Anchorage Assembly: Budget and Finance Committee-of-the-Whole Meeting

Present. And Member Gerger.

Here. Okay, great. I'll keep track of who further show up. Also joined in the room by clerk staff, members of the administration, a couple members of the public, and a couple of our presenters. And we will start into our items, and then I'll note I believe we'll have some additional documents from OMB probably being printed out, so we'll distribute those in the room when we get them.

So with that, let's move to our standing reports. So first I will call up our Budget Advisory Commission Chair, Mr. Ian Mills. And then I'll note we do not have it before us, but it was on our agenda. So let me just read out the number briefly. One second, sorry.

Because I wanted to note that the Budget Advisory Commission passed a resolution. And for those who are looking for it, it is AIM 146-2026, and it was on our September 15th agenda. So with that, I'll turn it to Mr. Mills. Go ahead. Yeah, thank you.

We had a good meeting last week. We are like you getting into the budget cycle. We heard from OMB Director Braus on the 120-day memo and where that stands. The only other thing I will note is that I have been working with Member Scout. She has expressed the intent to hold a couple town halls in the District 1 area for the budget cycle to get public input and feedback.

It has invited myself as the chair to present a little bit about the Budget Advisory Commission and some background on the budget and how that works. So I'm looking forward to working with her and potentially Vice Chair Voland on that. Okay, great. And as I said, I know we don't have the details in front of us, but would you like to discuss the resolution that you guys passed as well? Yeah, thank you.

The bulk of the resolution I would classify as encouraging communication and engagement with the community. We think that's very important to the budget process and building consensus and developing a vision of what the budget should be. We did include, at the request of some of our members, some language about considering the cost of infrastructure that gets built and is being maintained especially through the lens of density, acknowledging that low-density development tends to have a higher maintenance cost than the tax base it supports. So that was in there as well. Happy to take any questions on specifics.

Thank you. I'll note we were joined by Member Voland at 10:06, Member McCormick at 10:07, and I see Ms. Baldwin-Day in the queue. Go ahead.

Yeah, thank you, Mr. Mills. I'm, I'm curious if the Commission had any specific conversation or potentially recommendations about what types of public engagement might be the most effective, and if there's any additional color you would like to add to that suggestion. I think that's really salient for where we are in the budget process right now. Yeah, thank you. I think one of the things that was in the resolution that we passed was encouraging the Assembly and the school district to work together to the extent feasible on developing a budget that serves the needs of the community, or budgets I should say.

Um, you know, I, I, we know that the school district budget cycle does not line up directly with the Assembly budget cycle, but obviously they interact and affect each other.

So we were encouraging the school district and the assembly to work together and with the community to develop shared priorities. Also, we were encouraging the assembly and the administration to work to engage members of the community who tend not to interact. You know, we— not everybody is able or historically in the habit of attending the public hearings that happen or, you know, the workshops or the work sessions that the assembly holds. So looking for ways to engage the public, and the Budget Advisory Commission is more than happy to participate and facilitate that as the assembly wishes. We have the ability to invite assembly members or school board members to our meetings, and that would be something we were open to if you think that would be valuable.

Yeah, thank you. And beyond, beyond the town halls that you are working with with the District 1 representative. Are you— are there any other suggestions, sort of concrete suggestions, as to how exactly that engagement might best occur, or how we might move beyond the sort of status quo of community outreach?

That's a good question.

I'd be happy to discuss it more with you. I don't have anything off the top of my head. I don't want to get too far ahead of the resolution. The resolution did not include any really specific guidance.

Yeah, that's, that's totally fine. I was just curious if the commission had had a conversation where some of those specifics were discussed, but yeah, would be really excited to talk with you. Offline. Yeah, absolutely.

Okay, thanks. And then I'll note we were joined in the room by Member Scout at just now at 10:10. So any other questions for Mr. Mills?

Oh, Miss Scout. Hi, sorry.

Did you talk about our, our muni, our budget things? I mentioned the town halls that you and I have been working on. Great. Awesome, thanks. Sorry to miss it.

Okay, I don't see any other questions, so thanks for being here and thanks for your work. Yeah, thank you. Okay, next we will have our— I don't know if we have— MOA trust fund update, and then I'll just note we're going to briefly move through these reports so that we can make as much time as possible for service areas. So I'll keep us moving along. So please go ahead.

Thank you. Good morning, everyone. I'm Kevin Liu, Investment Director of MOA Trust. I have a very brief update for you guys today. As of August 31st, the market value of the trust is $516 million.

The monthly return is up by 1.7% from the previous month. This equates to $8.4 million increase in the month of August. Year-to-date return is up by 8.3%. The attribution to the return was because of the positive gain from the global markets, supported by the slowdown in tech sell-off. NASDAQ led the way with a 4.2% return, and the S&P 500 reached an all-time high in August.

And this concludes my remark. Happy to answer any questions. Any questions for Mr. Lu? Okay, not seeing any. And of course, folks on the phone, I'm keeping track of my text, so just text me to get in the queue, but speak up if I do miss you.

So, okay, I don't think there's any further questions, so thank you for your report. Thank you. And then next we'll move on to our revenue report. So, and I know we have one of our sheets here, the one-pager, with that update. So I will turn to our Treasurer.

Good morning, Deputy Treasurer Lauren Crawford. Briefly, revenues are coming in basically like we forecast. So the report's in front of you, there's nothing really controversial here, but if you have any questions, I'm happy to answer them. Okay, questions on the revenue report?

I do actually have one on the SEMT, the ambulance service fees. I know that one is essentially reimbursement from the state. I wonder, is it— I guess, what is the lag between when we submit for those reimbursements and then we'll get back? Is it a year, a few months, or, you know, what do we usually expect? It's quite a bit, so it's more than just a few months.

So this one's black in particular because It's not consistent on which month it comes in. And so the forecast on this is a little bit wider on the error. And so that's in particular why this is highlighted, but it's not something that we're worried about. Let's put it that way. And this process, through the chair, the— I recently asked the fire chief if the SEMT reimbursement was requested for the 2024 year because they finished the ACFA recently.

They were able to submit that, and so they are waiting on it. To come back. So it's, it is like Mr. Crawford said, it's on a who knows how long it takes to actually process, more than a few months but less than a year. So the good news is that we're back closer to the cycle of where we should be and we will be on the cycle next year. Great.

And just to, just so I'm clear, then it's because we have to have our audit finished in order to be able to submit for that reimbursement? Correct. Yes. The ACFR has to be complete and goes with the application to the state for reimbursement. Thanks.

And then one other quick question. So SEMT, is it one annual payment based on the prior year, or is there multiple per year? Through the chair, it's one payment at a time. So they submit the entire application for the prior year activity and they get the lump sum back. Great, thank you.

Any further questions? Mr. Handel.

So for the room tax, you might not have this available, but I'd be interested to see, I guess, the breakdown, how much of that is coming from like hotels or kind of traditional versus short-term rental. Do you have any idea? I guess we do have a report online that provides that type of information, could give you a pretty good ratio there. I don't have that off the top of my head. Okay, thank you.

Yeah, thanks. Yeah, there's, uh, well, and maybe could you speak just briefly, Mr. Crawford, to just generally which of these have reports online? Because I know, um, I know there's a few others too that basically report out annual revenue, sometimes in different categories. Is that correct? Sure, yeah.

So, uh, generally the excise taxes. So room tax, tobacco tax, the rental vehicle tax, tobacco tax I believe has one, alcohol and marijuana. So they should all have some type of report online within the tax website or Treasury website. Okay, yeah, and I'll just note the room tax in particular. My prior life was tracking this this tax data part of it.

So it does have different classes of hotels from like Class A, higher end, down to lower end, as well as other, and that's where the short-term rentals sit. And I can follow up with an email if you'd like that. Oh yeah, if you wouldn't mind. And just, I guess, one other thing, is the room tax, is that under the tax cap or is that a supplementary? Partial.

Okay, thanks. So one-third of it is.

The— it's outside the cap, but one-third of it comes to general government. So the, so the one-third is under the tax cap? Is outside the tax cap. Yeah, but it comes to general government. So, so the entire room tax is split into three buckets, and a third of it comes to general government, and that is outside the tax cap.

The other two-thirds go to other entities. Okay.

Yeah, and I think it's Makes me think there's— it's been a while since we've had a briefing on the bed tax or the room tax, so I think that could be a future topic as well. Um, because it gets even more complicated when you start talking about the bond agreements with the Divina Center. So, um, I'll note that, uh, Ms. Baldwin-Day just joined us in the room. Um, any other questions on revenue report?

Okay, not seeing any. Thank you. Uh, so next I'll move on.

Else in this category, and I'll just see if Ms. Brouse has updates on all of these. I do see we have our budget to actuals, and again, I'll remind folks trying to keep the keep these reports short so that we have time for the service areas. Through the chair, owner browse, Director of the Office of Management and Budget. Going down the agenda items, we have the budget to actuals. We also have update on fund positions in FEMA and ARPA.

The FEMA and ARPA updates will be next month when we're going through the budget process, but the sort of top line on that is that the ARPA grant spend is almost entirely complete. There is a small dollar amount under $100,000 that remains in the administration category for actually producing and monitoring the reports that have to go to the federal government for ARPA reporting. But for the most part, we expect all of that to be done before the end of the year and close out appropriately. FEMA is still processing through some of the outstanding earthquake projects. But the other FEMA projects have either been closed out or will be closed out as part of this year.

And so we'll do an update through the budget process on all of those. The fund positions will also be part of the budget conversation next month. And any additional detail that we need to do on fund positions outside of the budget process in October and November, we can continue through December and first quarter revisions. But the budget to actuals report report that you have in front of you. Um, on page 1, it's the overall budget to actuals by department, and at the top you see that we are 66.3% through the fiscal year as of this report, which encompasses all of August.

Um, the, uh, total spend so far through the year is 63%, so we are underspent by about 3%. Um, the, uh, The highs and lows on the overall department spend are the same as they have been throughout the year so far. Chief Administrative Officer has a high spend because of both the venues contracts and risk being in that department. But for the most part, those spends are not problematic or out of the ordinary in terms of where we would end the year. We are keeping an eye on risk and venues as we move throughout the rest of the few months.

Maintenance and operations, you'll see, is at 51, well under where they used to be. And that, again, is because of the appropriation that the assembly did maybe a month or two ago. But we will see how the weather treats us over the next few months and what that means for their bottom line at the end of the year. The municipal manager department is underspent, barely due to non-labor set aside in the Safety Department for software that has not been spent yet. I don't know if that project is going to be spent this year or if they have procurement set for a different time, but we will find out to know what the status of that IT project is.

And you see the TANZ expense at the bottom of the column is at zero. That's because that has not been transferred into— the TAN spend, as far as I know, and that should happen by the end of the year. But for the most part, overall, not surprising or out of the ordinary from what we've seen throughout the year. Any questions on page 1? Questions from members?

Okay, not seeing any. Okay. On page 2, or I guess page 3, because page 2 is now the supplemental overrun of all of the details from the first page. Page 2 is the labor versus non-labor. The numbers on labor versus non-labor have been interesting because so far throughout the year, the labor categorization has also always been a little bit off by percentage.

And so when we were talking to Payroll, it is because of the way Payroll has been divided in segments this year. And so So it is slightly confusing, has to do with the SAP configuration, and looks like we are overspent, but it is because of how payroll has the divisions made through this year. I'll get more detail for the next month, but, um, we sort of poked into this to say, why is this slightly different than it has looked in the previous years? And it's because we have more than 26, uh, payroll periods allocated because we split the beginning and the end of the year instead of only splitting it once. Something along those lines.

So we are making sure that that does not push us in a negative position by the end of the year. The non-labor category, again, Chief Administrative Officer at 83% from the contracts and risk assessment— or risk department. The Municipal Attorney's Office is at 91% spent, partially due to the fact that they encumber their large contract at the beginning of the year, um, and then spend that down throughout. Uh, and PM&E is at 88%. Um, we, uh, asked Director Colhass to let us know if that was an accounting anomaly or if that is a specific spend and, uh, what, if any, concern there may be before the end of the year.

Any questions on labor versus non-labor? Questions for members? And I'll note we were joined in the room by a member, Park, just now. Okay, not seeing any questions.

Okay. Overtime report. Let's see the outs. That's the outliers we have. We've talked about previously.

You'll see finance is in the overspend category, and that is due to property appraisal and the work that they have had to do throughout the year. I haven't looked at the direct split out between whether or not the controller's office has any ACFA-related OT, but I'll do that for the next committee meeting. But I think for the most part, no. And so the— that activity that we've seen out of the controller's office over the last couple of years catching up with the ACFFRS has slowed or stopped, which is great. The APD and AFD overtime numbers are higher than normal.

Some of that has to do with needing to adjust their actual overtime budget numbers. Some of it has to do with vacancies, as we know, in APD and in the fire department. There's a fair amount of OT analysis that's being done right now, partially just based on trying to understand and control the overtime accrual throughout the municipality, but particularly because the overtime category at the fire department is both part of their operational requirements, but part of the operations of the MCT and other reimbursable revenue from state callouts. So we are, um, picking through that to determine if there are any personnel adjustments that need to be made in order to accommodate that through regular staffing as opposed to overtime use, and whether or not that would be a cost control or a workplace improvement.

Any questions from members?

Ms. Baldwin-Duke. So how does that strategy sort of interact with the personnel attrition that we're seeing with retirements? And how are we squaring personnel with the capacity with— I don't know, maybe this is a separate conversation. Through the chair, you mean? The, the any increased regular would normally be dealt with by either enhancing the number of seats in an academy or running an additional academy.

So the what now in order to time dovetails in of how are we have enough positions to accommodate increased attrition. Okay. Seeing any and then move on. So let's quickly get through travel and then the alcohol and marijuana classes. Yes.

So the travel budget.

Uh, total budget $589,000 and spent through the year, and we are at $320,000. So 54% spent, 66% through the year. Um, that varies by departments, but as of right now, there aren't any departments who are overspent in their budget on travel. Uh, any questions on travel? Questions from members?

Not seeing any. And the next page, the alcohol tax. Last month we had some questions about encumbrances and, and some, some potential curiosity behind some of those numbers. We think that some of that was due to the HANA conversion and the fact that they were moving things back and forth between two platforms at the time when we pulled that report. So we made sure that these encumbrances, we drilled down into them to make sure that They were accurate to the department reporting, and the alcohol tax is pretty good in terms of all of the departments.

Next month you'll see this congregate shelter annual operations contract line item move due to Assembly action. We were able to appropriate the state money into that fund source to pay for that.

The rest of these, I think, are pretty good. The grants are all out the door and the program operations are running under spend through the year. Any questions on those? Questions from members on alcohol tax? I do have one there briefly.

So just in general, I know we've talked about receipts are going down. Obviously, some— it seems like maybe some consumer behavior is changing, etc. As it is right now, and I know that you guys have removed some things from this budget or shifted it to kind of make room so that it's right-sized or whatever the term would be, do you guys anticipate at this point any— basically, would we— do you think we would have a shortfall by the end of this year for what's budgeted this year? Through the Chair, or to the Chair, I don't. Right now, we're not concerned about the spend throughout the year.

I think we are coming in where we are supposed to.

There was a bit of a fund balance, I believe, previously. So if there is any overspend, maybe it will be accommodated that way. We also have the current revenue projections showing a slight increase in alcohol tax going into 2027. So, um, there will be slightly more on the revenue projection than is included in this, uh, budget for '26. Thank you.

I don't see any further questions, so I think we can move on.

The next page is the ACE Fund, the marijuana tax, and all of those grants are moving out the door and— or absolutely— and the alignment for tax collection will get taken care of before the end of the year, and board administration is on or under spend. Marijuana taxes. Okay, question. Do our ACE Fund board has provided for the context of budget, provided their recommendations to the assembly session on that, how they are doing Friday, October 2nd from 2:10 to 3:10 PM. So more discussion on ACE Fund coming soon.

Okay, I think that takes us through our reports. And of course we'll hear about some of these other items as Ms. Sprouse said, FEMA, ARPA, et cetera, next month. So let's move on to our last substantive topic of today, and that is service areas. So we are continuing the presentation that we started in August. So I'll just note we don't have print copies of the presentation, but if you kept one from last month, you have it there or it's online.

So I will turn to Ms. Braus, and I don't remember what slide we left off on, but maybe a quick refresher is good. Yeah. Okay. So what is a service— I think we are about two-thirds of the way through this when we stopped last time. We got to the really good part, the giant spreadsheet with tiny numbers.

So what is a service area? We talked through this, giving the definition of a service area, where they are authorized, the services they do fund, the common types across Anchorage, the how the services are paid for and what you can do with the money, who runs a service area, and whether or not that is the locally organized group or through municipal department activity. 21 Individual LRSAs on the Anchorage Hillside. We talked, we talked about Eagle River and Girdwood and the differences between those two areas, how a service area is created or expanded, and we were here, how a service area is created or expanded 50 years ago, and now 50 years later we have more than 60 active service areas, and we were talking about this, I think, and the red highlighted sections are the major funds that are part of the tax cap. So the illustration here is that all of these are service areas with assessments that occur and levies that are Taken, but the 6 red boxes are the funds that are part of the tax cap, and we have traditionally over the last many years talked about or heard about the 5 majors, and the 5 majors are the 5 major funds that are highlighted all together in one.

And, or I shouldn't say that, the 5 majors are the first 4 in the box of 5. Plus the ARDSA fund. So the outlier in the 5 major conversations is the Anchorage Building Safety Service Area, and that is the fifth column, I believe. Yes, the one that is entirely blank in this spreadsheet because there is no levy within the safety service area this year. There has been in the previous couple of years and 20, 30 years ago, there was every single year there was a collection within the BSSA.

So there are 6 of those major funds. You'll see that not all of the service areas pay into those funds. That is due to when those other secondary service areas either voted themselves in or out of the other service areas that they would be paying into. So if a specific area never joined the Parks and Rec service area, they do not pay into that levy.

Any questions on this?

Questions from members?

I do have a general question. Yeah, go ahead. Yeah, well, I'm going to try. So my question is, uh, can you speak a little bit about the— well, I guess one, I'm interested in the fact that ARTSA is— I know it's considered one of the five majors. Of course, there's a number of places in the city that are not in that area.

Um, was that— has that how it's always been since 1975, or was that changed? And then my other question is, do the other road service areas have have their own cap, essentially, but I'm wondering, like, there's— we're all held to the tax cap in this road and drainage service area. What are the other caps on other areas, if any? To the chair, is it weird if I go and point at the screen again? Because I know that you can't read it, but it's easier for me to show which one it's in.

So I'll just say I've zoomed in on my computer. To answer your question, the individual LURSAs and those individual service areas are outside of the overall tax cap, and they are part of their own approved cap. So many of the LURSAs have $1 mil or $1.5 mil or whatever they need it to be to get the work done, and they can vote themselves into a higher mil rate in order to get more revenue to improve those areas. The ARDSA fund, if I recall correctly, and Assembly Council, please correct me if you know any different or research things on your computer while we are talking. But the, the, originally ARDSA was a different city road fund that then once we incorporated was retired and rolled into this new creation and the debt anyway.

And so the ARDSA was created around that to incorporate more of that debt. Than what was just the city service area. So it has gone through at least one iteration of, uh, majority road service area, but for the most part, uh, this roads and drainage, this ARDSA category, is only in 1, 2, 3, 4, 6 other service areas. And then you see this road service area column, this, this limited road service area column here. So this column, this column, this column are all roads and drainage levees in different kinds of service areas.

So, and the numbers vary anywhere between— let's see, we've got a 0.34 up to 275. So they, they range all over, and each one of those service areas has a different total assessed value. So those mill rates are different, and how they impact each of those residents and their homes is different. So, uh, that is part of the confusion around, I want my pothole fixed, we can't fix it, that you don't live in the service area we're allowed to fix it in. And there's quite a few of those different service areas, so it can be very confusing.

So just to briefly restate, and I think there's other questions. So essentially ARDSA, which doesn't have an elected board, it's run by the departments and then voted on by the assembly essentially, that is within the charter. And so it would take a vote of the entire municipality to change that if it's within the tax cap. And then these other service areas you know, have an elected board or however they function, but they could essentially raise their own cap without having to go to everybody else. Is that correct?

To the chair, yes. Fascinating. Um, questions from other members? Mr. Hamplin. So on it with, with the cap, I guess it's different.

As I understand it, it's different than the tax cap that we, we have. And so they've got a, I guess, a direct mill rate cap and stuff on that. And I do like, so when we were dealing with this with the road board out in Eagle River, it did have to go to voters to, I guess, increase that cap. It was not something that they could just do. I mean, it was— they can adjust that mill rate between— I mean, within the financial constraints there, but there was still a mill rate cap, not how we traditionally— or I guess how the rest of Anchorage has it, where it's an actual dollar amount cap.

Well, the, the, the, the Anchorage amount isn't a dollar amount cap either. It's a formula that is applied to in a specific way. So depending on how the numbers change in there, then the amount of money underneath it would change as well. We have a, we have a, we have a formula cap that says you can only add this number of this category of things to the year over year. That doesn't equate to a specific number outcome on a recurring basis, if that makes sense.

The same way mill rates aren't either. The mill rates are the amount of money you— there's a cap on the total mill rate you can levy, 1, 1.5. The voters within the service area have approved that number at some point, and if you want to go outside that 1, 1.5, you have to go back to those voters within the service area to say, are we allowed to raise the mill rate to 2. So it is still a voter action that occurs, it's just not with the entire municipality, it's only within the individual service area to approve their mill increase outside the cap. Under the cap, everybody has to say yes.

Outside the cap, only the people who live in the service area have to say yes. Does that make sense? Yeah.

I guess what I'm saying is, I guess for the, I guess, services that fall into those, I guess, red boxes and stuff with the tax cap and stuff, if everyone's property values doubled and stuff, those mill rates would go down, correct? But for the ones that have a set mill rate, like Chugiak Volunteer Fire Department, where they've got a 1 mill rate, their budget essentially doubles on that because they are not— that mill rate doesn't actually change then. 'Cause they are, they set an actual set mill rate. Yes, but if their assessed values change, then the amount of money that is accessible under that mill rate goes up. Yeah.

Right. Okay. Okay, next I have Ms. Kelly. Thanks. Okay, I think I'm sure this is like an obvious question that we've discussed before, but I'm trying to just like connect all the pieces.

It's a lot. You know, but yeah, so the 5 service areas, they can raise their own mill rate? No, through the chair to member scout, the areas under the tax cap can only be increased by a voter approval of all voters within the municipality. Okay, that's why we do the bonds every year. And so when on the area-wide bonds Everybody has to say yes.

If you are within the police service area and you are approving any sort of capital improvements, then the people within the police service area only vote on that ballot, which is why we also have, as the clerk knows, how many styles of ballot? Welcome, Clerk Kynes. Well, if you don't mind me cutting in here, there's 180-something ballot styles because some precincts have multiple LURSSAs and some districts have LURSSAs and multiple precincts. Things anyways. But also, as far as the way we vote on bonds, everybody in the municipality votes on the full faith and credit of the municipality.

And, and so when you're looking at the results of the election, the first 9 pages are going to be what everybody in the service area voted on. And then— and I might have this backwards— and then there's a couple pages in the back that are the same ones, but that is the area-wide vote. So, so if we are voting on— and Girdwood gets hosed on this every year— Girdwood wants to repave a road and their stuff goes down because people don't understand that if you're not in the service area, you're only voting on the full faith and credit of the municipality backing that up. So, um, Okay, does that—. Yeah, that's super helpful.

So it's like, for that specific Girdwood example, everyone in the municipality votes on it, but not everyone would pay, like, their taxes, or whatever, wouldn't actually increase, just the people in Girdwood impacted. Yeah, through the magic of a database, we can— you, you fill in one bubble and the people in Girdwood are voting on it, and that is calculated in one area of the, um, yeah, results. And then in the other area is the entire municipality on the full faith and credit. And so the ins are first, and then she'll do separate reports for out, fire out. Okay, and so what were we talking about then with The board— what can the boards do outside the boards of supervisors of these service areas?

What can they do without municipal voter approval through the chair as long as they are only requiring their own activity? Meaning if, if, if a LURSA wants to improve their road and does not need bonding, aka a debt instrument or a promise from the municipality saying we will guarantee to pay this no matter what happens, they can take the action on their own, which is why some of these service areas are limited and some of them are not. So Girdwood is a small community, and so they are trying to make a large cost improvement using a debt instrument that means that the entire municipality area-wide, the incorporated area, has to say, yes, we're okay with that, we'll back you up. And if that doesn't happen, if, if, if the rest of the municipality is not willing to say, yeah, we'll do that, that, then the measure fails. So basically they just get to spend what's in their bank account.

Correct. But we decide—. And if—. And in those instances, if they want more in their bank account, they can increase their mill rate. Okay.

Because— so if— so the challenge here is that Girdwood has— GvSA is column yellow. It's the middle of the yellow columns. And they can change their mill rate, but their mill rate is pretty high considering the size of the community, and in order to make large capital improvements, you probably would need to use a debt instrument, and that would mean that they have to figure out a way to do that. They've tried different ways, different times, and yes, as Clerk Hines says, they regularly, uh, are not successful because of this confusion. Okay, so they can change their mill rate, but they can't incur debt without —vote for approval.

Okay, got it. Thank you for taking the time to explain that. Okay, I have myself in the queue for a very brief question, then Mr. Bullen, then Mr. Handlin. My question, just to follow up then, so, because I didn't realize, I was thinking as an ARSA voter, my understanding was that it's just folks within our service area deciding, but can you clarify, so it is the entire municipality who's voting to approve or not approve the ARSA bond? Unless it is the debt instrument within, if you are under, outside the cap, GBSA is outside the cap, then you have to get everybody else to say yes.

Okay. So ARDSA is part of the cap, GBSA is outside the cap. Okay, thanks. Next, Mr. Voland, then Mr. Hendolin.

If you, yeah, if you have, I'm just gonna say, come on up if, okay, yeah, more Mo Better information, which I'm sure he does. Thank you. What was the question? The question was really within the Arts and Service area, is it only the folks in that service area voting on a bond in a given year, or it sounds like it really is everybody.

Through the chair, to the chair, sort of one of the distinctions is what is being bonded for and with what capacity. So on ARDSA, as it's under the cap, if we're doing a full faith and credit bond, which means that the Municipality of Anchorage, the entire unit, stands behind the debt, which is one of the, you know, it's governmental gold-plated type of debt, so we get really good rates, then the entire municipality has to vote on a full faith and credit bond. There are other instruments that have pros and cons to them. You could do, we do revenue bonding debt, or you could also do a smaller entity could seek a different type of bonding, but they don't have access to full faith and credit bonding, so they would have to be limited to their bank account or the kind of financial leverage they could use based upon their bank account, not trading on the full faith and credit of the government. Thank you.

I was actually—. I just thought of something when that might be a clarifying thing that we can go to when we get through all the rest of these, just on how these service areas are viewed in terms of understanding what they really mean. But thanks. And I think the clerk has pulled up a recent election result as well. Yeah, so this is page— well, page 14 of the results.

And so it says in our summary And there is 1,000 or 186,198 voters in ARDSA. And so that's Proposition 2. So that's how the results of the voters in ARDSA voted.

And the municipality voted on the full faith and credit.

Lord, here, and so 235,398 voted on the— are able to vote on the full faith and credit.

Does that help? Yeah, thank you. That is helpful. Okay, next I have Mr. Bowen, then Mr. Hinterland.

Okay, can you hear me? Yes.

Great. I hear a little bit of an echo, but that's okay. I'm looking at slide 9, how many service areas are inside the tax cap.

And I have a couple questions looking at the spreadsheet. One is Tax District 9, Stepphagen Heights, without Parks and Rec.

What is the without Parks and Rec piece mean? Through the chair to Member Voland, it means that they are not a member of the Parks and Rec service area, and they do not pay into it.

Okay. And then, so, I, we're gonna have a more fulsome conversation about some of these issues, I think, at a later work session. On a matter that will be before us, but I'm interested in the different total levies. So those are the mill levy rates for those different areas.

And I'm interested in comparatively who, you know, what is the overall tax burden in these different service areas? And which services do they get? And which ones are they paying for? So, for instance, if Stuckigan Heights doesn't pay for Parks and Rec, but folks from that area are able to enjoy parks in the Anchorage Bowl, such as, I don't know, Kincaid Park or Cuddy Park, Town Square Park.

No. What other, I guess, okay, here's my question. What other service areas, excuse me, what other services might some of these service areas not be paying for?

Through the chair to Member Voland, that is a very good question, and actually it leads right into what I thought I should talk to you about because it is very, I think it's illustrative of what you are asking. When we are looking at, oh, and I'll I'll start by clarifying that I just realized at the beginning of this meeting that I think half the last half of the deck are all slide 9.

So, but I knew which one you were talking about.

Nice.

They were not paginated all the way through. So if you, so if we look at this page, like every column is a dollar, a penny, a cent. It is, it is a financial representation. Then what we have in column 1 is area-wide. Area-wide is $0.42.

Area-wide is what pays for us in this room. It is the municipal government charge, so it is the cost of the administration of the municipality. It is all of our internal service departments. It is the mayor's office, the assembly, it is the ombudsman, it is all of those different offices. It is everything that is not provided within one of these other service areas in the outlying columns.

So to your question, Member Voland, area-wide is the amount we pay for the administrative layer on top of all of the other service areas. If you have a number represented in the fire column, you are paying for fire services. If you have a number represented in the police service area, you are paying for police services. If you have a number in the parks and rec category, you are paying for parks and rec services. One of the reasons the numbers in the parks and rec category are different is because some of them are for Anchorage and some of them are for Eagle River parks and rec, so the numbers are slightly different.

The roads and drainage, you see that 1 to 5 service areas pay into the Roads and Drainage total. Girdwood Valley Levy only has one number in it because Girdwood pays into it and that is it. All of these other service areas in the sort of back half of the page have different totals because they have either voted themselves in at that rate or they have voted projects that create that rate. So it is a process of when all of this activity happens, let's, you know, talk about something we all love to talk about, and the white column in the middle of the two red columns is CASA. CASA is— you'll see lots of point zero ones and then a handful of nothing, and that is part of, from my perspective, what happens when you try to get an abandoned area voted into the Parks and Rec Service Area, but one side says no.

And so then instead of incorporating into a larger existing service area, we create another service area on top of an existing service area to vote everybody else around in. And that was approved. So there is this, this challenge in efficiency when it comes to how do we deal with this number of service areas and what, what's the amount of administrative work that has to be done and is that where it needs to be? Mm-hmm. Um, can I ask a follow-up question, Chair?

Yeah, please go ahead. Okay, so looking at, for instance, Glen Alps Service Area without fire, and they have a lower total levy of 12.08.

If there's a fire in that service area, is the fire department going to respond?

Through the chair, I believe the practical answer would be yes, and I think that— I don't know the exact answer on this, whether or not— I think that is the area that's served by one of the tenders or I'm not exactly sure, but on the way that we are supposed to deal with these things, no, it should not be responded to.

If you are not—. Your house is on fire. —In the service area, it is not something that is part of a response category unless it is some sort of emergency situation, in which case the municipality can respond deemed an emergency. Volunteer fire department, says our municipal attorney Ben Bowman.

They have a volunteer— the Glen Alps has a volunteer fire department? Not that I'm aware of. Okay, because I know that does, you know, but, um, okay, so that's interesting. Yeah, so I guess I'm just I'm interested in who's paying how much for what and the equity considerations there broadly.

You brought up CASA, so I'm going to go there.

Through the chair, I think it would have come up whether I said it or not.

Yes. So you said that some of these service areas can elect to levy themselves more, for instance, if they want to improve a road within their service area. Is that correct? Through the chair, yes.

Okay, so now CASA is a mechanism that can be used, so essentially they may not have to do that. In some instances to elect to pay more for the infrastructure that previously they would have had to step it up themselves and pay more and improve those facilities. Is that also correct? Through the Chair, it's my understanding that the challenge was that the, the, the infrastructure that was in discussion was not anybody's service territory.

And so it needed— because it had been previously paid for via state grants or state funding and had no longer been occurring, uh, the maintenance of that infrastructure declined to the point where people wanted to do something about it. And in Anchorage, if you aren't part of an existing service area, if you want to collect taxes to improve whatever you are discussing, you need to have a mechanism to levy.

Okay, I might have a different understanding of that, and I think we need to flesh that out because my understanding is that there are roads within CASA or that are eligible for CASA funding that would have been the responsibility of some of these limited road service areas, but now we have this bigger service area where folks in the Anchorage Bowl can contribute to those same facilities.

Are you saying, Ona, that the only roads that CASA is able to fund are roads that are in neither ARDSA nor Diversa? No, uh, through the chair, I, I think that if we are going to start talking about roads and ins and outs, that we should have maps in front of us and, uh, details, because I, I'm not the person to give you the history on Casa. So my concern is—. Sorry to cut in, so it is 10:59. I'm gonna ask if we can extend by a few minutes.

We got a couple other folks in the Thank you. And I'll just check, is there anybody to provide public comment or audience participation? I don't see any. Okay, go ahead, Mr. Ballen. Yeah, there's gonna be more conversation on future work sessions about this topic, but my concern is that we've created a mechanism where some of these service areas that are already paying lower mill rates can get around, could potentially get around, depending on the cost of bond package, having to electively say, hey, we're going to raise more of these funds ourselves because now ARDSUB is helping subsidize some of these facilities.

Meanwhile, the issue of reciprocity, they're not paying for fire, maybe they're not paying for parks, maybe and therefore they, their overall tax burden may be less than folks living in the bowl. And I just, I think that's really interesting to untangle. Through the chair to Member Voland, I think that, that is the, that is the overarching challenge with a service area model is that you have the legal ability and, you know, desire by the service area residents theoretically to keep that segregation so that they are only paying for what they have specifically approved of. But it's also the reason we're talking about this 50 years after we asked ourselves that question first. And, and so we have had 50 years of adding a service area, adding a service area, because it is how our model functions.

The other alternative is, do you want to blend all of these obviously area-wide services into one But I think the question is, what does that mean for some of the smaller communities to the north and south? And what does that mean to what everybody is paying? As you have said, we have a system that makes every different service area able to ask themselves what they want to do, not what we should be doing.

Well said. Thank you. Thank you, Chair. Okay, thanks. A couple more folks in the queue.

Mr. Handlin and Ms. Baldwin-Day. Yeah, just, I mean, Member Vohland took a bunch of my question there, but I was just had a kind of a little bit more specific on the, like, areas without fire. So they're not paying or anything. Does the municipality ever send a bill if if they are responding to those?

Through the chair, yes, I believe that they would. You'll see on the column it says, you know, Girdwood is not included in the fire area, but Girdwood's levy covers the cost of their provision within the community. So I think that we do invoice service areas if we provide service within those service areas, the same way maintenance and operations, if they went into into a LURSA, they would. Well, I guess I'm like, I guess more I think like, like Eagle River Valley has an area without a fire service area. I'm saying that if, I mean, they, they do respond to those areas if there's life, health, and safety.

I'm saying, does that individual property owner ever get a bill from the municipality to cover that?

Uh, through the chair to Member Hanlon. Eagle River, and again, Ona is correct, we would need to pull up the maps to be specifically certain, but I believe that Eagle River without a fire service area falls within the Chugach Fire Service Area, which, so the Chugach Fire Service Area overlaps with that Eagle River without a fire service area, which has more than one other service area within the Chugach Fire. So that's probably why that one didn't show up. Through the chair, yes, except that it's reversed. Chugach is alone, Anchorage, Eagle River the same.

Yeah, so Eagle River, they would respond and then the bill would be processed, but Eagle River is part of the Anchorage program. Chugach is slightly different. Okay, you know that. Yeah, and then just one comment, it's very interesting on this. We fought a war over no taxation without representation and we've got We've got some areas with representation but no taxation.

So just want to put that comment through the chair out there. Correct. And I would observe that's the Alaska story. Um, uh, okay, Miss Baldwin, I know we were short on time, so we'll go just a couple more minutes. But, um, yeah, thank you.

I think I just want to back up a step and understand, like, how does it happen that people get together and they go, hey, we want to create a LURSA but we don't want to pay for parks, so we're gonna opt ourselves out. Like, how? Like, that's wild. So we would— that we would be like, sure, you can live out there and probably ride your bike over here and use our parks and trails, but you're not going to pay for that. Why do we let that happen through the chair?

It's not something necessarily that we, quote, let happen. It's something that happens through the progress of time. We asked a question 50 years ago with tiny neighborhoods up in the hillside who were not part of any of this. Do you want to all incorporate and be up here? Yes, but only for this and only for this and only for this, not for all of these other things, because all of these other things are being paid for by the state.

And so then as that money goes away, that starts to become less and less possible. The LURSAs coordinate into their own areas. They create themselves as we go, and then they are not part of the overall area-wide— or not area-wide— of the police service area or fire service area unless they were part of it when it was originally conceived. Through the chair, to give just a quick illustrative moment of that, I would point you towards Code Section 2730.190, which which is the Glen Alps Service Area, came up earlier as kind of an odd thing. But you'll note that the services that that service area is responsible for are the services to be performed by the city of Glen Alps prior to the consolidation of the municipality.

So some— that, that's back to the origination of some of these service areas. The neighborhoods were cities. Yeah. So there are some people who have a premium subscription to the Municipality of Anchorage and they're they're not paying for it, is what I'm hearing.

I mean, they, like, they've kind of gotten, like, grandfathered in, I guess, is what I'm saying. They started with this very limited subscription, and now they have a premium subscription, and we're just like, sure, we'll subsidize that.

Through the chair, I don't know that anybody made that decision, uh, but that it is what happens because of— this is the nature of being a combined city borough. We, we are everything and not enough all at the same time.

That's actually like horrifying. Here we go. Okay, thank you. Yeah, and sorry, I know we want to continue this conversation. It's 11:07.

We have another committee in 8 minutes, and so I do know this is certainly a ripe topic. We can continue discussing in this committee or another place. I would also suggest I'm not the chair of the Transportation and Infrastructure Committee that has been created, um, but that would also be a great place to have, uh, really unpacking how these service areas work more in the mechanics. Um, so that's just a suggestion. Um, with that, I'm going to say we are adjourned, and then again, we're going to start our next committee meeting in 8 minutes in this room.

Thank you.