Hoonah borough petition should be denied, state’s preliminary report says

JUNEAU — A state commission has recommended denying an application by the Southeast Alaska city of Hoonah to form its own borough.

Staff at the Local Boundary Commission on Tuesday issued a 36-page preliminary report that identified “substantive concerns” with Hoonah’s petition. The borough would not extend local government to “a significant population,” and it could not be considered “a true regional government” by excluding several nearby communities, the report says.

The Local Boundary Commission — a state organization established by the Alaska Constitution to consider changes to municipal government boundaries — is composed of five members appointed by the governor. They can approve, deny or amend Hoonah’s petition to establish a borough.

Hoonah, with a population of roughly 900, has sought to create a borough for more than 30 years. The proposed Xunaa Borough — pronounced like Hoonah, but with a more Tlingit-stylized spelling — would encompass more than 10,000 square miles in and around Glacier Bay National Park.

If approved, the new borough would be Alaska’s 20th borough, ranking eighth in size and third smallest in terms of population. Nearby communities of Tenakee Springs, Pelican and Gustavus were invited to join the borough petition, but those communities declined to join or didn’t respond.

Representatives of those communities said they could now lose significant federal revenue by the formation of the new borough — among other concerns. Tenakee Springs Mayor Linnea Lospenosochatel said the Xunaa Borough would encompass the area surrounding the city, and diminish residents‘ voices in how lands and watersheds are managed.

Hoonah’s petition states that the new borough would not have property taxes. Instead, local government would largely be funded by seasonal sales tax revenue paid by visitors to Icy Strait Point, a massive cruise ship dock and activities destination just outside of Hoonah.

Supporters say a Xunaa Borough would give residents greater control in deciding the future of the region. Additional state public school revenue is expected. The borough would also encompass the Huna Tlingit’s historic territory, which the report noted is of critical importance to the local tribe.

“But as one commenter succinctly noted, borough formation is not about recognizing indigenous historic territory, rather borough incorporation is a modern governance construct intended to unify communities of common interest and deliver services on an areawide basis,” the commission’s report goes on to say.

The city of Hoonah — Alaska’s largest Tlingit village — would be the borough’s hub and seat of government, but there would be limited new services offered for residents outside of the city.

Critics of Hoonah’s plan, including residents of several tiny outlying communities like Elfin Cove, have raised concerns that they would pay sales taxes without seeing any benefits from the new borough.

”It essentially trades one local government for another,” the preliminary report says about the petition. “Further, the borough government would assume very little responsibility for services currently being delivered by the state, diminishing the benefit to the State from borough formation.”

After considering another round of public comments, commission staff are scheduled to issue a final report in September on Hoonah’s petition. The five commissioners are scheduled to travel to Hoonah for a public hearing in September and make a final decision on the petition in October.

Dennis Gray Jr., Hoonah’s city administrator, has long been a driving force behind forming a new borough in Glacier Bay. He said by phone on Tuesday that local officials were reviewing the preliminary report. The goal now is to convince the five commissioners why the Xunaa Borough should be established, he said.

“We don’t agree with them, simple as that,” Gray said about the preliminary report. “We think they’re incorrect in their conclusions.”

In 1992, the Local Boundary Commission issued a report on “model” boroughs that could incorporate parts of the state not organized in boroughs. The proposed “Glacier Bay Borough” included Tenakee Springs, Pelican and Gustavus.

Local Boundary Commission staff did not recommend that the commissioners amend the proposed Xunaa Borough to include those communities “as such a recommendation would be appropriate only with broad-based community support that this petition currently lacks.”

Any new borough approved by the commission would need approval from a majority of voters within its boundaries. The last Alaska borough to be incorporated was Petersburg Borough in 2013.