The Kodiak City Council has authorized a $35,000 economic analysis for expanding the city limits through annexation.

Research for the study will be led by Katie Cueva, an assistant professor of health policy with the Institute for Social and Economic Research at the University of Alaska Anchorage. 

The study was authorized at a city council meeting on Thursday. Recent discussions about annexation have focused on extending the city’s limits northward to include Kodiak Island Borough Service District Number 1, undeveloped city property and the city wastewater treatment plant. 

The city is also talking about annexing areas southward, stretching from the city’s southern border to Boy Scout Lake and the U.S. Coast Guard Lake Louise housing development. 

Funding for the study will come from $125,000 set aside in the city’s budget for annexation from the General Fund. 

At the Thursday meeting, City Deputy Manager Josie Bahnke said the study might conclude with a recommendation to initiate annexation, or with a different recommendation. 

“Assembling the information required for the council to make an informed decision on this question is important. This authorization is the next step to this process,” Bahnke said. 

If the city chooses to annex the two areas, the annexation petition will need to be approved by the Local Boundary Commission. After that, it will either go for a vote among community members or advance to a legislative review, which would require approval by the state Legislature.  

The city has annexed land 10 times since 1960 as the community has outgrown the city limits. There have also been unsuccessful attempts, such as in the 1990s when residents in Service Area 1 signed a petition to be annexed. It did not pass a vote by local citizens. 

Cueva and her team, which includes a number of contractors, will look at current data from interviews with city of Kodiak employees on population, property values and services provided within the city limits, as well as commercial activity and services that would transfer from the Kodiak Island Borough to the city. 

The study will also estimate revenue and cost changes that could occur by extending city services to the proposed annexation areas. 

Cueva’s team will also examine if annexing the areas will meet the guidelines of the Local Boundary Commission, the entity that reviews petitions for annexation and other types of boundary changes. 

“At the end of this analysis, the City of Kodiak will have an understanding of whether annexing these areas would be fiscally neutral, positive, or negative and what structural changes to the tax structure might be needed to end up in a fiscally neutral place,” said the scoping document for the study. 

According to the document, a range of benefits for annexation could include addressing the increasing inequities faced by city taxpayers, such as people who live outside city limits and pay sales tax when shopping within city limits, but who do not have a say in voting for sales tax or city elections. 

Another benefit would be to potentially extend utility and other services to outlying areas. 

In the past, members of the city council have also promoted enfranchising residents in outlying areas, and have said that annexation will bring the community closer together. 

“Annexation would allow those individuals to be appointed to city boards and commissions, hold elective office in city government, and vote in city elections,” said the document. 

Extending the city boundaries through annexation could also enhance the city’s tax base. 

Arguments against expanding city boundaries often focus on lifestyle, as some people say they choose to live in outlying areas to “pursue a lifestyle free from intrusive local government,” said the document. Residents of the territory proposed for annexation may also oppose annexation because they already receive city services. 

Currently, the city already provides Service Area 1 with sewer and water, mutual aid fire protection and recreational activities such as maintenance of Woody Way Field and Dark Lake Park. 

Councilor John Whiddon said he was “pleased” to see the annexation analysis moving forward.

“This is something that’s an integral next step in developing future plans for our city and potential expansion via annexation,” he said.

“This will give us some documentation and solid facts that we can use to move forward in an informed way.”

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