Mid-Hillside and Hillside East
Community Councils

Anchorage, Alaska

Road Service Areas

Everyone in our community council areas lives outside the Anchorage Road and Drainage Service Area. We take care of our roads through Local Road Service Areas (LRSAs) and informal neighborhood groups sometimes called "Independent Road Service Areas" or derogatorily "No Man's Lands.".

With LRSAs, the Muncipality is involved in collecting the money and spending it, but an independent board decides what level of service will be maintained. The independent areas are generally a group of neighbors who "pass the hat" to cover expenses.

This page provides information on our Road Service Areas .

For maps of the Road Service Areas, click on the MAPS button.

There is more information in the Minutes of meetings where LRSA issues were covered.

When the city ran into the tax Cap for 2003, spending by Local Road Service Areas was calculated into the city's total spending. That lead to cuts in the amounts the LRSAs voted to tax themselves. An opinion by Municipal Attorney Frederick Boness November 17, 2003 cleared up this confusion and showed that LRSA spending should not be included in the Tax Cap calculations.

November 18, 2003 report emailed by Assemblywoman Janice Shamberg:

An ordinance was introduced, by title only, placing LRSA's and, potentially, other road service areas such as Glen Alps, Eagle River and Girdwood, outside the Tax Cap. A recent opinion by Municipal Attorney Fred Boness declared that there is nothing keeping limited road service areas from being separated from the Tax Cap. This ordinance would subtract the LRSA funds from the total tax cap and treat it separately, so those members of the LRSA could pay for road services they deem necessary and vote on democratically. It will not, however, allow the general tax cap to be increased by the amount removed.

In the Fall and Winter of 2003 major road planning for our area will be finalized.

The second phase of DeArmoun Road (from 140th up to Hillside Drive) is in the late stages of planning now.

O'Malley Road work is also narrowed down to three broad alternatives.

Members of the Community Council are actively looking at these now. If you use these roads these changes will have a big impact on you. If you live ON these roads, you better get educated now!

Get involved now! Come to our meetings!

Road Service Areas are covered in the Municipal Code Title 27. There are 34 service areas in Anchorage. Twenty two are Road Service Areas. The largest is the Anchorage Road and Drainage Service Area (ARDSA). Eighteen Local Road Service Areas (LRSAs) are on Hillside.

ARDSA:

• This covers the area west of the Seward Highway plus East Anchorage.
• Maintenance on major roads to "mass standards" are taken over my MoA.
• Mil rate 3.03=1.91 for bond repayment plus 1.12 for maintenance.
• About 100 people work in operations and 4 in administration.
• ARDSA roads must meet MoA road standards.
• MoA does not have an accurate inventory of roads maintained.

LRSA:

• Mill rates run 1-2.5mil. The money is collected by MoA. 88% is for maintenance and 12% for MoA administrative fee (several people in attendance were surprised that it had changed from 10% to 12%.)
• Local Road Service Areas have a two year life, must be voted in again. Cannot issue long term debt. Most formed in mid 1970s to early 80's. To form, a petition must be signed by 10% of registered voters in the area, an ordinance is written and sent to the Assembly who will determine if it goes to vote at the next MoA election.
• A Board of Directors is voted in and runs the LRSA. Boards are supposed to meet quarterly. Now 30% vacancy on the boards so quorums are hard to meet.
• All work is contracted out by the MoA. MoA takes bids on the contracts for LRSAs. There are only 2 active bidders now. Contractors feel the work is costly and the pay is low and some boards are difficult to get along with. Vince suggested that consolidating LRSAs and "No Mans Lands" to get larger areas will make it easier for contractors to bid and create efficiencies in their work. The 2 contractors are getting spread thin. He recommended the 18 Hillside LRSAs be consolidated into 4 or 5. There was discussion that would create areas too big to meet diverse requirements.
• LRSA roads do not have to meet MoA standards. Many are not on official Rights of Way. Current laws do not allow road improvements or building new roads. There are gray areas such as application of recycled asphalt (rap) and drainage improvements that may be classified as basic maintenance. Federal air and water quality rules are hard to meet with dirt roads. That may create pressure for asphalt and force change in the LRSA's. State grants for improvements can get an exemption from the rules and can build roads not to MoA standards (i.e. Rockridge) Vince said the state won't give a grant unless MoA maintains the road, LRSAs are considered an extension of MoA

LRSA Class 2 City:

• Glen Alps, Girdwood and Chugiach/Eagle River Road Service Areas are set up as "Class 2 City Status" with perpetual life and the ability to pass capital improvement bonds.
• It would be possible for the Glen Alps Area to annex other areas into its Class 2 City.

No Man's Land:

• Part of the Hillside Area is not covered by an MoA Road Service Area. Those areas typically have an informal system of collecting funds from neighbors for road maintenance.
• May be problems with neighbors not paying.
• A significant road problem such as a flood may leave the neighborhood roadless.
• It was pointed out that at least one "No Mans Land" had no trouble getting good bids from contractors on plowing and sanding. The cost in that area is far lower than even local LRSAs.

ARDSA vs LRSA:

• Why are costs different? ARDSA uses graders are used that are expensive but allow "gating" driveways so there is no berm. There are cars on streets, driveways with little space between than create snow storage problems, snow removal and storage more difficult. Sidewalks must be plowed. There are more multi lane roads in ARDSA.
• For a comparison of costs see the Proposed 2001 Budget for RSA's.
• Chris Birch's Compass Article "Let's Get the Best Deal for Snow Removal in Anchorage" was provided to attendees.

Will MoA try to Annex LRSAs into ARDSA?

• This would be a good revenue source for MoA.
• Might require LRSA roads be upgraded to MoA standards. That would be very expensive.
• Wuerch and Mystrom support annexation.
• Hillside state representative Con Bunde submitted House Bill 13 to make it harder for MoA to annex areas on Hillside.

Discussion about who to call MoA, vs State, vs LRSA road.

• There's confusion on who to call when there's a road problem with MoA, LRSA's and the state and others involved. Call MoA at 343-8277. They will forward to the appropriate group in charge of maintaining that road.

HOUSE BILL 13 Your representative in the State House in Juneau, Con Bunde, introduced a bill 1/12/2001 that will make it more difficult for the Municipality of Anchorage to take over your Road Service Area and make it part of the Anchorage Road Service Area.

From the Anchorage Daily News May 25, 2001

Governor OKs limits on redrawing service areas
BOROUGHS: Law says residents must approve boundary changes.
The Associated Press (Published May 25, 2001) Juneau --

Gov. Tony Knowles has signed into law a bill that will prevent local governments from changing the boundaries of road and fire service areas without a vote of the people within them.

Knowles had vetoed a similar bill last year, but said House Bill 13 corrects some of the problems he had with the previous legislation. The measure passed by a large enough margin that legislators could have overridden a veto this year.

Service areas are areas within a borough or municipality in which residents pay taxes for a particular service, such as road maintenance, snow plowing or firefighting. Under current law, a borough assembly can change their boundaries.

House Bill 13, sponsored by Rep. Con Bunde, R-Anchorage, changes that. The bill requires a majority of residents in each area affected by a proposed boundary change to vote in favor of it. If service areas are combined, the bill lets residents in the new service area continue to pay different tax rates based on the area they were in before.

Bunde has said the measure will let residents of service areas control their own fates. He said his constituents are happy with the service they receive through their road service areas and fear if they were forced into a merger, they could wind up paying more taxes for less service.

Thursday night, Bunde said he sponsored the new law at least partly in response to a plan developed by former Anchorage Mayor Rick Mystrom that allowed Anchorage voters in 1996 to impose police services -- and the taxes to pay for them -- on the city's Hillside neighborhoods. Hillside voters had rejected police services several times, and did so again in 1996. Mystrom's plan, upheld later that year by the Alaska Supreme Court, required them to pay taxes for police services anyway.

Bunde said the framers of Anchorage's charter promised residents in 1975 that the newly created municipality would not force tax-supported services on them without an affirmative service area vote. "If the city could abrogate the charter for police, a number of us were concerned they would start looking at our local road service areas as a cash cow," Bunde said.

The new law does not require voter approval for boundary changes in fire service areas that would increase the number of parcels of land by no more than 6 percent or increase the number of residents by no more than 1,000 residents.

Knowles' spokeswoman Claire Richardson said the measure no longer exempts some boroughs from the voting requirement. Knowles had said that provision in the previous bill might be unconstitutional.

DEBATE: Residents of special service areas battle city tax burdens.
By Martha Bellisle
Anchorage Daily News (Published February 6, 2001)
Juneau --

City and borough officials argued Monday that giving people in service areas more say-so would steal municipalities' constitutional rights, while service area residents demanded the right to decide their own fates. So went the hours of back-and-forth public testimony in the House Judiciary Committee on a bill by Rep. Con Bunde to require voter approval both in cities and in service areas before any changes to road or fire protection can be made to those service areas.

At present, a majority of voters in the entire region can establish, change or abolish a special service area. That's basically how Anchorage residents, in 1996, brought the city's Hillside residents into the citywide police service area and taxed them for police protection. Such a system allows for "tyranny of the majority," said Bunde, R-Anchorage.

But Anchorage municipal attorney Bill Greene told the panel that the bill "provides for a minority veto." He said, "This bill would override some portions of the (Anchorage Municipal) Charter." Vic Fischer, a former legislator and a member of the Alaska Constitutional Convention, called the idea behind the bill "preposterous" and testified that House Bill 13 "flies directly in the face of Alaska's Constitution." The framers of the constitution were clear in their determination that local government power should reside in boroughs and cities, he said. "Service areas are not units of local governments," he said. "They're not autonomous." With this bill the Legislature would be unconstitutionally imposing on local government, he said.

Speaking for the bill, Abigail Fuller of Homer said, "To make changes without a vote is socialism." Sally Dodd-Butters, also of Homer, said, "If this flies in the face of the Alaska Constitution, then the entire issue of annexation and taxation without representation needs to be changed."

Bunde, who lives in a local road service area on the Anchorage Hillside, told the committee that the term "local control" should refer to the individual voters affected by specific changes, not a nearby city. If service area residents want to tax themselves to build a community center or bring in more snow plows, they shouldn't need the approval of city voters, Bunde argued. And city voters shouldn't be able to take over a service area without the OK of the affected people.

At Monday's hearing, Bunde amended the bill to include all service areas throughout the state: The Juneau borough has eight; Mat-Su has 31; Fairbanks has 117; Anchorage has 61; Kenai has 11; Ketchikan has 12. The bill had previously exempted second-class boroughs with populations of less than 60,000.

Jeff Bush, deputy commissioner of the Department of Commerce and Economic Development, told the panel that Gov. Tony Knowles and his administration oppose the bill because of the constitutional questions it raises. Knowles vetoed a version of the bill passed last session. According to the Alaska Constitution, the state should impose limits on home rule municipal governments "only in instances where there is clearly an overriding state interest," Bush said. "No such interest has been put in the record at any hearings on this bill." An opinion by the Legislature's legal services division challenged that argument, however. Tamara Cook, director of the division, said there is legal precedent for the state to make policy choices, even if it supersedes a city charter.

Members of the Judiciary Committee slowly disappeared from the room as the public testimony entered its third hour. With only two of his committee remaining, chairman Norm Rokeberg, R-Anchorage, delayed a vote on the bill.

Reporter Martha Bellisle can be reached at mbellisle@adn.com and 907-586-1531.

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HB 13 00 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 13

01 "An Act relating to municipal service areas and providing for voter approval of the 02 formation, alteration, or abolishment of certain service areas."
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 29.10.200 is amended by adding a new paragraph to read:
05 (60) AS 29.35.450 (voter approval of alteration or abolishment of
06 service areas). 07 * Sec. 2. AS 29.35.450(a) is amended to read:
08 (a) A service area to provide special services in a borough or unified
09 municipality may be established, operated, altered, or abolished by ordinance,
10 subject to (c) of this section. Special services include services not provided by the 11 unified municipality or a higher or different level of services. Special services
12 include services not provided by a borough on an areawide or nonareawide basis in
13 the borough [,] or a higher or different level of services [SERVICE] than that provided
14 on an areawide or nonareawide basis. A [THE] borough may include a city in a
01 service area if
02 (1) the city agrees by ordinance; or
03 (2) approval is granted by a majority of voters residing in the city, and
04 by a majority of voters residing inside the boundaries of the proposed service area but
05 outside of the city.
06 * Sec. 3. AS 29.35.450 is amended by adding new subsections to read:
07 (c) If voters reside within a service area that provides road or fire protection
08 services, abolishment of the service area is subject to approval by the majority of the
09 voters residing in the service area who vote on the question. A service area that
10 provides road or fire protection services in which voters reside may not be abolished
11 and replaced by a larger service area unless that proposal is approved, separately, by a
12 majority of the voters who vote on the question residing in the existing service area
13 and by a majority of the voters who vote on the question residing in the area proposed
14 to be included within the new service area but outside of the existing service area. A
15 service area that provides road or fire protection services in which voters reside may 16 not be altered or combined with another service area unless that proposal is approved,
17 separately, by a majority of the voters who vote on the question and who reside in
18 each of the service areas or in the area outside of service areas that is affected by the
19 proposal. This subsection does not apply to a proposed change to a service area that
20 provides fire protection services that would result in increasing the number of parcels
21 of land in the service area or successor service area if the increase is no more than six
22 percent.
23 (d) This section applies to a home rule or general law municipality, except that
24 (c) of this section does not apply to a second class borough with a population that is
25 under 60,000.
26 * Sec. 4. AS 29.35.470 is amended by adding a new subsection to read:
27 (b) The assembly may by ordinance establish, alter, and abolish differential
28 tax zones within a service area to provide and levy property taxes for a different level
29 of services than that provided generally in the service area.

Should the LRSA budgets be included under the Tax Cap?

Spending by Local Road Service Areas was considered as falling under the Tax Cap until an opinion by Municipal Attorney Frederick Boness November 17, 2003 cleared up this confusion and showed that LRSA spending is not under the Tax Cap.

November 18, 2003 report emailed by Assemblywoman Janice Shamberg:
An ordinance was introduced, by title only, placing LRSA's and, potentially, other road service areas such as Glen Alps, Eagle River and Girdwood, outside the Tax Cap. A recent opinion by Municipal Attorney Fred Boness declared that there is nothing keeping limited road service areas from being separated from the Tax Cap. This ordinance would subtract the LRSA funds from the total tax cap and treat it separately, so those members of the LRSA could pay for road services they deem necessary and vote on democratically. It will not, however, allow the general tax cap to be increased by the amount removed.

For most of Anchorage's history since the Tax Cap was put in place in 1984, this has not been an issue since the MOA was under the Tax Cap. When the MOA hit the Cap under the Wuerch administration, LRSA budgets were cut below what the residents of those areas wanted. A debate on the appropriateness of that ensued.

You can follow some of that historic debate in the following.

2004 BUDGET CUTS
Will LRSA budgets be cut again in 2004?

From an email from MHCC member Amy Johnson 7/16/03:
I talked with Brian Hoefler who is on our LRSA board. Apparently, the Mayor has begun some outreach work with the LRSAs, and Brian was saying that this may be a time to work with the community councils. There are clearly some differences of opinion on the roles and responsibilities of the LRSA boards and the city's traffic staff. This might be a good time to work on developing better communication with the city's staff and perhaps educating the local community on how their roads get maintained. Apparently it is an issue for assembly members as well, since for some of them, the bulk of the calls they get are about road issues. Let me/Brian know what you think.

From an email from Gail Dial, Chair of the Road Service Area in the Birchwood, Chugiak and Eagle River area. 7/18/03

I received this from our MOA financial supervisor in response to my questions on the reduction in state revenue sharing funds and the next budget. Since the 2004 budget is formulated starting with the final mil levy set for each service district in 2003, the potential for major reductions in the level of service is of great concern.

Gail Forwarded the following from the MOA:
Gail,
T to date, we have received no final policy decisions on the 2003 budget reduction proposals for dealing with the elimination of State Revenue Sharing or distribution of the one-time Federal payment. Basically, our budget analysts have been advising us to begin forgoing "nice to have/do" activities so that we can make the cuts when/if asked to do so from this year's budget.

Currently, the 1st draft of the 2004 budget is being formulated with final 2003 numbers as the starting point. No specific departmental funding assignments have been made. Yesterday, we were advised that a reduction in the neighborhood of 9% per department is possible.

Current guidance from the new administration so far is that everything is on the table. Unless directed otherwise, I would expect that to mean that special road service areas are not exempt from budget reductions.

Issues the Board may want to provide some input on may include the budget ratio of maintenance vs. CIP. Consider policy or program changes that might be implemented if required to cut 9%. The Board may also want to approve a request for a specific funding level. With a projected $23 million dollar deficit, there will be a lot of tough interdepartmental choices to make & everybody will need to be prepared to justify the need/benefit of their programs against others. Hopefully, by the August meeting, we will have more specifics on what we will be required to do for 2004.

The Administration submits the final budget draft to the Assembly on 10/01. So August should give us time to consider & incorporate the Boards input.

Thanks. Maury 343-8191

The following is from an email from Assemblywoman Janice Shamberg on December 4, 2002.

Below, in response to your concerns about your Limited Road Service Areas funding, I have paraphrased pertinent excerpts written by Attorney Thomas F. Klinkner of Birch, Horton, Bittner in answer to questions Dick Tremaine and I posed due to recent budgeting events. Below those are answers and remarks by MOA Attorney Bill Greene.

Question 1: Do limited road service areas have discretion to set the rates of taxation for their road maintenance services?

Answer: No, a LRSA has no discretion.... Under the Anchorage Charter, the authority is vested solely in the Assembly, subject to other limitations in the Charter or in state law. Changes in the rate of taxation in a LRSA that are associated with a material change in the level of service in the service area, or that exceed the voter-approved limit on taxation in the service area, are subject to approval by the voters in the service areas.

Municipal code establishes each service area specifies a maximum mill rate for service that may be levied in the service area. The ordinance and mill rate limitation was ratified by the voters under Anchorage Charter Section 9.01(a): "[a] service area may be created, altered or abolished only with the approval of a majority of those voting on the question within the area affected..." Since the mill rate limitation was ratified by the service area's voters, any change would be an "alteration" of the service area that also would be subject to voter approval. The "alteration" of a service area includes a material change in the level of service provided in the service area.

To the extent that a change in the rate of taxation results in a change in the level of service being provided, the change in rate of taxation is subject to the service area voters' approval of the change in the level of service. So, with the exceptions above, the Assembly has sole authority to determine the rate of taxation for road maintenance services in a LRSA.

Question 2: Are taxes for road maintenance services in LRSAs subject to the limit on taxation in Anchorage Charter 14.03(a)?

Answer: In the first year a tax is levied in a LRSA, the amount levied will not be subject to the tax cap. However, in years following the initial year of levy of a tax, the amount levied in the first year will be added to the tax cap, and the tax levy in the LRSA will be subject to that limitation.

He goes on to quote Section 14.03. Tax increase limitation. Excepted are taxes required to fund additional services mandated by voter approved ballot issues. The formation of each LRSA was subject to voter approval. Thus, taxes that are levied in a LRSA are taxes required to fund additional services mandated by voter approved ballot issues in the year that the tax is first levied. In 14.03(c) the Charter states that any tax increases resulting from the exceptions shall be added to the basic amount used for the calculations of the subsequent year tax increase limit.

Question 3: Do the road services areas in Girdwood, Glen Alps and Eagle River have discretion to set the rate of taxation for their road maintenance services?

Answer: No. (He then goes on to repeat the first paragraph of the answer to question one.)

City Attorney Bill Greene gives a slightly different answer to the same questions, emphasizing that the change in material service could result in a voters voting on the change in the level of service, not on the rate of taxation. He states that any change in the mill rate hardly constitutes a change in what service is authorized. He states that "In all LRSAs the service authorized and approved by the voters in the service area is 'limited road service' of minimal maintenance".

Bill Greene also states that not one of the existing LRSAs delineate any "level" of authorized service. In each service area it is the nature or kind of the service that is authorized. Since no service area delineates a "level" of service, a change in the mill levy cannot change something that does not exist.

In making his final point, Attorney Greene states that what a specified mill levy may provide in actual tax revenue one year will certainly change in succeeding years as new construction is added and assessed values change. An increase or decreased in assessed values with a corresponding increase or decrease in tax revenue does not change the authorized service, but only the resources available to fund it, and therefore does not trigger a requirement for voter approval.

We hope this is helpful.
Sincerely,
Janice Shamberg

********************
email Nov 26, 2002
From:Chris Hamre (response to Dick Tremaine's email following)
Robbing the LRSA's, as the assembly's budget now does, is a bad precedent for many reasons but let me first respond to your points.

Saying there is "little we can do" because of the Mayor's concerns avoids that it's the assembly that passes a budget.

1. "LRSA Budgets are large enough? Not true. LRSA's are very frugal with their money. All try to save money for future heavy snowfalls or costly maintenance but there's never enough money. We save for our rainy day not spend all we have and then ask to be bailed out when we have a problem. It also starts a declining spiral for our budgets in the out years.

2. The Mayor wants to move LRSA money elsewhere. Sure he wants to take our money. It's punishing LRSA's for not having a use it or loose it attitude It's bad faith with the "Charter Bargains" This mayor voted for the reduction that is causing this problem and none of that rebate went to LRSA households.

3. Mayor wants to eliminate LRSA's. Very true and by being silent you help him accomplish his goal. If this builds in a declining budget for LRSA's, our performance declines and people want a solution (ARDSA?) This is why we appreciate Con Bunde's bill that gives us more protection from the police type of shenanigans. Why aren't the votes there? Kendall and Fairclough should be as concerned as us. Their volunteer fire department may be next. Taylor and Whittle have Stuckagain Heights, Isn't Abbot Loop a LRSA for Van Etten and Traini.

I would think that the assembly would be rewarding the frugal volunteerism of the LRSA's rather than punishing us. What a bad message for policy makers to send. HALO and RCCC both had LRSA meetings that I'm sorry you weren't at but they were well attended and there was a consistent disagreement with the numbers that the administration was handing out.

This is dirty politics and bad policy. This may be the most important issue in the budget for the hillside. Being silent encourages those that see the hillside as the place to find the money to pay for financial mismanagement in other parts of town. We pay for more than we receive in services. I think that it avoids educating some that I probably pay more toward road plowing downtown than she does.

If you're saying there will be a better time to accomplish this then please let us know your stratagy.

----- Original Message -----
From: "Richard Tremaine"
Sent: November 25, 2002 7:45 PM
Subject: LRSAs >
There is precious little we can do here. Please remember the Mayor has explicitly stated that:

1) The budgets he has proposed are large enough for the LRSAs and besides they all have savings.
2) He is lowering the LRSA budgets due to the tax cap and because he wants to put more money elsewhere in the budget.
3) He was one of the prime movers to get police on the hillside against the wishes of the residents and took pride in twisting the system to let it happen - he also does not like nor see the need for LRSAs.

There will not be the votes to change the budgets at this time and so I am not intending to try (now). There will be a later chance.

Dick Tremaine

********************
email of 11/25/02
LRSA Budget Cuts for 2003 MOA budget
If you read the front page of Saturdays Daily News you see that the city has the money to increase the budget for next year yet they still plan to cut the LRSA budgets.

We do a great job maintaining our roads by being frugal and now others are taking our money because they can't manage their own. There are many reasons why this is wrong but sometimes right and wrong isn't the point. How many people call and write and how often is what matters.

The budget will probably be passed Tuesday night. Call the mayor and your assembly members immediately. Particularly Stuckagain Heights and Eagle River/Chugiak.

It's no secret that the city would like to eliminate the LRSA's and this is an important first step for them. This is a letter and call worth making.

Chris Hamre
HALO President
Phone: (907) 561-1840 Fax: 561-1843

********************
EMAIL 11/16/02 Starts w Dianne Holmes

Dear concerned LRSA residents,
This is Vince Mee's response to my question on the difference between RSAs and LRSAs. Some of us thought we heard him say RSAs didn't come under the tax cap at our meeting Thurs. I'm not sure I understand what he said here, but maybe some of you do.
Dianne Holmes

Subject: RE: LRSAs vs Road Service Districts
Date: Sat, 16 Nov 2002 20:02:46 -0900
From: "Mee, Vincent D." <>
CC: "Pineau, Gerald" <>,"Provenzano, Sam

Diane,
You're welcome.
As it stands right now RSA's come under the tax cap the same as LRSA's.
At the RCCC meeting Thursday night, I said that I had received a suggestion that the CIP mil rate for the RSA's be treated the same as "BONDS". The stated reasoning is that the CIP mil rate is in lieu of "BONDS" for CIP in the RSA's. I have passed that suggestion to my supervision.

RSA maintenance $$$'s would still come under the "Tax cap" the same as ARDSA and LRSA's maintenance $$$'s.

Sam Provenzano is the acting Department director in my absence.

However, as you can see I am checking my emails.
Thank you,
Vince

-----Original Message-----
From: Dianne Holmes []
Sent: Friday, November 15, 2002 1:22 PM
Subject: LRSAs vs Road Service Districts
Vince,
Thanks for coming to our Council last night.

I 'd like to follow up on something you said about Limited RSA vs regular Road Service Districts. Did I understand that while LRSAs come under the tax cap, the other does not? If so, please tell me the difference and how we might change the LRSAs so they do not come under the tax cap.
Dianne Holmes
RCCC 345-1514
********************

TO: LRSA Board Members
FROM: Ted Pease, Birch Tree/Elmore LRSA Board Member
RE: LRSA 2003 Budgets
DATE: November 12, 2002

Last month the chairman of each LRSA received a letter from Vince Mee, Director of the Street Maintenance Dept. stating that the "budget" of each LRSA for 2003 would be based not on the amount of anticipated tax collections as has been done in the past, but rather would be based on the average amount actually spent by each LRSA for the last 4 years including 2002. (When I reviewed the data with Maury Robinson, I found he had used a six year average- 1997-2002- and the expenditure figures he used for Birch Tree/Elmore for 2002 were not correct.) This was done without prior notice to, nor consultation with the LRSA boards.

In past years, LRSA property owners have been taxed the full mil rate authorized by the voters (in most cases, 1 or 1.5 mils). and any excess collected that is not expended goes into that LRSA's reserve account which carries over from year to year and is available in subsequent years for budget over runs or extraordinary expenses.

For the 2003 budget, as explained by Mr. Mee at a HALO meeting on Nov. 7th, each LRSA would be taxed at a mil rate just high enough to cover its budget as set by the Administration as described above. This would reduce the amount of taxes paid by LRSA taxpayers and would "free up" from the taxcap a corresponding amount of money that could be used for road maintenance in the core municipal road service area with a corresponding increase in funding and taxes for road maintenance for "down town" taxpayers. The total amount carved out of the LRSA budgets and available for this purpose is about $234,00. The total taxes collected by all LRSA's last year was in excess of $1,000,000.

Most LRSA's find they do not have enough money to do all the needed maintenance. The effect of Mr. Mee's 2003 budget action on the LRSA's for next year are severe. But the implications of Mr. Mee's approach for future years is alarming. If the MUNI can reduce the LRSA budgets and mil rates, then logically the MUNI in future years could cut the LRSA budgets and mil rates to zero, effectively destrtoying the LRSA's.

Two questions were raised at the HALO meeting. 1. Does the statute pushed through the Legislature by Con Bunde in 1999 or 2000 that requires an affirmative vote of the LRSA voters to establish, alter or abolish a LRSA prohibit the proposed budget action? 2. Are the taxes collected on properties in the LRSA's for LRSA purposes outside the tax cap? Neither Mr. Mee nor Mr. Robinson had an answer for question # 1. With respect to question #2, Mr. Robinson stated that in 1983 when the tax cap was passed, the city attorney advised that the LRSA taxes must be counted in the tax cap. If the LRSA taxes are outside the tax cap and not subject to its
limitations, the LRSA's could receive the full amount of their authorized mil rates and free up over a million dollars of the tax cap that could be used for other municipal purposes. Mr. Mee stated that he would ask the City Attorney for guidance on these questions.

I discussed both these questions this morning by telephone with Bill Green the Municipal attorney. With respect to question #1, his read of the Con Bunde statute is that it prohibits changes in the boundaries of service areas or the type of service provided by a service area without a vote of the voters in the service area, but it does not prohibit changes in the level of service provided. I have not reviewed this statute and its legislative history.

With respect to question #2, the tax cap is imposed by subsection (a) of section 14.03 of the Anchorage Charter.Subsection (b) sets out a number of exclusions from the tax cap including the following:

(b)(2) Taxes required to fund additional services mandated by voter
approved ballot issues.
(b)(3) Special taxes approved by voter approved ballot issues.
I suggested that since the LRSA's are ballot issues established by the voters they are outside the tax cap. Mr. Green replied that this is not so by reason of subpart (c) of Sec. 14.03 which states that "Any tax increases which result from the exceptions set forth in subsection (b) (1)-(3) shall
be added to the base amount which is used in subsection (a) for the calculations of the subsequent tax year increases." Section (c), Mr. Green maintains, is conclusive; the tax cap applies to LRSA's. There will be no helpful rulings coming from the City Attorney's office.

What can be done? There is not much time. I believe the Assembly must approve a budget by Nov 26th. The budget comes before the Assembly for action on November 19th. The Administration in its proposed budget has made cuts in the LRSA budgets of about 25%, but it is the Assembly that must approve the budget; it has the final say. So:
1. Let the Mayor know that these drastic cuts are opposed by the LRSAs. Full funding is needed to provide basic road maintenance and the money in our reserve funds is needed for emergencies such as severe break-up damage. It has been reported that the mayor may be rethinking his funding cut for Community Councils because of the volume of protests.
2.Write, email, call Assembly members asking that they reject all LRSA budget cuts proposed by the Administrtion and allow the LRSAs to collect the full amount of their authorized mil rates. These funds are needed by the LRSAs and LRSA voters by ballot every 3 years have signified their willingness to be taxed to provide these road services. Adopting the proposed cuts in LRSA budgets will have the effect of increasing taxes in the core area of Anchorage which receives Municipal road maintenance through Mr. Mee's department. Those voters have not signified that they want their taxes raised.
Ted Pease
Board

Member, Birch Tree/Elmore LRSA
345-1235

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email 10/20/02

Hi there,

I serve on the board of the South Goldenview LRSA and we just received a rather alarming letter from the MUNI Street Maintenance Department signed by Vince Mee. The letter indicates that our budget for next year will be based on this year's budget plus the amount of $480.00 rather than the 1 mill amount approved by the voters in our area. Mr. Mee states:

"As you can discern from the above BY 2003 proposed budget, your budget has not increased, which will result in a reduction property owners will pay next year. We approached your proposed budget by looking at what your LRSA actually spent in each of the last four years to come up with an average. We used this average to build the 2003 proposed budget. The challenge of building the overall Municipal budget is to balance the many competing needs and wants within the Municipality's overall Tax Cap. The taxes collected by each LRSA count in calculating the overall amount of taxes that can be collected under the Tax Cap. This means for each dollar of additional taxes collected in a LRSA, there must be a (sic) offsetting decrease in the taxes collected in another service area - whether it be the Police, Fire, or Areawide Service Areas. For this reason, it is important to budget based on what can be expected to be spent in a fiscal year, and not collect more taxes than needed in order to build up fund balance. The proposed 2003 budget for your LRSA will result in a corresponding reduction in your service area's mill rate...."

In the past few years, we have added about 2 more miles of road to maintain - now up to 15 miles - in our area. We have a large increase in traffic from the Middle School, construction traffic and new home owners which contributes to more maintenance costs for our LRSA. We have done some dust control measures on around 25% of our roads and with all the new homes being built, were planning on maintaining what we have plus expanding our dust control efforts next year. As a group of volunteers, we may not have a finance department, but we were definitely planning on a larger budget for next year to meet the growing needs of our growing service area. We have been functioning at the millage rate of 1% for a number of years, and our roads are getting worse every year. I cannot understand how the Municipality can arbitrarily lower a mill rate that we voted on so that they can raise another mill rate to pay for other city services. I should also add that there was no discussion with our board whatsoever on this matter. The term "blindsided" comes to mind...

I have contacted our Assembly members and they are also alarmed at this creative budgeting. I thought you would like to be informed of what's going on as I'm sure it will have a negative effect on all of the LRSA road maintenance in the Rabbit Creek area.

By the way, we invited Brad Kutzer and Mike Zidek to our last LRSA board meeting. Mike was working out of town in Bethel and Brad indicated he would attend but did not show up.

Dan Heynen
South Goldenview LRSA 345-3102

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email from Dianne Holmes 10/20/02

John,
Wish it could work that way. I too have an informal pass the hat system in my neighborhood but unfortunately the folks who voted to be in a LRSA have to pay the city no matter what, until they vote themselves out as I understand it.

By the way, I am trying to figure out how to write up any amendment to our covenants so we can make participation in the informal road maintenance group more legal. Know any lawyers who've done this kind of simple but rather strange legal work (and who might be cheap--I know that is an oxymoron). The reason to make our group more formal is so I can get my name and social security number off the bank account and into one where that isn't required and there indeed is
one that fits that requirement.

What does your group do for a bank account and did one of you have to sign your life away to open it?
Dianne
********************
John Weddleton wrote:

Dianne,

My neighborhood road group is an informal "pass the hat" group.

While there are hassles with collecting and some outright refusals to pay, we do not pay the MOA's overhead charge. This has worked for almost 2 decades.

I wonder if the LRSAs that were cut could have an informal road group in addition to the LRSA. They could make a separate collection on their own for some types of maintenance. That way, they'd have the roads they like and won't have to pay the MOA overhead.

If it works, they may want to pay for more work in the future without MOA involvement. That could be great for the LRSA members and would also free up $ for the MOA to spend elsewhere.

John

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email 10/20/02

I will also be taking a strong opinion concerning the right of the LRSA's to tax themselves and spend the amount they desire for the level of service they wish to have to the mayor and other assembly members. Dick and I are equally outraged about this.

My thought is that we need a legal opinion regarding whether the LRSA funds can be separated from the Tax Cap limit.

And why hasn't this come up before in any previous year?

More on this later.

Sincerely,
Janice C. Shamberg

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email from Judy Moerlein 10/20/02

Dear Dan,

Dianne H. forwarded your letter re: "LRSA Budget". You may wish to contact John Weddleton Pres. of Hillside East CC or Tom Newins Pres. of Huffman-O'Malley CC, or Robin & Bjarne Holm . (Bjarne was elected to the Hillside East Bd., and Robin has been on the LRSA Bd., as well as the Chugach Park Citizens' Adv.Bd. and the Equestrian groups, for many years.

At the joint meeting on Thurs. eve, we voted to send a resoluction to the Assembly... in essence, stating that: "As a neighborhood, the taxes should be used in full amount that those neighbors have agreed to pay for their Limited Road Service Assessments."

And we also requested Dick Tremaine, our representative to the Assembly, to take our strong opinion to the Assembly & the Mayor.

Judy Moerlein

Roads and city water on the hillside for security?
Be sure to read Mayor Wuerch's October 12, 2001 article on changes he envisions for the new Anchorage Comprehensive Plan in light of the terrorist attacks on Sept 11. "On our hillside there are no waterlines to serve homes or provide water hydrants.... Anchorage urgently needs new east-west and north-south thoroughfares ...." To read this article, click here.

It's hard to argue when we're told we need something for our safety. Where do you draw the line between safety and lifestyle?

Be careful what you wish for!

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