546, 552 (Alaska 1966) (recognizing that the relief and 
support of the poor as well as the "aiding [of] those persons . . . 
who have suffered a substantial financial burden as a result of 
natural disaster"as public purposes); see also Wright, 468 P.2d at 
328 n.2 (listing cases upholding municipal financing of improvement 
25 	Wright, 468 P.2d at 331.	
26 	Id.
27 	City of Wasilla v. Wilsonoff, 698 P.2d 656, 658 (Alaska 
28 	172 U.S. 269 (1898).
29 	Id. at 278-79.
30 	See AS 29.46.010(a)("A municipality may assess against 
. . . private real property to be benefited by an improvement all 
or a portion of the cost of acquiring, installing, or constructing 
[the improvement].") (emphasis added). 
31 	See Simmons v. City of Moscow, 720 P.2d 197, 204 (Idaho 
1986) (considering safety a legitimate benefit of a special 
32 	See Comtec v. Municipality of Anchorage, 710 P.2d 1004, 
1006-07 (Alaska 1985).
33 	See id.
34 	159 F. Supp. 733 (D. Alaska 1958).
35 	See id. at 737; see also Houck v. Little River Drainage 
Dist., 239 U.S. 254 (1915) (holding that where state forms an 
assessment district, "its action cannot be assailed under the 14th 
Amendment unless it is palpably arbitrary and a plain abuse").
36 	See Kissane, 159 F. Supp. at 737; see also AS 29.46.010 
(permitting assessments against "private real property to be 
benefitted by an improvement [for] all or a portion of the cost of 
. . . constructing [the improvement]").
37 	See City of Glendale v. Trondsen, 308 P.2d 1, 7 (Cal. 
38 	Weber also asserts that the assessment violates equal 
protection.  But, as the borough points out, Weber failed to raise 
this argument at the administrative or superior court level and 
thus has waived the issue.  See Nenana City Sch. Dist. v. Coghill, 
898 P.2d 929, 934 (Alaska 1995).

	-15-	5191