Legislature(2021 - 2022)BELTZ 105 (TSBldg)

03/25/2021 01:30 PM Senate TRANSPORTATION

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                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         March 25, 2021                                                                                         
                           1:32 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Robert Myers, Chair                                                                                                     
Senator Mike Shower, Vice Chair                                                                                                 
Senator Click Bishop                                                                                                            
Senator Peter Micciche                                                                                                          
Senator Jesse Kiehl                                                                                                             
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 103                                                                                                             
"An Act repealing the Alaska Marine Transportation Advisory                                                                     
Board; establishing the Alaska Marine Highway System Operation                                                                  
and Planning Board; and providing for an effective date."                                                                       
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 105                                                                                                             
"An Act relating to road service area consolidation."                                                                           
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 103                                                                                                                  
SHORT TITLE: AMHS OPERATION & PLANNING BOARD                                                                                    
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
03/10/21       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/21       (S)       TRA                                                                                                    
03/25/21       (S)       TRA AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
BILL: SB 105                                                                                                                  
SHORT TITLE: ROAD SERVICE AREA CONSOLIDATION                                                                                    
SPONSOR(s): MYERS                                                                                                               
03/10/21       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/21       (S)       TRA, CRA                                                                                               
03/25/21       (S)       TRA AT 1:30 PM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
ANDY MILLS, Special Assistant to the Commissioner                                                                               
Department of Transportation and Public Facilities (DOTPF)                                                                      
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:  Presented   SB  103   on  behalf   of  the                                                             
ROB CARPENTER, Deputy Commissioner of Surface Transportation                                                                    
Department of Transportation and Public Facilities (DOTPF)                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions  on SB  103 on  behalf of                                                             
the administration.                                                                                                             
MICHAELLA ANDERSON, Staff                                                                                                       
Senator Robert Myers                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:  On behalf  of  the  sponsor, presented  the                                                             
sponsor statement and sectional analysis for SB 105.                                                                            
MICHAEL BREDLIE, Rural Services Manager                                                                                         
Fairbanks North Star Borough (FNSB)                                                                                             
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  on SB  105 on  behalf of                                                             
the borough administration.                                                                                                     
JILL DOLAN, Attorney                                                                                                            
Fairbanks North Star Borough                                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Answered questions  on SB  105 on  behalf of                                                             
the Fairbanks North Star Borough.                                                                                               
ACTION NARRATIVE                                                                                                              
1:32:50 PM                                                                                                                    
CHAIR  ROBERT MYERS  called  the  Senate Transportation  Standing                                                             
Committee meeting  to order at 1:32  p.m. Present at the  call to                                                               
order  were Senators  Kiehl, Shower,  and  Chair Myers.  Senators                                                               
Micciche and Bishop arrived as the meeting was in progress.                                                                     
             SB 103-AMHS OPERATION & PLANNING BOARD                                                                         
1:33:25 PM                                                                                                                    
CHAIR MYERS  announced the consideration  of SENATE BILL  NO. 103                                                               
"An  Act  repealing  the Alaska  Marine  Transportation  Advisory                                                               
Board; establishing  the Alaska  Marine Highway  System Operation                                                               
and Planning Board; and providing for an effective date."                                                                       
1:34:14 PM                                                                                                                    
ANDY MILLS, Special Assistant to  the Commissioner, Department of                                                               
Transportation  and Public  Facilities  (DOTPF), Juneau,  Alaska,                                                               
stated that  SB 103 would  restructure the Alaska  Marine Highway                                                               
Advisory  Board  (MTAB)  based  on  recommendations  from  AMHS's                                                               
Reshaping Work  Group. This  group was  formed by  the governor's                                                               
Administrative Order  (AO) 313.  The group  held 29  meetings and                                                               
produced an October  2020 report that made  29 recommendations to                                                               
the governor, including one to restructure the board.                                                                           
He explained  that the Alaska  Marine Highway System  Operation &                                                               
Planning  Board (OPB)  would  be better  suited  to address  AMHS                                                               
issues than MTAB  because it would have  additional resources and                                                               
1:35:24 PM                                                                                                                    
SENATOR MICCICHE joined the meeting.                                                                                            
1:35:32 PM                                                                                                                    
MR.  MILLS referred  to page  14 of  AMHS's Reshaping  Work Group                                                               
report.  He  read,  "The  current   MTAB  is  formed  of  capable                                                               
individuals but not structured to  effectively challenge and help                                                               
the Alaska Marine Highway System  with the large marine operation                                                               
planning  and  execution  issues  that it  confronts."  The  work                                                               
group's recommendation  was to produce  a board that  could focus                                                               
on operations and planning; one  that would be well-grounded with                                                               
outside advice focused on business  and financial practices. This                                                               
board would change member credential and reporting requirements.                                                                
1:36:33 PM                                                                                                                    
MR. MILLS paraphrased the sectional analysis for SB 103:                                                                        
     Section 1   AS 19.65.011  is amended to change the name                                                                    
     of  the  Alaska  Marine Transportation  Advisory  Board                                                                    
     (MTAB) to  the Alaska  Marine Highway  System Operation                                                                    
     and  Planning   Board.  A  short-term  plan   (for  the                                                                    
     development  and  improvement   of  the  Alaska  marine                                                                    
     highway  system)  is  also added  to  the  department's                                                                    
     current statutory  responsibility for development  of a                                                                    
     long-term plan.                                                                                                            
1:37:42 PM                                                                                                                    
     Section  2    AS  19.65  is  amended  by adding  a  new                                                                    
     subsection to  establish the new Alaska  Marine Highway                                                                    
     System Operation and Planning  Board in subsection 210;                                                                    
     outline Board  membership and terms in  subsection 220;                                                                    
     speak  to  officers and  a  quorum  in subsection  230;                                                                    
     stipulated  meeting rules  in  subsection 240;  address                                                                    
     per  diem  and  expenses  in  subsection  250;  address                                                                    
     record inspection/copying in  subsection 260; establish                                                                    
     the Department  of Law as the  Boards' legal assistance                                                                    
     in subsection 270; document  the Boards' powers, duties                                                                    
     and  functions in  subsection 280;  establish that  the                                                                    
     Department of  Transportation & Public  Facilities will                                                                    
     provide staff  support to the Board  in subsection 290;                                                                    
     and define  the word 'Board'  for purposes of  AS 19.65                                                                    
     in subsection 295.                                                                                                         
1:40:37 PM                                                                                                                    
     Section  3    repeals  existing subsections  110    195                                                                    
     within chapter 65 which speak to the old MTAB.                                                                             
     Section 4    adds a  new section to the  uncodified law                                                                    
     of  the State  of Alaska  to establish  staggered terms                                                                    
     for  Board  members  and   identify  that  former  MTAB                                                                    
     members are  not prohibited  from being  reappointed to                                                                    
     the  new Alaska  Marine  Highway  System Operation  and                                                                    
     Planning Board.                                                                                                            
     Section 5  - adds a  new section to the  uncodified law                                                                    
     of  the State  of  Alaska to  establish  a deadline  of                                                                    
     September 1, 2021, for the  Board's initial reports, as                                                                    
     required  under  Section  2 of  the  proposal,  to  the                                                                    
     Section 6 - establishes an immediate effective date.                                                                       
1:42:01 PM                                                                                                                    
SENATOR BISHOP joined the meeting.                                                                                              
1:42:07 PM                                                                                                                    
SENATOR MICCICHE stated that an  ex officio member from each body                                                               
previously served on MTAB. He  asked whether including ex officio                                                               
legislature members was  considered or for a  specific reason not                                                               
to include them.                                                                                                                
MR.  MILLS  explained  that  the work  group  did  not  recommend                                                               
members from  the legislature serve  on the board. He  was unsure                                                               
why  but  he  thought  part  of   the  reason  was  to  pivot  to                                                               
restructure and  operate the Alaska Marine  Highway System (AMHS)                                                               
more  as   a  business.   He  suggested   that  the   work  group                                                               
acknowledged that MTAB required a different skillset.                                                                           
1:43:33 PM                                                                                                                    
SENATOR  SHOWER stated  his intention  to amend  the bill  to add                                                               
legislative members  to the Operating  and Planning  Board (OPB).                                                               
He expressed  frustration at missteps  the AMHS  previously made,                                                               
including purchasing  Alaska [fast ferries] that  were later sold                                                               
at  a  loss,  partly  because  offramps  were  not  appropriately                                                               
designed.  Currently, the  legislature  subsidizes a  significant                                                               
portion  of  the ferry  system  costs.  He  wondered if  the  new                                                               
management  structure   would  fail  because  the   board  lacked                                                               
sufficient  authority  and  the   management  structure  did  not                                                               
include a chief executive officer.  He expressed concern that the                                                               
state continues  to spend  money on  an unsustainable  system. He                                                               
recalled  that   the  [Inter-Island  Ferry  serving   Hollis  and                                                               
Ketchikan]  consisted  of  70  percent  private  funding  and  30                                                               
percent state funding.  He said that system uses a  hub and spoke                                                               
model with smaller vessels. He  asked what actions OPB could take                                                               
besides studying issues and compiling  a report. He said it seems                                                               
as though the Department of  Transportation and Public Facilities                                                               
(DOTPF) would still  run the system, so he wasn't  sure OPB would                                                               
MR. MILLS  pointed out that  Senator Shower mentioned  the Alaska                                                               
Class ferries; however, the fast  ferries were the ones purchased                                                               
and sold.  He agreed  this raises  a fundamental  question. OPB's                                                               
effort was  designed with  board member  expertise to  inform its                                                               
decisions  rather than  for AMHS's  competent operational  staff,                                                               
busy with the day-to-day system  operations, trying to squeeze in                                                               
time to analyze meaningful changes  to the system. He deferred to                                                               
the deputy commissioner to speak to the board's authority.                                                                      
1:47:20 PM                                                                                                                    
ROB  CARPENTER, Deputy  Commissioner  of Surface  Transportation,                                                               
Department  of  Transportation  and  Public  Facilities  (DOTPF),                                                               
Juneau,  Alaska, on  behalf of  the administration,  acknowledged                                                               
that  the work  group struggled  to identify  ways to  accomplish                                                               
meaningful changes, barring  going to a corporate  model, such as                                                               
the ones  used by  the Alaska Permanent  Fund Corporation  or the                                                               
Alaska  Railroad  Corporation.  He   envisioned  that  as  Deputy                                                               
Commissioner, he  would serve  as DOTPF's  designee, acting  as a                                                               
liaison  producing  documents  and  providing  direction  to  the                                                               
board. He compared that to  an advisory board providing input but                                                               
not integrating  or working  with the agency  on its  mission. He                                                               
highlighted  the  benefits of  keeping  AMHS  within the  agency,                                                               
including  allowing the  department  to  address the  multi-modal                                                               
aspects  of  Alaska's  transportation  system.  If  AMHS  were  a                                                               
separate  corporation,  it  would   not  have  the  advantage  of                                                               
conducting planning across all modes  and all regions. He offered                                                               
his  belief  that having  DOTPF  staff  serve  on the  board  was                                                               
instrumental  in giving  the board  power and  authority. Second,                                                               
besides the  board members with marine  experience, other members                                                               
will bring business experience to  the board. These members could                                                               
propose  business decisions  to  create  efficiencies that  could                                                               
make  AMHS   more  effective  and   able  to   achieve  long-term                                                               
sustainability.  He hoped  that OPB  would have  sufficient power                                                               
and authority to be effective.                                                                                                  
1:50:03 PM                                                                                                                    
SENATOR  SHOWER highlighted  that two  ports are  located in  the                                                               
Mat-Su district. Although he supports  the ferry system, which is                                                               
necessary  because of  Alaska's  size, he  was  unsure what  that                                                               
system  should  ultimately  resemble.  He opined  that  AMHS  was                                                               
failing so another approach could achieve better results.                                                                       
1:52:16 PM                                                                                                                    
SENATOR  KIEHL agreed  with Senator  Shower that  the board  must                                                               
effectively  challenge and  help the  department. He  pointed out                                                               
the similarities between  MTAB and the new OPB  established by SB
103. SB  103 would set  up OPB as  an 11-member board.  Just like                                                               
MTAB,  OPB members  will  serve at  the  governor's pleasure,  be                                                               
staffed  by   DOTPF  and  advise  DOTPF's   deputy  commissioner.                                                               
However, OPB  ultimately will  not make  any decisions.  While he                                                               
appreciated the  new board members' expertise,  nothing currently                                                               
prevents the  governor from appointing people  with expertise. He                                                               
asked how  the department could  better integrate this  group and                                                               
deeply involve OPB  in long-term planning. He asked  if OPB would                                                               
have  a   substantive  role   in  the   Statewide  Transportation                                                               
Improvement  Program  (STIP)  process  so the  board  could  also                                                               
consider things such as system  maintenance. He was unsure if OPB                                                               
could  participate  in  the budget  process.  He  suggested  that                                                               
someone other  than the governor  should appoint some  members to                                                               
better insulate them  from turnover. He asked what  could be done                                                               
to involve the board in the department's actual work.                                                                           
1:54:30 PM                                                                                                                    
MR.   MILLS  directed   attention  to   the  specific   reporting                                                               
requirements  on  page 4  of  SB  103. These  requirements  would                                                               
ensure  that the  board  cannot omit  crucial  elements, such  as                                                               
cost-saving   or   income-producing   business   or   procurement                                                               
practices.  He  related his  understanding  that  given the  work                                                               
group's recommendations,  the administration  considers OPB  as a                                                               
starting  point. The  administration  was  willing to  discussing                                                               
ways  this  board  could  truly   impact  AMHS's  operations  and                                                               
planning  to change  AMHS's trajectory.  He emphasized  that this                                                               
was not  a rehashing work  group designed to maintain  the status                                                               
quo; rather,  it was  evident that OPB  could improve  the system                                                               
for the coastal communities that AMHS serves.                                                                                   
1:56:24 PM                                                                                                                    
SENATOR MICCICHE  said he agrees  with the board  composition and                                                               
member   expertise  except   for  the   members  established   in                                                               
subparagraph  (C),   which  read   "two  members,  one   of  whom                                                               
represents  an Alaska  native organization  or tribe  and one  of                                                               
whom represents a  community served by the  Alaska marine highway                                                               
system;". Instead, this language  should read "representatives of                                                               
communities  served  by  the  AMHS, with  one  of  those  members                                                               
representing an  Alaska Native  organization." He  explained that                                                               
the qualifications  in subparagraphs (A) through  (E) were system                                                               
related,  but   the  Alaska   Native  representative   must  also                                                               
represent a coastal community served by AMHS.                                                                                   
He acknowledged  that the  board was viewed  as a  starting point                                                               
but expressed concern about the  lack of a superior work product.                                                               
In his experience  working in the private  sector, to effectively                                                               
solve  problems,  the  private  sector would  outline  tasks  and                                                               
establish deadlines for the board  to meet. He suggested that the                                                               
bill establish specific work product  deadlines for OPB's serious                                                               
consideration on  a much more  aggressive schedule.  Since AMHS's                                                               
problems require action now, AMHS  could garner statewide support                                                               
by highlighting that OPB recognizes  it needs more effective ways                                                               
to conduct  business. It would aggressively  pursue those changes                                                               
to deliver outcomes in a reasonable amount of time.                                                                             
1:59:30 PM                                                                                                                    
MR. CARPENTER  highlighted that  OPB needs  to be  in place  as a                                                               
sounding board,  but it must  also be an apolitical  board driven                                                               
by  business-oriented  members  interested  in  making  decisions                                                               
using aggressive timelines.  He said the new  board must consider                                                               
AMHS's current maintenance and recapitalization plans.                                                                          
2:00:52 PM                                                                                                                    
CHAIR  MYERS  recalled  the work  group  essentially  recommended                                                               
minimizing  politics for  the  board.  He suggested  establishing                                                               
longer  board  terms,  such  as  five or  eight  years  to  avoid                                                               
wholesale board turnover. Since  board members would serve three-                                                               
year  terms under  SB 103,  a  governor could  replace all  board                                                               
members during a single gubernatorial term.                                                                                     
MR.  MILLS responded  that  he  could not  speak  for Boards  and                                                               
Commissions,  but  he recalled  that  their  staff suggested  the                                                               
standard  three-year  terms.   However,  the  administration  was                                                               
willing to consider longer terms.                                                                                               
2:02:07 PM                                                                                                                    
CHAIR MYERS  noted that SB  103 reduced updates to  the long-term                                                               
plan from  five years  to three  years. However,  placing updates                                                               
too close together  would change it from a planning  process to a                                                               
planning-to-plan  process. Participants  would not  have time  to                                                               
think through  and reflect on  the updates. He  suggested keeping                                                               
the updates at five years.                                                                                                      
MR. MILLS  responded that five  years was  a long time  for board                                                               
service. He related  his understanding that the  impetus was that                                                               
a short-term  plan would apply pressure  to the group to  work on                                                               
specific issues actively.                                                                                                       
CHAIR MYERS  was unsure that  applying pressure to the  board was                                                               
as crucial as applying pressure to DOTPF.                                                                                       
2:04:10 PM                                                                                                                    
SENATOR BISHOP asked  if the board would  actively develop AMHS's                                                               
MR.  CARPENTER responded  that he  envisioned  OPB would  operate                                                               
similarly  to  how  the  Alaska  Mental  Health  Trust  Authority                                                               
(AMHTA) or the  University of Alaska, Board  of Regents operates.                                                               
OPB would compile  a one-year budget and  make recommendations to                                                               
the   governor   to   provide  the   legislature   with   another                                                               
perspective,  which   may  help  depoliticize  the   process.  He                                                               
recalled that  any changes or  deviations made to  AMHTA's budget                                                               
would require an explanation by  the legislature or the governor.                                                               
He said  the planning process should  include budget interaction,                                                               
which is not yet in the bill.                                                                                                   
SENATOR BISHOP asked  if the board would  actively develop AMHS's                                                               
budget. He said it makes sense to  base it on a five-year plan to                                                               
coincide with the STIP funding.                                                                                                 
2:07:14 PM                                                                                                                    
SENATOR KIEHL  agreed with Senator  Bishop. He recalled  that the                                                               
Board of Education  serves at the governor's  pleasure. The board                                                               
is briefed  on the governor's  proposed budget and then  it votes                                                               
to  approve  it.  He  suggested  the bill  would  need  a  slight                                                               
structural change to accomplish this.                                                                                           
2:08:16 PM                                                                                                                    
SENATOR SHOWER asked which agency  or person has the authority to                                                               
execute the board's recommendations.                                                                                            
MR. CARPENTER  answered that under  SB 103, OPB would  submit its                                                               
recommendations  to  DOTPF's  commissioner, who  would  make  the                                                               
final decisions. He  recommended that a DOTPF staff  serve on the                                                               
board  as a  liaison  between  the agency  and  the governor.  He                                                               
envisioned that  person would  work with the  board to  develop a                                                               
consensus on  issues and  ways to  accomplish them.  This liaison                                                               
could also  provide information and guidance  to the commissioner                                                               
and the  governor on the  board's approach and rationale  used to                                                               
make board recommendations.                                                                                                     
SENATOR SHOWER  agreed that  it is critical  to involve  DOTPF in                                                               
the  process;  however,  the commissioner  will  ultimately  make                                                               
decisions, which has  happened for a long time. It  might be time                                                               
to consider a  different model, but the  commissioner could still                                                               
have someone serve on the board to coordinate efforts.                                                                          
[SB 103 was held in committee.]                                                                                                 
             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                                                               
enable 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.  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.                                                                                                                 
This liaison could  also provide information and  guidance to the                                                               
commissioner  and  the  governor  on  the  board's  approach  and                                                               
rationale  used to  make board  recommendations. 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 obtained by the service areas.  By the 1990s, the M&O was                                                               
reduced to  $1,400 per mile,  declining until 2003 or  2004, when                                                               
state revenue sharing ended. At  the time, the reduction in state                                                               
revenue  sharing   prompted  many  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. He said  this increase in RSAs appears  to correspond with                                                               
state shared revenue that FNSB received from 1972 to 2004.                                                                      
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.  Concerning  RSA   commissions,  consolidating  RSAs  would                                                               
reduce  the number  of seats.  He said  that 266  of the  426 RSA                                                               
commissioner  seats are  filled,  which is  a 38-percent  vacancy                                                               
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 would  consolidate some power. 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 offered  his view that the mayor  would appoint every                                                               
commissioner  if this  bill were  to pass.  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 this process  changing, but  the terms                                                               
will be staggered.                                                                                                              
2:31:00 PM                                                                                                                    
JILL DOLAN,  Attorney, Fairbanks  North Star  Borough, Fairbanks,                                                               
Alaska, in response to 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                                                               
elected officials will make the ultimate decision.                                                                              
2:31:51 PM                                                                                                                    
MS. DOLAN  explained that FNSB  cannot run elections  for service                                                               
areas with  the regular municipal  election 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 consolidated 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  must  first  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  comprise 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.]                                                                                                 
2:36:00 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair   Myers  adjourned   the  Senate   Transportation  Standing                                                               
Committee meeting at 2:36 p.m.                                                                                                  

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