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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Fink v. Municipality of Anchorage (7/20/2018) sp-7258

Fink v. Municipality of Anchorage (7/20/2018) sp-7258

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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, email  

                                                                                                                         

           corrections@akcourts.us.  



                      THE SUPREME COURT OF THE STATE OF ALASKA                                       



MATTHEW  FINK,  WILLIAM                                         )  

COMPTON,  PATRICIA  LEFEVRE,                                    )     Supreme Court No. S-16451  

                                                                                                       

CORBETT  MOTHE,  CLARK  C.                                      )  

RUSH,  ELIZABETH  MORGAN,                                       )     Superior Court No. 3AN-15-06925 CI  

                                                                                                                                

NANNIE  SCHLEUSNER,  CHUCK                                      )  

SPINELLI,  DIANE  WILKE,  JASON                                                           

                                                                )     O P I N I O N  

DORRIS,  KARLA  GRUMMAN,                                        )  

JAMES  NIGH,  and  NICOLAS                                                                             

                                                                )    No. 7258 - July 20, 2018  

WIEDER,                                                         )  

                                                                )  

                                Appellants,                     )  

                                                                )  

           v.                                                   )  

                                                                )  

                                                                

MUNICIPALITY OF ANCHORAGE,  )
  

                                                                )
  

                                Appellee.                       )
  

                                                                )
  



                                                                                                             

                                   

                     Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                

                     Judicial District, Anchorage, Eric A. Aarseth, Judge.  



                                                                                                         

                     Appearances:  James N. Reeves, Holmes Weddle & Barcott,  

                                                                                                       

                     P.C., Anchorage, for Appellants. Robert P. Owens, Assistant  

                                                                                                    

                     Municipal  Attorney,  and  William  D.  Falsey,  Municipal  

                                                                

                     Attorney, Anchorage, for Appellee.  



                                                                                                          

                     Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  

                                           

                     and Carney, Justices.  



                                        

                     BOLGER, Justice.  


----------------------- Page 2-----------------------

I.                                    INTRODUCTION  



                                                                           Owners of real property (Property Owners) appeal special assessments that                                                                                                                                                                                                                                                                                                                           



the Anchorage Municipal Assembly levied on their lots to pay for recently constructed                                                                                                                                                                                                                                                                                                                                             



road, water, and sewer improvement projects benefiting the lots.                                                                                                                                                                                                                                                                                                        The Property Owners                                                             



 claim that the special assessments improperly include nearly $1 million in costs from                                                                                                                                                                                                                                                                                                                                                                                 



 another municipal utility project unrelated to the improvements built for the benefit of                                                                                                                                                                                                                                                                                                                               



their lots.  They also claim that the special assessments exceed limits set by ordinance  



 and   that   the   assessed   costs   are   disproportionate   to   the   benefits  provided   by   the  



improvements, violating municipal ordinance, charter, and state law.                                                                                                                                                                                                                                                                                                                               



                                                                           We conclude that the Assembly's allocation of costs among these projects                                                                                                                                                                                                                                                                                                    



was supported by substantial evidence and that the ordinance limit the Property Owners                                                                                                                                                                                                                                                                                                                                                                  



rely on does not apply to these assessments. We also conclude that the Property Owners                                                                                                                                                                                                                                                                                                                                                                  



have   not   rebutted   the   presumption   of   correctness   that   attached   to   the   Assembly's  



proportionality decisions.  We therefore affirm the superior court's decision affirming  



the Assembly's special assessment determinations.                                                                                                                                                    



II.                                   FACTS AND PROCEEDINGS                                                            



                                                                           The   present  appeal   concerns   lots   located   in   an   Anchorage   residential  



neighborhood   called   Turnagain   Heights.     This neighborhood                                                                                                                                                                                                                                                                                                  was destroyed                                                                           by   the  



  1964 earthquake and remained undeveloped decades later.                                                                                                                                                                                                                                                                                        In 2002 some Turnagain                                                                 



Heights lot owners petitioned the Municipality of Anchorage to establish road, water,                                                                                                                                                                                                                                                                                                                                                                           



 and sewer improvement districts.                                                                                                                                                                The Municipality produced cost estimates for the                                                                                                                                                                                                                               



projects, and a majority of the property owners in the proposed improvement districts                                                                                                                                                                                                                                                                                                                                                                 



 approved   the   estimates.     The   Assembly   consequently   enacted   ordinances   in   2004  



 creating three special assessment districts:  a road improvement district (RID), a water                                                                                                                                                                                                                                                                                                                                                                    



                                                                                                                                                                                                                                           -2-                                                                                                                                                                                                                            7258
  


----------------------- Page 3-----------------------

improvement district (WID), and a sewer improvement district (referred to as a "lateral                                             



                                                   1  

improvement district" or LID).                        



                      The Municipality hired an engineering consulting firm to do the design  

                                                                                                                                     



work for the three projects.   Based on a geotechnical analysis of the area, the firm  

                                                                                                                                        



recommended  that  subdrains  be  incorporated  in  the  projects'  designs  to  remove  

                                                                                                                                  

groundwater and ensure soil stability during seismic activity.2                                        These subdrains were to  

                                                                                                                                             



be placed in "the sewer utility trenches[,] . . . the deepest utility trench[es] that [are]  

                                                                                                                                        



graded to drain."   The proposed subdrainage system significantly increased the cost  

                                                                                                                                         



estimates for the RID, WID, and LID projects, and the Municipality issued revised  

                                                                                                                       



estimates in 2006.   A majority of the property owners in the improvement districts  

                                                                                                          



approved  the  revised  estimates.                           The  Assembly  amended  the  2004  ordinances  

                                                                                                                            



                     3  

accordingly.   



                      The Municipality consolidated the RID, WID, and LID projects with an  

                                                                                                                                            



unrelated project by the Anchorage Water and Wastewater Utility (AWWU) to replace  

                                                                                                                                    



Pump Station 10, an aging sewer pump station in the area that had needed to be replaced  

                                                                                                                                  



for years.  The contract manager for the RID, WID, LID, and Pump Station 10 projects  

                                                                                                                                   



           1          Municipality    of    Anchorage,    Ordinances    2004-2,    2004-19,    2004-20  



(Apr. 20, 2004).     



           2          Each of the ordinances that established the improvement districts expressly  

                                                                                                                                

required that "[t]he design of [the] public improvements . . . be routed through the  

                                                                                                                                          

Geotechnical Advisory Commission for review and recommendations."                                                             Ordinance  

                                                                                                                              

2004-2  8; Ordinance 2004-19  6; Ordinance 2004-20  6. The Commission approved  

                                                                                                                                 

the RID, WID, and LID projects.  According to the minutes of a June 29, 2006 meeting  

                                                                                                                                   

between improvement district property owners and municipal officials, the Commission  

                                                                                                                           

would  likely  not  have  approved  the  projects  if  the  designs  had  not  included  a  

                                                                                                                                             

subdrainage system.  

                                    



           3          Municipality  of  Anchorage,  Ordinances  2007-51,  2007-52,  2007-53  

                                                                                                                                 

(Apr. 17, 2007).  

                             



                                                                     -3-                                                               7258
  


----------------------- Page 4-----------------------

characterized   the   Pump   Station   10   project   as   "a   basic   infrastructure   upgrade"   that  



benefited   users   outside   the   improvement   district   area   as   well   as   within   it.     The  



Municipality   believed   consolidating   the   projects   would   "allow   maximum   cost   and  



schedule efficiencies."                                                     



                                            The Municipality created six work schedules for the consolidated projects,                                                                                                                                          



lettered A-F.                               Schedules A-C included all the work necessary for the Pump Station 10   



project, as well as some work needed for the RID, WID, and LID projects.  Schedules                                                                                                                                       



D-F included the balance of the work needed for the RID, WID, and LID projects.                                                                                                                                                                                              The  



Municipality invited contractors to submit a "base bid" comprising work identified in                                                                                                                                                                                               



 Schedules   A-C   and   bid   on  "deductive   alternates"   comprising   work   identified   in  



 Schedules D-F.                                     The Municipality divided the work and solicited bids in this manner so                                                                                                                                                          



that the Pump Station 10 project could go forward without the improvement district                                                                                                                                                                                  



projects in the event that none of the bids was compatible with the cost estimates that the                                                                                                                                                                                       



district property owners had approved.                                                                                           



                                            The   Municipality  received   an   acceptable   bid   for   the   entire   contract  



(Schedules A-F), and all four projects were built.                                                                                                                 In November 2011 the Municipality                                             



submitted proposed resolutions to the Assembly to levy special assessments on the                                                                                                                                                                                               



improvement district properties to pay for the completed work.                                                                                                                                                    The Assembly held a                                                  



two-day   public   hearing,   and   in   February   2012   it   issued   resolutions  levying   the  

                                          4        The  RID,  WID,  and  LID  assessments  included  not  only  costs  from  

assessments.                                                                                                                                                                                                                                                              



 Schedules D-F but also some costs from Schedules A-C.  

                                                                                                                                                                                            



                                            Some affected property owners - including most of the Property Owners  

                                                                                                                                                                                                                                                                  



in the present appeal - were unsatisfied with the assessments and the process afforded  

                                                                                                                                                                                                                                                               



                      4  

                                                                                                                                                                                                                                                           

                                            Municipality of Anchorage, Resolutions 2011-321, 2011-322, 2011-323  

                                                       

(Feb. 28, 2012).  



                                                                                                                                         -4-                                                                                                                                             7258  


----------------------- Page 5-----------------------

them by            the   Assembly; they filed                            an   appeal in              superior   court.     The superior                             court  



remanded the matter to the Assembly, ruling that the Assembly needed to conduct an                                                                                        



adjudicatory hearing and decide disputed issues of fact in accordance with Anchorage   



                                                                              5  

Municipal Code (AMC) Chapter 3.60.                                               



                           A panel composed of three Assembly members conducted such a hearing  

                                                                                                                                                                



over three days in December 2014.  Following the hearing, the panel issued findings of  

                                                                                                                                                                           



fact and conclusions of law rejecting most of the aggrieved property owners' objections  

                                                                                                                                                           

to the assessments.6                       The Assembly approved the hearing panel's findings of fact and  

                                                                                                                                                                        



conclusions of law and issued new resolutions confirming and levying assessments on  

                                                                                                                                

the improvement district property owners.7  

                                                                                          



                           A  group  of  property  owners  -  the  Property  Owners  -  remained  

                                                                                                                                                           



unsatisfied and filed a renewed appeal in superior court.  The Property Owners argued,  

                                                                                                                                                                



among other things, that "[a]ll items of work set forth on Schedules A-C were necessary  

                                                                                                                                                            



components of [Pump Station] 10" and that it was thus "improper and unlawful [for the  

                                                                                                                                                                         



Assembly] to pass those costs to the improvement districts."  The Property Owners also  

                                                                                                                                                                       



argued the assessments exceeded "120% of contract construction costs," in violation of  

                                                                                                                                                                           



AMC 19.30.040(A)(1).  And they argued the special assessments were not proportional  

                                                                                                                                                      



              5            Fink v. Municipality of Anchorage                                   , No. 3AN-12-06917 CI (Alaska Super.,                             



Sept. 6, 2013).                    Chapter 3.60 sets out procedures to be followed in "quasi-judicial                                            

proceedings and administrative hearings."                        



              6            The hearing panel found that two properties in the improvement districts  

                                                                                                                           

received no net benefit from the improvements.  See infra note 44.  The hearing panel  

                                                                                                                                                   

otherwise rejected all challenges to the assessments.  

                                                                                



              7            Municipality of Anchorage, Resolutions 2014-193, 2014-194, 2014-195  

                                                                                                                                                           

(Apr. 14, 2015).  

                    



                                                                                     -5-                                                                             7258
  


----------------------- Page 6-----------------------

to the benefit conferred by the improvements. The superior court rejected all arguments;                                                             



the Property Owners appeal to this court.                             



III.          STANDARD OF REVIEW                   



                                                                                                                                       8  

                                                                                                                                                                   

                          We   review   a   municipal   assembly's   decision   directly.                                                    We  apply  the  



                                                                                                                                              9  

                                                                                                                                                   

substantial evidence standard of review to the assembly's findings of fact.                                                                       "Substantial  



                                                                                                                                                                      

evidence is 'such relevant evidence as a reasonable mind might accept as adequate to  



                                               10  

                                                     

support a conclusion.' " 



                                                                                                                                                                        

                          Interpretation of an ordinance or municipal charter provision presents a  



                               11  

                                                                                                                                                       

question of law.                    We generally review such questions using our independent judgment,  



                                                                                                                                                  

adopting "the rule of law that is most persuasive in light of precedent, reason, and  



                12  

                                                                                                                                                         

policy."            But "when reviewing questions of law that involve the [Assembly's] expertise  



                                                                                                                                                       

 .  . .  [or] fundamental policy  determinations," we apply  the  rational basis standard,  



                                                                                                                                                                   

deferring "to the [Assembly's] determination as long as it is supported by the facts and  



                                                            13  

                                                                 

has a reasonable basis in law." 



             8            Luper   v.   City of Wasilla                      ,  215  P.3d 342,                  345 (Alaska 2009);                       Miller v.   



Matanuska-Susitna Borough                                , 54 P.3d 285, 288 (Alaska 2002).                     



             9            S. Anchorage Concerned Coal., Inc. v. Municipality of Anchorage Bd. of  

                                                                                                        

Adjustment , 172 P.3d 774, 780 (Alaska 2007).  

                                                                               



             10           Id. (quoting Leigh v. Seekins Ford, 136 P.3d 214, 216 (Alaska 2006)).  

                                                                                                                                                      



             11           See Cent. Recycling Servs., Inc. v. Municipality of Anchorage, 389 P.3d 54,  

                                                                                                                                                                    

57 (Alaska 2017); Municipality of Anchorage v. Repasky, 34 P.3d 302, 305 (Alaska  

                                                                                                                                                          

2001).  



             12           Alaska Miners Ass'n v. Holman , 397 P.3d 312, 315 (Alaska 2017) (quoting  

                                                                                                                                                          

Alaska Conservation Found. v. Pebble Ltd. P'ship , 350 P.3d 273, 279 (Alaska 2015)).  

                                                                                                                                                            



             13           Miller, 54 P.3d at 288-89.  

                                                               



                                                                                  -6-                                                                           7258
  


----------------------- Page 7-----------------------

                                       Our review of a municipal assembly's special assessment decision is also                                                                                                                                



                                                                                                                                           14  

constrained by the "presumption of correctness."                                                                                                                                                                               

                                                                                                                                                  This presumption attaches whenever  



                                                                                                                                                                                                                                                      15  

                                                                                                                                                                                                                                                             

                                                                                                                                                                                                                

a municipal assembly  acting in  its legislative capacity  levies special assessments. 



                                                                                                                                                                                                                                            

When the presumption has attached, we will reverse the assembly's 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  



                                         16  

                                     

oppressive.' " 



IV.	               DISCUSSION  



                   A.	                 Allocation Of Costs Between The Improvement Districts And The                                                                                                                                         

                                       Pump Station 10 Project                              



                                       ThePropertyOwners first claimthat the Municipality improperly "shifted"                                                                                                                   



about $1 million in costs from the installation of a subsurface drainage system needed  

                                                                                                                                                                                                                                     



by Pump Station 10 to the RID, WID, and LID projects.   As a result, the Property  

                                                                                                                                                                                                                                



Owners argue, "a small group of property owners" has been forced to "hold[] the bag                                                                                                                                                             



for" expenses related to AWWU's maintenance of its sewer system - expenses that                                                                                                                                                                



ordinarily would have been passed on to the utility's systemwide customer base.                                                                                                                                                            



                                       1.	                Additional background   



                                       As explained above, the Municipality divided                                                                                     the construction work for the                                             



                                                                                                                                                                                                                            

RID, WID, LID, and Pump Station 10 projects into six different schedules:  Schedules  



                                                                                                                                                                                                                                                 

A-F.  Schedules D-F included work necessary for the RID, WID, and LID projects but  



                    14                Prop. Owners Ass'n of the Highland Subdivision v. City of Ketchikan                                                                                                                                                ,  



781 P.2d 567, 572-73 (Alaska 1989).                                                      



                    15	               Id.  



                    16                 Weber v. Kenai Peninsula Borough, 990 P.2d 611, 614 (Alaska 1999)  

                                                                                                                                                                                                                                        

(alteration in original) (quoting City of Wasilla v. Wilsonoff, 698 P.2d 656, 658 (Alaska  

                                                                                                                                                                                                                                    

 1985)).  

                       



                                                                                                                         -7-	                                                                                                               7258
  


----------------------- Page 8-----------------------

not for the Pump Station 10 project.                                                  The Municipality charged the expenses associated                                              



with   Schedules   D-F   to   the   improvement   districts   and   included   them in                                                                                            the   special  



assessments.  



                                Schedules A-C included all the work needed for the Pump Station 10                                                                                



project and some work needed for the RID, WID, and LID projects.                                                                                                  The Municipality   



charged    nearly  $1    million    in    expenses    associated    with    Schedules    A-C    to    the  

                                                                                                                                                                        17  A significant  

improvement districts and thus included them in the special assessments.                                                                                                            



portion of this nearly $1 million - namely, $834,542 from Schedule B - resulted from  

                                                                                                                                                                                                 

construction of a subdrainage system.18   As explained above, the firm that designed the  

                                                                                                                                                                                                     



RID, WID, and LID projects recommended construction of this subdrainage system in  

                                                                                                                                                                                                        



order  to  remove  groundwater  and  make  the  soil  more  stable  in  the  event  of  an  

                                                                                                                                                                                                     



earthquake.                        Ensuring  stability  was  essential  because  it  was  expected  that  the  

                                                                                                                                                              



improvement districts would be developed for residential use.  

                                                                                                                                                    



                                Pump Station 10 also needed the subdrainage system.  But the Assembly  



hearing  panel  heard  testimony  that  a  subdrainage  system  that  served  only  Pump  

                                                                                                                                                                                             



Station 10 would have been more limited than the shared system actually constructed.  

                                                                                                                                                                                                               



The  projects'  contract  manager  explained  that  "maintaining  the  stability"  of  the  

                                                                                                                                                                                                    



                17              Specifically, for Schedule A, the Municipality charged $94,998 to the LID                                                                                          



and $3,223,269 to Pump Station 10. For Schedule B, the Municipality charged $834,542                                                                                                   

to the RID and $56,760 to Pump Station 10.                                                                    And for Schedule C, the Municipality                           

charged $60,821 to the WID and $159,329 to Pump Station 10.                                                                                              



                18              The rest of the nearly $1 million resulted from construction of sewer and  

                                                                                                                                                                                    

water lines shared by the improvement districts and Pump Station 10. See supra note 17.  

                                                                                                                                                                                                               

The Property Owners do not specifically argue that these expenses were improperly  

                                                                                                                                                                                  

shifted to the improvement districts.  Such an argument would lack merit in any case.  

                                                                                                                                                                                                               

Substantial evidence in the Assembly hearing record supports a conclusion that the  

                                                                                                                                                                                                     

improvement district properties benefited significantly from the sewer and water lines  

                                                                                                                                    

and were charged only a fraction of the cost for these lines.  

                                                                                                                                              



                                                                                                   -8-                                                                                           7258
  


----------------------- Page 9-----------------------

improvement districts was "more important than dewatering the pump station."  The  

                                                                                                                             



primary author of the geotechnical report for the projects further explained, "If a pump  

                                                                                                                           



station slides down the hill, the consequences are far less than a lot of houses."  The  

                                                                                                                             



Municipality charged the vast majority of the expenses associated with constructing the  

                                                                                                                               



subdrainage system to the RID project.  

                                                             



                    The hearing panel heard testimony on the accounting practices used to  

                                                                                                                                



ensure that costs were properly allocated among the projects.  In particular, AWWU's  

                                                                                              



capital program manager testified that expenses for the different projects were "tracked  

                                                                                                                      



separately" and that multiple individuals reviewed the pertinent records as the projects  

                                                                                                                       



progressed. Aprojectadministrator acknowledged discrepanciesofaround$10,000total  

                                                                                                                             



in the accounting records.  She testified that the errors had been corrected and that "the  

                                                                                                                             



total project costs that were calculated and allocated [were] accurate."  

                                                                                                            



                    The  Assembly  hearing  panel  found  that  the  subdrainage  system  was  

                                                                                                                            



"necessary" for the improvement district projects. The panel found that the Municipality  

                                                                                                                



"properly shifted approximately $1 million . . . back into the Special Improvement  

                                                                                                              



Districts so that [they] would pay for that part of the construction work essential to and  

                                                                                                                              



directly  benefiting  the  Improvement  Districts."                              And  the  panel  found  that  the  

                                                                                                                             



Municipality "used proper accounting procedures to separately track the costs of each  

                                                                                                                            



project individually, and that none of the costs for [Pump Station] 10 were improperly  

                                                                             



assessed against the property owner taxpayers." The Assembly approved these findings.  

                                                                                                                                    



                    2.        Analysis  



                    In arguing that the Municipality erroneously shifted about $1 million from  

                                                                                                                            



the Pump Station 10 project to the improvement district projects, the Property Owners  

                                                                                                                       



rely on Anchorage Municipal Charter section 9.02(e).   This provision states:   "An  

                                                                                                                             



account or accounts for each special assessment district shallbecreated and kept separate  

                                                                                                                       



                                                               -9-                                                         7258
  


----------------------- Page 10-----------------------

from all other municipal accounts.                                                                                        Revenues collected within a special assessment                                                                                   



district may be applied only to costs incurred with respect to that assessment district."                                                                                                                                                                                                            



                                             The   Property   Owners   fail   to   show   that   the   Municipality   violated   this  



provision.   The Assembly hearing panel's findings set forth above establish that the                                                                                                                                                                                                 



Municipality complied with section 9.02(e) by maintaining separate accounts.                                                                                                                                                                                                     The  



findings also establish that the Assembly complied with section 9.02(e) because the                                                                                                                                                                                                   



special assessments did not include any costs other than those "incurred with respect to                                                                                                                                                                                                   



the assessment district[s]."                                                                The Property Owners do not challenge these findings, let                                                                                                                                     



                                                                                                                                                                                                                    19  

alone show that they are not supported by substantial evidence.                                                                                                                                                            



                                             The Property Owners point to hearing panel testimony by an "engineer  

                                                                                                                                                                                                                                                                



engaged by AWWU and the [Municipality] . . . that all of the items on Schedules A, B  

                                                                                                                                                                                                                                                                                            



and C were necessary for Pump Station 10, regardless of whether the Improvement  

                                                                                                                                                                                                                                                   



District[s] were built."   But the Property Owners ignore contrary testimony that the  

                                                                                                                                                                                                                                                                                      



subdrainage system included in Schedule B would have been more limited had the  

                                                                                                                                                                                                                                                                                      



improvement districts not been built.  In any case, the fact that items in Schedules A-C  

                                                                                                                                                                                                                                                                                   



were required by the Pump Station 10 project is consistent with these items also being  

                                                                                                                                                                                                                                                                               



required by the RID, WID, and LID projects.  Or to use the language of section 9.02(e),  

                                                                                                                                                                                                                                                                       



the mere fact that costs were "incurred with respect" to the Pump Station 10 project does  

                                                                                                                                                                                                                                                                                   



not mean that the same costs were not also "incurred with respect to the assessment  

                                                                                                                                                                                                                                                           



district[s]."  



                       19                    The superior court required the Assembly hearing panel to decide this issue                                                                                                                                                         



using the adjudicatory procedures of AMC Chapter 3.60.                                                                                                                                              The Municipality does not                                                         

appeal this interim ruling.                                                               We thus assume, without deciding, that the Municipality's                                                                                             

characterization of these costs is a factual issue and that we should affirm the Assembly                                                                                                                                                                       

on this issue only if its determination is supported by substantial evidence.                                                                                                                                             



                                                                                                                                          -10-                                                                                                                                   7258
  


----------------------- Page 11-----------------------

                                                 In the alternative, the Property Owners argue that even if the subdrainage                                                                                                                                                   



system benefited the improvement district properties in addition to Pump Station 10, the                                                                                                                                                                                                                       



Municipality   failed   to   "   'fairly   allocate'   the   costs"   and   improperly  "forc[ed]   the  



 [improvement district properties] to pay for the entirety of them." However,                                                                                                                                                                                                 the Property  



Owners do not cite any authority other than section 9.02(e).                                                                                                                                                                   This provision does not                                                        



impose a "fair allocation" requirement over and above its requirements that expenses be                                                                                                                                                                                                                           



properly segregated and accounted for and that assessments "be applied only to costs                                                                                                                                                                                                                   



incurred with respect to th[e] assessment district."                                                                                                                                    To the extent the Charter and other                                                                            



sources   of   law   do   not   fully   dictate   how   expenses   should  be   divided   once   the  



requirements of section 9.02(e) are satisfied - as they are in this case - such                                                                                                                                                                                                            division  



is a policy matter that is legislative in nature.                                                                                                                   The Assembly may accordingly exercise                                                                                   

its discretion in dividing the expenses within the bounds of the controlling law.                                                                                                                                                                                                               20  



                                                 IftheProperty Owners couldshowthat theMunicipalityor Assembly acted  

                                                                                                                                                                                                                                                                                                        



arbitrarily or with bias or malice in dividing the costs - and thus rebut the presumption  

                                                                                                                                                                                                                                                                             



of correctness - then perhaps it would be appropriate for this court to intervene.  But  

                                                                                                                                                                                                                      



the Property Owners fail to do so.  We thus reject the Property Owners' claim that the  

                                                                                                                                                                                                     



Municipality did not properly divide the expenses among the RID, WID, LID, and  

                                                                                                                                                                                                                                                                                                            



Pump Station 10 projects.  

                                                               



                        B.                      AMC 19.30.040(A)(1) Assessment Limit  

                                                                                                                                                                                      



                                                 The Property Owners next claim that the special assessments levied by the  

                                                                                                                                                                                                                                                                                                               



                        20                      See   14   EUGENE   MCQUILLIN, T                                                                                      HE  LAW   OF   MUNICIPAL   CORPORATIONS  



  38:61, at 287 (3d ed. 2008) ("In the establishment of improvement districts and levying                                                                                                                                                                                                     

assessments on property benefited, within the restrictions of the applicable law, broad                                                                                                                                                                                                              

discretion is vested in the municipal authorities.").                                                                                



                                                                                                                                                      -11-                                                                                                                                               7258
  


----------------------- Page 12-----------------------

                                                                                                                                                              21  

 Assembly violate AMC 19.30.040(A)(1).                                                                                                                                AMC 19.30.040(A) states:                                                        



                                                    Generally.   Except as provided in subsection B of this section                                                                                                                                        

                                                   or elsewhere in this title, the project costs assessed against                                                                                                                                         

                                                   benefited parcels shall be the least of the following:                                                                                                                                                



                                                                             1.     Construction   contract   costs   plus  20   percent   for  

                                                   noncontract costs, including but not limited to engineering                                                                                                                          

                                                   and                   design,                           surveys,                               soil                 investigations,                                                right-of-way  

                                                   negotiations,  inspection   and   contract supervision, and                                                                                                                                                          net  

                                                   interest, plus actual property acquisition costs;                                                                                                         



                                                                             2.   The last approved estimate plus ten percent; or                                                                                                                                          



                                                                             3.   The total cost of the improvement less the amount                                                                                                                      

                                                   of any grant the municipality uses to defray the cost of the                                                                                                                                                          

                                                   project.  



 The    Property    Owners    argue    that    the    special    assessments    exceed   the    cap    in  



 subsection   .040(A)(1)   because   the   assessed   project   costs   exceed   the   "construction  



 contract costs" of the RID, WID, and LID projects by more                                                                                                                                                                                        than 20 percent.                                                     For  



 instance, the Property Owners assert that the construction contract costs for the RID                                                                                                                                                                                                                                

                                                                                                 22         Yet in calculating the RID assessments, the Municipality  

 project were $2,371,707.                                                                                                                                                                                                                                                             



 used an adjusted project cost of $4,860,838, a figure which far exceeds 120% of the  

                                                                                                                                                                                                                                                                                                                            



                          21                       The Municipality argues that we should apply the rational basis standard   



 on this issue because the interpretation of this ordinance involves the Assembly's special                                                                                                                                                                                                                   

 expertise.     But   because   we   reach   the   same   result   when   we   apply   the   independent  

judgment standard advocated by the Property Owners, we do not need to decide which                                                                                                                                                                                                                              

 is appropriate.                                         See Cent. Recycling Servs., Inc. v. Municipality of Anchorage                                                                                                                                                                            , 389 P.3d          

 54, 57 (Alaska 2017).                                                               



                          22                       The Property Owners do not include expenses associated with Schedule B  

                                                                                                                                                                                                                                                                                                                                  

 in this figure.  If these expenses are included - as they should be, see supra Part IV.A  

                                                                                                                                                                                                                                                                                                                    

 - then the construction costs come to $3,206,249.  

                                                                                                                                                                                                     



                                                                                                                                                             -12-                                                                                                                                                     7258
  


----------------------- Page 13-----------------------

construction contract costs.23  Similar discrepancies between the construction cost and                                                                       



the assessed project cost purportedly exist for the WID and LID projects.                                                                                                                           



                                         The               Property                         Owners'                          claim                  that              the             assessments                                violate                     the  



subsection .040(A)(1) cap is undermined by the exception clause at the beginning of                                                                                                                                           



subsection .040(A). By its express terms, the caps in subsection .040(A) apply "[e]xcept                                                                                                                                                  



as provided . . . elsewhere in" AMC Title 19.                                                                                          Because there are provisions elsewhere in                                                                                 



AMC Title 19 that independently determine the assessable project costs for road, water,                                                                                                                                                             



and sewer improvements, the subsection .040(A) caps do not apply.                                                                                                                          



                                        First, AMC 19.40.100(A), which governs assessments for "upgrade" road                                                                                                                                            

                                                                                                                                                  24  provides that "[a]ssessable costs for  

improvement districts like the RID in this case,                                                                                                                                                                                                             



upgrade RIDs shall be seventy percent (70%) of the total project costs." The term "total  

                                                                                                                                                                                                                                                      



project costs" is defined in AMC 19.40.010 as "all costs, direct and indirect, incurred  

                                                                                                                                                                                                                                            



during development of the project."  Moreover, AMC 19.30.030(A) provides:  

                                                                                                                                                                                                                



                                         The costs of an improvement or service shall be its actual cost  

                                                                                                                                                                                                                  

                                         including acquisition of real property and interests therein,  

                                                                                                                                                                                                      

                                         appraisal,   design,   engineering,   and                                                                                  surveying   for   an  

                                                                                                                                                                                                                   

                                         improvement, andadministration,overhead,collections, legal  

                                                                                                                                                                                                                

                                         and other professional services, net interest (interest paid less  

                                                                                                                                                                                                                   

                                         interestearned)[,]anticipated reserveorguaranteefundcosts,  

                                                                                                                                                                                                             

                                        the  cost  of  notice,  and  all  other  costs  resulting  from  the  

                                                                                                                                                                                                                   

                                         formation   of   the   district   and   the   construction   of   the  

                                                                                                                                                                                                                 

                                         improvement  or  providing  the  service,  including  costs  

                                                                                                                                                                                                            

                                         described in [AMC] 19.30.040 and 19.30.080.  

                                                                                                                                                     



                    23                   This $4,860,938 figure, which is below the $4,898,550 total project cost,                                                                                                                                      



is equal to 110% of the cost estimate approved by the district property owners.                                                                                                                                                                          See  

AMC 19.40.130.                                        The RID properties were assessed only about half of the $4,860,938                                                                                                            

amount for the RID portion of the improvements.                                                                                                        See infra                    note 36 and accompanying              

text.   



                    24                   The Assembly treated the road improvements in this case as upgrade road  

                                                                                                                                                                                                                                                         

improvements.  

                                               



                                                                                                                             -13-                                                                                                                      7258
  


----------------------- Page 14-----------------------

Together,   these   three   provisions   define   the   "assessable   costs"   for   upgrade   road  



improvements  as   70%   of   the   total   actual   costs   of   the   improvement,   including  



construction   expenses   and   all   other   direct   and   indirect   expenses.     This  definition  



overrides subsection .040(A)'s definition of "project costs assessed."                                                                                                                                                              The 120% cap in                                   

subsection .040(A)(1) thus does not apply to the RID in this case.                                                                                                                                                       25  



                                            Next,                     assessments                                      for               water                     improvements                                            are               governed                               by  

                                                                                                                                                                                                                                                                              



AMC 19.55.010.  This ordinance provides that "[t]he cost of capital improvements to  

                                                                                                                                                                                                                                                                                      



provide water service shall be allocated in the manner and according to the criteria  

                                                                                                                                                                                                                                                                    



provided in the approved tariff of the municipal water utility." The water utility tariff in  

                                                                                                                                                                                                                                                                                      



effect during the relevant time period states that "[t]he assessed project cost shall equal  

                                                                                                                                                                                                                                                                           



the total cost of the water main improvement less the amount of any funds contributed  

                                                                                                                                                                                                           

                                                                                                                                     26        The tariff's definition of "assessed project  

to defray the cost of the improvement."                                                                                                                                                                                                                              

                                                                                   



                      25                    Furthermore, the Assembly enacted subsection .040(A)'s exception clause                                                                                                                                                      



and   AMC   19.40.100,   the   provision   for   calculating   RID   assessments,   in   the   same  

ordinance.   See  Municipality of Anchorage, Ordinance 2002-186 (Jan. 28, 2003).                                                                                                                                                                                              The  

Mayor's assembly memorandum accompanying this ordinance states that the purpose of                                                                                                                                                                                                    

subsection .040(A)'s exception clause is to "allow the assessment cost issues related to                                                                                                                                                                                              

street improvements to be addressed in the code section related to street improvement."                                                                                                                                                                                                         

Mayor, Municipality of Anchorage Assembly Memorandum 2002-1067, at 2 (Dec. 17,                                                                                                                                                                                                    

2002). The Mayor's contemporaneous interpretation of subsection .040(A)'s exception                                                                                                                                                                          

clause provides additional support for our conclusion that the subsection .040(A)(1) cap                                                                                                                                                                                          

does not apply to the RID in this case.                                                                                                 See Cent. Recycling Servs.                                                                    , 389 P.3d at 57                              

(explaining that in interpreting an ordinance, as in interpreting a statute, we consider the                                                                                                                                                                                       

ordinance's language and legislative history);  Flisock v. State, Div. of Ret. & Benefits                                                                                                                                                                                                  ,  

 818 P.2d 640, 645 (Alaska 1991) ("The interpretation of legislation by . . . the agency                                             

that sponsored the bill is entitled to be given weight by the court in construing the intent                                                                                                                                                                              

of the statute.").     



                      26                    Anchorage Water Utility, Tariff for Water Service, Regulatory Comm'n of  

                                                                                                                                                                                                                                                                                      

Alaska Certificate No. 122, Sheet No. 118 (Apr. 12, 2010).  The Municipality provided  

                                                                                                                                                                                                                                                               

the Assembly hearing panel with a copy of this tariff.   The Property Owners do not  

                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                 (continued...)  



                                                                                                                                        -14-                                                                                                                                 7258
  


----------------------- Page 15-----------------------

cost" clearly overrides subsection .040(A)'s definition of "project costs assessed." And                                                                                                                                           



by defining the "assessed project cost" as the "total cost of                                                                                               the water main improvement,"              



the            tariff              tracks                 the            expansive                         "costs                 of          an           improvement"                                   language                       in  



AMC 19.30.030(A), not the more limited concept of "construction contract costs" in                                                                                                                                                       



subsection .040(A)(1).                                          Thus, AMC 19.30.030(A), AMC 19.55.010, and the applicable                                                                                         



tariff   together   provide   for   the   assessment  of   the   total   actual   costs   of   the   water  



improvement.   The cap in subsection .040(A)(1) does not apply to the WID assessment                                                                                                                            

in this case.                   27  



                                     Finally, AMC 19.70.010 governs assessments for sewer improvements.  

                                                                                                                                                                                                                                                 



Identical   in   form   to   AMC   19.55.010,   discussed   in   the   preceding   paragraph,  

                                                                                                                                                                                                              



AMC 19.70.010 states that "[t]he cost of capital improvements to provide sewer service  

                                                                                                                                                                                                                            



shall be allocated in the manner and according to the criteria provided in the approved  

                                                                                                                                                                                                                     



tariff of the municipal sewer utility." The pertinent sewer tariff states that "[t]he assessed  

                                                                                                                                                                                                                        



project cost shall equal the total cost of the improvement less the amount of any grant  

                                                                                                                                                                                                                                

                                                                                                                                                                   28     Like the water tariff, this  

that the Utility uses to defray the cost of the improvement."                                                                                                                                                                        

                                                                                                                          



sewer tariffsupplants subsection.040(A) for improvementswithin itsscopeandprovides  

                                                                                                                                                                                                                        



                  26                 (...continued)  



                                                                                                                                                                                                                                           

dispute that this is the applicable tariff, and we therefore assume that this is the case.  



                  27                 AMC 19.30.090 reinforces our conclusion that the subsection .040(A)(1)                                                                                                      



cap does not apply to the WID assessment in this case.                                                                                                         This provision supplements   

subsection  .040(A)'s  exception  clause,  stating:                                                                                          "This  chapter"  -  which  includes  

                                                                                                                                                                                                                      

subsection .040(A) - "does not apply to water improvements constructed pursuant to                                                                                                                             

tariffs filed with the state public utilities commission by the municipal water utility."                                                                                                                           



                  28                 Anchorage Wastewater Utility, Tariff for Wastewater Service, Regulatory  

                                                                                                                                                                                                                

Comm'n of Alaska Certificate No. 126, Sheet No. 84 (July 29, 2010). The Municipality  

                                                                                                                                                                                                           

provided a copy of this tariff to the Assembly hearing panel, and the Property Owners  

                                                                                                                                                                                     

do not dispute that this is the applicable tariff.  See also supra note 26.  

                                                                                                                                                                                                     



                                                                                                                  -15-                                                                                                           7258
  


----------------------- Page 16-----------------------

for   the   assessment  of   the   total   actual   costs   of   the   improvement.     The   cap   in  



subsection .040(A)(1) therefore does not apply to the LID assessment.                                                                                                                                                             



                                           The   Property   Owners   advance   several   arguments   against   interpreting  



AMC19.40.100(A),                                                 19.55.010, and 19.70.010asoverridingthesubsection                                                                                                                      .040(A) caps.                                



None is persuasive.        



                                           The Property Owners first contend that subsection .040(A) "determin[es]                                                                                                                     



the              amount                        that              can               be            recovered                             by             assessing                           the             properties"                               and               that  



AMC 19.40.100(A), 19.55.010, and 19.70.010 merely "determin[e] how that amount is                                                                                                                                                                                            



to be allocated among the properties in the improvement district."                                                                                                                                                     In support of this                             



argument, the Property Owners note that the title of AMC Chapter 19.30 is "                                                                                                                                                                Calculation  



of Improvement Costs" and that the title of AMC Chapter 19.40 is "                                                                                                                                               Allocation  of Street   



Improvement Costs."                                                   (Emphases added.) They also point out that AMC 19.55.010 and                                                                                                                                     



 19.70.010  expressly refer to "allocat[ion]" - not "calculation" - of costs.                                                                                                                                                                    



                                          Even                    if         the              words                     "allocation"                                 and               "calculation"                                   are              read                in  



contradistinction   as   suggested   by   the   Property  Owners,   it   does   not   follow   that  



assessments under AMC 19.40.100(A), 19.55.010, and 19.70.010 are subject to the cap                                                                                                                                                                                    



in subsection .040(A)(1).   AMC 19.40.100(A) expressly states that "[a]ssessable costs                                                                                                                   



for upgrade RIDs shall be seventy percent (70%) of the                                                                                                                         total project costs                                      ."   (Emphasis  



added.) Similarly, the tariffs invoked by AMC 19.55.010 and 19.70.010 provide that the                                                                                                                                                                                   

                                                                                                                                                                                                                     29   Accordingly, the  

"assessed project cost shall equal the                                                                              total cost of the improvement                                                               ."                                                       



quantity allocated is the "total project costs" or the "total cost of the improvement," not  

                                                                                                                                                                                                                                                                        



the               capped                         "[c]ontract                                construction                                    costs                   plus                 20              percent"                           amount                          in  

                                                                                                                                                                                                                                      



 subsection .040(A)(1).  

                                    



                     29  

                                                                                                                                                                                                                                                                    

                                           Tariff for Wastewater Service, Sheet No. 84 (emphasis added); see also  

                                                                                                                                  

Tariff for Water Service, Sheet No. 118.  



                                                                                                                                   -16-                                                                                                                                        7258  


----------------------- Page 17-----------------------

                                The Property Owners next argue that the subsection .040(A)(1) cap is                                                                                                        



needed to protect the interests of property owners who oppose a special assessment.                                                                                                                                



Under Anchorage ordinance, a special assessment district "may be created or extended                                                                                                       



. . . with the approval of the property owners who would bear more than 50 percent of                                                                                                                      

                                                 30      Both the owners who supported and those who opposed the  

the estimated cost."                                                                                                                                                                                    

assessment district are assessed when the project is completed.31                                                                                           The Property Owners  

                                                                                                                                                                                             



assert that owners who supported the assessment are protected from ballooning project  

                                                                                                                                                                                                



costs by ordinances that limit assessable costs to 110% of the cost estimate approved by  

                                                                                                                                                                                                           

these property owners.32   So long as the assessed costs are within this limit, the approving  

                                                                                                                                                                                        



owners arguably have a weak basis to complain even if the assessed costs are inflated by  

                                                                                                                                                                                                           



excessive design, administrative, and other non-construction expenses.  The dissenting  

                                                                                                                                                                                        



property owners, however, did not approve the cost estimate.  If these owners complain  

                                                                                                                                                                                          



of excessive non-construction costs, it is no answer to them to say that the costs are  

                                                                                                                                                                                                        



consistent with (or no more than 110% of) the approved estimate.  Thus, the Property  

                                                                                                                                                                                  



Owners argue, subsection .040(A)(1)'s cap of 120% of the construction contract costs  

                                                                                                          



is needed to protect the dissenting property owners frominflated non-construction costs.  

                                                                                                                                                                                                                   



                                The  problem  with  the  Property  Owners'  policy  argument  is  that  the  

                                                                                                                                                                                                        



exception clause in subsection .040(A) shows that the Assembly anticipated that the  

                                                                                                                                                                                                        



subsection .040(A)(1) cap would not apply in all cases. It therefore does not appear that  

                                                                                                                                                                                                        



the Assembly viewed subsection .040(A)(1)'s cap of 120% of the construction contract  

                                                                                                                                                                                             



                30              AMC 19.20.010(B).   



                31  

                                                                                                                                                                                                           

                                See AMC 19.20.190 ("The assembly may assess for an improvement or  

                                                                                                                                                                                                    

service  any  real  property  or  interest  in  real  property  specially  benefitted  and  such  

property may include abutting, adjoining, adjacent, contiguous, non-contiguous or other                                                                                                             

                                                                                                                                                                                  

property specially benefitted directly or indirectly by the improvement . . . .").  



                32              See AMC 19.30.040(A)(2), 19.40.130.  

                                                                                                    



                                                                                                   -17-                                                                                             7258
  


----------------------- Page 18-----------------------

costs as essential protection for property owners who oppose a special assessment.  In                                                                             



the absence of any indication that the policy advanced by the Property Owners was in                                                                                                             



fact the Assembly's - the legislature's - policy, we follow the plain language of the                                                                                                          

                                                33     And as explained above, this language indicates that the RID,  

pertinent ordinances.                                                                                                                                                                     



WID, and LID assessments in this case are not subject to the subsection .040(A)(1) cap.  

                                                                                                                                                                                            



                               The  Property  Owners'  final  argument  is  that  if  AMC  19.40.100(A),  

                                                                                                                                                                    



 19.55.010, and 19.70.010 "trump the '120%-of-contract-construction-costs' limit" of  

                                                                                                                                                                                                



subsection .040(A)(1), this limit will "never apply to any road, water [or] sewer project"  

                                                                                                                                                                                   



and "[t]he alleged exceptions . . . [thus] nearly swallow the rule."  This, the Property  

                                                                                                                                                                                 



Owners argue, violates the "general rule" of statutory interpretation that a "statute should  

                                                                                                                                                                                       



be construed so that effect is given to all its provisions, so that no part will be inoperative  

                                                                                                                                                                            

or superfluous, void or insignificant."34  

                                                      



                               This argument lacks merit.   We do not apply the presumption against  

                                                                                                                                                                                     



superfluity  "mechanistically"  or  in  such  a  manner  as  to  defeat  the  intent  of  the  

                                                                                                                                                                                             

                         35     Here, the text of AMC 19.40.100(A), 19.55.010, and 19.70.010 clearly  

legislature.                                                                                                                                                                          



favors reading these provisions as overriding subsection .040(A)(1) for assessment  

                                                                                                                                                                            



districts within their scope.  Moreover, AMC 19.40.100(A), 19.55.010, and 19.70.010  

                                                                                                                                           



donot "swallowtherule." TheMunicipality's counsel providedseveral examples during  

                                                                                                                                                                                       



               33             See Homer Elec. Ass'n v. Towsley                                            , 841 P.2d 1042, 1043-44 (Alaska 1992);                                      



see also Attorneys Liab. Prot. Soc'y, Inc., v. Ingaldson Fitzgerald, P.C.                                                                                        , 370 P.3d 1101,        

 1105 (Alaska 2016) ("We 'use a sliding scale approach to statutory interpretation, in                                                                                                           

which   "the   plainer   the   statutory   language   is,   the   more   convincing   the   evidence   of  

contrary legislative purpose or intent must be." ' " (quoting                                                                          Municipality of Anchorage             

v.  Stenseth, 361 P.3d 898, 905 (Alaska 2015))).                                          



               34             Homer Elec. Ass'n, 841 P.2d at 1045 (quoting Alascom, Inc. v. N. Slope  

                                                                                                                                                                                         

Borough, Bd. of Equalization, 659 P.2d 1175, 1178 n.5 (Alaska 1983)).  

                                                                                                                                                    



               35             Id. at 1045-46.  

                                            



                                                                                              -18-                                                                                        7258
  


----------------------- Page 19-----------------------

oral argument of improvement districts that do not fall within those three ordinances and                                                                                                                                                                                                                                                                                                                          



thus are subject to the subsection .040(A)(1) cap:                                                                                                                                                                                                extension of a gas line, construction                                                                                 



of a parking facility, and construction of drainage facilities.                                                                                                                                                                                                                                     



                                                                 We therefore reject the Property Owners' claim that the Assembly violated                                                                                                                                                                                                                                                    



AMC 19.30.040(A)(1) by failing to cap the RID, WID, and LID assessments at 120%                                   



of the construction contract costs.                                                                                                     



                                 C.                              Proportionality Between Costs Assessed And Benefit Conferred                                                                                                                                                                                                                        



                                                                 The Property Owners claim that some of the special assessments levied are                                                                                                                                                                                                                                                                            



illegal   because   they   "exceed   the   value   that   [the   improvements]   add[ed]   to   the  



propert[ies]."     They   contend   that   the   assessments   on   certain  properties   in   the  



improvement districts "exceed[] . . . the value of the benefit . . . , as measured by . . .                                                                                                                                                                                                                                                                                                                             



change in market value, by approximately 400%."                                                                                                                                                                                                         



                                                                  1.                             Additional background   



                                                                 In determining the assessments to be levied on the improvement district                                                                                                                                                                                                                                                         



lots, theAssembly                                                                        applied provisions in theAnchorageMunicipal                                                                                                                                                                                      Codefor apportioning                         



road, water, and sewer special assessments.                                                                                                                                                                                For the RID, the Assembly apportioned                                                                                                         



 $2,538,137 (representing the total RID project cost of $4,898,550 minus the "Municipal                                                                                                                                                                                                                                                                                       

Contribution")36                                                                                                                                                                                                                                                                                                      

                                                                                 among the properties based on "parcel access, parcel area, and parcel  



                                                                                                                                                                                                                                                                                                               37  

                                                                                                                                                                                                                                                         

 frontage," in accordance with the formula in AMC 19.40.090. 



                                 36                              Mayor, Municipality of Anchorage Assembly Memorandum 2014-411                                                                                                                                                                                                                                                     



 (Apr.   14,   2014)   (detailing   the   calculations   that   produced  the   assessment   amounts  

approved in Municipality of Anchorage, Resolution 2014-193 (Apr. 14, 2015)).                                                                                                                                                                                                                                                                                                                                 The  

Municipal   Contribution   included   deductions   required   by   AMC   19.40.100(A)   and  

  19.40.130, assessments for properties owned by the Municipality, and various other                                                                                                                                                                                                                                                                                                                      

"equitable adjustment[s]."                                                                                                        Id.  at 2.                                 



                                 37                              Municipality of Anchorage, Ordinance 2004-2  5 (Apr. 20, 2004).  

                                                                                                                                                                                                                                                                                                                                                                                                            



                                                                                                                                                                                                         -19-                                                                                                                                                                                                 7258
  


----------------------- Page 20-----------------------

                         The Assembly apportioned the WID assessment according to the "equal                                                           



                                                                                                                                                     38  

assessment methodology as delineated in the Anchorage Water Utility Tariff."                                                                              The  



                                                                                                                                                          

equal assessment methodology is one of two methods set forth in the water utility tariff  

                                                                       39   and  was  the  method  selected  by  the  district  

                                                                                                                                                      

                                                  

for  distributing  a  special  assessment 

property owners who approved the WID.40                                           In accordance with this method, each lot in  

                                                                                                                                                                



the WID was assessed an amount equal to the total assessed project cost of $1,030,741  

                                                                                                                                              

divided by the total number of lots.41  

                                                                       



                         The   Assembly   likewise   apportioned   the   LID   assessment   (totaling  

                                                                                                                                                 

$1,326,810) according to the sewer utility tariff's equal assessment methodology.42   The  

                                                                                                                                                            



             38          Municipality of Anchorage, Ordinance 2007-51  3 (Apr. 17, 2007).                                                     



             39          Anchorage Water Utility, Tariff for Water Service, Regulatory Comm'n of                                                                



Alaska Certificate No. 122, Sheet No. 118 (Apr. 12, 2010).  

                                                                                                                 



             40          See Municipality of Anchorage, Ordinance 2004-19  E (Apr. 20, 2004);  

                                                                                       

Mayor, Municipality of Anchorage Assembly Memorandum 2004-55 (Jan. 20, 2004).  

                                                                                                                                                                     



             41          Tariff for Water Service, Sheet No. 118.  To be entirely accurate, each lot  

                                                                                                                                                              

was assessed an equal "mainline charge" of $29,554, but the lots' "service connect"  

                                                                                                                                                  

charges were not all identical: Two lots' charges were $2,000, others' were $3,000, and  

                                                                                                                                                             

those  for  lots  owned  by  the  Municipality  were  $0.                                                   Municipality  of  Anchorage,  

                                                                                                                                            

Resolution 2014-194 Exh. A (Apr. 14, 2015).  

                                                                           



             42          All lots were charged an equal "lateral mainline charge" of $43,062, and  

                                                                                                                                          

all but the Municipality-owned lots were charged a $3,000 "lateral service connect"  

                                                                                                                                                  

charge.  See Municipality of Anchorage, Resolution 2014-195 Exh. A (Apr. 14, 2015);  

                                                                                                                                                       

Municipality of Anchorage, Ordinance 2007-52  3 (Apr. 17, 2007); see also Anchorage  

                                                                                                                                               

Wastewater  Utility,  Tariff  for  Wastewater  Service,  Regulatory  Comm'n  of  Alaska  

                                                                                                                                                     

Certificate No. 126, Sheet No. 85 (July 29, 2010).  

                                                                                   



                                                                              -20-                                                                       7258
  


----------------------- Page 21-----------------------

district property owners who approved the LID selected this method over the alternative                                         

provided for in the tariff.               43  



                      Various district property owners (including most of the Property Owners  

                                                                                                                                    



in this appeal) argued to the Assembly hearing panel that some of the assessments  

                                                                                                                             



calculated in the manner just described are illegal because they "exceed[] the benefit that  

                                                                                                                                            



[the improvements] confer[] upon the propert[ies]."  They contended (and the Property  

                                                                                                                                   



Owners continue to contend) that the assessment imposed on a lot should not exceed the  

                                                                                                                                             



amount by which the lot increased in value as a result of the improvement.  

                                                                                                                               



                      The Assembly hearing panel discussed this issue in its findings of fact and  

                                                                                                                                            



conclusions of law and ultimately rejected the argument for all but two properties.  The  

                                                                                                                                           



panel first noted that "the annual [property tax] assessments for the vast majority of the  

                                                                                                                                            



properties affected by the Improvement Districts ha[d] risen since the improvement  

                                                                                                                           



districts [had been] completed."  The panel cited two examples.  First, "one of the low- 

                                                                                                                                          



end lots[] was assessed at $34,800.00 in 2007; $36,600.00 in 2008; $36,600 in 2009;  

                                                                                                                                        



$80,200.00 in 2010; $97,800.00 in 2011; $94,200.00 in 2012; and $94,000.00 in both  



2013 and 2014."  Second, "a higher-end lot . . . was assessed at $71,600.00 in 2007;  

                                                                                                                                        



$60,200.00 in 2008; $60,200.00 in 2009; $237,600.00 in  2010; $246,600 in 2011;  

                                                                                                                                       



$246,600.00 in 2012, 2013 and 2014."  

                                                                    



                      The hearing panel next examined the "sale activities of some of the lots in  

                                                                                                                                              



question following completion of the improvements." In December 2012 a lot "assessed  

                                                                                                                                  



at approximately $60,000.00 before the Special Improvements were built . . . sold for  

                                                                                                                                             



$200,000.00 with the buyer assuming the assessments 'for  any  and all subdivision  

                                                                                                                              



improvements (LID/RID/WID).' "  Similarly, in an April 2014 sale, the buyer assumed  

                                                                                                                                   



           43  

                                                                                                                                      

                      Municipality  of  Anchorage,  Ordinance  2004-20    E  (Apr.  20,  2004);  

                                                                                                                                                   

Mayor, Municipality of Anchorage Assembly Memorandum 2004-56 (Jan. 20, 2004).  



                                                                     -21-                                                                    7258  


----------------------- Page 22-----------------------

"the obligation of the Special Assessments as part of the sale - 'regardless of the final                                                                                                                                                                                                                              



assessment value.' " In other sales the buyer likewise agreed to "assume[] liability to pay                                                                                                                                                                                                                                



for the assessments associated with the lot." The panel found these sales were "evidence                                                                                                                                                                                                          



that most properties received substantial benefit in the form of an increase in fair market                                                                                                                                                                                                                   



value."   



                                                  Next, the hearing panel noted that two district property owners - both of                                                                                                                                                                                                     



whom are parties to                                                               this appeal - acknowledged                                                                                            in   their  testimony  that they                                                                                had  



received some benefit from the improvement districts.                                                                                                                                                         The panel also found that "with                                                                      



 [one] exception . . . , no [property owners] submitted any evidence . . . sufficient to show                                                                                                                                                                                                                       



that   their   property   values   decreased   as   a   result   of   the   construction   of   the   Special  



Improvements." The panel concluded that "with the exception of [two] properties[,] . . .                                                                                                                                                                                                                                         

                                                                                                                                                                                                                                                                         44  The Assembly  

the assessments do not exceed the value conferred upon the lot owners."                                                                                                                                                                                                                           



approved these findings.  

                                                           



                                                   2.                       Analysis  

                                                                                                                



                                                   In arguing that certain assessments exceed the benefits from the projects  

                                                                                                                                                                                                                                                                                                         



and are thus illegal, the Property Owners rely on two municipal provisions setting forth  

                                                                                                                                                                                                                                                                                                                     



a "proportiona[lity]" requirement.  First, Anchorage Municipal Charter section 9.02(a)  

                                                                                                                                                                                                                                                                                                            



provides that an "assessment or levy shall be proportionate to the benefit received from  

                                                                                                                                                                                                                                                                                                                     



and the burden imposed upontheimprovement." Second, AMC19.20.010(A) states that  

                                                                                                                                                                                                                                                                                                                          



                         44                        The   Assembly   hearing   panel   made   a   number   of   findings   on  the   two  



properties   that   did   not   benefit,   one   of   which   purportedly   decreased   in   value.     The  

Municipality had erroneously included these two properties in the improvement districts                                                                                                                                                                                                                   

even though the properties had already been "fully developed with water, sewer, road                                                                                                                                                                                                                                  

access and homes built on the lots."                                                                                                              The Municipality had previously provided an                                                                                                                                

equitable adjustment for one of the two properties, and the panel recommended that the                                                                                                                                                                                                                                      

Municipality provide an equitable adjustment for the other property.                                                                                                                                                                                                         Ultimately, an   

adjustment was provided.                                                                           



                                                                                                                                                             -22-                                                                                                                                                     7258
  


----------------------- Page 23-----------------------

"[a]s required by the Charter, assessments for capital improvements                                                                                                                .   .  . within an            



assessment district shall be proportionate to the benefit received from and the burden                                                                                                                

imposed upon the improvement."                                                      45  



                                                                                                                                                                                                               

                                 When a municipal assembly, acting in its legislative capacity, chooses and  



                                                                                                                                                                                                                   

applies a method for ensuring proportionality, a presumption of correctness attaches to  

                                                                                  46     This presumption "places a heavy burden of proof"  

                                                                                                                                                                                                        

its proportionality determination. 

on  a  party  challenging  the  determination.47                                                                            Such  a  party  must  show  "gross[]  

                                                                                                                                                                                                  

disproportiona[lity]"48 or otherwise show that the determination was the product of fraud  

                                                                                                                                                                                                           

or "so manifestly arbitrary and unreasonable as to be palpably unjust and oppressive."49  

                                                                                                                                                                                     



                                 We  conclude  that  the  Property  Owners  have  failed  to  show  that  the  

                                                                                                                                                                                                               



assessments were disproportionate. First, it is clear that the Assembly chose and applied  

                                                                                                                                                                                                      



methods  for  calculating  proportionality.                                                                      It  apportioned  the  RID  assessment  in  

                                                                                                                                                                                  



accordance with AMC 19.40.090, which expressly states that its "intent . . . is to establish  

                                                                                                                                                                                                   



a method for determining an assessment share for each parcel that is proportionate to the  

                                                                                                                                                                                                                 



                 45              The Property Owners also cite AS 29.46.060(a), which states that "[t]he                                                                                                 



governing body shall assess the authorized percentage of the cost against property in the                                                                                                                        

[special   assessment]   district   .   .   .   in   proportion  to  the   benefit   received."     As   the  

Municipality points out, this statute does not apply because the Assembly has exercised                                                                                                          

the authority granted under AS 29.46.020 to adopt ordinances governing the special                                                                                                                    

assessment   process   -   namely,   the   ordinances   codified  at  AMC   Title   19.     See  

AS 29.46.020(c);                              Miller v. Matanuska-Susitna Borough                                                                , 54 P.3d 285, 290 (Alaska                         

2002).   



                 46              See Weber v. Kenai Peninsula Borough, 990 P.2d 611, 614 (Alaska 1999)  

                                                                                                                                                                                                          

("We presume that a municipal legislative assessment decision is valid.").  

                                                                                                                                                                    



                 47               City of Wasilla v. Wilsonoff, 698 P.2d 656, 658 (Alaska 1985).  

                                                                                                                                                                              



                 48              Miller, 54 P.3d at 290.  

                                                                               



                 49               Weber, 990 P.2d at 614 (quoting Wilsonoff, 698 P.2d at 658).  

                                                                                                                                                                                            



                                                                                                       -23-                                                                                                 7258
  


----------------------- Page 24-----------------------

                                                                    50  

benefit   received."                                                         The   Assembly   apportioned  the   LID   and   WID   assessments   in  



accordance with the equal assessment methodology set forth in the water and sewer                                                                                                                                                                                                                        



tariffs.     Pursuant to AMC 19.55.010 and 19.70.010, the Assembly was required to                                                                                                                                                                                                                                     



comply with the tariffs.                                                                 The district property owners who approved the improvement                                                                                                              



districts chose the equal assessment methodology over an alternative method set forth                                                                                                                                                                                                                         



                                                                                                                                                                                                                                                                                          51  

in the tariffs, and we have previously approved the use of this methodology.                                                                                                                                                                                                                      



                                                  The Assembly next concluded that under the chosen methodologies, the  

                                                                                                                                                                                                                                                                                                                    



total costs assessed against the improvement district properties did not exceed the total  

                                                                                                                                                                                                                                                                                                                



benefits conferred on those properties.  Evidence and findings in the Assembly hearing  

                                                                                                                                                                                                                                                                                                    



record support thisassertion. Thehearingpanelconsideredtworepresentativeproperties  

                                                                                                                                                                                                                                                                                           



                         50                      AMC 19.40.090 provides for assessment based on "parcel access," "parcel                                                                                                                                                                              



area," and "parcel frontage." The assembly memorandum for the ordinance that enacted                                                                                                                                                                                                                

AMC 19.40.090 explains why the Municipality believed consideration of these three                                                                                                                                                                                                                            

factors would provide for an equitable division of road and street special assessments:                                                                                                                                                                                        



                                                                          Parcel access:                                        Improved parcel access to the public                                                                                   

                                                 roadway system is considered the primary benefit of a street                                                                                                                                          

                                                  improvement . . . .         



                                                                          Parcel area:   Increased property value and enhanced                                                                                                             

                                                  land use are considered the next significant benefits of street                                                                                                                                          

                                                  improvements. Parcel area is a practical method of allocating                                                                                                                            

                                                 these benefits since both property value and land use are                                                                                                                                                        

                                                  functions of the parcel size. . . .                                                                        



                                                                          Parcel frontage:   Improved parking and direct access                                                                                                                        

                                                 to a parcel is another benefit of street improvements.                                                                                                                                               Parcel  

                                                  frontage   is   the   most   practical   method   of   allocating   these  

                                                 benefits.  



                                                                                                                                                                                                                                                                                                                    

Mayor, Municipality of Anchorage Assembly Memorandum 2002-1067, at 3 (Dec. 17,  

                                                                                                                                                                                                                                                                                                                           

2002) (proposing Municipality of Anchorage, Ordinance 2002-186 (Jan. 28, 2003)).  



                         51                      See Miller, 54 P.3d at 289-92.  

                                                                                                                                    



                                                                                                                                                         -24-                                                                                                                                                 7258
  


----------------------- Page 25-----------------------

(a "low-end" lot and a "higher-end" lot) and found that they had substantially increased                                                                                                                                                                



in value as a result of improvements.                                                                                       The panel also examined evidence of property                                                                                   



sales in the improvement districts.                                                                             This evidence showed that properties had been sold                                                                                                       



at   prices   higher   than   their   pre-improvement   values   and   with   the   buyer   assuming  



responsibilityforpayingtheassessments. Finally,                                                                                                               thepanel                      considered affectedproperty   



owners' testimony to the effect that they had benefited from the improvements.                                                                                                                                                                                   Based  



on this evidence, the Assembly hearing panel found that "property values have increased                                                                                                                                                                  



substantially with the completed Special Improvement District construction."                                                                                                                                                                                          This  



general finding, adopted by the whole Assembly, is legislative, rather than adjudicative,                                                                                                                                                     



                                                                                                                                                                                                                                                          52  

in character because it pertains to a large group of taxpayers in the aggregate.                                                                                                                                                                                 



                                           In sum, the Assembly divided the assessments among the properties in  

                                                                                                                                                                                                                                                                                



accordance with methods required by ordinance and tariff, and it made a legislative  

                                                                                                                                                                                                                                                     



determination that the assessments and benefits were proportionate.  A presumption of  

                                                                                                                                                                                                                                                                                



correctness accordingly attaches to the assessments imposed on the improvement district  

                                                                                                                                                                                                                                                                 



properties.  



                                           The Property Owners fail to overcome this presumption.   They do not  

                                                                                                                                                                                                                                                                            



dispute that the total costs assessed against the improvement district properties do not  

                                                                                                                                                                                                                                                                            



substantially exceed the total benefits conferred on those properties. Instead, they argue  

                                                                                                                                                                                                                                                                     



that  consideration  of  proportionality  in  aggregate  was  not  sufficient  because  the  

                                                                                                                                                                                                                                                                           



Assembly was required to make "a separate comparison of cost to benefit for each lot on  

                                                                                                                                                                                                                                                                               



astand-alonebasis" to discharge the proportionality requirements inAMC19.20.010(A)  

                                                                                                                                                                                                                                            



                      52                    See Prop. Owners Ass'n of the Highland Subdivision v. City of Ketchikan                                                                                                                                                                  ,  



781   P.2d   567,   571-72   (Alaska   1989)   (holding   that   a   city   council's   decision  was  

legislative because it "affected a large development and a group of similarly situated                                                                                                                                                                       

taxpayers").  



                                                                                                                                     -25-                                                                                                                              7258
  


----------------------- Page 26-----------------------

and section 9.02(a) of the Charter. But these two provisions do not require the Assembly                                                                      



to engage in a lot-by-lot inquiry.                                    



                           Most importantly, increase in fair market value is not the only relevant                                                              

measure of benefit.                      "[S]pecial benefits cannot always be translated into dollar terms";                                                                  53  



they can "take various forms," including "a relief from a burden, the creation of a special  

                                                                                                                                                                   



adaptability in the land, or an improvement which allows the land to continue being  

                                                                                                                                                                      

used."54           Furthermore, when conducting proportionality inquiries in similar cases, we  

                                                                                                                                                                            



have consistently held that "benefit to property is not limited to the immediate increase  

                                                                                                                                                                 

in property value to the landowner."55                                                For example, in  Weber v. Kenai Peninsula  

                                                                                                                                                             



Borough, we affirmed a gas line assessment even though the property owner offered  

                                                                                                                                                                   



evidence that the value of his property had declined and argued that he did not want to  

                                                                                                                                                                              

                               56    In City of Wasilla v. Wilsonoff, we recognized the benefit of a water  

access the line.                                                                                                                                                      

                       



main installation, even though the landowner testified that it would be very difficult to  

                                                                                                                                                                              



hoist a fire hose from the water main to her house and that her insurance rates were  

                                                                                                                                                                        

                                                                           57    Similarly, in Kissane v. City of Anchorage, the  

unlikely to decrease for many years.                                                                                                                                        

                                                                



              53           MCQUILLIN,  supra  note 20,  38:37, at 188.                                      



              54           Id.   38:38, at 202-04; see Miller, 54 P.3d at 291 (approving finding that  

                                                                                                                                  

property benefited from construction of a paved road because, among other things, the  

                                                                                                                                                                            

road provided "reduced vehicle wear and tear and health benefits from reduced dust").  

                                                                                                                                                                    



              55           Miller, 54 P.3d at 290; see also Weber v. Kenai Peninsula Borough, 990  

                                                                                                                                                                          

P.2d 611, 615-16 (Alaska 1999);  City of Wasilla v. Wilsonoff, 698 P.2d 656, 657-58  

                                                                                                                                                                   

(Alaska 1985).  

                  



              56            990 P.2d at 615-16.  

                                                     



              57            698 P.2d at 658.  

                                                     



                                                                                     -26-                                                                              7258
  


----------------------- Page 27-----------------------

territorial court held that a landowner could be assessed for the costs of public parking,                                                                   

even though his property was used for residential purposes.                                                             58  



                           Here, the special assessments provided the district properties with road  

                                                                                                                                                                     

                                                                                                                                             59    We therefore  

access and basic utilities, necessary steps for residential development.                                                                                    

                                                                                                                   



cannot conclude that the discrepancy between the special assessments and increase in  

                                                                                                                                                                          



appraised property value for some district properties shows gross disproportionality; nor  

                                                                                                                                                                        



can we conclude that the Assembly acted fraudulently or arbitrarily in determining the  

                                                                                                                                                                        



assessment amounts.  

                        



V.            CONCLUSION  

       



                           We AFFIRM the judgment of the superior court affirming the Assembly's  

                                                                                                                                                       



special assessment determinations.  

                                       



             58            159 F. Supp. 733, 738 (D. Alaska 1958).                              



             59            This  is  so  notwithstanding  the  Property  Owners'  assertion  that  "the  

                                                                                                                                                                    

subdivision improvements did not include gas, electric and other shallow utilities, which  

                                                                                                                                                                  

would all need to be added if a lot owner wanted to construct a home on the lot."  

                                                                                                                                                                    



                                                                                   -27-                                                                             7258
  

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