SB 208 - VOTER APPROVAL OF SERVICE AREA CHANGES SENATOR PARNELL introduced this bill as a means of strengthening local control of service areas, in the spirit of Article 10, Section 1, of the Alaska Constitution which established the principle of maximum local control. The Constitution also enabled the creation, alteration or abolishment of these service areas, subject to provisions of law. Throughout Alaska, there are about 200 of these local service areas that assess themselves for a range of services such as snow plowing and road maintenance. SENATOR PARNELL stated that this bill requires a majority vote in three situations: creation, alteration or change of a service area. SENATOR PARNELL said an abolishment is subject to approval by the majority of residents in the service area, abolishment and replacement with a larger service area must be approved by a majority of voters inside the existing service area, as well as a majority of those within the proposed service area. SENATOR PARNELL said areas being altered or combined must receive approval of the majority of voters voting on the question and residing in each of the service areas. SENATOR PARNELL noted the bill is supported by many service area boards around the state and he urged the committees's support. MR. GENE KANE, representing the Department of Community and Regional Affairs (DCRA), indicated that the bill diminishes local control and is inconsistent with the five fundamental principles of local government in Alaska. He agreed that Alaska's Constitution provides for maximum local self-government but said SB 208 imposes restrictions on the way certain service areas may be formed, altered and abolished. The Constitutional delegates wanted authority vested in the assembly to ensure a unified overview of all functions, according to MR. KANE. He said the current law allows for a local self-government that a borough assembly can enact local laws to cover. MR. KANE said the Constitution calls for the minimum of local government units, and said SB 208 restricts the ability of local governments to comply with this. He observed that there are currently 250 service areas in Alaska within 16 organized boroughs, with the Fairbanks North Star Borough containing over half of these. MR. KANE said some of these service areas are tiny and this bill would restrict the ability of the North Star Borough to promote greater efficiency in its service area operations. He added that the Constitution prevents the creation of new service areas in home-rule and general-law governments if, consistent with the constitutional provisions of maximum local self-government and minimum numbers of local government units, the service can be provided by an existing service area. Mr. Kane again said this bill will restrict the ability of boroughs to conform with the Constitution. MR. KANE stated that the Constitution allows municipal governments to take on home-rule status, which affords broader provisions than any other state. He quoted a drafter of the Constitution who said, "the Legislature should have the authority to deny local exercise of specific powers when necessary in behalf of an overriding state interest or to resolve conflicts of authority between home-rule cities and home-rule boroughs. MR. KANE noted it was also assumed that the Legislature would not act to limit home rule powers exept under special circumstances. The Constitution prevents duplications of tax-levying jurisdictions and SB 208 has the potential of fostering this duplication, according to MR. KANE. He used the possible annexation of an area near Kodiak to show how this might occur. In conclusion, MR. KANE said DCRA does not support the bill for the previously stated reasons and he mentioned he also had some technical suggestions regarding the bill. SENATOR PARNELL asked if the amendments were substantive or merely clean up and MR. KANE indicated the latter. MR. OCIE ADAMS, a volunteer representing the Road Service Area Advisory Board, commended SENATOR PARNELL for looking out for the taxpayer in this bil. MR. ADAMS said he'd like to see the power returned to the people, so they may decide what they want done with their service areas. He noted that the only area of concern is section 2, line 14 which seems to require a city ordinance or voter approval for a service area change. He wondered if this should read "and". SENATOR MILLER said his reading shows it requires two separate affirmative votes to effect a change. CHAIRMAN TAYLOR asked if MR. ADAMS had a problem with two separate votes and MR. ADAMS said he preferred it. It did seem to him that both the city and the borough could agree and not require a vote of the service area residents or the voters in the city. CHAIRMAN TAYLOR said he believed MR. ADAMS was reading the bill correctly and the use of the word "or" would seem to allow the city or the borough to make changes by ordinance without a vote. MR. ADAMS verified that was his concern and suggested the change would tighten things up. SENATOR PEARCE asked if anything in the bill could be used by an area of the state to prevent its residents from voting on the establishment of an organized borough. SENATOR PARNELL did not believe so, according to previous testimony form DCRA. MR. KANE interjected that he did not see it being used in that context, as it only applies within the 16 existing organized boroughs. CHAIRMAN TAYLOR asked MR. KANE if he though the word "or" was appropriate if the intent is to allow a vote, or if the word "and" would be required. Mr. Kane said the latter was consistent with his understanding and CHAIRMAN TAYLOR clarified if the vote was desired the word would be "and". MR. KANE concurred. SENATOR PARNELL asked if this was existing law and MR. KANE replied it was. SENATOR PARNELL asked if the word was changed to "and" it would apply to the recent situation in Haines. MR. ADAMS said he did not believe so and stated that if the "or" was removed that would also delete the conditional phrase and act to require the satisfaction of both paragraphs. SENATOR ELLIS inquired whether there had been testimony heard from the municipal league and SENATOR PARNELL said no, they had no coherent position at the time of the last hearing. SENATOR ELLIS asked if there was an Anchorage assembly position on this legislation and SENATOR PARNELL responded the only thing he could relate was that, at last night's assembly meeting, there was a motion to adopt a resolution in opposition to this bill and that motion was tabled and no position was taken. SENATOR PEARCE asked if this law had been in effect, could the state have stopped providing Troopers to the Anchorage hillside. SENATOR PARNELL responded that he did not believe so. CHAIRMAN TAYLOR said he did not believe this would stop the state if they wanted to take over, though he couldn't image that happening. SENATOR PEARCE said she was really thinking about whether or not the state could stop providing a certain type of service and if this bill would prevent that. SENATOR PARNELL replied no, this bill deals only with self-assessing service areas. CHAIRMAN TAYLOR agreed he did not see the application here. MR. KANE repeated that this bill relates only to the 16 organized boroughs, and he sees no application outside of those service areas. SENATOR ELLIS asked if SENATOR PARNELL had gotten an opinion on the bill from Mayor Mystrom and SENATOR PARNELL stated he had not, nor heard from his office. MS. LINDA ANDERSON, representing the Fairbanks North Star Borough, advised the committee she had not known that Fairbanks comprised 100 out of the 250 road service areas. She said the Fairbanks assembly is constantly being approached by road service areas for new proposals and abolishments and the concern is with the provision on page 2, line 14, regarding combining road service areas. She voiced the position that there is quite a bit of duplication in those areas and the assembly would like to reserve the right to decide whether to create a new road service area or simply combine an area into an existing road service area. She expressed her willingness to work with the sponsor on a solution to this problem. SENATOR PARNELL maintained that the assembly will ultimately decide and suggested that their fear is of proliferation. MS. ANDERSON said in fact they were most concerned with the combination of areas. SENATOR PARNELL asked if the assembly had a problem asking the residents of the areas to vote on combination of areas. MS. ANDERSON replied that they are concerned with the possibility of a stalemate, which would raise administrative costs and further stretch the limited revenue-sharing funds they receive now. SENATOR PARNELL commented it may make them more conscious of drawing boundaries that the voters will approve. He said he wants these decisions made as locally as possible. CHAIRMAN TAYLOR asked MS. ANDERSON if the borough has area-wide road powers now. She responded that they only had specific pockets within the borough. CHAIRMAN TAYLOR said this was a result of their failure to bite the bullet and get their roads all covered under one road program. MS. ANDERSON replied that this was also a local issue and this is how the residents wanted it. SENATOR PARNELL remarked that this speaks well for the bill. MS. ANDERSON suggested perhaps this might be optional to second class boroughs, which would still allow some say by the assembly. CHAIRMAN TAYLOR said Ketchikan has never taken on road powers and has no road equipment nor fire vehicles. He said in his district one of the biggest problems is with the hodgepodge of different water and sewer systems. CHAIRMAN TAYLOR asked again about the word "or". SENATOR PARNELL said he was not prepared to change this without legal counsel. CHAIRMAN TAYLOR agreed. SENATOR ELLIS noted that may give the committee time to solicit opinions of other groups. SENATOR PARNELL indicated that he did solicit the opinion of road service areas and they responded. SENATOR PARNELL moved Senate bill 208 from committee. SENATOR ELLIS objected and explained that he believes, as the last responsible committee working on the bill, they should get the necessary legal advice on the "and" vs. "or" question and also the input of other groups. SENATOR PARNELL acknowledged that they could get Tam Cook on the phone in two minutes. SENATOR ELLIS stated that legal issues should be resolved in the judiciary committee and not the rules committee. SENATOR PARNELL withdrew his motion and asked MS. TAM COOK about page 2, line 2. MS. TAM COOK, from the legislative legal department, explained that changing the word "or" to "and" would require the satisfaction of both paragraphs on either side. SENATOR PARNELL asked what the impact would be. MS. COOK said it would mean a city could no longer act by ordinance, and would have to hold an election on the issue. SENATOR PARNELL moved SB 208 from committee with individual recommendations. Without objection, it was so ordered. With no further business to come before the committee, they were adjourned.