Division 1. General Provisions

Chapter 14.04


14.04.010    Definition.

14.04.020    Procedure for forming service area.

14.04.030    Petition – Contents.

14.04.040    Petition – Filing – Review.

14.04.050    Information meeting – Notice.

14.04.060    Preparation of the proposed service area ordinance.

14.04.070    Assembly action on the proposed service area.

14.04.080    Procedure and limitations on forming differential tax zones.

14.04.090    Commission – Created – Membership – Appointment and qualifications.

14.04.100    Commission – Oath of office.

14.04.110    Commission – Terms.

14.04.120    Commission – Vacancies.

14.04.130    Acting commissioners.

14.04.140    Commission – Meetings – Quorum, procedure and records.

14.04.150    Commission – Duties.

14.04.160    Minor modifications to improve road safety or drainage.

14.04.170    Annual completed project review and report.

14.04.190    Assembly – Duties.

14.04.200    Legal affairs.

14.04.210    Loans to road service areas from the road service revolving loan fund.

14.04.010 Definition.

A “service area” is a specific geographic area of the borough designated by ordinance in accordance with FNSBC 1.12.150 and AS 29.35 within which the borough provides a governmental service not provided on either an areawide basis or nonareawide basis, or a higher or different level of service than that provided on an areawide or nonareawide basis. A service area is a separate taxing jurisdiction. (Ord. 97-025 § 3, 1997; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.181.)

14.04.020 Procedure for forming service area.

Establishment of a service area or annexation to a service area may be initiated either by the introduction of an ordinance or by the filing of a petition with the borough mayor. (Ord. 2001-65 § 2, 2001; Ord. 83-56 § 2, 1983; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.011.)

14.04.030 Petition – Contents.

The petition shall contain the following:

A. A designation of the service or services proposed to be exercised by the service area or annexation;

B. A map and/or a legal description of the area to be included within the proposed service area or area proposed for annexation; and

C. The signatures of the owner or owners of at least 51 percent of the property within the proposed service area or area proposed for annexation, as shown on the current property tax assessment roll. If any individual property owner owns more than 25 percent of the land area proposed to be included or annexed, the signature of that property owner is required. Land owned by the state of Alaska or by the United States of America shall not be included in these computations. (Ord. 2017-34 § 2, 2017; Ord. 2001-65 § 3, 2001; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.021.)

14.04.040 Petition – Filing – Review.

The petition shall be reviewed for number and validity of signatures. If the petition contains a sufficient number of valid signatures and all of the real property is eligible for inclusion into a road service area, it will be accepted. If the petition does not contain a sufficient number of valid signatures, it will be returned to the sponsors who may obtain additional valid signatures or abandon the effort. (Ord. 2012-14 § 5, 2012; Ord. 83-56 § 3, 1983. 2004 Code § 14.01.031.)

14.04.050 Information meeting – Notice.

A. The borough mayor or designee shall hold an informational meeting on the proposed service area or annexation.

B. Notice of the meeting shall be published in a newspaper of general circulation within the borough once each week during the 14 days prior to the meeting.

C. Notice of the meeting shall be mailed to each landowner as shown on the current property tax assessment roll within the area described on the petition.

D. Notice of the meeting shall also be mailed to each landowner, as shown on the current property tax assessment roll, within a service area that may be altered by a proposed annexation. This subsection does not apply to a proposed change to a fire service area that would result in increasing the number of parcels of land in the service area if the increase is no more than six percent and would add no more than 1,000 residents. (Ord. 2001-65 § 4, 2001; Ord. 83-56 § 2, 1983; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.041.)

14.04.060 Preparation of the proposed service area ordinance.

The borough mayor shall cause a review to be made of the proposed service area or annexation. The review shall include the topics of the proposed powers and boundaries as well as the assessed valuation, the population and other relevant information. After the informational meeting held pursuant to FNSBC 14.04.050, the mayor shall introduce before the assembly an ordinance to establish the service area or annexation and describe its boundaries. (Ord. 2001-65 § 5, 2001; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.051.)

14.04.070 Assembly action on the proposed service area.

The assembly shall consider the proposed service area in light of the mayor’s review and recommendations. There shall be a presumption of appropriateness of the proposed boundaries. Should the assembly make a finding that the proposed boundaries are inappropriate, it shall return the ordinance to the borough mayor for modification and further investigation. (Ord. 86-043 § 33, 1986; Ord. 83-56 § 2, 1983; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.061.)

14.04.080 Procedure and limitations on forming differential tax zones.

A. Establishment of a differential tax zone within a service area may be initiated either by the introduction of an ordinance or by the filing of a request with the borough mayor. A request must be accompanied with:

1. Service area minutes showing the approval of the service area of the request or signatures of a majority of real property owners within the proposed differential tax zone;

2. An appropriate legal description, by parcel, of the area to be included in the differential tax zone; and

3. A description of the additional service(s) to be provided within the differential tax zone, the approximate cost of the additional service(s), and the proposed additional property tax levy.

B. After receipt of an appropriate request, the borough mayor shall review the proposed differential tax zone, prepare an appropriate ordinance, and forward it to the assembly along with any relevant information and the mayor’s recommendation.

C. A particular service area may not, at any given time, have more than one differential tax zone. In addition, borough-wide no more than 10 differential tax zones may lawfully exist at any given time. (Ord. 2008-11 § 2, 2008. 2004 Code § 14.01.091.)

14.04.090 Commission – Created – Membership – Appointment and qualifications.

A. A commission shall be appointed to supervise the furnishing of special services within a service area. The commission shall consist of at least three but not more than seven commissioners plus one additional alternate commissioner. The assembly shall establish the number of commissioners for each service area at the time the service area is proposed for formation, and if the assembly fails to so act, the number of commissioners shall be three plus one alternate. The assembly may alter the number of commissioners constituting a given service area commission at any time by resolution. The enactment of this section shall not affect the composition of any borough service area commission, as it exists on the date of said enactment, unless the composition of said commission is subsequently altered in accordance with the terms of this section.

B. The mayor shall appoint service area commissioners, including alternate commissioners; appointments are subject to confirmation by the assembly. An individual is eligible for appointment as a road service area commissioner if the individual is a qualified Alaska voter, owns property within the boundaries of the road service area, and if appointed will not simultaneously serve as a voting commissioner on more than three road service areas. Priority for service area commissioners will be given to residents of the service area first.

C. Each alternate commissioner shall perform the duties of any commissioner of his service area who is not reasonably available to personally perform said duties, including but not limited to attending and voting at commission meetings. When acting in place of an unavailable commissioner, an alternate commissioner shall have the same powers, duties and authority as the unavailable commissioner for whom he acts. No alternate commissioner may act in the place of more than one commissioner at any given time. All provisions of this code which apply to service area commissioners shall apply equally and in the same manner to alternate service area commissioners, unless expressly provided otherwise. An alternate commissioner shall have no power to act for or bind the service area unless he is acting in place of an unavailable commissioner as provided in this section. (Ord. 2012-43 § 2, 2012; Ord. 2001-19 § 2, 2001; Ord. 85-127 § 2, 1985. 2004 Code § 14.01.101.)

14.04.100 Commission – Oath of office.

Before assuming office, each commissioner and alternate commissioner shall take an oath in writing to faithfully discharge the duties of his office. The oath shall be filed with the borough clerk. (Ord. 85-127 § 2, 1985. 2004 Code § 14.01.111.)

14.04.110 Commission – Terms.

A. Immediately after qualifying, the commissioners first appointed after formation of a service area shall draw lots at the office of the borough clerk to determine their initial terms of office. Two classes of commissioners shall be established by said drawing. In computing the membership of said classes the total number of commissioners shall equal the number of commissioners established in accordance with FNSBC 14.04.090(A) plus the alternate commissioner.

The first class shall consist of commissioners equal in number to one-half of the total number of commissioners, and the members of said class shall serve an initial term of two years.

The second class shall consist of the alternate commissioner and the remaining commissioners, and the members of said class shall serve an initial term of one year. Thereafter, each commissioner and alternate commissioner shall serve a term of two years.

B. Enactment of the ordinance codified in this section shall not alter the term of office of any service area commissioner as said term exists on the date of enactment. As each said term expires, the successor to the commissioner whose term has so expired shall be appointed for a term of two years. When the first such successor is appointed in each service area in existence on the date of enactment of this section, the assembly shall also appoint an alternate commissioner for said service area whose term of office shall be two years. (Ord. 85-127 § 2, 1985. 2004 Code § 14.01.121.)

14.04.120 Commission – Vacancies.

A. If a member of the commission leaves the area with the intent of remaining absent more than 90 days, or fails to attend three consecutive meetings of the commission, the commission may declare the office of that member vacant. A vacancy is also created by the resignation of a member presented in writing and accepted by the commission, or by the death of a member, or by his failure to qualify within 30 days after his appointment.

B. A vacancy is filled by appointment as provided in FNSBC 14.04.090. The person appointed holds office until the term of his predecessor expires.

C. The assembly may, for reasonable cause, remove service area commissioners from office. As used in this section, the term “reasonable cause” shall include, but not be limited to, failure to comply with the following sections of the Fairbanks North Star Borough Code of Ordinances: FNSBC 7.12.130(B), 14.04.110, 14.04.150, this section, and any provision of FNSBC Title 16. Any service area commissioner removed for a reasonable cause shall be personally liable for any financial loss suffered by the borough as a result of the actions for which the commissioner was removed. In order to remove a commissioner for cause, the mayor shall give written notice to the commissioner of proposed removal. The commissioner shall have the right to submit written evidence to the mayor in his own defense not more than two weeks after receipt of the notice of proposed removal. The borough mayor shall submit to the assembly his justification for the proposed removal and the written evidence submitted by the commissioner. The assembly shall, not later than 30 days after the receipt of such information, determine whether or not to remove the service area commissioner. (Ord. 89-006 § 2, 1989; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.131.)

14.04.130 Acting commissioners.

A. In the event that there are no acceptable and qualified applicants to fill vacant commission positions, and there are an insufficient number of commissioners seated to legally conduct business in a service area pursuant to FNSBC 14.04.140, the mayor may temporarily appoint one or more employees of the rural services division or one or more consenting member(s) of the service area’s district council as acting commissioners, notwithstanding the qualification requirements of FNSBC 14.04.090, to fulfill the minimum duties of the commission. If, however, a road service area has been approved by ordinance for dissolution, the acting commissioner(s) shall be appointed as necessary to enable the fund balance to be spent within the service area before the effective date of the dissolution.

B. Notwithstanding FNSBC 14.04.090(B), assembly confirmation of the appointment of an employee of the rural services division as an acting commissioner is not necessary; however, the assembly shall be notified of the appointment.

C. The employee(s) appointed pursuant to this section shall sit only until a qualified commissioner from the service area is appointed and confirmed.

D. Employee’s time spent on service area business shall be within the course and scope of the employee’s employment and charged to the service area pursuant to FNSBC 14.04.190(B)(2). (Ord. 2013-58 § 3, 2013; Ord. 2004-63 § 2, 2004. 2004 Code § 14.01.135.)

14.04.140 Commission – Meetings – Quorum, procedure and records.

A. A chairman and a secretary of each service area commission shall be elected by and from the members of the commission. Except as otherwise provided in this section, each commission shall establish its own rules of procedure. Every commission shall hold at least two meetings per year, one in the first quarter and one in the third quarter, and the chairman or a majority of the commissioners may call special meetings as necessary. The borough clerk shall publish public notice of all meetings of each commission, and all such meetings shall be open to the public.

B. A majority of the commission shall constitute a quorum for the transaction of business, and the affirmative votes of a majority of those commissioners present shall be necessary to carry any question. Each commissioner shall vote on all questions unless he has a substantial direct or indirect financial interest in the matter, or is otherwise required by law to abstain.

C. The secretary shall record, and file with the borough office of rural services, minutes of each meeting of each commission. Such minutes shall record the vote of every commissioner on each question, and shall be available for public inspection in accordance with law. (Amended during 2016 republication; Ord. 2010-11 § 2, 2010; Ord. 85-127 § 2, 1985. 2004 Code § 14.01.141.)

14.04.150 Commission – Duties.

The commissioners shall:

A. On or before March 15th of each year submit a comprehensive budget to the mayor with an accompanying message and the proposed appropriation and tax levy;

B. On or before March 15th of each year submit a detailed plan describing the commission’s proposed short- and long-term maintenance, permanent improvements and strategic plans together with an account of how the plan varies from those of previous years;

C. Recommend standards and specifications for inclusion in contracts and agreements for the construction of improvements and performance of services within the service area; provided, that all such inclusions shall conform to the borough procurement code and implementing procedures promulgated under the authority of FNSBC 16.08.020(B)(5);

D. Act on behalf of the borough to supervise and manage the affairs of the service area. For purposes of this subsection, this shall include the right to determine whether an in-house professional or a third-party contractor will be used for design work (including whether to use a design-build contract) on a service area project paid for in whole or in part by service area funds. If a procurement process is necessary, the service area chair, or the chair’s designee, shall have a vote in and fully participate in the selection of the design professional including serving on any selection committee used in the procurement;

E. Implement policies and programs to protect the safety of the public and preserve the service area’s capital assets in a fiscally prudent manner, and perform such further specific duties as may be, from time to time, delegated to it;

F. Encourage participation and communication with residents and property owners within the service area;

G. Make recommendation to the mayor regarding the service area, service area administration, and service area policies, as the commission deems proper;

H. To the extent a road service area commissioner is willing and available, provide minor road maintenance work which may involve the use of light hand tools. This work may include, but is not limited to, such work as cutting grass or brush, installing, replacing or repairing signs, picking up trash, removing fallen trees, clearing or cleaning of culverts or ditches, sanding roads, and filling sand barrels. A commissioner may perform additional work only if a contractor is unavailable and the work is necessary to mitigate an imminent threat to life or property during an emergency (e.g., road not passable by emergency service vehicles). This does not include operation of any equipment including snowplows and earth-moving equipment. To the extent a privately owned vehicle is used for transportation, its owner shall insure it as required by Alaska law. (Ord. 2016-69 § 2, 2017; Ord. 2013-22 § 2, 2013; Ord. 2010-10 § 2, 2010; Ord. 2001-19 § 3, 2001; Ord. 97-025 § 2, 1997; Ord. 84-81 § 2, 1984; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.151.)

14.04.160 Minor modifications to improve road safety or drainage.

Notwithstanding FNSBC 2.04.030 or other law regarding the powers and duties of the borough mayor, a service area in which the borough exercises road maintenance and/or construction power may, at the direction of the service area commission, authorize available service area funds to be spent on minor modifications to roadways within the service area for the purpose of improving safety or drainage. Examples of such modifications include speed humps, speed tables, speed dips, speed bumps, road striping and drainage swales and culverts and other drainage structures. (Ord. 2012-48 § 2, 2012. 2004 Code § 14.01.152.)

14.04.170 Annual completed project review and report.

The director of the department of public works shall annually provide a written project review and report of each construction project completed in a road service area in the prior year to the assembly road service area committee. A copy shall also be provided to the chair of each service area with a completed project listed in the report. The report must include a separate listing of the total project cost, the actual design cost, actual construction cost, and the project management costs, if any. The report shall also compare and contrast final costs with the original and any other subsequent estimated costs. (Ord. 2013-18 § 2, 2013. 2004 Code § 14.01.153.)

14.04.190 Assembly – Duties.

A. The assembly of the Fairbanks North Star Borough has full legislative responsibility for all service areas and may review and accept, reject or modify the budget, annual plans and proposed tax levy of the service area commission.

B. The assembly, with the recommendation of the administration, shall set a direct services fee for each service area to cover the administrative cost of that service area. For road, sewer, light and water service areas, the direct services fee shall be limited to no more than the full cost of liability insurance plus the actual expenditures of rural services for the preceding closed fiscal year. The fee may be less, depending upon whether additional non-service area duties are imposed on rural services staff, and other factors. This limitation, however, does not preclude direct costs chargeable to individual service areas because of particularized services such as legal costs, or costs incurred pursuant to subsection (B)(2) of this section.

1. If a service area provides no services and has not recommended a tax levy, the assembly shall establish a levy to fund the administrative fee for the service area.

2. If a service area has an insufficient number of commissioners seated to legally conduct business pursuant to FNSBC 14.04.140 and the borough administration must conduct or assist in the conduct of business for the service area pursuant to FNSBC 14.04.130, the administrative fee for that service area for the following year will include any and all costs to the borough, including staff time, for administering the service area duties. (Ord. 2014-41 § 2, 2014; Ord. 2005-66 § 2, 2005; Ord. 2004-63 § 3, 2004; Ord. 2001-19 § 4, 2001; Ord. 81-22 § 2, 1981. 2004 Code § 14.01.161.)

14.04.200 Legal affairs.

A. The borough attorney or the designee of the borough attorney is legal counsel for all service area matters. Service areas do not have authority to retain independent legal counsel.

B. The borough mayor has the authority to approve negotiated settlements for all litigation involving service areas, in the manner provided by law, after consulting with the borough attorney. The borough mayor shall consult with the service area commission before binding the service area in a settlement of litigation.

C. In accordance with state law, borough areawide and nonareawide taxes cannot be used for payment of amounts due in satisfaction of judgments entered or settlements negotiated in litigation concerning a service area. If the service area does not have sufficient funds to pay the judgment or settlement the borough mayor may introduce an ordinance to advance from the borough general fund to the service area budget to be used for the payment of such judgment or settlement. Said advance shall be repaid on such terms as the borough mayor shall determine. (Ord. 86-100 § 3, 1986. 2004 Code § 14.01.175.)

14.04.210 Loans to road service areas from the road service revolving loan fund.

A. An organized road service area within the Fairbanks North Star Borough, by and through its duly appointed commission, may apply for a loan which will be secured by a pledge of taxes to be levied in the road service area, to fund road improvement capital projects, major upgrades, and other similar projects within the road service area.

1. Applications shall be collected annually on or before June 30th. The borough clerk shall notice the date by publication by newspaper once a month for at least three months prior to the deadline as well as other appropriate methods. Applications submitted after the due date shall be deemed untimely and shall be considered with the next round of applications unless withdrawn by the road service area commission.

2. The application deadline and related requirements imposed in this section, including the review by the rural services division and selection by the board, shall not apply to applications for projects that have already been selected by the borough for grant funding. Subject to subsection (J) of this section, to the extent projects have already been selected for grant funding by the borough, those projects shall be automatically deemed eligible for loan funding for up to 10 percent of the project costs, following receipt of a loan application that complies with subsections (B) and (C) of this section.

B. The loan application must be accompanied by a $250.00 loan application filing fee. The mayor may defer the application filing fee in cases of emergencies. The filing fee would then be included in the loan amount or be paid back over time if the loan is not approved by the loan board or the voters. The service area commission must apply to the mayor for deferral prior to submittal of the loan application.

C. The service area commission must submit a loan application provided by the board along with a proposed budget and plan showing income from a mill rate sufficient to:

1. Make annual indebtedness and interest payments to the fund;

2. Maintain adequate funds for the services normally provided by the service area, including annual maintenance; and

3. Provide for a fee to the borough to cover administrative costs as determined by the finance department including administrative costs of the indebtedness.

D. The service area commission shall submit the application, the filing fee and the proposed budget to the rural services division of the public works department. Prior to forwarding the completed applications to the loan board, the rural services division shall work with the service area commission to develop and finalize the application. The manager of the rural services division, or designee, shall review applications timely submitted, and:

1. Attempt to validate the contents of the application;

2. Research the basis or history of the underlying project;

3. If the application meets the minimum requirements of this section, forward the application to the FNSB road service loan fund board (loan board) for processing. The director, or designee, shall enclose a recommendation for approval or denial of the loan and reasons supporting the recommendation; and

4. Provide staff support to the loan board.

E. The loan board shall determine whether or not a service area is eligible to receive a loan and when there is inadequate money in the loan fund to fund all eligible loan requests, the loan board shall prioritize the applications based on criteria set by the loan board which shall include, but not be limited to, the following:

1. Life safety issues, including:

a. School bus or other child safety issues;

b. High traffic fatality or injury accident history; and

c. Accessibility issues for fire, ambulance or other emergency vehicles;

2. Nonfatality traffic accident history or other property safety issues;

3. Mitigation of the costs of combining road service areas;

4. Long-term maintenance and operational cost reductions;

5. Mitigation of high traffic level problems;

6. Matching funds from road service area fund balance or other sources;

7. Public support;

8. Benefit-to-cost ratio;

9. Project feasibility; and

10. Length of time to repay the loan.

F. The board shall only loan, in the normal loan application course, no more than 90 percent of the loan fund balance. The remaining 10 percent shall only be loaned on an emergency basis.

G. The board may request from the road service area commission additional information or clarification. The board may not change a loan application or project structure without the approval of the relevant commission; however, it may make recommendations for such changes.

H. The board may approve a loan amount less than the amount requested in the loan application; however, the commission may then withdraw the loan application prior to submittal of the list of approved loan application to the assembly if they determine the project would not be feasible.

I. A loan made to a service area pursuant to this section:

1. Shall be subject to a vote in the service area as required by FNSBC 7.04.050(A);

2. Shall have a term recommended by the board, and approved by the assembly, not to exceed the life of the project; and

3. Shall bear simple interest at a fixed rate of one percent.

J. Service areas may not apply for any additional loans if there is an outstanding balance due on a previous loan unless a prior project was not fully funded and the additional loan is for the second phase of the project or the assembly makes a special exception due to extraordinary emergency circumstances.

K. Once the board has completed the approval and prioritization process, the prioritized list of loans recommended for approval shall be forwarded to the assembly, through the mayor, for final approval.

L. The assembly shall set on a vote, subject to FNSBC 7.04.050, in each of the service areas which the assembly approves for a loan.

M. Once a loan is granted after a vote by the service area, the finance department shall withdraw from a service area’s fund balance on November 15th of each successive year following the year of the loan funds sufficient to cover the annual payment, accrued interest and the administrative costs. The annual payment and the accrued interest shall be deposited in the service area revolving loan fund. (Ord. 2015-39 § 2, 2015; Ord. 2007-31 § 2, 2007; Ord. 2003-55 § 5, 2003. 2004 Code § 14.01.180.)