Chapter 11.04
ESTABLISHMENT OF UTILITY AND MANAGEMENT

Sections:

11.04.010    Establishment.

11.04.020    Management.

11.04.030    Application of laws.

11.04.010 Establishment.

There is established the Interior Alaska Natural Gas Utility1, the purpose of which is to facilitate, if possible, or provide, if necessary, affordable natural and/or manufactured gas to the largest number of people in the Fairbanks North Star Borough in the shortest amount of time except that direct competition in an area covered by a certificate of public convenience and necessity by the Regulatory Commission of Alaska will not be initiated without approval of the city of Fairbanks by resolution. The Interior Alaska Natural Gas Utility shall be a public corporation and an instrumentality of the Fairbanks North Star Borough. It shall be wholly owned by the Fairbanks North Star Borough but shall have a legal existence independent of and separate from the borough. Interior Alaska Natural Gas Utility (IANGU) will function first as a facilitator, second as an implementing corporation that contracts, partners or joint ventures with private companies, and third as a provider/competitor if services are not currently being provided or if the private entity is unwilling to provide them or will not do so in a timely manner. (Amended during 2016 republication; Ord. 2012-52 § 5, 2012. 2004 Code § 11.01.010.)

11.04.020 Management.

A. There is hereby created a seven-member independent and nonpartisan Interior Alaska Natural Gas Utility board of directors who shall oversee the work necessary to achieve the purpose of the utility which specifically may include management and operation of a natural gas utility. Board member compensation shall not exceed the compensation paid to assembly members. The board shall annually elect a chair and may elect other officers from among its members. The board shall have the authority to adopt and amend bylaws subject to assembly approval. The board shall report to the assembly at least quarterly and shall provide an annual report which must include financial statements audited by independent outside auditors. These reports shall be available to the public.

B. The initial appointments to the board shall be made as follows: three by the borough mayor, one by the assembly presiding officer, one by the city of North Pole and two by the city of Fairbanks, each confirmed by the respective governing body. Appointments shall be made for staggered terms (in a manner that ensures each city has an appointment on the board) with two members serving for two years, two serving for three years and three serving for four years with their terms ending when their successors are elected or appointed. Upon the expiration of the first four initial appointed terms of office, their successors shall be elected at large by the voters of the Fairbanks North Star Borough. Upon expiration of the last three initial appointed terms, their successors shall be appointed, one by the borough mayor, one by the city of North Pole mayor and one by the city of Fairbanks mayor, each subject to confirmation by the respective governing body. After the expiration of their initial terms all shall thereafter serve a term of three years.

C. The utility shall be independently managed and operated by the board of directors in accordance with prevailing industry practices and general standards common to utilities providing the same utility service. The board, not the Fairbanks North Star Borough, shall oversee the management of the utility and shall have the powers necessary or convenient to the management and operation of the utility including the authority to borrow money and, as evidence of that borrowing, to enter into loan agreements and issue bonds, notes or other obligations. The utility may pledge any of its assets or revenues to pay or secure the payment of any such borrowing. The borough intends that the board shall have full authority respecting the utility unless that authority is specifically withheld by law or ordinance. During its first year of operation the board may request and use, at the discretion of the mayor, available borough resources such as staff and equipment. Thereafter, the board may not utilize the resources of the borough except as authorized by the assembly. The fee for administering grant funds awarded to the utility or awarded to the borough for gas utility projects may not exceed one-fourth of one percent. The board may contract or act only on behalf of the utility and not on behalf of the Fairbanks North Star Borough. The Fairbanks North Star Borough shall not be liable for the debts or liabilities of the utility without specific authorization by the Fairbanks North Star Borough assembly. No general obligation bonds may be issued without voter approval. The board shall maintain a separate account for the utility which shall be kept and classified in accordance with uniform accounting standards generally prescribed for public utilities providing the same utility service. The board may acquire and dispose of capital assets. No part of the funds of the utility may inure to the benefit of, or be distributed to, its employees, officers, board of directors, or any private individual, except that the utility is authorized to pay reasonable compensation for services rendered and to reimburse its board members for reasonable and necessary expenses related to their duties as board members. Upon dissolution of the utility, any assets of the utility remaining after the utility satisfies its obligations will be distributed to the borough or to an instrumentality of the borough for a public purpose. Private individuals or entities are prohibited from receiving any of the utility’s assets upon its dissolution.

D. Manager. The board of directors may enter into contracts or other agreements to provide for the management and operation or any aspect thereof of the natural gas utility and shall have the authority to appoint a manager which may be an individual or a private entity.

E. The board shall have a separate capital and operating budget. Provided that total utility annual budgeted revenues at least equal total annual budgeted expenses, no further borough assembly approval is required. If required, the borough assembly shall have approval only over the total budget amount and may not raise or lower any other line item. Earnings shall be retained by the utility to enable the utility to meet its purpose of providing affordable natural and/or manufactured gas to the largest number of people in the borough in the shortest amount of time.

F. During the term for which elected and for one year thereafter, no local elected municipal official may be directly or indirectly employed by the utility in any paid position or nominated, elected or appointed to the board if the board was created or the salary, compensation or emoluments of the board were increased during the elected official’s term of office. “Indirectly employed” for purposes of this section means subcontracts with the utility, other payments from a third party arising from or related to a third party’s contract with the utility, or any other contractual or consulting arrangement between the utility and a business entity partially or wholly owned by the elected municipal official or in which the elected municipal official has a substantial financial interest. (Ord. 2017-25 § 2, 2017; Ord. 2012-52 § 5, 2012. 2004 Code § 11.01.030.)

11.04.030 Application of laws.

The utility shall, as a public corporation, comply with the Open Meetings Act and other applicable state laws. Borough ordinances not of general public application shall apply only as specified herein or as specifically made applicable in any adopted ordinance. Ordinances not of general public application include the procurement code, the personnel ordinance and the ordinance requiring a vote for revenue bonds. (Ord. 2016-40 § 61, 2016.)


1

Code reviser’s note: The Interior Alaska Natural Gas Utility has adopted bylaws calling themselves the Interior Gas Utility.