Anchorage Assembly: Budget and Finance committee-of-the-whole

Okay everyone, apologize for the delay. We'll get started.

Um, if I can ask folks in the back to take your seats and, um, we'll get moving into our business.

Okay everyone, I'm going to call this meeting to order. Today is Thursday, August 20th. We're noticed from 10 to 11 AM, starting just a few minutes late. This is the Assembly Budget and Finance Committee of the Whole. We will do introductions and move into our business.

I'll start in the room. Donald Handlin. Sure. Erin Baldwin-Day. Sydney Skow.

Anna Brawley. And on the phone, I see Mr. Martinez.

Yep, I do. And Ms. Park. Okay, thank you. Thank you. And I think that's everybody in the room.

We're also joined by clerk staff, assembly council, several administration members, and a couple other folks who will be speaking today. So we'll move into— I guess I'll orient folks. So we'll do our usual standing reports, at least the ones that we have updates on, and then we're gonna do a very brief overview of our budget approval process, not getting into the budget but just reminding folks about the calendar and kind of what to expect in the next few months. And then the rest of our time, probably the bulk of our time, we will spend on an overview and presentation about service areas. So first we'll go into our standing reports, and I will invite up our Budget Advisory Commission Chair to give a report.

I'll also note that our documents are being circulated by email and then will be online as well if they aren't already. So first I will turn to Mr. Mills. Go ahead. Yeah, thanks. We had a good meeting last week, sort of two main areas of focus.

We had a really information-rich presentation from ASD OMB Director Ms. Parrott on the foundation formula, which was very educational. We're looking at discussing with her and with ASD, you know, because we are an advisory commission for both the assembly and the school district, so working on both parts of our mission there. The other thing we did was we passed a resolution regarding the BAC's budget priorities for 2027. I don't think that made it on your agenda for your most recent meeting. I think it's on your next agenda, but it's out there.

You could read it if you were interested. And subsequent to that, I've been putting some thought into how we can— the Budget Advisory Commission can partner with the assembly in the school district to have some of our recommendations actually materialize and ways that we can work on pushing those forward. One of our recommendations was that the assembly and the school district have some sort of a joint work session on the budget to, you know, have shared priorities and stuff like that. And so I've been thinking about how, you know, I can contribute to that process. If any of you have any questions or— yeah, happy to take questions.

Okay, any questions for Mr. Mills? Mr. Gerker? Yeah, I appreciate that. I don't want to put you on the spot, but are there items you think that the Budget Advisory Commission has recommended that either the city or the school district hasn't taken into account?

Yeah, you said you, you want to see that, you want to see the, um, the recommendations from the BAC materialize. So are there, are there recommendations that have, that you guys have made that haven't materialized? Any specific ones you want? And again, I don't want to put you on the spot. Yeah, so just curious.

I don't have the whole document right in front of me, but our recommendations are, one of, one of the focuses is about community communication and participation. So there's the recommendation to have some sort of a joint work session, we'll call it, with the assembly and the school district. Also, you know, proactive public outreach before people are up in arms about a particular change, talking about community priorities and, you know, where the community wants to go and how the school district and the assembly can craft a budget that gets the community where we want to be. So none of it has happened yet, but I'm not shocked that none of it has happened yet because we're early in the budget process and we just suggested this stuff effectively last Thursday. So, yeah, thanks, Ms. Waldron-Day.

So, so that was really a comment about forthcoming recommendations and things like that, not necessarily recommendations that have been perhaps sidelined or ignored in the past. Yeah, that's correct. We just adopted this resolution on Thursday. It hasn't been on your agenda.

Agenda yet, so not—. Yeah. Well, I just want to offer that I'm really grateful that the Commission is taking a proactive stance on the municipal budget and the state budget as well, and look forward to seeing the recommendations you bring. Thank you. Thank you.

Any other questions? And then folks on the phone, feel free to text me. And yeah, I think we can communicate offline about joint work session, things like that. And so if I appreciate that, and then we'll look for— I assume it will be an AIM on our upcoming agenda, and I'm happy to continue talking. So thank you so much.

Okay. Next we'll move on to our MOA trust fund update for a brief report.

Good morning, everyone.

So as of July 31st—. Oh, and I'm sorry, just make sure to put your name on the record as well. Kevin Liu, I'm the investment director with MOA Trust. As of July 31st, the fund has a market value of $507 million, with a month-to-date return was slightly down by 0.4%, while the year-to-date return remains a plus 6.5%.

July had a mixed result in the stock markets as the rotation sharply switch away from the tech sectors that offset the gains from the energy sectors. Energy sectors surged about by about 12% overall, and it was driven by a 20% spike in the crude oil prices. The crude oil price was hovering about $100 per barrel in the month of July. And as we arrive at the earnings season for the second quarter, we will continue to monitor the markets for the second half of the year. The next quarterly MOA Trust Board meeting will be held tomorrow.

And this concludes my updates. Happy to answer any questions. Thank you. Any questions for Mr. Lu? Let me just check.

I don't see any on the— sorry, I don't see any on the phone. Thanks for your report. Thank you.

Okay. And then next we have our— from Treasury, our revenue report. And I'll also note that we are joined officially by Mr. Crawford, We had previously Mr. Cipriano, but recently confirmed him to be the head of our Police and Fire Trustees Board. So go ahead, Mr. Crawford. Thank you.

Good morning. Loren Crawford, Acting Municipal Treasurer. Before you got the revenue summary highlights that we prepare each month. This is as of the 18th, so just a couple days ago.

We've realized 75.8% of our revenue for the year, which is tracking on par.

We're looking at, you know, $611.8 million in this, in this report, and we're at $463.9 million. So of note, our property taxes have now been realized on the report, which prior to were not. Come in, they're tracking almost exactly what we were expecting. Personal property tax hasn't— is yet to come.

Our self-filed taxes are also tracking remarkably well as far as what we were expecting. Private PILT has come in a little early, so we are fully, fully covered there for the year. There might be some small incidental numbers that come in, but nothing material.

The— so when you're looking at this report, anything that's gray or black again are like the things that might seem a little off. Okay, so just looking at those items really quick, personal property is running a little hot. We're actually got more money coming in so far this year than we had expected. That's not a bad thing.

Ambulance service fees are— have not yet been posted in June, so that's not actually a concern at this point. But just based on our SAP numbers, we do not have everything in yet for what we had expected.

Rental vehicle tax is not really a concern. This is just a timing issue with the with the reporting. So while it's gray, it's not actually coming in hot. We're— that's right on par with what we're expecting. Building safety actually is running hot, and we're probably going to end up something more like the 2025 actuals in the, in the $7 million area.

And the APD counterfines is a It's coming in low due to a tracking issue, so that is a non-problem, we believe. So I would open up to any questions. Good questions from members, and also note we were joined by Ms. Silvers on the phone a couple minutes ago. Questions?

Okay, Ms. Baldwin-Day.

So recognizing that, you know, with building safety, we're getting to the end of the building season, do we anticipate additional revenue in September and October from—. In this particular revenue source? Yes. Okay. Yes.

Fantastic. Thank you. And I have one question just on the alcohol and marijuana tax. I know that's been a discussion. We've got our actuals from last year.

We see we budget a little bit lower. Just wondering, because I can see it's about— both of them are about halfway through. I know some of that is seasonality, but do we, based on the trends, do you see any variance or any reason to say we might get more or less than what we expected? So on alcohol and marijuana, there's actually not a ton of seasonality in these. They're fairly steady, or at least inconsistent in their seasonality, you might say.

They're tracking right on. So we don't see our November and December until next February. And so, that means we're always 2 months behind. So we're exactly where we should be. Okay, thank you.

Yeah, I know that's one we'll be watching during the budget season to see what we can fund. Okay, I don't—. Let me check one more time. I don't see any other questions, so thanks for your report.

And then we'll move on to our— well, I'll say we have our remaining 3 reports, so I will turn to the OMB Director mainly for budget to actuals, but just to see if there's any updates on fund positions. I know we've talked about those before. Floor and/or the FEMA and ARPA reports. So go ahead, Ms. Brouse. Uh, thank you, Madam Chair.

Ona Brouse, Director of the Office of Management and Budget. Um, I think we can take these in reverse order, uh, to make them quick. The FEMA and ARPA funding reports will have a roll-up of for next month, and then also throughout the budget process. Um, they are refining the FEMA details right now to determine exactly which projects remain on the earthquake and what we need to get reimbursed for on those, but the dollar amount is considerably smaller than it ever has been with the FEMA reimbursements being up in the double digits. I think we're now under $10 million remaining total.

The updates on fund positions, those will also come as part of the budget conversation. Some of the fund movement that happens in the budget proposal is to rebalance the funds whenever there is fund balance available in any of those areas.

So we would detail and explain what may be happening with any of those funds that were reviewed during the fund position report and the budget to actuals in front of you. Let's see, let me go to— Okay, so we are about 58% through the year as of this report, through the end of July. And if you look on the lower right-hand side of the first page, you see that the municipality is about 51% spent. So we are underspent. Some of that is due to, you know, accounting posting, and we know that there are items that will be spent that have just not been moved into the correct category yet.

But for the most part, even with those included, we have a relatively secure spend so far through 2026. When we're going down the list to look at outliers, obviously line 2, the Chief Administrative Officer position, has a 70% spend through the year when we're representing about 58%, and that is mostly, again, due to the contractual nature of the venues contracts for some of our large community buildings. And so aside from that, the, the department is, is fine in terms of spend control. The—. I will call out the Equal Rights Commission particularly because they are underspent.

And when we look at the next page on the labor and non-labor spend, the, the labor is, is slightly under, but the real magic in the Equal Rights Commission is their non-labor spend. I think that Director Bose has done a very good job at controlling their non-labor spend in light of some of the attention that the Assembly and the administration had put on the Equal Rights Commission over the last couple of years. So she's keeping a tight handle on those. The other department, you know, 70% spend in health, that is again due to non-labor and the fact that the Health Department has their encumbrances and contractual items taken care of in a timely manner. So we have not seen that bouncing around a lot.

It just means that they have cataloged their contracts in the right way.

Other departments, maintenance and operations. If you look at the maintenance operations line, that is at a 33% spend, which is considerably different than last month's presentation because of the action the assembly took on that reappropriation of 2025 budget. So the $3.55 5 in the supplemental column is the additional contractual space and equipment operator positions that were added. So we see changes in their total budget spend, and then also in the labor and non-labor and in their overtime categories. So we'll go through and talk about those when we hit each one of those.

Let's see who else.

The municipal manager is at 40% spent, and that is, again, due to non-labor. The safety division has a larger than normal amount of money in non-labor for software procurement for 2026 that has not yet been spent. So we're keeping an eye on that to see how they produce through that for the rest of the year. Parks and Rec is underspent, partially due to seasonal vacancies in their workforce and also some contractual items still remaining to be spent from the summer season that they're closing up now.

See, and the other big winner-loser is real estate at 37% spent, and that's mostly due to the nature of the real estate contracts and the way that Director Briggs has those. That's, uh, that will be transferred and spent. We don't expect that to remain. Any questions on Overall questions from Ms. Baldwin-Day. Yeah, can you, can you speak to the convention center and reserves and why that's the number that is?

Correct. So convention center and reserves is at 28% spent, and that's just because the revenue that remains in convention center and reserves hasn't been moved over to pay the Denaina note or visit Anchorage. And so those are, I think, I think as far as I know, they're non-labor budget categories, so it's all contractual.

When does that typically happen during— over the course of a typical year? I would need to ask, I think, Treasury and the Controller's Office to find out when they transfer those funds. I think it's a regular set schedule.

But I think also depending on the status of the controller's office and where they are in the accounting for each month, but they've gotten totally caught up, I think, on '25. And so we would expect this year and 2027 to start being likely to be closed as we roll through the year, as opposed to having to do other prior year work throughout the beginning of the year and then pick up the current year. So we're getting closer to being back to a normal cadence.

So when, when do you think we would expect that number to move?

I, I don't know, before the end of the year. So I can ask and find out.

I think last year it did not move until the end of the year because of the nature of the controller and balancing the accounts.

Okay. Okay. Any other questions? Okay. I don't see any right now.

Okay, next one is the labor and non-labor report. Again, about 58% through the year in timing, and as we said, Equal Rights Commission is underspent a little bit on labor but mostly very contained on their non-labor. The maintenance and operations line, about halfway through the page, the labor side says 58% spent. Last year, or last month, the department was about 10% over their spend through the year allocation. And so again, that dollar amount, um, has moved for the better because of the Assembly action and the, um, budget addition.

Um, overall on the labor side, 55% spent, and on the non-labor side, 46% spent. Um, the, uh, very interesting Item, and I think we talked about this on the page before, is in the municipal manager's column, the non-labor is 8% spent, which again is mostly attributable to the fact that they have a larger than normal non-labor budget because of the safety software procurement that has not gone out the door yet. But otherwise, the larger sort of what appear to be overspends in the non-labor category are actually due to encumbrances within the health department. They're 82% spent. The Municipal Attorney's Office is 88% spent, but again, that is because they encumber their large contract at the beginning of the year and then spend it in the actual expense category as they go throughout the year.

So they know exactly how much non-labor they have available after they have paid their contracts.

And let's see, Project Management and Engineering is 88% spent, but that's because they have a very a very small non-labor budget of $237,000.

And as Ms. Baldwin-Day pointed out, convention center and reserves at 28% spent. Any questions on labor and non-labor? Questions from members? Don't see any. Thank you.

Over time, we, uh, Maintenance and Operations in the middle of the page. Um, the last month report, the overtime spend was over 100% because of the activity within Maintenance and Operations in the first quarter of the year. Um, because the, uh, Assembly added, uh, some of that funding to the overtime budget specifically for Maintenance and Operations, they are back under to about 80% spent. And so we are hoping that they will be able to cost control that with the additional budget that they were given last month. Um, other OT, the fire and police departments are still obviously running over their overtime allocations.

Again, part of that has to do with the fact that the overtime amounts have not been adjusted within the last few years to accommodate increased salaries. But overall their year-over-year spend is better than it was the prior year. So they're controlling more. And I think with additional seats being filled, they are able to cut some of the overtime a little bit. So again, I think we're going to deal with some of those overtime adjustments in the budget process.

Any questions on overtime? Questions from members? Okay, let's continue.

Oh, I'm sorry, actually I do have a question. I was curious on, in particular, public transit. I see, and I'm guessing, I don't know if that's due to vacancies, just wondering, because it is higher, but I know we need folks to run the buses. So is that a story where there's not enough staff and they're running overtime, or is there other issues there? To the Chair, the public transit rate, so while this is higher than what they have budgeted is lower than what they have run in overtime over the last couple of years.

From the pandemic forward, public transit has had real issues with having enough drivers to cover the bus routes and having to do mandatory OT specifically in order to keep the bus routes running. With the number of vacancies that were occurring during 2021 and '22, they were running much larger overtime budgets. As a, as a combination of that that plus additional worker callout. And you'll see in the '25 report versus the '26 report that they are sort of trying to control to a level that is no longer accurate for public transit. This is something that we spoke with Director Rudolph about during our budget conversation, that the sort of new ability to recruit and retain within transit needs to be taken into consideration for the vacancies that they have and how we are able to cover the fixed routes, because otherwise it turns into a very large amount of mandatory OT and callbacks for, uh, the Teamsters working there.

Um, so I think that that's a something we should dig into during the budget process with Director Rudolph to see what recommendations we bring forward and how to deal with that. But ideally, one of them will be an adjustment to staffing levels so that the overtime is manageable in the new operations.

Any other questions? No, not seeing any.

Thank you. Okay, travel. Overall travel budget for the municipality is $586,000, currently spent at $275,000. The overall department spend— there aren't any overspends, and the departments who have needed more travel allocation, mainly police and fire, have moved portions of their budget into the travel category to accommodate increased travel above any municipal dollars that are allocated in an annual budget process. Any questions on that?

Questions from members? Not seeing any. We can move on.

Okay. Alcohol tax. As this is a fun one, everybody, here we go. Alcohol tax, 107% spent. Yay!

Part of that has to do with the encumbrances and moving dollar amounts back and forth. It also has to do with the million dollars in the sheltering line item that was part of the 1Q budget cut, and we are still needing to move those expenses out of the alcohol tax and into the general government operating budget of the health department. So you see about 2/3 of the way down the page, the million dollars disappeared disappears from the budget line, so that needs to move, and then the spend will be corrected. And some of the encumbrances are slightly over their total dollar amounts in either the alcohol tax or the marijuana tax, and those will be corrected as well as they move through their accounting process. But for the most part, the grants are out the door and program operations are being billed for the positions that are assigned within the um, alcohol tax.

And, uh, overall, I believe we are hearing that, um, while 25 to 26 was a reduction in alcohol and marijuana revenue, that, um, there is probably additional reduction in one or both of those categories for 2027, um, but probably less than the $25,000 to $26,000 Delta. Any questions on this?

Ms. Baldwin-Day, go ahead. Thank you.

So I think I'm trying to wrap my brain around this first chunk of grants.

How are we— how have we encumbered? Have we encumbered more than we had? I guess is what I want to ask. I want to know, like, how does this work? Through the chair to Member Baldwin-Day, because those are two discrete columns of information, and so you have to subtract one to— you have to actually go in and reduce the encumbrance to accommodate when you spend it in the expenditure line.

And so if that hasn't happened, then we are missing the reduction that would show us being underspent as opposed to overspent. So it's being reported in two columns, essentially. Right. So until— and so there's a, there's a regular practice within the municipality where as we get closer and closer to the end of the year, departments go in and clear their encumbrances because they may have set aside something at the beginning of the year and not spent hit so far. And in order to free up that room within their budget, they have to go in and release the encumbrance so that the budget is available for a different kind of spend.

So I think that that is the nature of the specific activity on the alcohol tax because it is a closed fund.

So how— so if we were going to pay attention to what has actually gone out the door, we would be looking at the expenditures column itself. Correct. Okay. And comparing that with the approved budget. Correct.

Okay. Thank you. Yes. That's, that's helpful. Yeah.

Encumbrances is a set aside. Sure. And then expenses is out the door. Yeah. We've said this is what we think we're doing.

And then we have this reconciliation that needs to happen is what I'm hearing. Right. Okay. And is that something that happens periodically? Is that something that happens?

I think a lot of these are health department, right? Health department administrators. Is this something that happens at the start of budget? Like when do we true this up, I guess is what I'm wondering. I think it depends on the department, but it's supposed to happen relatively in real time so that this kind of confusion isn't part of the problem.

But I didn't have enough time to go in and ask the health department specifically about when they were planning to go in and adjust for that, but we can find out if they do it on a regular basis or if it is, you know, once or twice a year, but I think it's supposed to be on a monthly basis. Okay, got it. And then my, I guess, on the opposite end of that line of questioning, right now program operations is basically sitting at a 0% spent or encumbered. What, what's, what's that about? What, so the program operations lines are the municipal staff lines, essentially.

So each one of those program operations has municipal staff assigned to it. And if the position has not billed to the alcohol tax fund, either because it is not set up appropriately with an SAP with a coded, basically biller behind the personnel function, or it's not journaled by the accounting division, then it doesn't show up as being spent. It's currently, if there is a person in that position that has been accruing payroll, it's living in the Health Department budget and will be moved over into the alcohol tax to take up that space. So the program operations on health is one of them. The, let's see, the alcohol tax enforcement, you see that that's sort of a limited dollar amount.

Those are all positions or portions of positions that Bill to the Alcohol Tax Fund. Thank you.

Okay, thank you. I don't see other questions. And then I'll just note, I know we have one more report, but I want to move on to our other items soon. So we'll go to the Marijuana Tax report as well. Marijuana tax is 66% spent, and we have a couple of grant items that still need to be moved out the door and the tax collection amount that needs to be aligned with— we're working with the Treasurer's Office to get that set up specifically for the marijuana tax fund.

And but for the most part, the ACE Fund is functioning pretty well this year, getting their stuff out the door and all their paperwork in order. Any questions on ACE Fund? Questions from members? Not seeing any right now. And I know we will be— you've been talking about the management side.

We'll come back to the budget side, of course, during the budget cycle. So, okay, I think we—. Well, thanks. So that'll be our reports, and we will of course see another report next month. So let's move on then to our other two remaining items.

And before we do that, I should have said this at the beginning, I think it's been announced announced in our Rules Committee meeting, but wanted to also note that we now officially have a budget analyst, Miss Molly Rocher, who's sitting over there. And so she is getting trained up and working with our clerk, Miss Hines. And so you'll see her, and she of course will be participating in the budget process with us, some of us for the first time, along with her for the first time, at least in this side of the house. So welcome, Molly. And then speaking of budget, we will move on to the budget calendar.

So I will turn again to Miss Brausen. We've got our schedule up on the screen.

Okay, quick reminder, this is a, you know, if the larger budget calendar is too detailed and lots of lines and very tiny print, this is the sort of major action for Assembly members and the public. This is when information either hits the street or is transmitted to the Assembly or the public hearing opportunities. Through the budget process. So the, uh, major kickoff is, uh, the, the preliminary budget information, also known as the 120-day memo, that we transmit to the Assembly by September 2nd, uh, 120 days before the end of the year. Um, the next, uh, major milestone is the Assembly work session that is scheduled for September 18th, where we will go through the items in the 120-day memo.

To answer any questions. Uh, on October 2nd, uh, OMB transmits the mayor's proposed budget to the clerk. Um, and the 6th is the official introduction of that budget on the assembly agenda. Um, so it lives sort of, uh, unofficially introduced for a few days. Um, the October 16th meeting is the, um, work session for general government operating and capital And I think the day before that is Budget and Finance Committee.

So if there is any additional content or items that need to be covered, then the Budget and Finance Committee meeting could be used for additional conversation. I think that work session is 3 or 4 hours. The Assembly meeting public hearing is October 20th. Then we do the second work session for any continued general government departments and enterprise and utility operating and capital budget, uh, an additional public hearing opportunity. And then November 6th is the assembly work session for amendments.

Um, we have between November 6th and November 17th for passage. So we would expect to, um, see, uh, any member amendments come forward during the November 6th work session. And then, um, if the administration is planning to do an S version, The incorporation of any of those amendments and any additional budget activity that has taken place between October 2nd and November 10th would be incorporated into this version on the addendum on the table for final action from the assembly. Thank you. And maybe I could ask—.

Here's some crackling—. If you could switch real quick. Oh no, it's okay. I think it was working, but if you want to I'm going to just swap them out since you have two before you. Any questions from members on this?

Okay. I'll just note a couple of things. One is certainly the highlights are here. Most of these dates are basically enshrined in code. A couple of them are in the charter.

So this is a very set schedule that we're on. It is one of our main functions. And of course, we'll have a lot more discussion throughout this process. So this is just a preview. But I also want to note we do have a one-pager that we won't go through.

It's the full budget calendar. Here, and it does have these dates in bold, essentially, but I want to just note that there is a whole bunch of work that happens mostly in August and July, as you'll see in the dates here, and so the, the MUNI is actively in the budget cycle right now. It's just that we're not seeing it. So again, if you do have thoughts or you have questions or specific things you want to dig in, this is a great time to talk to departments, talk to OMB, but of course there's later opportunities for that as well. So, so that's just a preview.

And then I'll also note for members, once in a while we have somebody who is out of town on the 17th. I will note that is probably the most important meeting of the year, that and the one in April when we have our first quarter budget revision. So please do not miss that meeting because I will come after you if you do. We need everybody there. And then also just to note, really the whole month of November up to that meeting is— that's the busiest time for us.

So just mentally, you know, plan. Obviously life happens, but plan accordingly, especially if you want to be active on amendments. So I think that's all we need to say about that for now. So let's move on. And also, no, I don't see any members of the public here to provide audience participation, so I'll keep an eye on that.

But otherwise, I think we can go right to—. Right to 11, and we can go just a couple minutes over if we need to. So we will turn to our last item of business, and that is our overview of service areas. And I will also say, I imagine this is going to generate a lot more questions, and so this is not the only time we have to talk about about this, but we'll at least get as far as we can, and I know this will be a big discussion moving into the future. So I will turn again to Ms. Sprouse, and I'll note there's a presentation on the screen.

Thank you, Madam Chair. So what is a service area? I think many of you know what a service area is, but to get into the sort of nitty-gritty of it in order to understand what our municipal structure looks like, um, the The general premise of a service area is how the municipality funds and governs local roads, fire protection, parks, and other neighborhood services through special taxing districts. And we'll talk about special taxing districts versus service areas versus everything else. So much fun.

So defining a service area. A service area is a geographically defined district within the municipality. So when we were formed, we were the city and the Greater Anchorage Borough, which had a bunch of different service areas, and we said there's too many government happenings, paperwork inefficiencies going on, and so we would like to merge into one sort of administrative leadership layer of the municipality in order to consolidate those costs and efficiencies and maintain our service area sovereignty and be able to sort of control what we pay for within each district. When originally unified, it was established by— service areas are established by the Anchorage Assembly under Municipal Code Title 27. If you guys are looking for all of the service area maps that exist, it's in the very last section of Title 27.

There's a lot of them and they are very different styles of maps because they have existed through different times. They are funded through property taxes or special assessments within boundaries. And they're usually or often governed by a local board of supervisors, unless some of the more interesting service areas have different leadership structures or none at all and the municipality is in charge of them.

So any questions on service areas there? No. Okay, authorized under Title 27, the Assembly creates and maps them, state law enables them, and the voters must approve them unless Yes, it is an area-wide power that the assembly is basically decreeing be added to area-wide. There are some specific limitations on what you can and can't do when making that kind of choice, and it depends on the level of taxation within the service areas that may be merged or created, but each of those is a different, uh, uh, category unto itself, each situation, I suppose. As I said, Title 27 has all of the maps.

Let's see, what services do they fund? Road maintenance, the Anchorage Roads and Drainage Service Area, the Chugach-Birchwood Eagle River Rural Road Service Area, the Girdwood Valley Service Area has roads, all of the local road service areas are road maintenance, our police service area, our fire service area, parks and rec is an individual service area. Street lighting is a service area. What? Street lighting is a service area because most of our road infrastructure is rural, therefore we do not command lighting on much of it, and there are many service areas who want their roads lit, so they band together and create a street lighting service area and then tax themselves to be able to pay for those lights.

So there— I don't know how many street light service areas there are. I think there's at least 4 or 5 of them.

And the building safety service area, which is the service area that the permit center and the building safety code is enforced within. And for the most part, that's the bowl of Anchorage. Question for Mr. Handlen and Ms. Baldwin-Day. So I know with, I mean, road boards, police and fire, Parks and Rec, those have actual members that are elected to it. I'm not aware of anyone, I guess, street— for street lighting having a street lighting board or anything with that.

I guess, how is that then, I guess, kind of governed after they've instituted it? So that, I think, is one of the service areas that when there is no governing board, the governance falls to the municipal department responsible for doing the work in the service area. So if street lighting is part of road maintenance, then the street lighting service area would be governed or maintained by maintenance and operations, or Chugiak-Burchwood Eagle River Rural Road Service Area, who then goes through maintenance and operations depending on what the need is. So there are the, the service areas that have boards that are either elected or appointed, and then there are a handful of service areas that don't have functional need other than existing existing for taxation. And so there is no direct governance over those.

And then so if I guess something with that governance had to change where, I mean, electricity rates went up and we were having to change that, I guess what is then the process? Do those residents then have to vote on that, or is it kind of, is it just for the creation of it? When they originally are created, there is a limit on how far that revenue can go up to without an additional vote of the residents within the service area. So, you know, your mill caps within Eagle River are set here, and once you start to push up against them, you have to go back to the voters within the service area and ask, do you want to pay more or be taxed more for services, you know, according to X, Y, and Z? It's very similar to what we do at the municipal level when we hit the tax cap.

It's okay, well, we have choices. We either cut or we try and find revenue from somewhere else. So go to the voters or make some other changes. Okay, thanks. And I'll just add a little color to that too.

I think one recent example, I remember former Assemblymember Crystal Kennedy came in and testified in support of an increase to the mill rate in Eagle River, which did go to voters and I think didn't, didn't pass at that time. The one of the largest service areas that is managed by a department is ARTSA. There is no Board of Supervisors for our roads. But I think the indirect supervision is the assembly. So it's interesting that all, all 12 members vote basically on the governance of that service area through our budget process, even though only 5 of the 6 districts have ARTSA in it, within it, and District 6, the South District, only has a small portion of ARTSA.

And then another thing to note is we have a Parks and Rec Advisory Commission, so they have a function of reviewing what happens within the Parks and Rec service area area, which doesn't include most of Hillside, doesn't include Eagle River, but they are advisory and so they are not a board of supervisors. So there are other— I just want to note there's other kind of governance structures, but it really depends on the service area and where it is. So, Ms. Baldwin-Day, next question. Yeah, thank you. Um, is, is Girdwood Valley a rural road service area or a limited road service area?

Uh, so they are— we talk about them later in the presentation. Oh, uh, okay. If you want to, if you want to tackle that later, that's really specifically because there are differences between Girdwood and Eagle River, and a lot of people, I think, think that they are very similar, and they are similar in that they are separate from the municipality in the Anchorage Bowl, but their structure is different. And to Chair Brawley's point, I don't know why I didn't mention this, but yes, the other larger service areas like area-wide police, fire are governed by you guys. So those major funds funds, which on the bottom of this slide I have quiz questions for.

What are the 5 major funds? If you've heard of, you know, the 5 majors of the municipality, do we know what the 5 major funds are? Anybody?

Except Council Gates and Chair Brawley. No. So they—.

Do you want to put your guesses on the record? It's— I mean, the answer is it's most of these services that are up on the board right now. It's ARDSA, it's the police service area, the fire service area, Parks and Rec, area-wide. And this is the challenging part. There are actually 6 major funds within the tax cap and the municipality, but when the budget was reset in 2010, the deletion of the Building Safety Service Area and the taxation within the Building Safety Service Area made the 6th Fund essentially obsolete.

So the 5 major funds were the ones that carried forward beyond 2009, and road maintenance, police, fire, area-wide, and parks and rec are those 5 majors. Once the Building Safety Service Area became strictly fee-supported in 2010, the taxation within the BSSA went away. But the Assembly resurrected the BSSA revenue about 3 years ago, 4 years ago, I think, specifically to deal with the deficits that were accruing within the BSSA and the personnel assigned to the BSSA because that structure of being fee-based only works for a certain amount of time, and eventually you have to figure out how to deal with that, and that's part of the conversation we're having about our deficit funds and the budget going forward. But so technically there are 6 major funds, ones, and so we have to change our vocabulary. And well, just briefly note, so we do have technically 5 minutes left.

I'll ask if we can extend to 11:05, but also just to note, I know we have a lot of content, so I think we can try to get as far as we can, and then we're gonna have to come back to the subject, I think, because I know there's a lot to unpack.

Sure, follow up. So other than Seversa, do we have any other rural road service areas, or is that the only one? Through the chair to Member Baldwin-Day, hold please.

I will also say, one of the quiz questions is what's included in area-wide powers in the area-wide service area. Does anybody know what is included in the area-wide powers aside from Chair Hawley and Council Gates?

It's a way longer list than you would think. Mike, and I have it in front of me, so I'll read it to you. Animal control, assessment and collection, education, fireworks control, health and environmental protection, the library, mass transit, planning, platting, and zoning, taxicab and limousine regulation, regulation of entry upon and use of municipal rights-of-way, parking, civic convention, sports, performing and visual arts center, and urban redevelopment and beautification. General powers granted to all municipalities under AS 29.33. Sewers and sewage treatment facilities, processing federal firearms forms under AMC Section 8.100.020, highway law enforcement, the construction and maintenance of life safety access roads, and municipal cemeteries.

As we get further into the alphabet, we get closer to the chronological time of where we currently are, because cemeteries was added— how long ago? 2024. Highway law enforcement, I think, was '18, 2018, maybe. Maybe. And many service areas have existed within the municipality and then been repealed.

So the sewers and sewage treatment facilities— there are quite a few previous sewer service areas that have been repealed throughout the municipality because of the development status. And I'll note, I also see the clerk entering the chat at the table. Oh, there we go.

I was just looking in the code for the rural road service areas if Ona needed help there. It's the two— yeah, it's Subversa South Golden View Rural Road Service Area and Mountain Park Robin Hill Rural Road Service Area. And if you ever want to know why we have 198 ballot styles, it's because of this road service areas. And I will double down on the clerk's sentiment there in just a moment. So this is the listing of the service or common types of service areas throughout Anchorage, the road and drainage, the arts, the limited road service area, the rural road service area, the building safety service area, and special purpose areas for streetlight drainage, fire, whatever those may be.

So each service area performs a different service aside from area-wide for the most part, and they are aligned in different parts of the community in different ways. Some of them serve a single subdivision, some of them serve a single property, some of them serve the entire community.

The house service areas are paid for only within the boundary, either through an annual mill levy. They have a dedicated fund and use annual carryforwards in order to keep the revenue within the dedicated funds moving forward. I believe there was an item on your agenda at the last meeting that was is one of the LERSAs moving funding from their budget, which is their fund balance, their dedicated fund. And aside from the annual amount that they may budget to spend on an operating basis, on a, on a regular occasion, they will move revenue from their fund balance into their annual operating account to be spent in the current year. And so That is all within the LERSA fund and does not touch other municipal funds and not our general government operating budget, but the LERSA's budget.

And so Chugiak Fire operates the same way. We see if they have any revenues that are saved or unspent throughout the year, they roll into the fund balance of the Chugiak Fire Service Fund. And then that fund balance can be spent for capital acquisitions or anything in future years through a vote of the board. Board that governs that service area.

Okay, so who runs a service area? Board of Supervisors, locally elected residents, or municipal support, as we talked about. It depends on what the service area is and what they do. We have 21 limited road service areas, and they are— they're different in the sense that for the most part they are all from the area of the Greater Anchorage Borough.

Originally, and they maintain their specific— for the most part, they are road service areas, and they were either previously road and sewer service areas, or they're only road service areas. It's a combination across the board because all of those LURSSAs have come on at different times. Also, as the population has grown throughout Anchorage, each of those LURSSAs pop up in a different way once they are formed and the neighborhoods are built, etc., etc. So the—. So there's a question from this—.

Oh, go ahead. So there's a whole lot in this municipal support category. Do LURSSAs pay us an admin fee for doing this work on their behalf? Through the chair, remember Baldwin Day, there may be IGCs involved with some of them, but particularly the departments that provide service to them are public works administration, and I believe that a portion of the positions there are billed to the LURSAs, but the LURSA work for the most part is done on a contractual basis managed by the boards themselves. So the, you know, one of the LURSAs mentioned has an annual contract that they go out to bid for via the procurement process to determine which private contractor they will have to come and maintain their road.

For the most part, our municipal departments do not maintain the LURSA roads. We do in special circumstances, and then there is an appropriate financial exchange, but for the most part, they are contracted. Yeah, that part I was aware of. I just, I had not thought about the fact that there's administrative support happening on our side, and I was just curious if we were being reasonably compensated for our admin. Technically, all of us are municipal support to those LURSAs because everything we are doing here is supporting their functionality, but it's also why the Assembly is IGC IGC'd.

It's why the mayor's office and the municipal manager is IGC'd, because each of those values is sent out in tiny little bits to the entities that are receiving the management from that structure. So that's the sort of general premise of the IGC overhead is we are the municipality providing this specific kind of support, and so the sort of overall position positions get broken up into tiny little pieces and the dedicated positions are billed straight to a fund. Gotcha. So we do have IGCs with these 21 LARSAs. Okay, thank you.

Okay, so Eagle River and Girdwood— the, the main difference from my perspective is that Girdwood Valley Service Area is one Board of Supervisors, and Chugiak/Eagle River Rural Road Service Area and Chugiak/Eagle River Parks and Park and Rec are two separate boards. And so they manage their funding differently because the Rural Road Service Board takes action on those items and the Parks and Rec Board takes action on those items. But GvSA is one board that manages each of those things the same way the Assembly manages the municipality as a whole. That's the major difference. Difference in terms of structure.

Any additional comments from our friends from Eagle River? That sounds about right.

So the challenge with being a service area like Eagle River and Girdwood— one of the challenges, one of the major challenges— is that because you are essentially a component unit of the municipality, when you ask to improve something within your district, you also have to to get the entire municipality to agree that we are willing to also let them tax themselves into paying for something within their area. And that is the legal structure where, because we are pledging the full faith and credit of the entire municipality to support the bonding or taxation for one specific area, they have to say— everybody has to say yes.

Okay, and I'll note Mr. Gates is in the queue and also note we're at 11:04, so I think this is going to— the slide we were just on is going to need to be the last slide. But Mr. Gates, go ahead. Yeah, I'll take 15 seconds. I just wanted to mention at this point, the Goodwood Valley service area is unique because GBAS also was recognized as the community council for the Goodwood area, so they have this dual function that sometimes creates some really odd situations. Such as open insight compliance with their own service-oriented functions, but that doesn't apply when there's community council function.

And I'm gonna cut in and say maybe this is the last point we can make. We're gonna be out of time, but I also note this conversation I think will continue to the next meeting so we can pick up the slideshow then. And also just to note, we're reorganizing some of our committee structure in order to provide more time between committees because of the situation that we keep running over. And so that's a separate discussion we'll have tomorrow, but back to Miss Brouse. So very quickly to roll up to points that have been made already, how many service areas within the municipality 50 years later?

More than 60. This is the taxing district and service area list from our budget documents. And these are all of the— these are all of the individual road service areas. Areas and lighting districts, and the ones across the top, the area-wide fire, police, ARDSA, those— while we have more than 60 service areas, what we actually have is 6 service areas within the tax cap. So those red highlighted sections are the service areas that are included under the tax cap.

Those are the major funds, and you can see that for the most part, the mill rates that they are taxed at are pretty much exactly the same across the board. They have to be, except for a handful of different service areas that are left out of that taxation, and it is because of when each of these taxing districts was formed and how they voted themselves into inclusion. So you could have two areas around parks and rec area right in the middle, and they are not part of the parks and rec service area. That's how CASA is born. So the way our structure works, anytime you want to add something new that you do not incorporate into an area-wide power, you are creating another service area, another ballot, another item within the ACFR, another fund to track, another governing board.

So at some point, the efficiency of the municipal structure structure, not the most efficient. And the question is, what do we do with that? That is a great question to end with. I will just note, some have observed we are not a city, we're not a borough, we are a collection of service areas. And yeah, this, this conversation will continue for sure.

And then I'll also give a shout out to Tax District 8 in my district that opted out of the Building Safety Service at some point. So when you look at the map, there's some interesting stories to dig into there. So, um, with that, um, I know we are out of time, so we will adjourn this meeting. We'll be back in a few minutes for our next committee meeting, and we will pick up this next, uh, this discussion next month. Thank you.