II. STATEMENT OF RELEVANT FACTS
1. Undisputed Facts
Council placed two propositions before the electorate: Proposition F1 that reads in pertinent part as follows: "Shall the Fairbanks Municipal Utilities System be sold for one hundred sixty million three hundred thousand dollars ($160,300,000) to Golden Valley Electric Association, Fairbanks Sewer and Water, Inc., P.T.I. Communications of Alaska, Inc., and Usibelli Coal Mine, Inc.?"; and Proposition F2 that reads in pertinent part as follows: "(a) A permanent fund is hereby created
from the proceeds of the sale of municipal property and assets." (Appendix P. A-1)
(b) Propositions F1 and F2 were approved by a majority of the voters voting on the questions. (see Certificate of Election , Appendix P.A-2 and A-3.)
part of renters, military personnel residing at Fort Wainwright, and property owners whose name also appeared on the tax assessment roll of the City of Fairbanks. [Exc. 2 and 15 paragraphs 3 and Exc. 5 paragraphs 2 and 3; Exc. 29].
(d) This action was initiated in the Superior Court by qualified voters who are property owners and whose names appear on the tax assessment roll of the City of Fairbanks. [Exc. 1, 5, and 14 paragraphs 1].
(e) The plaintiffs brought the action also on behalf of all others similarly situated, that is on behalf of all other property owners whose names appear on the property tax assessment roll of the City of Fairbanks. [Exc. 1, 5, and 14 paragraphs 2]. The complaint was not filed on behalf of all qualified registered voters and residents of the City of Fairbanks; it was not filed on behalf of renters and military personnel living at Fort Wainwright and residing within the City limits of Fairbanks that were qualified registered voters.
(f) The Fairbanks Municipal Utility System is a municipal corporation of the City of Fairbanks empowered by the Home Rule Carter of the City of Fairbanks, Sec. 10.1. [Exc. 19, paragraph 2].
(g) The Fairbanks Municipal Utilities System is a municipal corporation 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 of Fairbanks. [Exc. 10]
(i) The Fairbanks Municipal Utility System received some of its investment capital from federal and state grants that in turn were generated by either direct taxation or by borrowing in various forms which obligations were repaid and its cost was paid for by taxation of various kinds at the state or federal level. [Exc. 35 to 46; 11 paragraph 2; 19 paragraph 2; 26, 27]. To obtain some of the state or federal grant money a local participation of matching funds or of a certain percentage was required; the local share was generally financed by general obligation bonds; the cost and debt service thereof was assessed against the local property owner and made a lien against the property affected. [Exc. 35, 36].
System were derived from the payments of utility rates, user fees, charges, surcharges, meter charges, etc. that were paid by the rate payers. [Exc.19, paragraph 2].
(k) There was no direct city tax, such as a sales tax or other general tax, that paid for the accumulation of Fairbanks Municipal Utility System assets; to the contrary, some of the revenue that was generated by the operation of the Fairbanks Municipal Utility System was transferred to pay for the cost of operating the Fairbanks City government and its services. [Exc. 11 paragraph 2; Exc. 23].
2. Disputed Facts, or Issues of Genuine Material Fact
appear on the tax assessment roll of the City of Fairbanks - that are the plaintiffs and all others similarly situated - through the payments of utility rates, user fees, charges, surcharges, meter charges, etc., and through the payment of taxes that made the obtaining of federal grants possible, and through the payment of special assessments against their real property that made the financing of the local participation in obtaining grants possible, and through putting up their property as collateral or guarantee for the repayment of such "local participation obligations" in form of liens against their property, have a substantial stake or vested interest in
the assets in the Fairbanks Municipal Utilities System. [Exc. 2, 6 and 15 paragraphs 8; also Exc. 35, 36; 19 and 23; 26 to 32].
(b) Any reasonable person will recognize that it will be unlikely for the City of Fairbanks to be able to obtain federal grants for the purpose of establishing a permanent fund, however, given sufficient time, this fact can be proven through the orderly discovery process; likewise, any reasonable person can see that it is unlikely that the property owners within the City of Fairbanks would have paid taxes, assessments, utility rates, etc., and guaranteed bonded indebtedness for the City Council to establish a one hundred million dollar plus valued savings account or "permanent fund". [Exc. 2, 6, 15, paragraphs 9].
Municipal Utility System through the payment of utility rates, user fees, charges, surcharges, meter charges, etc., and through the payment of taxes that made the obtaining of federal grants possible, and through the payment of special assessments against their real property that made the financing of the local participation in obtaining grants possible, are not justly compensated by the sale of the Fairbanks Municipal Utility System and the establishment of a permanent fund from the proceeds of said sale. [Exc. 3, 6, and 16 paragraphs 10 and 11]. Just compensation may not necessarily be in dollars and cents. Proper privatization of a government operated public corporation can be more justly accomplished by issuing stock of the privatized government entity to the private investors in the former public corporation (in this case the plaintiffs and all others similarly situated) at no cost but in lieu of other compensation, and in the form of stock options to maintain an equal share in case of expansion. [Exc. 3, 6, and 16 paragraphs 12].