SB 335-EMERGENCY SERVICES DISPATCH/911 SURCHARGE  CHAIR BERT STEDMAN announced SB 335 to be up for consideration. He asked Senator Seekins to proceed. SENATOR RALPH SEEKINS, sponsor, asked his staff member to present the bill. JOE MICHEL, legislative aide to Senator Seekins, explained that the bill relates to enhanced 911 surcharges. Enhanced 911, or E- 911, shows the physical location and name of a caller to emergency service dispatchers. The purpose of SB 335 is to give municipalities more freedom to recover some of the costs of providing E-911 service to their community. Currently there is a statutory ceiling on the amount a municipality may collect to pay for E-911 services. That amount isn't enough to pay the overhead so municipalities have to recover those costs from the people through increased taxes of some sort. SB 335 amends the statute by raising the surcharge ceiling and by instituting a surcharge for the operation of the E-911 service. The final change this bill makes occurs on page 3, lines 18-20. It says, "The municipality may only use the emergency services dispatch surcharge for the actual labor and equipment used to provide emergency services dispatch." That addition is to ensure that municipalities recover no more that their operation costs. Also, an annual review of the actual costs is required. SENATOR GARY STEVENS noted that municipalities with fewer than 100,000 people could charge up to $2.15 for E-911 services and asked for verification that they wouldn't recover more than the actual costs up to that limit. MR. MICHEL agreed and reiterated that the goal is to transfer the cost burden from the taxpayers. CHAIR STEDMAN told of an experience he had recently, in which he was asked to return a missed call to someone in a nearby community. When he made the call, he discovered that the cell number was from the state of Washington. He asked if that caller would be paying the proposed fees or would they be able to avoid them. MR. MICHEL replied they would avoid the fees. He explained that his cell phone service comes from Fairbanks and if that municipality instituted a fee he would pay that fee regardless of the fact that he was using his phone in Juneau. Furthermore, the difference between phases I and II, E-911 service is that 911 calls from cell phones in Alaska can't currently be triangulated. Unlike a landline, emergency cell phone calls in Alaska don't register a physical location. SENATOR KIM ELTON noted that this is a per line charge rather than a per household charge and asked whether the sponsor might consider the latter rather than the former. He reasoned that a number of households have separate computer and fax lines that wouldn't be used to make emergency calls. "How did you get to the point where you do it per line rather than per household," he asked. MR. MICHEL responded by saying that the Fairbanks mayor asked the sponsor to introduce the bill, which is a companion to HB 461. As written, the charge would be per line, but the sponsor is open to the change. "The idea was presented that you could provide evidence that you have a fax line and then you'll be able to take that surcharge off your phone line. So it would be by household. It would be the responsibility of the resident to turn that in to the phone company. Those ideas have been brought forward by different representatives." SENATOR GARY STEVENS remarked that this bill attempts to recover some of the costs, but there are inequities to consider. Referring to his community, he said the City of Kodiak provides E-911 service to the city and a much larger portion of Kodiak Island that is outside the city. MR. MICHEL said this bill is trying to address that. Using Fairbanks as an example, he said that this would transfer the burden from those paying property tax to those with phones who therefore have the capability of dialing 911. SENATOR GARY STEVENS asked if 911 service extends outside the city or borough of Fairbanks. MR. MICHEL deferred to Mr. Harris, director of police. SENATOR ELTON assumed that there is no distinction made between a business phone and a residential phone. MR. MICHEL agreed there is no distinction. "If you can dial 911 from it, the surcharges apply." SENATOR ELTON wanted to make sure he understood correctly that the surcharge would apply to all lines, but the sponsor would consider change to exclude lines that weren't used for voice calls. MR. MICHEL said the sponsor would consider change in that area, but currently the surcharge would apply to fax and modem lines. CHAIR STEDMAN opened public testimony. PATRICK COLE, representative for the Fairbanks mayor, testified via teleconference to express support for the bill. Fairbanks has been working with both the borough and the City of North Pole in an effort to find ways to control and or recover the cost of dispatch centers. Referencing an earlier question about service areas, he explained that under current law a dispatch center could serve an area that stretches beyond its own boundaries. Specifically, Kodiak may serve beyond the city boundaries, which would allow them to recover some cost of providing service to the surrounding area. For at least the last ten years the law has provided for a per line charge. They have discussed the possibility of not charging for more than one line, but "this bill, as written, solves our short term problem," he said. It would enable the municipality to broaden service and take the burden off taxpayers and place it on users. SENATOR ELTON asked, "If the bill is amended to allow customers to check off and not pay for modem or fax lines, would that make us need to revisit the 85 cents per month surcharge? I mean would you need to go up to 87 cents?" MR. COLE said he didn't know, but he did know that the number of landlines have declined in the last few years in Fairbanks. "I don't think that allowing a per household [charge] would hurt things terribly, but we really don't know." SENATOR GARY STEVENS asked if the City of Fairbanks subsidizes their 911 services and if so, how much does it every year. MR. COLE said they spend about $1 million a year to run their center. "That includes all our dispatch services. Right now the current surcharge only pays for the software and the equipment." ERIC MOHRMANN testified via teleconference from Fairbanks to represent the Interior Fire Chiefs Association in support of the bill. His department is one of nine within the borough and this bill would help address their high and escalating costs. PAUL HARRIS, Fairbanks Police Department director, spoke in support of the bill. Fairbanks Police Department currently runs a dispatch center and provides services to the Fairbanks Police Department, fire department, and emergency medical services. We've just signed a contract with North Pole and we will be providing those same services to North Pole and we're working on contracts with Delta, Delta Rescue, and Deltana to provide services out there along with the Salcha Rescue. We support this bill.... We think it will help us a lot in covering the cost of the dispatch center. It will provide funding for the dispatch center as we go together. And even if we don't end up in a regional dispatch center, we would end up in that place like we are now with five different dispatch centers. Each one of those dispatch centers would receive funding for their operation from this bill. The 911 surcharge is certainly not a new concept. AS 29.35.131 already provides for a surcharge of up to 75 cents on every telephone line and cell phones if enhanced 911 services are offered. In the [Fairbanks] North Star Borough, we haven't charged against the cell phones. If you're in Fairbanks and you dial 911 on your cell phone, it doesn't make any difference whether you're inside the city limits or outside in the borough someplace. It all rings into the Fairbanks Police Department dispatch center. So every cell phone 911 [call] that is made rings in. We have an operator that picks it up and answers it, finds out where the problem is and sends it to the right agency. There was a comment made about what if somebody has a cell phone in Fairbanks and is in Juneau and dials 911. What actually happens is that 911 call is answered at the Juneau 911 center and they would know that it is in the area. They would not know exactly where that phone was located. That's the same thing we deal with in Fairbanks. The 911 rings into us from Delta all the way down to past Nenana. The surcharged provided in the current law is barely enough just to cover the equipment costs for maintenance and replacement. The proposed amendment provides money necessary for equipment upgrades and replacement up to 85 cents and additional monies to pay for the actual operation of emergency dispatch center up to $2.15. I don't believe that in the North Star Borough that we would ever charge the maximum amount that's allowed under this proposed amendment. It's possible some other jurisdictions might do that, but as previously stated, there's language in the bill that causes each municipality to go back and look at it every year so that ... the surcharge then can then be adjusted up or down to cover the actual costs of the dispatch center. The current surcharge that we have does not pay for the cost of a well-trained dispatcher 24/7 to answer the call. Right now the money that is collected on the surcharge simply pays for you to pick up the telephone, dial 911, it to ring into a dispatch center. That's all that's paid for at this point. There's nothing provided to pay for somebody to actually lean down and pick up the headset and say, "Hello this is the Fairbanks Dispatch Center." That cost is all covered by the local governments. I think it's also important to recognize that there's nothing in this proposed legislation that requires a municipality to charge the maximum amount. That question has come up several times and it needs to be made clear that the amount that's put into this is the maximum amount that can be charged, but it's not a requirement that anybody charge that amount. We feel that now, especially with municipalities having difficult times financially, this amendment allows the opportunity to pay for critical services without going back to the property owners and laying it on the taxpayers. We support this amendment and we encourage you to support it. SENATOR ELTON thanked Mr. Harris for extending him the courtesy of meeting with him prior to the hearing and apologized for neglecting to ask about the following: Consider a small business owner with a couple of employees. When you consider that they might have a fax line, a modem line, employee lines and a cell phone at work and nearly as many lines at home. I can see the monthly surcharge for this one small businessperson amounting to $8.50 if they have 10 different lines. In comparison, he said, someone else pays for my work phone and at home I pay for one landline and my cell phone. "And so my bill is $1.60. I'm one person and that is one person and yet they're supporting this enhanced 911 service and the dispatch call service at a rate 3 to 4 times what I'm paying. And how do you get around that?" MR. HARRIS replied you have to justify it by saying that any time there is a phone line with voice call capability it's available for a 911 call 24/7 and you're paying for that service. He runs a dispatch center and can easily justify that in his own mind because he knows the kinds and numbers of calls that come in. He understood the concern, but he asked for recognition of the fact that most fax phones have a handset and are therefore available for voice communication. If the bill is amended to exempt phones that aren't meant for voice communication, he didn't know that they would be greatly impacted. The reason he can say that is because of the increased cell phone usage. "Cell phones are getting to be used so much that that's what we need to charge it to." SENATOR ELTON said you're looking at that from a logical perspective and "the thing is, we sometimes think too much in this building and there are several logical perspectives." One such perspective is that the person who pays a surcharge on 10 lines and the one who pays a surcharge on two lines are equally likely to call 911. From that perspective, one person's access is worth more per month than another's, particularly when it's more and more likely that both individuals would use their cell phone to place a 911 call. MR. HARRIS reasoned that the cost of the equipment for those phones to have access doesn't go down if there are two less phones, which is justification for spreading the cost over every phone. CHAIR STEDMAN asked whether there were any other questions or comments and if not he was ready for a motion. SENATOR ELTON remarked that a lot of the issues the committee raised could be addressed at the local level where decisions could be made regarding how to assess the charge and which phones would be exempt. Although that has a certain attraction, he asked whether the committee should consider an amendment to exempt certain kinds of lines. The sponsor's staff indicated that they are open to the change. The change wouldn't be dramatic and the phone owner would still have to apply for the exemption. "I don't know what the rest of the committee feels about an amendment like that, but I think in Finance they'll probably just be looking at the numbers. They're not going to be looking at the policy in general so I'd like to hear from other members of the committee about it." SENATOR GARY STEVENS agreed that the committee should consider such an amendment and there was time to do so in the CRA Committee. CHAIR STEDMAN commented that in his previous life he dealt with bringing phone systems into the Municipality of Sitka and the issue of surcharges for multiple lines came up. They decided not to exclude any phones so the cost was spread over all phones. At that time it was an inconsequential expense, but that isn't the case here. With that, he announced he would hold SB 335 until the next meeting to allow time for an amendment. SENATOR ELTON suggested that the sponsor has already spent time considering this change and perhaps he would consider working with the Chair's office to draft an amendment.