At the October 8, 1996 held Municipal Election, a majority of the qualified voters of the City of Fairbanks approved two propositions, one for the sale of the Fairbanks Municipal Utilities System for an amount of $160.300.000 and the other to establish a City of Fairbanks Permanent Fund with the proceeds from said sale.

[Exc. 11, paragraph 5; Exc. 12, paragraph 6]. A copy of a sample ballot thereof is added to this brief as Appendix Page A-1, and a copy of the Certificate of Election as Appendix Page A-2 and Page A-3.

The Fairbanks Municipal Utilities System is a municipal corporation of the City of Fairbanks that provides water, wastewater, electric, steam heat and telecommunications utilities services in substantial part within the city limits and telecommunication utility service also to some areas outside the city. [Exc. 10]

The real property owners within the City of Fairbanks have a substantial stake or dominating interest in the assets of the Fairbanks Municipal Utilities System because these assets were in substantial part acquired from the property tax payers

through the payment of charges, rates and fees, through the payment of tax assessments, utility assessments and special assessments, and through the payment for taxation in general that provided for grants or for the debt service of such grants if based on bonds or other type of indebtedness, that accumulated the assets of the municipal corporation, etc.; and through the guarantee with their property for the repayment of bonded indebtedness and other obligations and liabilities, the real property owners within the City of Fairbanks undertook the risks enabling the operation of the municipal corporation. [Exc. 35, 36; exc. 26 - 31; and Exc. 19 paragraph 2].

Where private funds are invested in a municipal corporation, privatization or sale of such municipal corporation fundamentally requires that the private investors in the municipal corporation be justly compensated. [Exc. 23; Exc. 2, 5, and 15 paragraphs 7; Exc. 29-31].

Just compensation may also be in form of shares of stock in the newly formed "privatized" corporation and may include stock options, etc. to purchase additional shares in the newly formed privatized corporation to maintain the level of "ownership" or interest enjoyed in the municipal corporation in case of expansion

of the newly formed "privatized" corporation. [Exc. 29 - 30].

The sale or "privatization" of the Fairbanks Municipal Utility System does not

provide for the just compensation to the parties that have a stake, or interest, in the

assets of the municipal corporation, namely the property owners within the City of Fairbanks that have invested their private money in form of payment of assessments, [see Exc. 35-36] rates, fees, etc. in the mainlines for water, sewer, electricity and telephone and all the things that make the system work, such as lift stations, treatment plants, exchanges and power plants, etc. [Exc. 2 and 15 paragraphs 8, Exc. 26, 30; Exc. 19 paragraph 2]. Instead, "the proceeds of the sale of municipal property and assets" will be used for a different public purpose, namely the creation of the "City of Fairbanks Permanent Fund" , (see Appendix pages A-1 and A-2 under Proposition F2, subsection (a)). [Exc. 11, paragraph 5; Exc. 12, paragraph 6].

The water, sewer and electric lines are to the property owner in the city what a well, a cesspool and a generator is to the property owner in the outlying areas, namely an asset that increases the property value. [Exc. 30]. Investors in a private utility corporation did not pay for the assets of the Fairbanks Municipal Utility System, but rather the rate payers and property owners within the City of Fairbanks did. [Exc. 35, 36; Exc. 26; and Exc. 19 paragraph 2]. Transferring the proceeds from the sale of the municipal utility property to a permanent fund is equivalent to taking private property for a public use without just compensation. Such is in violation of the Alaska Constitution, Article 1, Section 18, that reads: "Private property shall not be taken or damaged for public use without just compensation."

The electorate of the October 8, 1996 municipal election was not comprised of only qualified voters that were listed on the City of Fairbanks tax assessment roll and property owners that had a stake in the assets of the Fairbanks Municipal Utility System, but also of renters and of members of the military located at Ft.

Wainwright. [Exc. 29] The Alaska Constitution, Article I, Section 18, protects the minority, namely the property owners within the City of Fairbanks, from suffering injustice at the hands of the majority of the moment, namely the majority of the members of the City Council that put the questions on the ballot and the majority of the voters that approved the ballot measures; however, or most obviously, enforcement by the judiciary is necessary in this matter.

"Enforcement [of Article I of the Alaska Constitution]

by the judiciary is necessary because that is the only

means by which the instruments of the majority of the

moment, the legislative and executive branches, can be

restrained. A Citizen’s Guide to the Constitution of

the State of Alaska, Institute of Social and Economic

Research, University of Alaska, Lee Gorsuch, Director

(1982), page iv.

The property owners within the City of Fairbanks seek an injunction restraining the sale proceedings of the Fairbanks Municipal Utility System under the present terms and ordinances until they comply with the mandates of the Alaska Constitution Article I, Section 18 and provide just compensation to the property owners as set forth by new or amended ordinances. [Exc. 3, 16].

2. Procedural History

Plaintiffs Wolfgang Falke, Olive Anderson, Rudy Voigt, Don Carpenter, Sidney Childers, Virginia F Kittredge, Ronald A. Jeager, Sandra J. Copeland, Jefferson J. Blevans, Randall B. Wallace, Martha M. Smelcer and Danny B. Stepp Jr., all of whom are qualified registered voters and are residents of the City of Fairbanks and whose names appear on the tax assessment roll of said city that is a municipal corporation and a political subdivision of the State of Alaska situated in the Fourth

Judicial District, State of Alaska, filed, on their own behalf and on behalf of all

others similarly situated, a Complaint [Exc. 1 to 3] seeking Injunctive Relief and restraining The Council of The City Of Fairbanks from proceeding with the sale of the Fairbanks Municipal Utility System under the present terms and ordinances until they comply with the mandates of the Alaska Constitution Article I, Section 18 and provide just compensation to the property owners as set forth by new or amended ordinances, in the Superior Court of said Judicial District on October 21, 1996.

On November, 8, 1996, The City of Fairbanks Council filed its Answer [Exc.

5, 6] together with a Motion on the Pleadings [R. 139, 140] seeking dismissal of the case on grounds that there purportedly is no foundation to the plaintiff’s "legal theory" that they have a real and substantial stake or interest in the assets of the Fairbanks Municipal Utility System and that the sale was approved by majority vote and in accordance with Sec. 8.4 of the City’s Charter.

On November 14, 1996, plaintiffs filed Request for a Jury Trial as a matter of right pursuant to the Alaska Constitution, Article I, Sec. 16 [Exc. 7] that was opposed by the defendants [R. 134, 135] and to which Opposition the plaintiffs filed a Reply [R. 129 to 133] on Nov. 20, 1996; Judge Steinkruger denied plaintiffs’ Request for a Trial by Jury on Dec. 2, 1996. [Exc. 9].

After the granting a Motion for an Enlargement of Time [R. 120] the plaintiffs filed an Opposition to Defendants’ Motion for Judgment on the Pleadings on December 12, 1996. [R. 111 to 119].

On December 17, 1996, the defendants filed a motion for Expedited Consideration of their Motion for Judgment on the Pleadings together with their Reply to Plaintiffs’ Opposition to said motion and an Affidavit of Frank Biondi [Exc. 10 to 13].

On December 19, 1996, the plaintiffs filed an Opposition to the Motion for Expedited Consideration, [R. 88 to 94] and said motion was denied. [R. 95].

A First Amended Complaint [Exc. 14 to 17] was filed after a motion therefor [R. 79 to 84] was granted. [Exc. 33].

On January 15, 1997, the plaintiffs filed a Memorandum in Response to Reply to Opposition to Defendants’ Motion for Judgment on the Pleadings that was supported by the Affidavits of Randall B. Wallace and Wolfgang Falke filed therewith [Exc. 18 to 32][R. 59 to 60].

On Jan. 17, 1997, signatures for documents previously submitted by plaintiff were filed [R. 42 to 54] together with one Notice to Withdraw [R. 30] and 11 Proxies [R. 31 to 41].

On Jan. 21, 1997, Judge Steinkruger held a hearing on the motion for judgment on the pleadings as one for summary judgment and took matters under advisement. [R. 78, 55 to 57].

On January 23, 1997, Harold Gillam, an expert witness and a friend of the court, pointed out in a letter addressed to Judge Steinkruger that the attorney for the City Council made a misstatement of fact during said hearing when the attorney wrongfully asserted that the property owners within the city had no interest in the main lines in the street, and wherein Mr. Gillam beyond any reasonable doubt established that the "The ENTIRE cost of project less any state or federal grant was apportioned and assessed to the affected property owners and became a lien

upon the property." [Exc. 35 to 46]. An Order Granting Defendants’ Motion for Judgment on the Pleadings, treated as a motion for summary judgment, was signed by Judge Steinkruger and was dated and file-stamped January 22, 1997, and was distributed by mail on January 24, 1997. [Exc. 34]

On February 24, a Notice of Appeal was filed pursuant to Appellate Rule 202(a), appealing Judge Steinkruger’s summary judgment entered on 1-22-97 and Judge Steinkruger’s Order Denying Plaintiffs’ Request for Trial by Jury entered December 2, 1996. [Exc. 47 to 51] [R. 1 to 5]

1. The Superior Court’s Rulings

1. In spite of the fact that plaintiffs asserted a legal claim that is vested in the

Alaska Constitution Article I, Section 18, upon which they prayed for relief, and the fact that the controversy in this case exceeds $100,000,000 Judge Steinkruger

found "that Plaintiffs have no right to a jury trial" and denied plaintiffs’ request for a jury trial as a matter of fundamental right pursuant to the Alaska Constitution, Article I, Section 16, on Dec. 2, 1996. [Exc. 9].

2. Despite the fact that the plaintiffs assert the legal claim that they are

denied just compensation as a matter of fundamental right pursuant to the Alaska Constitution Article I, Section 18, Judge Steinkruger found that "Plaintiffs have

failed to state a claim or legal theory which would entitle them to the relief requested" and without any written further finding of material fact and without any conclusion of law entered "summary judgment" and dismissed the Complaint on January 22, 1997. [Exc. 34].