MEMORANDUM

Kenai Peninsula Borough Assembly Members

THRU: John J. Williams, Borough Mayor

FROM: Craig Chapman, Finance Director

Scott Walden, OEM Director

DATE: April 6, 2006

SUBJECT: Ordinance 2006-18, Amending KPB 2.60.035 to increase the E911 surcharge on local exchange wireless telephones from $.75 to $1.15 per month to cover the cost of providing E911 services

Pursuant to AS 29.35.131, the borough can cover the cost of operating an enhanced 911 (E911) system by imposing a 911 surcharge. In the last legislative session, the Alaska Legislature enacted legislation that allowed for the E911 surcharge to be increased from $.75 to $2.00 per month. Pursuant to that legislation, on March 14, 2006, the assembly enacted Ordinance 2006-06, which authorized an increase from $.75 to $1.15 per month for local access land-based telephone lines. The code section governing surcharges on wireless (cell) telephones, KPB 2.60.035, was inadvertently left out of that ordinance. This ordinance would amend KPB 2.60.035 to increase the E911 surcharge from $.75 to $1.15 per month retroactively effective May 1, 2006, for cell phones. This effective date will coincide with the effective date of the surcharge increase for land lines, and notice was already provided before the omission of cell phones from ordinance 2006-06 was discovered.

The information regarding revenue from the surcharge contained in the memo supporting Ordinance 2006-06 included revenue from both land lines and cell phones without specifically saying so. As stated in that memo, the Borough's current surcharge of $.75 per month, authorized by KPB 2.60.030 generates annual revenue of approximately $475,000, but this money is actually from both land lines and cell phones. Additional revenue of $195,000 is generated from fees charged to CES, Nikiski Fire, and the City of Soldotna for total E911 revenues of $670,000. The borough currently incurs costs totaling $948,500 for operations of the E911 system, a shortfall of $278,500.

It should be noted that AS 29.35.131 requires a municipality to review an enhanced 911 surcharge annually to determine whether the current level of the surcharge is adequate, excessive, or insufficient to meet anticipated enhanced 911 system needs. As was done with Ordinance 2006-06, this ordinance will expire June 30, 2007, to ensure this review occurs at the end of FY 2007.