Legislature(2005 - 2006)CAPITOL 124
02/15/2005 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
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| Start | |
| HB121 | |
| HB27 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 27 | TELECONFERENCED | |
| *+ | HB 121 | TELECONFERENCED | |
HB 121-SERVICE AREAS IN SECOND CLASS BOROUGHS 8:04:50 AM CO-CHAIR OLSON announced that the first order of business would be HOUSE BILL NO. 121, "An Act relating to consolidating or abolishing certain service areas in second class boroughs." 8:05:18 AM CO-CHAIR THOMAS moved to adopt CSHB 121, Version 24-LS0396\Y, as the working document. There being no objection, Version Y was before the committee. 8:05:33 AM KACI SCHROEDER, Staff to Representative Thomas, House Community and Regional Affairs Standing Committee, Alaska State Legislature, explained that when the state revenue sharing program was in place, residents of subdivisions outside of city limits were allowed to establish local service area road commissions. The commissions were funded with revenue sharing funds. Now the revenue sharing program doesn't exist and these local service area road commissions don't have the funds to adequately maintain the roads. Therefore, these roads are deteriorating and passage is becoming difficult. Ms. Schroeder reminded the committee that these service areas are part of the borough, which means that the borough bears the ultimate financial responsibility for these road service areas. However, the boroughs can't assess a boroughwide tax and apply it to a specific road service area. This legislation allows second class boroughs to consolidate or dissolve service areas that aren't functioning or are functioning below minimum standards, while protecting service areas that adequately tax themselves and maintain their roads. 8:07:16 AM REPRESENTATIVE LEDOUX asked if this legislation will do anything to ameliorate the situation in which the road [service areas] don't receive funds to [maintain] the roads, which leads to unsafe conditions. MS. SCHROEDER opined that the intent is to work with the road service areas to get services out there, but when that isn't possible the borough wants to alleviate its liability for those [unsafe] roads. REPRESENTATIVE LEDOUX asked if the legislation alleviates the borough's liability for the safety hazards in the roads; or is the purpose of this legislation to not allow the road service area to contract for services, not pay for those services, and leave borough on the hook for payment of those. MS. SCHROEDER deferred to Rene Broker. 8:08:43 AM RENE BROKER, Attorney, Fairbanks North Star Borough, explained that the borough has a number of sources of liability when a road service area isn't functioning and doesn't have funds. She informed the committee that there are service areas that don't have commissioners, and therefore can't legally conduct business. Furthermore, there are safety issues when roads aren't maintained or aren't properly maintained. The aforementioned are two primary sources of liability that the [Fairbanks North Star Borough] hopes to address. 8:09:17 AM REPRESENTATIVE LEDOUX asked whether the borough will be able to take over the maintenance of these road service areas if the road service areas are abolished. MS. BROKER replied no, and clarified that currently the borough only exercises road powers through the service areas. The aforementioned is why [the Fairbanks North Star Borough through this legislation] is seeking the right to dissolve and consolidate service areas. She mentioned that dissolution would be a last resort. 8:10:27 AM REPRESENTATIVE NEUMAN inquired as to who would ultimately take care of these roads if it isn't the borough's responsibility. BONNIE WILLIAMS, Legislative Liaison, Fairbanks North Star Borough Assembly, informed the committee that currently there are over 300 miles of roads inside of the Fairbanks North Star Borough that aren't in road service areas, but are outside of the city [limits] and aren't state roads. These roads are maintained happenstance by those living along the roads. If a road service area were dissolved, whatever length of road in that road service area would be added to the 300 miles. Those roads wouldn't be maintained unless someone volunteered to do so, she said. 8:11:53 AM REPRESENTATIVE CISSNA asked if there has been a history of problems with transportation due to the inability to [maintain] the roads. MS. WILLIAMS said it depends upon one's perspective. She recalled when she lived on a road that was not in a road service area. In that neighborhood a couple of people had a backhoe and a snowplow and when they felt like it, they plowed. In the beginning those in the area did okay, but as time passed and usage continued the roads began to deteriorate. Therefore, the neighborhood eventually joined an existing road service area. She noted, "Some people in our borough are extraordinarily independent-minded and they may have lived on roads like this for 20, 30, 40 years and they think it's just fine, and so we leave them alone." 8:13:54 AM REPRESENTATIVE NEUMAN inquired as to how many people this would impact. He also inquired as to any negative impacts of this. MS. WILLIAMS explained that if HB 121 passes, in an unusual circumstance in which there are no active commissioners and no tax approved by the voters in the road service area, [the borough] will give the area one last chance to consolidate with another road service area or to tax itself. If one of those options isn't chosen, the borough would dissolve the [road service area]. At the moment, the borough can't dissolve a [road service area] and thus the liability is that [of the borough]. 8:14:50 AM REPRESENTATIVE LEDOUX asked if HB 121 could force one road service area that wants to continue as it is to consolidate with another road service area that wants to tax itself in order to improve its roads. MS. WILLIAMS opined that the joining of two road service areas should be undertaken carefully. 8:15:31 AM RANDY FRANK, Chair, Road Service Area Committee, Fairbanks North Star Borough Assembly, confirmed that such would be a possibility were HB 121 passed. However, part of another piece of legislation would change the way in which a road service area can tax itself, which alleviates that problem because it allows for differential taxation between different parts of a service area. 8:16:58 AM CO-CHAIR OLSON asked if this is being handled as a local improvement district (LID) with the borough participating or is it 100 percent from the road service area. MS. WILLIAMS explained that the road commissioners work with neighbors and, through an election, independently decide the mill rate. The road [service area] prepares the budget, the assembly approves it, and the road service area works with borough purchasing to select a contractor(s) and oversee what is done. CO-CHAIR OLSON surmised then that the borough provides no matching funds. MS. WILLIAMS confirmed that the borough provides no matching funds, but merely provides administrative assistance. 8:17:59 AM RYNNIEVA MOSS, Chair, Road Commission, related that the road commission with which she is affiliated works quite well. This legislation was introduced because, by statute, the legislature placed a liability on boroughs for road service areas. The language in HB 121, she highlighted, was written to protect those service areas doing their job correctly. 8:19:53 AM REPRESENTATIVE CISSNA expressed concern with the language at the end of [Section 1]. She related her understanding that the aforementioned language seems to specify that it takes "a majority of the people who live in both the area that is taking in the service area and the people that live in the service area." "So, in other words, you can be forced, if in fact you happen to be in the minority of the service area, but not otherwise," she surmised. MS. MOSS suggested that Representative Cissna is confusing HB 121 with HB 133 regarding the Local Boundary Commission. Ms. Moss clarified that HB 121 deals with road service areas that could be dissolved by the borough assembly without an election when a road service area isn't functioning properly. REPRESENTATIVE CISSNA directed attention to the language "voters reside". MS. MOSS explained that the new language, the underlined and bold language, specifies that such an election doesn't have to occur if the road service area isn't functioning. 8:22:13 AM KEVIN RITCHIE, Executive Director, Alaska Municipal League (AML), echoed earlier comments that municipalities and assemblies must address the road system as a whole. This legislation provides the [borough the ability to take action] if there is a problem within the service area that causes a problem for the entire road system. 8:24:16 AM REPRESENTATIVE LEDOUX surmised then that if there is a dysfunctional service area that's abolished, the borough uses taxes from throughout the entire borough to fix the problem in the road service area. MR. RITCHIE deferred to Ms. Broker. 8:24:57 AM MS. BROKER clarified that the borough is prohibited from spending areawide and nonareawide tax dollars on road service areas. Therefore, if a road service area is dissolved, it would join the 300 miles of area in the Fairbanks North Star Borough that aren't maintained or maintained only by private citizens. 8:25:21 AM REPRESENTATIVE LEDOUX said she didn't understand what HB 121 does to take anyone off the hook for liability when it comes to inadequately maintained roads. MS. BROKER reiterated that the borough has the liability because the service area exists. The borough, through the road service area, has undertaken the duty to maintain and construct roads in the road service area. Once that road service area dissolves, that duty also dissolves because the [Fairbanks North Star Borough] doesn't have areawide or nonareawide road powers. 8:26:05 AM MR. FRANK added that another part of the problem is that some property within road service areas don't use the road service area road, but are taxed by the road service area. The aforementioned people would like to [not be included in those] road service areas because they don't use the road service area roads. In order to alleviate that concern, there must be a positive vote by the existing road service area and the property owner. Mr. Frank predicted that the road service area wouldn't allow such because the road service area needs all the money it can obtain. Therefore, he said he would like the ability for those property owners to be released from the road service area by an action of the assembly. 8:27:31 AM MR. RITCHIE suggested that it's also important to be in the hands of the assembly when a small road service area can't afford to maintain itself and may need to consolidate. Sometimes the assembly, acting with [specified] criteria, can serve the good of the entire community. 8:28:50 AM CO-CHAIR OLSON pointed out that [the committee packet should include] two letters of support from the mayor and the presiding officer of the Fairbanks North Star Borough. 8:29:17 AM REPRESENTATIVE CISSNA inquired as to the latitude of the road service area to exist, if it so wishes, when the larger community doesn't want it to exist. MS. BROKER explained that if a road service area is taxing itself and functioning as it should, the borough assembly has no ability to effect that road service area. The borough assembly can only effect or dissolve a road service area if the road service area is not performing its services and duties, which passes on the liability to all borough taxpayers. 8:30:54 AM MS. BROKER, in response to Representative Cissna, clarified that when a road service area votes to become such it undertakes the duty and responsibility of constructing and maintaining roads in that road service area. The aforementioned has to be performed in a safe manner, she commented. REPRESENTATIVE CISSNA inquired as to who decides the standard. MS. BROKER opined that the standard is negligence. The intent is to only protect the liability of the borough, she specified. 8:32:56 AM REPRESENTATIVE CISSNA asked if HB 121 leaves recourse for the road service area at odds with that interpretation. Can a road service area sue in an attempt to resolve the conflict, she asked. MS. BROKER reminded the committee that this will be an action by ordinance by the borough assembly. Therefore, there would be a public hearing and work session, which would provide many opportunities for residents to testify. 8:34:05 AM REPRESENTATIVE NEUMAN asked if the borough has any existing taxing mechanism to address this. Representative Neuman stated that his concern is in regard to public safety and the ability for fire trucks and other emergency vehicles to traverse over the roads that aren't maintained. MS. WILLIAMS highlighted that under state statutes and voter- approved initiatives [the Fairbanks North Star Borough] has a tax cap. Therefore, if those in a road service area choose not to tax themselves, the borough is prohibited from providing funds from other sources to fund the necessary maintenance. She explained that in order to eliminate the [borough's] liability, the borough needs a mechanism by which it can dissolve the road service area. 8:35:34 AM CO-CHAIR OLSON inquired as to how many of the 100 road service areas are currently functioning. MS. WILLIAMS specified that [in the Fairbanks North Star Borough] there are 107 road service areas, of which two are without commissioners. She noted that at an upcoming election two road service areas will be voting on whether to implement a tax. CO-CHAIR OLSON surmised that there isn't a significant number of [problem road service areas]. MS. WILLIAMS agreed, but emphasized that it's a real problem. She related that it would take only one accident in which the borough is the "deep pocket" with an outstanding liability. 8:36:25 AM CO-CHAIR THOMAS inquired as to why the road service areas have become defunct. MS. WILLIAMS reminded the committee that the road service commissioners are volunteers. In practice, someone volunteers and ends up doing [road maintenance] for 10-20 years. After a while, those volunteers burn out or move away and no one else volunteers. MR. FRANK interjected that most of these road service areas were formed in early 1980s when a lot of state money was available. Now that the state funding isn't available, the [residents of the] road service areas may choose not to tax themselves. He noted that Fairbanks has an anti-tax history. 8:38:01 AM CO-CHAIR THOMAS related that he comes from an area that was afraid to tax itself for a fire service area, until a few houses burned and the City of Haines refused to send firemen to a service area without insurance and protection for the firemen. Co-Chair Thomas stated that he supported service areas. MR. FRANK agreed that service areas are a good tool for people who want to help themselves. 8:39:02 AM REPRESENTATIVE LEDOUX said she had no problem with the abolition of a service area not acting as such. However, she expressed concern that HB 121 allows for consolidation of two service areas. If one service area wants to function while another doesn't, she said she wouldn't force the two to consolidate. MR. FRANK informed the committee that in the past, the assembly had the ability to consolidate service areas no matter the desire of the service area. However, that was problematic because of money from the existing service area being spent on the annexed service area, which is a classic case of income redistribution. The aforementioned was addressed with a law allowing differential taxation levels. 8:42:16 AM MR. FRANK, in response to Representative LeDoux, clarified that the aforementioned law passed a few years ago. REPRESENTATIVE LEDOUX posed a situation in which one road service district that taxed itself and was spending prudently was consolidated with a road service that didn't. In the aforementioned situation, the money could go for projects in the service area that didn't [tax itself or spend prudently]. MR. FRANK said that he didn't believe so and highlighted the ability for there to be differential taxation. MS. BROKER maintained that those service areas that don't want to be such won't be consolidated. However, those small service areas without a tax base still wanting to be a service area will probably consolidate in order to share expenses. She reminded the committee that the commissioners of the service areas are making the decisions regarding where to spend the money. 8:45:43 AM REPRESENTATIVE CISSNA expressed interest in knowing how service areas work in communities besides Fairbanks. Representative Cissna said that she wouldn't want to pass a law that effected one community in a way that took away options in other communities. 8:46:47 AM CO-CHAIR OLSON related that his district consolidated into one boroughwide road service area, which has seemed to work well. 8:47:01 AM MR. RITCHIE informed the committee that at AML's subcommittee of its legislative committee meeting, a number of communities were represented. He related that the road service areas don't impact all boroughs the same. The two boroughs that are most dependent on road service areas are the Fairbanks and Mat-Su boroughs. With regard to whether this legislation could be used to treat people inequitably, Mr. Ritchie related the need to trust in the local governing authority. However, at the moment, the boroughs' hands are tied, and therefore HB 121 allows the assembly to step in, under certain cases, for the good of the community. 8:50:40 AM REPRESENTATIVE NEUMAN asked if the borough can [stop providing service] to those road service areas from which it feels it isn't receiving enough money. MR. RITCHIE reiterated earlier testimony that currently the only way road powers can be executed in Fairbanks is through road service areas. In the case in which a road service area is at the end of a road and the road service area can't afford to tax itself, the road service area might look to another with which to consolidate in order to reduce costs to the extent it could afford to provide services. In response to Representative Neuman, Mr. Ritchie said he didn't believe such an area could be treated unfairly. MS. MOSS clarified that HB 121 is about a liability, involving service areas, that the state has placed on boroughs. If those in a service area won't tax themselves and don't keep the roads safe, the borough is held liable for that road service area's negligence. The legislation specifies that if a road service area is negligent, the borough can come in and dissolve the service area in order to dissolve the liability. 8:53:46 AM REPRESENTATIVE LEDOUX asked whether HB 121 would be as effective if the legislation said the borough "may dissolve" the service area without "consolidation" language. MS. MOSS related her belief that the consolidation language is desired because there are many small service areas that could function properly when receiving state money. Therefore, without the state funds consolidation may ease the pain. REPRESENTATIVE LEDOUX surmised "I guess it would alleviate the pain because somebody in some other service area that gets consolidated with it would be having to pay it." She asked if that would be correct. MS. MOSS answered that she believes it to be more of a case of consolidating administration. 8:55:20 AM MR. FRANK added that some service areas [in the Fairbanks North Star Borough] are very small, and therefore consolidation would address a portion of the borough fee. Furthermore, consolidation would allow [a service area] the ability to go out to bid in order to obtain a better contract price for the work on the roads in the area. 8:56:52 AM CO-CHAIR OLSON announced that HB 121 would be held over.
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