Postponed Indefinitely

DENALI BOROUGH, ALASKA

ORDINANCE NO. 96-11

VERSION C

INTRODUCED BY: DON MELLECKER

AN ORDINANCE AMENDING TITLE IV CHAPTER 23 AND CREATING CHAPTERS 24,25 AND 26 OF THE DENALI BOROUGH CODE OF ORDINANCES CONCERNING REAL PROPERTY ACQUISITION, MANAGEMENT AND DISPOSAL.

**Footnote: for the pupose of this ordinance the term “Mayor” denotes the Mayor or his designee.

BE IT ENACTED by the Assembly of the Denali Borough, Alaska that:

Section 1. Classification. This ordinance is of a general and

permanent nature.

Section 2. Title IV name change. The Title IV name shall be changed from

TITLE IV. ACQUISITION AND DISPOSAL OF Borough PROPERTY to TITLE IV.

REAL PROPERTY ACQUISITION, MANAGEMENT AND DISPOSAL.

Section 3. Chapter 23 amended. Chapter 23 shall be amended to read as follows:

CHAPTER 23

REAL PROPERTY ACQUISITION

Sections: 1. Acquisition and ownership.

2. Real Property defined.

3. Procedural requirements.

4. Ownership.

5. Rights and powers of the Borough.

6. Dedication by plat.

7. Industrial sites.

8. Federal and State aid.

9. Real property as security.

Section 1. Acquisition and ownership.

The Borough may acquire, own, and hold real property inside or outside the Borough boundaries by purchase, gift, devise, grant, dedication, exchange, redemption, purchase of equity of redemption, operation of law, tax or lien foreclosure, adverse possession, condemnation or declaration of taking, annexation, or by any other lawful means of conveyance.

A. Acquisition By Borough Municipal Land Entitlement Selections.

1. During the course of selected lands being adjudicated, new selections shall be made in the event selection applications are denied by the Department of Natural Resources to fulfill the Entitlement Certification acreage. Land may be nominated for selection by Borough residents filing a written nomination with the Borough office during the times established by the Mayor.

2. The Mayor shall prepare a written report for each nominated parcel that evaluates the parcel and makes a recommendation to the Assembly as to whether the parcel should become a Borough Municipal Entitlement selection.

3. Upon the approval [decision] of the Assembly, the Mayor shall file for the new selections.

Section 2. Real Property Defined.

As used in this chapter, "real property" includes any estate in land, easement, right‑of‑way, lease, permit, license, franchise, future interest, building, fixture, or any other right, title or interest in land or a building.

Section 3. Procedural Requirements.

A. The Borough may acquire, own, and hold real property by warranty or quit claim deed, easement, grant, permit, license, a deed of trust, mortgage, contract of sale of real property, plat dedication, lease, tax deed, will, negotiate an exchange involving Borough land or any other lawful means of conveyance or grant. Real property shall be held in the name of "Denali Borough".

1. Borough land to be sold or retained by nomination.

a. A Borough resident may nominate Borough lands to be sold or retained by filing a written nomination with the Borough office. Nominations shall be received before a closing date established by the Mayor. The Mayor shall post a notice of the filing period. Nominations received after the closing date shall not be considered.

b. The Mayor shall hold a meeting to hear public comments on the recommendations. Notice of the meeting shall be published once before the meeting and shall contain a brief description of the parcels recommended for sale or retention. After evaluating the written recommendations and the public comments, the Mayor shall select the parcels to be proposed to the Assembly for sale or retention.

c. The Mayor shall prepare a written report for each nominated parcel that evaluates the parcel and makes a recommendation as to whether the parcel should be sold, retained or managed as Borough land.

d. The Mayor shall annually present to the Assembly a written summary of the parcels proposed for sale or retention within the next three fiscal years. The summary shall also contain a plan for implementing the sale or retention of the proposed parcels.

2. Borough land to be Retained.

a. The Assembly may by ordinance retain Borough land for present or future public purpose or use.

b. The Assembly may by ordinance retain lands that have been determined to be in excess of present or future municipal needs and which may have a present or future market value for industrial, commercial, residential, recreational, institutional or other municipal use.

c. The Assembly [shall] may by ordinance retain Borough land if the Assembly determines that the land poses a danger to public health, safety or welfare because of a geophysical hazard or terrain limitations.

B. Any instrument requiring execution by the Borough shall be signed by the Mayor and attested by the Clerk. The form of any conveyance [may] shall be [approved] reviewed by the Borough Attorney.

C. Upon a specific resolution of the Assembly, the Mayor may act on its behalf in the acquisition of real property or an interest in real property when that property to be acquired is for a valuable consideration or as part of a program of grants acreage. The resolution shall set forth the terms, conditions and manner of acquisition.

D. No Assembly approval is necessary to acquire any easement, right‑of‑way, permit, license, or other interest in real property necessary for a utility or public improvement where the utility or public improvement has been authorized and approved by the Assembly.

E. Prior to approval, the Mayor is to furnish the Assembly with a title report, an appraisal of the real property, a review of any problem in acquisition, and may require a liability assessment. The failure to furnish the Assembly any such materials shall not affect the validity of any acquisition or purchase of real property by the Borough.

F. Unless otherwise provided by the Assembly, the Borough shall purchase marketable title in real property. Unless otherwise provided by ordinance or resolution, or upon Assembly approval of a purchase, the Mayor is authorized to obtain title insurance, to execute any instruments, and to take all steps necessary to complete and close the purchase and acquisition of the real property.

G. The Assembly may exercise the powers of eminent domain and declaration of taking in accordance with A.S. 29.35.030; however, eminent domain shall be exercised only if the Mayor has [made reasonable but] been unsuccessful in efforts to negotiate a purchase.

H. The Assembly may authorize the Mayor to acquire land for more than fair market value only if the resolution authorizing the acquisition contains funding; [that] the acquisition is for a compelling public purpose or use; and a statement of the facts on which the finding of compelling public purpose or use is based.

Section 4. Ownership.

A. The Borough may acquire and hold real property as sole owner or as tenant in common or other lawful tenancy, with any person, corporation or government body for any public purpose. The Borough may hold real property in trust for any public purpose.

B. The Assembly may approve and authorize the purchase of real property by contract of sale, a deed of trust, or mortgage.

Section 5. Rights and Powers of Borough.

The Borough shall have and may exercise all rights and powers in the acquisition, ownership, and holding of real property as if the Borough were a private person.

Section 6. Dedication by plat.

The Borough may not acquire any real property by means of dedication by plat unless the dedication of real property is accepted in writing and signed by the Mayor and approved by the Assembly.

Section 7. Industrial Site.

The Borough may acquire, own, and hold real property, either inside or outside the Borough boundaries, as sites available for new industries which will benefit the Borough.

Section 8. Federal and State aid.

The Borough may apply for, contract with, and do all things necessary to cooperate with the United States government and the State of Alaska for the acquisition, holding, improvement, or development of real property inside and outside the Borough boundaries.

Section 9. Real Property as security.

The Assembly may pledge, mortgage, or otherwise secure real property of the Borough for the payment of Borough bonded or other indebtedness when required, as authorized by law.

Section 4. Chapters 24, 25 and 26 created.

CHAPTER 24

MANAGEMENT OF BOROUGH REAL PROPERTY

Sections: 1. Managing Authority.

2. Management Plans.

3. Annual Work Plan.

4. Leasing Borough Land.

5. Sale of Resources on Borough Land.

Section 1. Managing Authority.

A. The Denali Borough Assembly or designated representative shall be the Managing Authority for all Borough land.

B. The Managing Authority shall manage all Borough land in accordance with this Title and adopted management policies and goals.

Section 2. Management Plans.

A. The Mayor, under the advisement of the Managing Authority of Borough lands, shall prepare for each parcel of Borough land, a written management plan that:

1. Identifies the uses, including public uses, for which the parcel is suited;

2. Evaluates the economics of the identifies uses;

3. Identifies whether the parcel may pose danger to public health, safety, or welfare because of a geophysical hazard; and

4. Makes recommendations regarding the retention, management, development, and sale of the parcel.

B. The Mayor shall publish notice of and hold at least one public meeting to hear public comment on the management plans.

C. At least once every five years the Mayor shall review and update the management plans that are then in effect.

Section 3. Annual Work Plan.

A. The Mayor shall prepare and submit for Assembly approval, an Annual Work Plan for proposed acquisitions of real property, inventory, management and disposal activities for the coming year which will include but not be limited to:

1. A summary of the previous year's transaction, expenditures and investments;

2. Proposed actions concerning real property;

3. A proposed operating budget for land management activities.

B. The Mayor shall have available a tentative Three Year Plan showing:

1. Tentative proposed actions concerning real property;

2. Financial projections of revenue from sales, leases, or Fund investments, and expenditures that would be incurred by any tentative proposed actions concerning real property; and

3. Management activity increases or changes.

Section 4. Leasing Borough Land.

A. "Lease" means an agreement granting exclusive possession or use of Borough land for a specific period of time and in accordance with specific terms.

B. An Assembly resolution authorizing the lease shall be required before the Mayor may grant a lease.

C. The Borough may provide for competitive bidding to lease Borough land that is suitable for a commercial or industrial use. The competitive bidding shall be conducted in accordance with requirements established by the Management Authority.

D. The Assembly may authorize the Mayor to lease Borough land for less than fair rental value only if the resolution authorizing the lease contains a finding that the lease is for a compelling public purpose or use and a statement of the facts on which the finding is based. The Mayor shall periodically reappraise leased Borough land to determine fair rental value.

E. The term of the lease shall be based on the nature of the improvements to be made by the lessee and shall be long enough to allow for amortization of improvements made by the lessee, and a period of not more then ten years. A lease for a term in excess of ten years shall be recorded. A lease may contain a provision granting the lessee of Borough land the right to renew the lease.

F. The Mayor may require a proposed lessee to cause the Borough land to be surveyed at the proposed lessee's own expense. Some or all of the survey costs may be considered as a part of the lease [The survey costs shall be deducted and considered as a part of the lease.]

G. The proposed lessee shall submit to the Mayor a property improvement plan that includes a schedule for proposed improvements. When the lease terminates, the lessee shall remove all improvements made pursuant to the improvement plan except those improvements that the lease specifies shall become the property of the Borough, and the lessee shall restore the land to the same condition it was in at the time the lease was executed or, if stipulated, to the conditions specified in the lease agreement. Improvements that are not removed by the lessee at the expiration of the lease shall become the property of the Borough.

Section 5. Sale of Resource on Borough Land.

A. The Mayor may grant to a person an extraction license that allows a person to extract a maximum of two thousand cubic yards of Borough sand or gravel per year if the extraction for the project is for a public purpose a larger extraction may be allowed. An extraction license does not convey an interest in land.

B. If the Mayor determines an extraction license may substantially affect the surrounding area then the Mayor shall publish notice of the proposed use. The notice shall include a description of the proposed use and notice of a two-week period during which public comment on the proposed use will be accepted by the Mayor. If the Mayor receives substantial adverse public comment to the proposed use then before issuing the license the Mayor shall hold a public hearing on the proposed use.

4. Notice of the land sale.

5. Auction sale.

6. Lottery sale.

7. Over-the-counter sale.

8. Direct sale.

9. Exchange sale.

10. Conveyance of the land.

11. Statement of expenses and revenues.

Section 1. Policy.

A. It is the intent and goal of the Borough to offer for sale to the general public for fair market value, except as provided by Chapter [44] 23, Section [2] 3 of this Title, all patented, unretained, general grant lands.

Section 2. Mayor authorized to sell Borough land.

A. The Mayor may sell unretained Borough land according to the terms fixed by the Assembly by ordinance except that the Mayor shall not sell approved, but unpatented general grant land, without fully disclosing the unpatented status of the land to the purchaser. [without obtaining the consent of the land to the purchaser without obtaining the consent of the Director of Lands, Departments of Natural Resources.]**see footnote this page**

Section 3. Terms of the land sale.

A. The Assembly shall by ordinance fix the terms of all sales of

**Footnote Section 2A** Deletion of this wording is contrary to State Statute 29.65.070(b). The LUPC members determined that once the Borough acquired a final decision from the DNR to transfer lands as a municipal entitlement property, although not yet patented, that permission of the DNR Director of Lands should not be necessary.

Borough land. The ordinance shall contain the date of the sale, the method or methods of sale, the manner in which payment is to be made, the interest to be conveyed, the instrument of conveyance to be used, and any other term the Assembly deems appropriate.

B. The Assembly may authorize payment to be made over time only based upon the following:

1. The down payment, payment schedule and rates of interest are reasonable; and

2. The period for total payment does not exceed ten years, or twenty years if the land is sold for agricultural use.

C. The Assembly may authorize the Mayor to sell land for less than fair market value only if the land is to be offered for sale at an auction, or if the ordinance authorizing the sale contains:

1. A finding that the sale for less than fair market value is in the best interests of the Borough;

2. A statement of the facts on which the finding is based; and

3. The period of time during which the offer may be accepted.

D. If the Assembly requires a prospective buyer to pay the Borough a down payment, bond or other deposit, and if the prospective buyer breaches a term of the sale damages will be addressed. [then] The Borough shall retain as liquidated damages the prospective buyer's down payment, bond or other deposit.

Section 4. Notice of the land sale.

A. The Mayor shall cause notice of a land sale to be published four times in the thirty-day period immediately preceding the date of the sale. The notice shall contain a brief description of the land, the general location of the land and the terms of the sale as fixed by the Assembly by ordinance.

Section 5. Auction sale.

A. The Assembly may by ordinance authorize the Mayor to sell Borough land by the use of either an outcry or sealed bid public auction. The Mayor shall sell the land to the highest bidder who performs all the terms of the sale. The Mayor may promulgate rules and regulations for conducting an auction.

Section 6. Lottery sale.

A. The Assembly may by ordinance authorize the Mayor to sell Borough land by the use of a lottery. Only natural persons **see footnote this page ** may participate in a lottery sale. A natural person may purchase by lottery only one parcel of Borough land every three years. In order to insure the fair and equitable disposal of Borough land to the public, the Assembly may by ordinance impose additional limits on the number of parcels a person may buy from lottery sales. The Mayor may promulgate rules and regulations for conducting a lottery.

**Footnote Section 6A** The LUPC members determined that the word "natural person" does not include Corporations.

Section 7. Over-the-counter sale.

A. The Assembly may by ordinance authorize the Mayor to sell Borough land by the use of over-the-counter sales if the land was offered for sale at an auction or lottery and the land did not sell at the auction or lottery. Land offered over-the-counter for sale may be purchased on a first come, first-served basis at the Borough Office. The Mayor may promulgate rules and regulations for conducting an over-the-counter sale.

B. The Mayor shall periodically review the terms of sale of all land offered for sale over-the-counter and shall:

1. Adjust rates on interest to reflect the prevailing market conditions, provided the rate of interest shall be not more than six percentage points above the prevailing Federal Reserve discount rate to member banks.

2. Adjustments in the price of any lot offered in the over-the-counter sale shall be made by the Assembly. Price adjustments shall be made only under the guidance of an[d] independent fee appraiser.

Section 8. Direct Sale.

A. The Assembly may by ordinance authorize the Mayor to sell Borough land directly to the land owner adjoining the Borough land if there is no public use for the land and if:

1. The land has no legal or physical access and the cost of developing access would be greater than the resulting value of the parcel with access; or

2. The cost of surveying, platting, or taking other action necessary to establish an acceptable legal description would exceed the value of the property; or

3. The land is of such a size or shape as to be illegal or unfeasible to develop as an independent parcel under the applicable land use ordinance.

Section 9. Exchange sale.

A. The Assembly may by ordinance authorize the Mayor to exchange Borough land but only if the ordinance authorizing the exchange sale contains a finding that the exchange sale is in the best interests of the Borough and a statement of the facts on which the finding is based.

Section 10. Conveyance of the land.

A. After the buyer has paid to the Borough the payments required by ordinance, the Mayor shall execute the instrument of conveyance authorized by ordinance that transfers the land or the interest in land to the buyer.

B. [An instrument conveying land for agricultural use shall contain restrictions that:] An instrument conveying land may contain conditions, covenants and restrictions imposed by the Assembly

[1. Restrict the use to agricultural use; and

2. Prohibit subdivision.]

Section 11. Statement of expenses and revenues.

A. At the conclusion of each [sale of Borough land] fiscal year, the Mayor shall deliver to the Assembly a written statement that sets forth the expenses of conducting the sale and the revenues derived [or to be derived from the sale] from those sales.

CHAPTER 26

FINANCIAL PROVISIONS FOR LAND SALES AND LEASES

Sections: 1. [Land Enterprise Fund.] The Land Management Fund

2. [The Land Management Fund.] Land Enterprise Fund

Section 1. [Land Enterprise Fund.] The Land Management Fund

[A. The Land Enterprise Fund is established. Revenue derived from the sale, lease or use of Borough land, shall be deposited in the Land Enterprise Fund. Money may be appropriated from the Land Enterprise Fund only for the acquisition of real property, management, development, sale or Mayor of Borough land, or other land related purposes approved by the Assembly.]

[B. Revenue from the Land Enterprise Fund not appropriated shall be invested in a prudent manor within the guidelines set forth in Title _____, Chapter ____ of the Denali Borough Municipal Code and under the advisement of the Denali Borough Finance Committee.]

A. The Land Management Fund is established. The Land Management Fund is the operating fund for all activities that concern the acquisition of real property, management, development, sale or [Mayor] administration of Borough land.

B. The Managing Authority for Borough lands shall be responsible for establishing the annual operating budget.

Section 2. [The Land Management Fund] The Land Enterprise Fund

[A. The Land Management Fund is established. The Land Management Fund is the operating fund for all activities that concern the acquisition of real property, management, development, sale or Mayor of Borough land.

B. The Managing Authority for Borough lands shall be responsible for establishing the annual operating budget.]

A. The Land Enterprise Fund is established. Revenue derived from the sale, lease or use of Borough land, shall be deposited in the Land Enterprise Fund. Money may be appropriated from the Land Enterprise Fund only for the acquisition of real property, management, development, sale or Mayor of Borough land, or other land related purposes approved by the Assembly.

B. Revenue from the Land Enterprise Fund not appropriated shall be remitted to the General Fund. [invested in a prudent manor within the guidelines set forth in Title _____, Chapter ____ of the Denali Borough Municipal Code and under the advisement of the Denali Borough Finance Committee.]

Section 5. Effective Date. This ordinance becomes effective upon adoption by the Denali Borough Assembly, and signature of the Mayor and approved by a majority of the voters at the next scheduled election.

DATE INTRODUCED: April 14, 1996

FIRST READING: April 14, 1996

PUBLIC HEARING:

PASSED and APPROVED by the DENALI Borough ASSEMBLY this ______ day of_________________________, 19___.

____________________________

Mayor

ATTEST: ____________________________

Borough Clerk