HB 148-SECOND CLASS BOROUGH SERVICE AREAS  8:02:21 AM CO-CHAIR FANSLER announced that the only order of business would be HOUSE BILL NO. 148, "An Act relating to service areas in second class boroughs; and providing for an effective date." 8:02:56 AM REPRESENTATIVE MIKE CHENAULT, Alaska State Legislature, presented HB 148, as prime sponsor. He paraphrased the sponsor statement, which read as follows [original punctuation provided]: House Bill 148 expands the authority for second-class boroughs to exercise the local option of creating a non-taxable service area to provide emergency response along state highway corridors not covered by existing emergency services areas. In particular, this legislation would enable the Kenai Peninsula Borough to establish a service area for coordinated coverage for the almost 90 miles of the heavily traveled Seward and Sterling highways that are not within the boundaries of any established emergency services area. The bill proposes additional language in AS 29.35.490(a) Establishment of a Service Area, allowing second-class boroughs to create service areas along state highway corridors by ordinance, provided that no voters reside within the service area boundaries and no new taxes are levied for the service area. Under the current statute, approval by a majority of voters is required to create a new service area with residents this legislation would not change that provision. The intent is to deal only with unpopulated highway right-of-way corridors. Second class boroughs within the state, besides the Kenai Peninsula Borough, are the Aleutians East Borough, the Fairbanks North Star Borough, the Ketchikan Gateway Borough, the Kodiak Island Borough and the Matanuska- Susitna Borough. In the case of the Kenai Peninsula, subject to borough assembly approval, the municipal government could use a portion of its federal payment-in-lieu-of-taxes (PILT) allocation to cover the costs of providing highway corridor travelers with life-and-safety response services. The Overview, Background and Conclusion brief that is included in your back up materials provides a more in- depth analysis as to why this legislation is necessary and needed. 8:04:51 AM REPRESENTATIVE CHENAULT noted that there is a map in the committee packet showing the area the bill addresses, and it shows the accidents that have occurred in the area from January [2015] to December 2016. 8:05:22 AM REPRESENTATIVE RAUSCHER asked if those in the service areas being discussed currently pay taxes. 8:06:06 AM TOM WRIGHT, Staff, Representative Mike Chenault, Alaska State Legislature, on behalf of Representative Chenault, prime sponsor of HB 148, stated that someone living in a service area would pay taxes. He added, "For the most part." REPRESENTATIVE CHENAULT, in response to Representative Rauscher, clarified that the section of road being addressed under HB 148 currently has no service provided; therefore, he offered his understanding that no one is paying taxes on it. He said currently areas like Cooper Landing and Moose Pass send their volunteer fire departments to service the areas discussed under HB 148 when people are available. REPRESENTATIVE RAUSCHER asked if the borough area would be expanded under HB 148. REPRESENTATIVE CHENAULT answered no: the borough currently encompasses the area being discussed in relation to HB 148. In response to a follow-up question, he offered his understanding that currently the land being discussed is federal and there are no residents living in the area that pay a current tax. 8:08:50 AM MR. WRIGHT said most of the service areas being proposed by the Kenai Peninsula Borough are "along federal land," and [the borough] receives PILT to cover costs - "whatever the borough may ... incur." He said HB 148 would create service areas along state highway corridors by ordinance, provided no voters reside within the service area boundaries and no taxes are levied for the service area. In response to a follow-up question, he said it is the borough that would be involved in deciding upon the option. 8:10:21 AM REPRESENTATIVE SADDLER asked under which specific program the federal PILT is available and how much money it would generate. REPRESENTATIVE CHENAULT explained that under HB 148, the borough would be allowed to use the money currently generated under the federal PILT to fund emergency services along the highway corridor. In response to a follow-up question, he said he does not know how much money is currently made available by means of the federal PILT, but he suggested that Mr. Persily, Mr. Navarre, or Representative Knopp, who sits on the assembly, may be able to offer more details regarding where the money is currently being spent. 8:11:56 AM REPRESENTATIVE GARY KNOPP, Alaska State Legislature, indicated that the Kenai Peninsula Borough receives a few million dollars of federal PILT in timber receipts. In response to the previous queries from Representative Rauscher, he said service areas typically are created by a vote of the people and the boundaries are defined; the purposes of those areas include fire service, road service, and recreation, and there is a proposed mil rate to fund what the voters deem is necessary. He indicated that the borough is asking that its powers be expanded under statute to be allowed the option of using federal PILT to create a new service area along the highway corridor where currently there are no emergency services and no residents to tax. 8:14:42 AM REPRESENTATIVE SADDLER said the idea sounds like a good one and is a novel approach. He asked if the presence of a voter in the area - someone who, perhaps, purchases private land in the corridor - would change the situation. REPRESENTATIVE KNOPP answered that in order for a person to purchase land in this area, the state would have to give up its right-of-way, which he said "won't happen." He said the amount that would be spent for ambulance services and training would be minimal; he deferred to Mayor Navarre for further details. 8:15:44 AM REPRESENTATIVE TALERICO offered his understanding that the area in question already has [emergency response] services; the proposed legislation would "clearly define for these people where their service areas goes" and make certain that "everyone's aware that everything that they have in place would be covered." He indicated that is how things worked in his home rule borough and "this just really kind of cleans it up and gives it a good definition." REPRESENTATIVE CHENAULT responded, "It's true: most of our departments have mutual aid agreements." He deferred to Mayor Navarre, but stated, "I think that they're really pushing the envelope calling some of this mutual aid, because ... they really weren't doing it - they were responding because they were the only ones that could respond." 8:17:50 AM REPRESENTATIVE PARISH asked for confirmation that his understanding was correct that HB 148 would allow a second-class borough to extend a service area, provided there is no tax payer living in that area, but it would not allow a borough to "increase the property tax with that expanded service area." REPRESENTATIVE CHENAULT responded, "That's correct as far as our interpretation. There are no tax payers ... in the area that we're talking about, and ... it wouldn't expand any other borough power." In response to Representative Parish, he offered his understanding that in recent years the following volunteer emergency responder services have been covering the area being discussed: Cooper Landing, Moose Pass, Hope, and Central Emergency Services (CES) out of Sterling - all within the Kenai Peninsula Borough. REPRESENTATIVE PARISH commended the sponsor for a bill that aims to "do right by the borough." 8:19:49 AM REPRESENTATIVE WESTLAKE said he thinks HB 148 is a great bill and a great idea. He asked what would happen with the current volunteers. 8:20:21 AM REPRESENTATIVE KNOPP explained that the volunteers would still remain, but HB 148 would allow the borough to assist the community in which those volunteers operate. He mentioned CES and said that the borough has been pushing outside the boundaries. He said there are stringent rules around services areas. Regarding CES, he said the borough has been "pushing completely outside the boundaries that was approved by the voters." The proposed legislation would provide the opportunity for the borough to provide the financial support to the communities to keep these services in place. 8:21:02 AM REPRESENTATIVE SADDLER asked how reliable the timber receipts are in regard to the federal PILT. REPRESENTATIVE CHENAULT deferred to Mayor Navarre. 8:22:00 AM REPRESENTATIVE RAUSCHER expressed uncertainty as to whether "if no voters reside in the service area" means no one owns property in the area. REPRESENTATIVE CHENAULT said he thinks there are a few cabins along the road, but he does not know whether they are on federal land via permit or private land. He deferred to Mayor Navarre for further information. 8:23:02 AM CO-CHAIR FANSLER expressed appreciation for the colored map included in the committee packet as a means to understand the number of responses that have occurred in the corridor. He offered his understanding of the map was that everything except the top-right Girdwood Portage is part of the Kenai Peninsula Borough, which sets up the service areas, including the CES near Kenai and Bear Creek near Seward, and everything else makes up the area that is being discussed, including Hope and Moose Pass. He concluded, "So, what we're talking about is perhaps the central emergency following the corridor out, perhaps, if they wished, is what this bill would allow." REPRESENTATIVE CHENAULT answered that is correct. He said the line on the left of the map is where the services of CES stops. Coming out of Seward, at the bottom of the map, and up to Bear Creek is another service area. All the rest is covered by volunteer fire and emergency service departments in Cooper Landing, Moose Pass, and up toward Hope. He said, "The rest of that area is in non-service areas." CO-CHAIR FANSLER asked if only those second-class boroughs listed in the sponsor statement would be affected under HB 148. REPRESENTATIVE CHENAULT offered his understanding that is correct. In response to a follow-up question, he said his office has asked the Kenai Peninsula Borough to contact all the other second-class boroughs to elicit comments, but he has not heard back from those boroughs. 8:25:53 AM REPRESENTATIVE KNOPP related that the Kenai Peninsula Borough owns "the two hospitals" and has created a task force to study how to provide better services. He said the mayor has proposed expansion. He clarified that [the proposed legislation] focuses solely on providing emergency medical services in the highway corridor area highlighted on the aforementioned map - not road improvements. 8:26:53 AM REPRESENTATIVE RAUSCHER expressed concern about other boroughs. He asked if a specification that "no private properties exist in the service area" would "interrupt what you're trying to do." REPRESENTATIVE KNOPP responded that he cannot speak for the other boroughs, but if the request being made through HB 148 is successful, the issue would still have to be vetted by local governing bodies and assemblies would still have the final say; therefore, every second-class borough's governing body would have the authority to make the decisions. REPRESENTATIVE RAUSCHER said he will support HB 148, but wants to ensure that under HB 148 private properties would not be taxed if caught in the service area. REPRESENTATIVE KNOPP said current statute requires a vote for a borough to be included in a service area; therefore, private property could not be included without a vote of the people. REPRESENTATIVE RAUSCHER offered his understanding that a borough can have six different reasons for having a service area, including for gas, river erosion management, or road service. He said Representative Knopp is correct that private property owners do have to vote to be included in one of those service areas, but he was "just making sure that that language would fit." 8:29:06 AM REPRESENTATIVE SADDLER questioned why no definition of "highway corridor" was included in the bill. REPRESENTATIVE CHENAULT pointed to a legal opinion in the committee packet [a memorandum from Legislative Legal and Research Services dated 2/5/17] regarding highway corridor, and he said it would be the purview of the committee to include a definition in the proposed legislation. 8:29:54 AM MR. WRIGHT related that he had forwarded the legal opinion to the Kenai Peninsula Borough, which did not think a definition in HB 148 was necessary. Nevertheless, he echoed Representative Chenault's remark that it would be the purview of committee. 8:30:29 AM CO-CHAIR FANSLER asked what, under HB 148, would happen if a private land owner is involved in an accident while pulling out of his/her driveway onto a highway in the highway corridor service area in question. REPRESENTATIVE CHENAULT answered, "I would assume that they would respond to any accident within the corridor and provide life/health assistance to any accident there." He offered his understanding that "what it would do is it would have somebody that would respond versus wondering if somebody will respond ...." CO-CHAIR FANSLER offered a [reverse] scenario in which someone driving in the highway corridor loses control of the vehicle and hits a tree on someone else's private property. He asked if that scenario would also be a situation in which [emergency medical services] would respond. REPRESENTATIVE CHENAULT said that would be his assumption, because the intent of HB 148 is to create an emergency response group that can assist people involved in accidents along that highway corridor. 8:32:16 AM REPRESENTATIVE KNOPP offered that most highway corridors vary in width but are typically about "100 foot each side the center line"; therefore, "a lot of your driveway approaches are into right-of-way highway corridors way before you get to the actual driving portion of the road ...." 8:32:55 AM CO-CHAIR PARISH offered his understanding of only one instance in statute where "highway corridor" is defined, and that is as "land within five miles of the right-of-way of a highway". He said, "It does just make me leery to have that as the statutory precedent for this within ... the State of Alaska." He added, "It would ... set my mind at ease if, for the purpose of this bill, it were redefined along the lines that Representative Knopp outlined just few moments ago." REPRESENTATIVE KNOPP responded, "I'm not familiar with that language, ... so I can't respond to that. The mayor may be able to do that, though." 8:34:11 AM MIKE NAVARRE, Mayor, Kenai Peninsula Borough, expressed appreciation for those who had worked on HB 148. He said there is little tax base in Cooper Landing, Moose Pass, and Hope, in part because a great deal of the property is federal forest or refuge land. As a result, there is a huge gap in emergency services in the area between where CES ends and Bear Creek's fire and emergency services begins, and that gap in coverage currently is being filled by volunteers. He said the borough has spoken to community members in that area who want to help their community, but that portion of the highway is populated with people commuting from other areas and visitors to the state, and accidents that require emergency service response are stretching thin the resources of those sparsely populated areas. He said Cooper Landing, in particular, is populated by many seniors, which is significant because their tax base is lower and many of the volunteers have lost their stamina and are no longer allowed to drive at night because their night vision has declined. He said because the area in question is so large, a transport from an accident, often in the middle of the night, ends up taking four hours. MR. NAVARRE said while the area may receive more volunteers during increased summer population, in the winter they will often call CES or a dispatch service to state that they have no one who can respond to an emergency. He said the permission for one service area to respond in another service area must come from a government authority, such as by mayoral approval or at the direction of the Alaska State Troopers; however, even with that permission, the tax payers in the responding service area are paying for the emergency services of the outside service area. He said, "We can do it in the case of mutual aid and auto aid, but those are prescribed, and the reality is that there is no mutual aid that comes from Cooper Landing to Central Emergency Services - it's all ... one-way." Mr. Navarre said the folks from Cooper Landing approached the Kenai Peninsula Borough a couple years ago and said they did not want to respond all along the highway - they wanted to reduce the area in which they served - and the borough could see that that was a problem for visitors and residents of the Kenai Peninsula who travel through Cooper Landing. He said the federal PILT received by the borough fluctuates between 2.1 to 3.1 million dollars a year for all the federal lands on the Kenai Peninsula - some of it from forest receipts. He said the amount is not a guarantee, but it has been fairly stable for the last 20 years or so. 8:39:21 AM MR. NAVARRE said the borough is proposing to its assembly that the borough would use up to 20 percent of the federal PILT to provide resources and coverage to the area in question. He said because PILT monies are already utilized in the budget, the borough recognizes that if it diverts the funds for this purpose without any other changes in its budget, it would have to raise taxes on a borough-wide basis in order to cover the funds that would be used for the emergency service. He said the borough is being upfront with the assembly. He called the proposed method a creative way to get coverage in an area for which nobody has taken responsibility, with the exception of the Cooper Landing emergency services volunteers, who end up getting "burnt out." He said currently the borough has been offering housing and a small stipend to a volunteer from the paramedics training program at Kenai Peninsula College to stay in Cooper Landing. He said the proposed legislation would, if the assembly is agreeable, allow coverage of emergency services in an area that is otherwise not adequately covered. MR. NAVARRE said the borough has checked with all the other second-class boroughs, none of which have expressed any opposition to the proposed legislation, and it would be the option of the second-class borough whether or not "to do this." He said this road corridor in question is already authorized under AS 29.35.490(a)(2), which read as follows: (2) all owners of real property in the service area consent in writing to the exercise of the power if no voters reside in the service area. MR. NAVARRE stated: The problem that we have and the reason that we're asking for this change is you can imagine that we get into discussions with the state Department of Transportation [& Public Facilities], the Federal [Highway Administration], landowners from the refuge, and the [U.S.] Forest Service - all the different agencies having to give permission - and at the same time, we're in it getting all the attorney's wrapped up and twisted around the axel over who ends up what type of liability in this corridor. So, what we're asking for is a ... clarification of what's already authorized in state statute, so that we can, using borough resources, step up and provide coverage to visitors to resident alike. 8:42:38 AM REPRESENTATIVE RAUSCHER referred to AS 29.35.490(a) and (c) and expressed a desire to learn more about the distinction between various classes of cities and boroughs. MAYOR NAVARRE suggested one difference is the amount of power given. CO-CHAIR FANSLER suggested Representative Rauscher might find some answers on that issue from his staff. 8:44:45 AM REPRESENTATIVE SADDLER asked for more details related to the anticipated use of 20 percent of the federal PILT by the Kenai Peninsula Borough. MAYOR NAVARRE said 20 percent of the current approximately $3 million in federal PILT monies would amount to a little over $500,000. He said, "The reason that we're going to ask the assembly ... to utilize those funds is it represents about 20 percent of the federal land areas ... within the Kenai Peninsula Borough, so we ... think that using up to 20 percent in order to provide this service makes some sense." He said he is not sure what the assembly will say, but he opined that this is the sensible and best way to provide the coverage needed at no cost to the state. REPRESENTATIVE SADDLER asked if there would be any negative affect resulting from a lack of votes to support the intent of HB 148. MAYOR NAVARRE answered no, the authority would exist in state statute, so that at some point, "if we chose to go at it again, we'd be able to provide coverage." The biggest concern, he emphasized, is that currently there is no coverage in these areas. A further problem is that in the aforementioned highway corridor area, there is often insufficient cell phone coverage. Without residents in the area, this issue will be up to the assembly, he advised. He reemphasized the need to take care of visitors to the area in an appropriate manner. REPRESENTATIVE SADDLER asked if HB 148 would balance out any costs that the people in Mr. Navarre's borough are currently paying. MAYOR NAVARRE answered that there is an area serviced by Cooper Landing Emergency Services, but "it's not a service area." He reiterated that the taxable value in that area, because of all the federal land, is not significant. He commended Cooper Landing for doing an extraordinary job in fundraising but said it is "deficit spending on an annual basis about $40,000" and having to try to raise those funds to cover that spending. He emphasized how overwhelming it becomes for [Cooper Landing] to serve its community and spend a lot of its resources well outside its community on the state highway. REPRESENTATIVE SADDLER noted that the Dalton Highway is referenced in statute in regard to the specifics of a highway corridor, and it states it is 5 miles on both sides and 100 feet on either side of the center line. He asked Mr. Navarre what he thinks is appropriate. MAYOR NAVARRE responded that he does not think [this definition] is critical, because "we're still going to provide the responses." He reemphasized the problem is that more than half of the emergency responses outside of Cooper Landing are for people who are passing through - not residents - and HB 148 would allow the legal authority to set up a structure for additional coverage. 8:51:45 AM REPRESENTATIVE WESTLAKE expressed support for "getting the authority out there." He said he has traveled the road, which he characterized as having "a lot of lonely stretches," and he commended Mr. Navarre for bringing forward this issue. He alluded to accidents that happen along the corridor. He said he feels badly about the money coming out of [the Kenai Peninsula Borough's] coffers, thus encouraged Mr. Navarre to look for more PILT money. 8:52:49 AM CO-CHAIR PARISH asked if the emergency responses essentially would be provided by CES. MAYOR NAVARRE said he thinks some of it would, because CES is the largest professional department in close proximity, depending on the location of the other communities. The proposed legislation would give the legal authority [for an emergency response service] to respond outside of its area. The federal PILT, he said, would allow the borough to access grant funding and other funding sources in order to supplement the service to ensure it does not use too much of its funds currently being used elsewhere in its budget. He said it comes down to a question of priorities and "in this case, we think that this service is critically important." CO-CHAIR PARISH observed that the Turnagain Pass area is significantly closer to Girdwood and Portage than "any substantial community" in Mr. Navarre's borough. He asked if [Girdwood and Portage] have picked up the slack in terms of helping those who get in accidents. MAYOR NAVARRE responded that Cooper Landing has a volunteer fire department and emergency medical services that cover a large portion of that area. He added, "They are also a part of the Municipality of Anchorage." 8:55:01 AM REPRESENTATIVE RAUSCHER questioned how the proposed legislation may affect the borough in terms of equipment. MAYOR NAVARRE answered that Cooper Landing has some equipment, but not as much as CES or some of the other professional service areas, and Cooper Landing often does not have enough volunteers. He pointed out that being a volunteer takes a person away from his/her family life, and he reiterated that many of the seniors who love to volunteer may have restrictions in terms of physical ability. Further, the level of resources is inconsistent. He reiterated that the borough has been successful in getting volunteer trainees to help out in Cooper Landing. Under HB 148, the borough would have the ability to coordinate training, stipends, and the other costs of emergency response coverage. REPRESENTATIVE RAUSCHER shared that he had the experience of traveling from Cooper Landing to Kenai in an ambulance, and he appreciates the volunteers, the distance that must be traveled, and the proposed legislation. 8:57:55 AM REPRESENTATIVE SADDLER said he would like an appropriate definition of emergency services. MAYOR NAVARRE responded that he is not sure how it is defined, but "what we're intending for this purpose is fire and EMS." He said having volunteer law enforcement officers would create "a whole additional set of concerns." REPRESENTATIVE SADDLER asked Mr. Navarre if he would object if the committee was to "define that narrowly enough to encompass ... fire and EMS services in this bill." MAYOR NAVARRE answered that he does not think it necessary. He said the committee should have a letter from the Department of Public Safety (DPS), in which the department recognizes "the distinction." 8:59:40 AM CO-CHAIR FANSLER thanked Mr. Navarre for his testimony. He said he has driven the corridor in question and appreciates knowing that people can be safe there. MAYOR NAVARRE indicated a willingness to field questions following the meeting, either directly or through the office of the prime sponsor. 9:00:23 AM CO-CHAIR FANSLER opened public testimony on HB 148. 9:00:37 AM GEORGE PIERCE testified in opposition to HB 148. He said the federal PILT - once put into the general fund (GF) - could be spent anywhere. He noted that Mr. Navarre had said that 20 percent of the approximately $3 million in PILT would be roughly $5,000 going into the project, and he said that amount would not cover much. He listed the following necessities: a fire house, emergency vehicles, trained staff, health care, and retirement funds. He offered his understanding that Mr. Navarre had said that [the proposed services] would be federally funded but had also added that the residents will end up paying for them. He said currently the community of Hope is conducting business with the borough to put in sidewalks along the highway, and as a former volunteer firefighter of many years, he said that helped. He said, "If that's all you're going to do is protect your house from fire and emergencies for medical, a volunteer ... services is perfect for that." MR. PIERCE continued as follows: We cannot afford to just keep putting these major projects up there and expecting to ... build all these infrastructures. This is a bad idea; I do not approve of this. The borough will end up putting all this on the backs of the Kenai residents, and we're in a deficit right now; we cannot afford this. ... People that live down in this borough just voted on ... certain taxes being raised, and they were all turned down. So, this is just another scam of the borough trying to get land to where they can control. And it's not about the emergencies. Every time I go through there and there's an accident, there's always [Alaska State] Troopers or an emergency vehicle there. So, if they're worried about more protection for emergency service along the highway corridor, maybe the legislators ought to give them some more police protection. 9:03:39 AM CO-CHAIR FANSLER, after ascertaining that there was no one else who wished to testify, closed public testimony on HB 148. 9:04:35 AM REPRESENTATIVE SADDLER stated his intent to work with the prime sponsor to add a definition of "emergency services" and possibly one of "highway corridor" to HB 148. 9:04:51 AM REPRESENTATIVE RAUSCHER said he would like comment from Mr. Navarre regarding the infrastructure [Mr. Pierce] had said would be necessary. 9:05:30 AM LARRY PERSILY, Chief of Staff, Kenai Peninsula Borough, noted that Mr. Navarre was not currently available, thus he would respond to Representative Rauscher's request. He stated that currently the borough is not proposing or contemplating any construction or new fire station as part of the emergency services area, which he said would be limited to the highway right-of-way. He said existing staff and facilities would be used. If, in the future, the borough, in consultation with the existing emergency service providers in Cooper Landing and Hope, and the staff in CES, decide there is a need for additional equipment to cover [emergency services], then that would be "a borough decision to make for ... the borough assembly and a borough financial decision as to how to pay for it." 9:07:25 AM REPRESENTATIVE WESTLAKE expressed hope that the committee would not restrict the bill too much, because he would like help to be given to those who need the help irrespective of borders. 9:08:12 AM REPRESENTATIVE KNOPP offered response to former queries. First, he noted that the information Representative Rauscher had sought regarding various classes of cities and boroughs could be found under AS 29.200, 210, and 220. Next, regarding highway corridors, he said the Dalton Highway Corridor is the only one he knows of that extends out to five miles, and that has to do with an "archery only" hunting restriction in that file-mile area. He suggested that if the committee is concerned about corridors, it might define them as DOT rights-of-way. CO-CHAIR FANSLER announced that HB 148 was held over.