02/05/2001 01:15 PM House JUD

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled

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ALASKA STATE LEGISLATURE HOUSE JUDICIARY STANDING COMMITTEE February 5, 2001 1:15 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chair Representative Scott Ogan, Vice Chair Representative Jeannette James Representative John Coghill Representative Kevin Meyer Representative Ethan Berkowitz Representative Albert Kookesh MEMBERS ABSENT All members present COMMITTEE CALENDAR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 13 "An Act relating to municipal service areas and providing for voter approval of the formation, alteration, or abolishment of certain service areas." - HEARD AND HELD HOUSE BILL NO. 52 "An Act relating to the Interstate Compact for Adult Offender Supervision and the State Council for Interstate Adult Offender Supervision; amending Rules 4 and 24, Alaska Rules of Civil Procedure; and providing for an effective date." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 13 SHORT TITLE:SERVICE AREAS:VOTER APPROVAL/TAX ZONES SPONSOR(S): REPRESENTATIVE(S)BUNDE Jrn-Date Jrn-Page Action 01/08/01 0027 (H) PREFILE RELEASED 12/29/00

01/08/01 0027 (H) READ THE FIRST TIME - REFERRALS

01/08/01 0027 (H) CRA, FIN

01/10/01 0056 (H) COSPONSOR(S): KOHRING

01/12/01 0066 (H) SPONSOR SUBSTITUTE INTRODUCED

01/12/01 0066 (H) READ THE FIRST TIME - REFERRALS

01/12/01 0066 (H) CRA, FIN

01/25/01 (H) CRA AT 8:00 AM CAPITOL 124

01/25/01 (H) Heard & Held MINUTES(CRA)

01/30/01 (H) CRA AT 8:00 AM CAPITOL 124

01/30/01 (H) Moved SSHB 13 Out of Committee MINUTES(CRA)

01/31/01 0209 (H) CRA RPT 2DP 1DNP 4NR

01/31/01 0209 (H) DP: SCALZI, MORGAN; DNP: KERTTULA;

01/31/01 0209 (H) NR: HALCRO, MURKOWSKI, GUESS, MEYER

01/31/01 0209 (H) FN1: ZERO (CED)

01/31/01 0209 (H) ADDITIONAL REFERRAL TO JUD

01/31/01 0209 (H) JUD REFERRAL ADDED AFTER CRA

01/31/01 0209 (H) WITNESS REGISTER REPRESENTATIVE CON BUNDE Alaska State Legislature Capitol Building, Room 501 Juneau, Alaska 99801 POSITION STATEMENT: Sponsor of HB WILLIAM A. GREENE, Municipal Attorney Municipality of Anchorage Department of Law PO Box 196650 Anchorage, Alaska 99519-6650 POSITION STATEMENT: Provided Municipality of Anchorage's position on SS HB VICTOR FISCHER PO Box 201348 Anchorage, Alaska 99520 POSITION STATEMENT: Testified in opposition to SS ACTION NARRATIVE TAPE 01-12, SIDE A Number 0001 CHAIR NORMAN ROKEBERG called the House Judiciary Standing Committee meeting to order at 1:15 p.m. Representatives Rokeberg, James, Ogan, Coghill, and Meyer were present at the call to order. Representatives Berkowitz and Kookesh arrived as the meeting was in progress. HB Number 0091 CHAIR ROKEBERG announced that the committee would hear SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 13, "An Act relating to municipal service areas and providing for voter approval of the formation, alteration, or abolishment of certain service areas." Number 0107 REPRESENTATIVE CON BUNDE, Alaska State Legislature, sponsor, explained that SS HB voters, and privatization. He pointed out that in the packets was a letter from former Representative Willis detailing the situation in Anchorage. The charter that created the borough/city of Anchorage had to address the needs and interests of people outside the city. One such interest was maintaining the ability to have control of local road service. Currently, there is some concern about a "tyranny of the majority;" that local areas, particularly on issues of road service, aren't able to maintain their level of service if the surrounding area chooses to vote them out of existence. He ventured that if a decision was to be advantageous to all parties, then all parties must be involved in the process of reaching said decision. In terms of service area issues, if both the surrounding area and the affected area agree, then reaching a majority vote would not be a problem. However, if the local [affected] area objected to proposals, it should not be subject to them simply because the surrounding areas voted in favor of the proposals. As an analogy, why should people in Virginia make decisions on our [Alaska] exploration of the Arctic National Wildlife Refuge (ANWR). Or similarly, why should people in Anchorage, which has half the population of Alaska, make decisions for the entire state. He felt that SS HB taxation. This is of particular interest to Fairbanks because it has 117 local road service areas. And while many of those areas would like to consolidate for administrative savings, current law prohibits this because of the differential taxation issue. As an example, an area with improved streets and one with gravel streets could each [after joining together under SS HB needs and then elect one local road board representative to oversee the maintenance contracts of both areas. That local road board representative would then ensure that each area was getting its needs fulfilled. Thus, the people in each road service area would only be paying for the services for which they vote. Number 0637 REPRESENTATIVE COGHILL made a motion to adopt the proposed committee substitute (CS) for SS SB boroughs] or at least move in that direction. REPRESENTATIVE BERKOWITZ stated "I just want to note ... that after hearing the Speaker [of the House] today, say how wonderful it was [that] we could have the folks who wrote the constitution come and tell us how to interpret it, and hearing Representative Coghill say more or less the same thing, I'm looking forward to see how they look at Senator Fischer's testimony here today and how they view this bill in it's totalities." Representative Berkowitz thanked Mr. Fischer. Number 1585 GAIL DIAL, Birchwood Supervisor, Chugiak, Birchwood, Eagle River Rural Road Board of Supervisors (CBERRRSA), testified via teleconference. She clarified that the Anchorage Municipal Assembly passed a resolution last Tuesday supporting She noted that the Municipality of Anchorage operates under a service area concept, which means that the residents of particular areas have voted on whether to receive and pay taxes for a particular service from the municipality. The issue in the proposed CS is simply one of clarifying the existing state laws and the municipal charter. She believes that is an issue supported by the Anchorage Assembly. The only difference she sees between the existing laws (indisc.) to the service districts and the proposed CS is that varied mill levies within a service district would be allowed. She went on to say that the service district of her area has 20 percent of the population of the Municipality of Anchorage, with landmass equal to the area of people (indisc.) Anchorage. In addition, her area is separated [from the city] by two military bases, a mountain, and a river. She pointed out that Girdwood was another area in the same situation. Her area has road maintenance, fire, and park services, which are all managed by separate, volunteer boards. The ability to have a tax variation within a service district would be a benefit to both their service district and the Municipality of Anchorage, which is also a road service district. There are 26 separate service districts that provide road and drainage services in the Municipality of Anchorage. She explained that because their [CBERRRSA] area is so large, with approximately 200 miles of road to be maintained under a variety of circumstances, it would be advantageous to have one service district with different levels of service. She does not believe that passage of the proposed CS will result in mass confusion EDWARD C. WILLIS testified via teleconference. He informed the committee that he had submitted his [supporting] testimony in writing and wished to yield his time to other speakers. Number 1280 LEE JORDAN testified via teleconference. He felt the proposed CS would protect the rights of people who live in service areas and depend on those services. As an example, he brought up the formation in 1964 of the Greater Anchorage Area Borough, during which, the people of Chugiak saw an opportunity to provide their fire department with a working mechanism that would allow them to operate successfully. He believes the proposed CS deals with the dual majority vote in service area questions, whether one is created, altered, or abolished; and he feels the dual majority vote should be protected. BOBBI WELLS, Officer, Birchwood Community Council, testified via teleconference. She did not see any problems with enacting the proposed CS. She feels the state has the authority and the duty to safeguard the right of its citizens to choose, and nothing in the proposed CS precludes the state from doing this. She supports the proposed CS. FINIS SHELDON testified via teleconference in support of the proposed CS. Also, he wondered if the proposed CS would deal with the court's concerns. REPRESENTATIVE BUNDE answered "No, that was for area wide greater good and this, of course is for neighborhood roads, so I don't think that arguments there were germane." understood, the Alaska Supreme Court case on police protection abrogated the charter, saying it was for a greater good. He suspected that the court would not feel that a neighborhood road was at the same level as police protection. He confirmed for Chair Rokeberg that the proposed CS only pertained to existing road and fire service areas. Number 0854 BONNIE NELSON testified via teleconference in support of the proposed CS. In addition, she strongly supported any legislation that would strengthen local control on all services, such as parks and recreation, transit, and sidewalks in downtown Eagle River. DARYL NELSON testified via teleconference. He noted his support of local control and belief that the Chugiak/Eagle River area should maintain its own services. He pointed out that 30 years ago the Chugiak/Eagle River area voted to have its own community, while Anchorage had voted it down. He would rather maintain his own services as much as possible because, in his view, Anchorage is providing less and less when Chugiak/Eagle River requests services. Number 0658 JAMES SWING, Director, Public Works Department, Matanuska- Susitna (Mat-Su) Borough, testified via teleconference. He explained that the voters of the Mat-Su borough, a second class borough, chose the service area concept to provide road maintenance services. The 16 road service areas of the Mat-Su valley, though of varying sizes, all have in common: the same powers granted by ordinance, contracts with contractors specifying the same maintenance requirements, and roads maintained at the same level of service. In addition, these areas have similar mill rates and similar road conditions. The borough administers all contracts and in some cases, such as patching potholes and sealing cracks, performs the maintenance service as well. He also pointed out that their service area supervisors are not elected. Rather, they are appointed by the borough mayor and confirmed by the assembly. These supervisors act only as advisors to the assembly, recommending capital improvements and projects, and mill rates; for all practical purposes, it is the borough that contracts and controls all activity within service areas. Mr. Swing noted that [the Mat-Su Public Works Department] is opposed to the proposed CS primarily due to the rapid growth experienced in their area, because there would be too much delay while waiting for voter approval on service area issues. For example, if a proposed subdivision crosses service area boundaries, particularly since all roads are built to borough standards, why wait to provide road maintenance services until the next general election. In conclusion, Mr. Swing recommended that should the proposed CS move out of committee, that it be amended to include a six percent factor in road service areas similar to fire service areas. MR. SWING, in response to questions and statements posed by Representative James, related that the Mat-Su Borough did not have areawide powers; it has road powers only through the service areas. However, because [the borough] has been working over the years to ensure that the roads in their contiguous service areas have the same level of service, it appears, to the casual observer, as though the Mat-Su valley does have areawide service powers. He noted that these service areas were formed in the 1980's when the state provided a lot of money for maintenance, and often the boundaries don't seem to make much sense. He acknowledged that consolidation of some service areas might be an advantage to the people in those areas. As an explanation of what road service commissioners do, Mr. Swing reiterated that they are advisory only, though they do provide the important function of being the eyes and ears of the community. Addressing the question of why a service area may have money left over at the end of the year, he recounted situations whereby a service area taxes itself above and beyond the cost of maintenance and thus has money left for capital improvements within that specific road service area. MR. SWING further explained for Representative Rokeberg that the Mat-Su Borough has separate fire service areas with variable mill rates, with the mill levies being based on the assessed valuation of the service area. Emergency Medical service, however, is an areawide function because the people voted it to be such. [Please note that the tape was changed early and thus there is a brief pause in recording.] TAPE 01-13, SIDE A Number 0009 MICHAEL GATTI, Borough Attorney, Matanuska-Susitna Borough, testified via teleconference in opposition to the proposed CS. He said he feels [the proposed CS] is regressive and detracts from local control in that it takes away the authority of the assembly to determine what is to occur or not occur. Also, that it raises serious constitutional and policy considerations for the administration of local government, as well as questions as to how the constitution fits into this particular proposed CS. He found former Senator Fischer's testimony to be quite apt and compelling in demonstrating why service areas were adopted. Other testimony, both pro and con, has illustrated the distinctions found throughout the state in the way that local municipalities treat service areas. These distinctions between service areas as they exercise maximum local control, are a result of how individual municipalities want to see functions accomplished. He maintained that the proposed CS would take away from local self-control. Elaborating on the issue of fire service areas, he pointed out that under Title 18 there is an allowance for mutual aid so that fire service responsibilities can be shared among the various fire services. This is an example of creating efficiencies on the local side for services. He related his belief that in these instances it is not "charged back." However, he noted that fire service is different from road service. MR. SWING informed the committee that the Mat-Su Borough, a second class borough, has areawide, nonareawide, and service area powers that are exercised. Because of the way in which those powers are exercised, eventually the Mat-Su Borough will have to review the form of governance it is engaged in. Therefore, the borough may find that changing from second class status would be advantageous in the future. The consolidation of service areas by the assembly is one tool that determines governmental efficiencies. In an era of rapid growth, the proposed CS detracts from the ability of local assemblies to accomplish governmental efficiencies - an already difficult task. CHAIR ROKEBERG turned over the gavel to Vice Chair Ogan. Number 0318 MR. GATTI cautioned the committee that it must carefully scrutinize the proposed CS, and any similar legislation, due to the serious constitutional issues raised. Recognizing that, should a court case come about because of the constitutional concerns of the proposed CS, lawyers on each side of the issue will have opposing viewpoints; therefore, he didn't see any need to take the risk of having [the proposed CS] struck down in court to begin with. Mr. Gatti mentioned that nothing in the proposed CS would preclude attempts of annexation in the Knik/Fairview area, because it is the local boundary commission that governs annexation procedures. Number 0481 MR. GATTI, in response to Vice Chair Ogan, predicted that the proposed CS would conflict with the following sections of Article X. Section 1, because it calls for maximum local government with a minimum of local units, as well as liberally construed municipal powers. Section 2, because service areas are not units of local government. And Section 5, because of service area/municipality issues. In response to Representative James, Mr. Gatti clarified that he did not consider service areas to be local government, simply a geographical taxing area that allows for exercising a higher or different level of service within the boundaries of that service area. Traditionally, local assemblies have had the ability to abolish and consolidate service areas without a minority vote of the people. He pointed out that in the majority ruled democracy of America, even if some members of the minority disagree, the majority determines what happens. The proposed CS does exactly the opposite. REPRESENTATIVE JAMES remarked that it appears to her as if, in some instances, the concepts and abilities of road service areas have been misrepresented; whereby, the road service areas often behave more like units of local government. MR. GATTI offered the argument that, at least in the Mat-Su Borough, the advisory road service area supervisors and their opinions are highly respected by the Mat-Su Borough Assembly. It is a rare day that the assembly ignores the opinions of the road service area supervisors. He related his belief that the supervisors perform a tremendous service and do an excellent job. Nevertheless, they are not another form of local government, and to consider them so is wrong VICE CHAIR OGAN returned the gavel to Chair Rokeberg. Number 0830 OCIE ADAMS testified via teleconference. He asked whether or not the proposed CS would, by requiring a vote of the people, preclude the Anchorage Borough from annexing a portion of the Knik road service area. REPRESENTATIVE BUNDE related his view that it could not happen if they were already part of the Anchorage area, without a majority vote of both entities involved. CHAIR ROKEBERG pointed out that this particular situation appeared to be an annexation/boundary issue and was not germane to the topic of service areas. MR. ADAMS concluded by saying that he shared some of the same concerns expressed by the Matanuska-Susitna Borough. He noted however, that he was there to speak on behalf of the people of the road service areas, who support the proposed CS. He himself would support it if it were to include a six percent limit on the size of changes to a road service area. Number 0968 ABIGAIL FULLER, Vice President, Kachemak Area Coalition Inc. DBA, Citizens Concerned About Annexation, testified via teleconference in support of the proposed CS. Her testimony is as follows: You may wonder what this bill has to do with annexation, but the basic issue is the same - who gets to decide. And we do have a service area that may be affected by annexation. I understand the gist of this bill is that the people within a special service area should be the ones to approve any changes to the service area, rather than have the changes imposed by the ruling municipality. (I'm including boroughs in the term municipality.) Service areas, like municipalities, are about collecting taxes and providing services. Changes to a service area, or a municipality, aren't just lines on a map; they involve changing the taxes paid and services received by a group of people. In a free country, it is the people who make these choices, not some branch of government. Making changes without a vote is socialism. This concept applies equally for boundary changes to cities and boroughs; the affected people have a right to vote on what they will have for local government. As an example, last year we established a new fire and emergency services area, which was approved by the voters residing in the area. The City of Homer is trying to annex a portion of the new service area, which if approved would take a significant bite out of it. Under current law it is entirely up to the state to make this decision. We get no vote whatsoever. We voted to set up this service area but it can be taken away against our will, without a vote, at the whim of the government. This is wrong, and needs to be changed. Not only should the service area itself have to approve this change, but the people who will have their service area replaced by city government have a right to vote on this change. All people deserve the level of autonomy promised by this bill. Governor Knowles was wrong to veto last year's version. Taking power from government, at whatever level, and giving it to the people is a good thing. It all boils down to the same question - who gets to decide local government issues - the state or the people? It should be the people. I want to thank you for removing the restriction on second class boroughs of under 60,000 population. This does need to apply to all boroughs, and all service areas. And we do support this bill. Thank you. Number 1086 SALLY DODD-BUTTERS, Citizens Concerned About Annexation, testified via teleconference. She declared, that with the change removing the 60,000 population limit, she was wholeheartedly in favor of the proposed CS. She raised the point that local control should be by the voters, not "control of the voters," on issues of self determination that directly affect their lives. She contended that if the proposed CS flies in the face of state law or policy, and the Alaska State Constitution, then it is time to correct the state law, policy, and constitution. In regard to the issue of annexation or taxation without representation, Ms. Dodd-Butters felt that needed to be changed. Number 1228 RICK NAVIN, Director, Direct Service Department, Fairbanks North Star Borough, testified via teleconference. He acknowledged that former Senator Fischer's testimony reflected his understanding of the origin of the authority to create service areas, and how they are completed and administered. He noted that in Fairbanks, appointed officials, not elected ones, run the service areas. With regard to Article X, Section 5, of the Alaska State Constitution, he feels the proposed CS would put a unique stricture on a creating body. Currently, there are mechanisms that allow for creation of a borough government, as well as allow changes to a portion of a borough government to occur. Passage of the proposed CS would take away this authority to effect change. Furthermore, even though a number of service areas exist other than fire and road, the proposed CS only addresses those two authorities. He also expressed concern with the concept of exempting fire service areas of six percent or fewer parcels from annexation. In spite of these concerns, he was in favor of allowing for disparate tax rates within a service area. He anticipated that it would become a valuable tool to the borough as they bring new service areas, or parts of service areas, to parity with existing service area conditions. He is not sure however, if it would be utilized much to allow for different levels of service within service areas. MR. NAVIN reported that there are 111 service districts in the Fairbanks North Star Borough: 5 fire service areas; 2 specialty areas, one streetlight, one sewer; and 104 road service areas. He added that the bulk of the road service areas connect to either other service areas or to state maintained highways, but he did not have specific numbers with him. He noted the concept of requiring elections as [more support] for opposing the Proposed CS because the costs [for the elections] would have to be absorbed by the local government who in turn, would pass them on to existing service areas. Number 1550 KEVIN RITCHIE, Executive Director, Alaska Municipal League (AML), said he appreciated the opportunity to discuss the issues raised by the proposed CS, particularly with regard to the Alaska State Constitution and its meaning. Another area of concern that has engendered thoughtful discussion is the issue of balance between where local decisions ought to be made and at what level. He directed members to the letter that outlines the position of AML. MR. RITCHIE pointed out that the proposed CS would overrule local charters, which form the basis of local government. Furthermore, assemblies can already do what is proposed in the proposed CS, and thus he feels that the proper place for that type of discussion is at the local level. He also pointed out that though Section 3 is problematic, as the previous testimony illustrated, Section 4 [differential taxation] seems like a good tool to give local governments. He used an example of where different response times in a fire service district result in differential "ISO ratings" for fire insurance. MR. RITCHIE, in response to a question from Representative Coghill, said that the proposed CS appears to impose a "one time solution" on all the municipalities at the same time, even though voters in different areas might benefit more from solutions derived locally and tailored to their specific needs. He related his belief that the spirit of what the constitutional framers intended, was for those types of issues to be handled by local governments through ordinances, charters, and initiatives. And while he recognized that community councils and service areas have a lot of political power, he reiterated that the individual needs of the community should be looked at as a whole, at the local level, rather than mandated at the state level. His view is that the proposed CS is based on theoretical problems, rather than addressing any current problems. Number 1886 REPRESENTATIVE JAMES expressed frustration with the current way in which road service powers are viewed and treated, both by the municipalities, and the people in road service areas. CHAIR ROKEBERG reiterated that he feels the proposed CS raises policy issues notwithstanding any constitutional issues. And on the point of policy, it is how far to devolve the rights of democracy down to the lowest denominator of people. In contrast to the position he perceives the AML holds, he believes that the legislature should not be restricted from overriding a charter simply because all the local people voted on it [the charter]. MR. RITCHIE clarified that the question raised is, between the state level and the assembly level, who should set the rules for the framework of how decisions are made. He elaborated that at the local level people actually do have a vote because they can change the representatives or they can bring forth an initiative petition. REPRESENTATIVE JAMES commented that when people are not getting a desired response from their local government, they come to the legislature. CHAIR ROKEBERG noted that sometimes it is easier to change a charter at the state level or through the courts, then at the local level. Number 2079 CHAIR ROKEBERG closed public testimony and indicated the proposed CS would be held over until the next available meeting, at which time questions by the committee could be addressed though no additional public testimony would be taken. ADJOURNMENT Number 2095 There being no further business before the committee, the House Judiciary Standing Committee meeting was adjourned at 3:30 p.m.

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