Legislature(2021 - 2022)BELTZ 105 (TSBldg)

03/25/2021 01:30 PM TRANSPORTATION

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Heard & Held
-- Testimony <Invitation Only> --
Heard & Held
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**Streamed live on AKL.tv**
             SB 105-ROAD SERVICE AREA CONSOLIDATION                                                                         
2:11:40 PM                                                                                                                    
CHAIR MYERS  announced the consideration  of SENATE BILL  NO. 105                                                               
"An Act relating to road service area consolidation."                                                                           
CHAIR MYERS  stated that  SB 105 was  requested by  the Fairbanks                                                               
North Star Borough.                                                                                                             
2:12:11 PM                                                                                                                    
MICHAELLA  ANDERSON, Staff,  Senator Robert  Myers, Alaska  State                                                               
Legislature,   Juneau,  Alaska,   on  behalf   of  the   sponsor,                                                               
paraphrased the sponsor statement:                                                                                              
     Senate  Bill 105  provides second  class boroughs  with                                                                    
     the  ability to  consolidate two  or more  road service                                                                    
     areas  (RSAs) if  the  boards  representing those  RSAs                                                                    
     request consolidation  and no new parcels  are added to                                                                    
     the single new service area.                                                                                               
     A   road  service   area  is   a  taxing   jurisdiction                                                                    
     established  at  the request  of  the  voters within  a                                                                    
     geographical  area to  provide certain  services within                                                                    
     their   specific    area.   Voters    establish   their                                                                    
     boundaries,  the  maximum  mill levy  imposed  on  real                                                                    
     property for the purpose  of road maintenance services,                                                                    
     and  a   board  that  determines  the   level  of  road                                                                    
     maintenance   services  and   directs  contractors   to                                                                    
     perform  these  services.  Members  of  the  board  are                                                                    
     nominated  by the  mayor and  confirmed by  the borough                                                                    
     Beginning  in 1972,  and in  the  years that  followed,                                                                    
     RSAs  benefited from  state shared  revenues (SSR)  for                                                                    
     local   road   construction   and   improvements.   SSR                                                                    
     reductions  through the  1990s  prompted  RSAs to  hold                                                                    
     elections to  establish tax revenue caps  to supplement                                                                    
     the  reduced state  funding for  local roads.  Existing                                                                    
     RSAs  also  resisted  annexations of  new  parcels  and                                                                    
     roads to  their service areas leading  to the formation                                                                    
     of new RSAs.  Of the five second class  boroughs in the                                                                    
     State  of Alaska  that  have  RSAs (Fairbanks,  Mat-Su,                                                                    
     Kenai, Kodiak and Ketchikan),  the Fairbanks North Star                                                                    
     Borough has,  by far,  the most RSAs  at 103.  The next                                                                    
     largest borough by RSAs is the Mat-Su Borough with 16.                                                                     
2:13:01 PM                                                                                                                    
MS.  ANDERSON said  municipalities currently  do not  receive any                                                               
state-shared  revenues   for  road  service  areas   (RSAs).  She                                                               
explained  that SB  105 would  address an  issue facing  the vast                                                               
majority of  RSAs in the  Fairbanks North Star Borough  (FNSB) by                                                               
adding a  new exception to  allow timely consolidation of  two or                                                               
more RSAs  without a vote  by their residents. Instead,  it would                                                               
allow the affected RSA boards to  agree to the changes as long as                                                               
no new parcels were added or removed.                                                                                           
MS. ANDERSON continued to paraphrase the sponsor statement:                                                                     
     While   greater  efficiencies   and   lower  costs   in                                                                    
     maintaining  local  roads  could  be  achieved  through                                                                    
     consolidating  some  RSAs,  borough assemblies  do  not                                                                    
     have  the  power  to  adjust  service  area  boundaries                                                                    
     without   voter   approval.  Separate   elections   are                                                                    
     required   for   each   of    the   RSAs   subject   to                                                                    
     consolidation,  and these  elections typically  fail to                                                                    
     turn-out  voters.  Consolidation  efforts led  by  RSAs                                                                    
     themselves,  as proposed  under SB  105, would  lead to                                                                    
     greater efficiency and  reduced costs through economies                                                                    
     of scale  and less  contract administration  by borough                                                                    
MS.  ANDERSON said  this  bill  does not  allow  FNSB's mayor  or                                                               
assembly  to  consolidate  RSAs  without  RSA  boards  requesting                                                               
2:14:27 PM                                                                                                                    
MICHAEL  BREDLIE, Rural  Services Manager,  Fairbanks North  Star                                                               
Borough, Fairbanks,  Alaska, spoke  in favor of  SB 105.  He said                                                               
his  division manages  the road  service areas  (RSAs) throughout                                                               
the  Fairbanks  North Star  Borough  (FNSB).  As a  second  class                                                               
borough,  FNSB receives  its  road  construction and  maintenance                                                               
powers  through   service  areas.  Currently,  FNSB's   103  RSAs                                                               
maintain a total of 498 road miles.                                                                                             
He  provided  a  brief  history  of  RSAs  in  the  borough.  The                                                               
borough's first RSA was established in  1965 and a second one was                                                               
added in 1969.  Between 1973 and 1979, 20  RSAs were established.                                                               
All but  two of  the 67  RSAs were  established between  1981 and                                                               
1986. In the 1990s, 13 RSAs  were established, with the final one                                                               
formed in 2002.                                                                                                                 
MR.  BREDLIE  stated that  starting  in  1972, the  state  shared                                                               
revenue for local road construction  and improvements. During the                                                               
mid-1970s, the RSAs received $2,500  per mile for maintenance and                                                               
operations (M&O).  This became  the majority,  if not  the entire                                                               
revenue, received  by the  service areas. By  the 1990s,  the M&O                                                               
was reduced to $1,400 per  mile, which continued to decline until                                                               
2003 or 2004, when state revenue  sharing ended. At the time, the                                                               
reduction in state  revenue sharing prompted a number  of RSAs to                                                               
hold elections  to establish revenue  tax caps to  supplement and                                                               
replace their state revenue-sharing funds.  From 1991 to 1997, 74                                                               
RSAs instituted revenue tax caps.                                                                                               
MR.  BREDLIE  related  his  understanding  that  RSA  commissions                                                               
resisted annexing new  parcels and roads to  their service areas.                                                               
In  response,  the administration  decided  to  form new  service                                                               
areas. This  increase in  RSAs appears  to correspond  with state                                                               
shared revenue that FNSB received from 1972 to 2004, he said.                                                                   
He offered  his belief  that no  other borough  in the  state has                                                               
this  issue. Alaska  has  five second  class  boroughs with  road                                                               
service area powers. FNSB has  103 RSAs, the Mat-Su Borough (MSB)                                                               
has 16,  Ketchikan Gateway  Borough (KGB)  has 10,  Kodiak Island                                                               
Borough (KIB) has four and  the Kenai Peninsula Borough (KPB) has                                                               
one large RSA split into five regions.                                                                                          
MR. BREDLIE  explained that FNBS's RSA  consolidation process was                                                               
difficult. First,  elections are  required to consolidate  two or                                                               
more  RSAs  if the  voters  reside  within the  existing  service                                                               
areas.  Next, the  borough  must hold  open  house meetings,  the                                                               
assembly  must approve  the election  ordinance to  authorize the                                                               
RSA  elections  for  residents in  the  service  areas.  Finally,                                                               
holding an election  to consolidate each service  area is costly,                                                               
he  said.   Currently,  FNSB  has  13   contractors  who  perform                                                               
maintenance in  its 103 RSAs.  Some contractors maintain  one RSA                                                               
and others maintain from 10 to 20 service areas.                                                                                
2:18:40 PM                                                                                                                    
MR.  BREDLIE explained  that  consolidating  service areas  would                                                               
provide greater  efficiencies and better prices  for contractors,                                                               
which could result  in less contract administration.  In terms of                                                               
staff,  consolidating RSAs  could reduce  contract administration                                                               
costs and increase staff's presence  to assess road conditions in                                                               
RSAs. With  respect to RSA commissions,  consolidating RSAs would                                                               
reduce  the  number of  seats.  Currently,  266  of the  426  RSA                                                               
commissioner  seats are  filled,  which is  a 38-percent  vacancy                                                               
rate, he said.                                                                                                                  
2:19:34 PM                                                                                                                    
CHAIR   MYERS  asked   how  much   money  FNSB   would  save   by                                                               
consolidating RSAs.                                                                                                             
MR.  BREDLIE responded  that he  was unsure  but FNSB  would save                                                               
contractor and administrative costs.                                                                                            
2:20:12 PM                                                                                                                    
SENATOR MICCICHE  asked what problems FNSB  encountered by adding                                                               
RSA consolidations to the ballot for municipal elections.                                                                       
MR.  BREDLIE  answered  that  each RSA  election  would  be  held                                                               
outside  the municipal  election  because voters  are located  in                                                               
different  areas and  separate  taxing  jurisdictions. He  stated                                                               
that FNSB's Clerk's  Office incurs substantial time  and costs to                                                               
administer elections given the large number of RSAs.                                                                            
2:21:34 PM                                                                                                                    
SENATOR  SHOWER  recalled  that a  similar  bill  was  previously                                                               
introduced.  He asked  whether FNSB  asked its  residents whether                                                               
they wanted to consolidate RSAs.                                                                                                
MR.  BREDLIE answered  no. He  acknowledged  that former  Senator                                                               
Coghill introduced a bill during  the last legislature but it did                                                               
not pass.                                                                                                                       
SENATOR  SHOWER  asked whether  the  purpose  of  SB 105  was  to                                                               
provide  FNSB  with a  method  to  consolidate its  RSAs  without                                                               
obtaining sufficient support from residents.                                                                                    
MR.  BREDLIE responded  that SB  105  would give  the borough  an                                                               
additional  tool to  join two  or more  service areas  without an                                                               
election when the  road commissions agree. He  remarked that FNSB                                                               
would  still  reach out  to  residents;  that the  process  still                                                               
requires approval by RSA commissions and the assembly.                                                                          
2:24:36 PM                                                                                                                    
SENATOR  SHOWER asked  who currently  appoints the  commissioners                                                               
and  whether  this  process  would   give  the  mayor  additional                                                               
MR. BREDLIE  responded that the mayor  appoints commissioners and                                                               
the assembly confirms them.                                                                                                     
SENATOR SHOWER  said it  seems as though  this process  will give                                                               
the mayor additional power.                                                                                                     
2:25:28 PM                                                                                                                    
SENATOR BISHOP asked whether FNSB's Assembly supports SB 105.                                                                   
MR. BREDLIE responded  that the request for SB  105 was initiated                                                               
by FNSB's  legislative committee, which is  comprised of assembly                                                               
members, the  mayor, and legal representatives.  He surmised that                                                               
assembly  members support  SB  105 since  the  assembly passed  a                                                               
SENATOR BISHOP asked for a copy of the resolution.                                                                              
MR. BREDLIE agreed to provide it.                                                                                               
2:26:32 PM                                                                                                                    
SENATOR  MICCICHE stated  that  RSA members  are  elected in  the                                                               
Kenai   Peninsula  Borough   (KPB).  KPB   regularly  experiences                                                               
problems with vacancies. He surmised  that people would prefer to                                                               
have  elected  officials make  the  final  decisions although  he                                                               
agreed  that some  power  would be  consolidated.  He offered  to                                                               
consult with KPB on whether it supports the concept.                                                                            
2:27:42 PM                                                                                                                    
CHAIR MYERS asked  if FNSB passed an ordinance  earlier this year                                                               
for all road commissioner terms to expire in June 2021.                                                                         
MR.  BREDLIE responded  that in  2019, an  ordinance changed  the                                                               
commissioner's  terms  from  two  to three  years  to  allow  for                                                               
staggered   terms.  In   the  meantime,   FNSB   will  send   out                                                               
applications to all  commissioners and draw to  decide which ones                                                               
are one, two or three year terms, he said.                                                                                      
CHAIR MYERS related  his understanding that if this  bill were to                                                               
pass, every commissioner  would be appointed by  the mayor. Given                                                               
that the  mayor would like  to consolidate RSAs, the  mayor could                                                               
impose a litmus test for applicants.                                                                                            
MR. BREDLIE  explained that half  of the commissions  expire each                                                               
year.  He related  that prefilled  applications are  sent to  all                                                               
commissioners  by April.  Once the  applications are  signed, the                                                               
applications are forwarded  to the mayor and to  the assembly. He                                                               
said he did  not envision that this process would  change but the                                                               
terms will be staggered.                                                                                                        
2:31:00 PM                                                                                                                    
JILL DOLAN,  Attorney, Fairbanks  North Star  Borough, Fairbanks,                                                               
Alaska,  in response  to the  question  of whether  SB 105  would                                                               
ultimately  give  more power  to  the  mayor, said  any  boundary                                                               
change  must  be made  by  ordinance.  Although this  bill  would                                                               
require  that  service  area   boards  make  recommendations  and                                                               
request to consolidate  RSAs, the ultimate decision  will be made                                                               
by the elected officials.                                                                                                       
2:31:51 PM                                                                                                                    
MS. DOLAN  explained that  the reason  FNSB cannot  run elections                                                               
for service areas with the  regular municipal election is because                                                               
the  precinct  boundaries do  not  align  with the  service  area                                                               
boundaries.  The borough  must  determine  voter eligibility  for                                                               
each  service  area.  She  explained  that  to  consolidate  RSAs                                                               
requires elections be held in  each service areas being combined,                                                               
which means  that ballots  are separately  accounted for  in each                                                               
RSA election.                                                                                                                   
2:32:25 PM                                                                                                                    
SENATOR  SHOWER said  the 2020  election  included local,  state,                                                               
federal elections  in Alaska. Thus,  voters were  handed multiple                                                               
ballots. He was  unsure why the RSA elections could  not be given                                                               
on the same day as municipal elections.                                                                                         
MS. DOLAN  responded that municipal and  state election districts                                                               
share  the  same precinct  boundaries.  She  said FNSB's  Clerk's                                                               
Office  runs  the elections.  Voters  request  their ballots  for                                                               
service area  elections in  person. The  clerk must  determine in                                                               
which  RSA area  the person  resides since  the ballots  for each                                                               
service  area must  be counted  separately.  The municipal  clerk                                                               
advised that RSA elections should  not be held at concurrent with                                                               
municipal elections, she said.                                                                                                  
2:34:37 PM                                                                                                                    
SENATOR MICCICHE  asked how many  households were located  in the                                                               
largest service area.                                                                                                           
MR.  BREDLIE answered  that the  College RSA  maintains about  20                                                               
miles of road serving over 1,000 households.                                                                                    
[SB 105 was held in committee.]                                                                                                 

Document Name Date/Time Subjects
SB 103 Sponsor Statement Version A 3.9.2021.pdf STRA 3/25/2021 1:30:00 PM
SB 103
SB 103 Sectional Analysis 3.9.2021.pdf STRA 3/25/2021 1:30:00 PM
SB 103
SB 103 Fiscal Note DOTPF.PDF STRA 3/25/2021 1:30:00 PM
SB 103
SB105 Sponsor Statement 3.24.21.pdf STRA 3/25/2021 1:30:00 PM
SB 105
SB105 Sectional Analysis Version A 3.24.21.pdf STRA 3/25/2021 1:30:00 PM
SB 105
SB105 Fiscal Note DCCED.pdf STRA 3/25/2021 1:30:00 PM
SB 105
FNSB Road Service Area Map.pdf STRA 3/25/2021 1:30:00 PM
SB 105
FNSB support for SB105_3.24.21.pdf STRA 3/25/2021 1:30:00 PM
SB 105