A long-term Mat-Su Borough road strategy relies on voters to regularly OK new tax rates

Originally published July 30, 2024

What you need to know:

• Mat-Su Borough officials want to fund road projects by asking taxpayers to regularly approve new bond measures, a plan they say will keep tax rates steady rather than letting them fall as old debt is repaid.
• A new road projects bond measure that could be headed to voters in November is part of that strategy. The measure would fund seven projects across the region, including an extension of Engstrom Road and fixes to Settlers Bay Road. The measure will go before the Assembly on Aug. 6.
• The same proposal would also ask the Assembly to approve new bond sales that could cover shortfalls in funding for a series of three previously approved projects.
• Mat-Su's growing population has increased road usage and maintenance costs, outpacing available funds. Over the last 15 years, the borough has increasingly relied on voter-approved bonds due to increased repair needs paired with decreased outside funding.

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PALMER – A proposed Mat-Su bond measure that would fund seven new road projects across the region is part of a long-term borough plan to ask voters to approve a steady stream of new debt over the coming years, all of which would be repaid through property taxes.

Bond debt-related property taxes traditionally grow or shrink based on factors that include interest rates and how much voter-approved debt the borough holds.

Rather than letting borough debt and related taxes fall as bonds are repaid, the plan would keep the tax rate steady by consistently adding new debt to the old, Borough Manager Mike Brown said.

The plan requires borough voters to periodically approve new projects funded at least in part by bond sales. Borough officials hope to put a new bond package on the ballot every three to five years, he said.

“We have to find a rhythm that financially makes sense,” he said. “That’s what we’re working on.”

Keeping the borough's transportation-related bond debt even by cycling in new voter-approved projects gives the borough both the construction authority and a way to pay for the constant parade of needed road repairs and extensions across the region, Brown said. Federal and state funding could also pay for portions of the approved projects, he said.

The bond measure currently under consideration asks Matanuska-Susitna Borough voters to approve $33.3 million in bonds for seven area road projects. It is scheduled for a vote by the borough assembly on Aug. 6. If approved, it would go before voters in November. It is sponsored by Assembly Member Dmitri Fonov, whose district includes parts of Wasilla.

Mat-Su's steady population growth has put unsustainable pressure on roads originally designed to handle limited neighborhood traffic, Brown said, while also accelerating wear and tear on major traffic collectors.

As Mat-Su grows, the cost of those repairs has outpaced the money available through Road Service Areas, a system through which residents pay road maintenance levies that vary by region.

Mat-Su is the only area of the state projected to grow in population over the next several decades, according to state demographers.

Even as Mat-Su’s population and corresponding road use have grown, available state funding has decreased, Brown said, and officials have increasingly turned to voter-approved bond sales to help fund the projects.

Only one such bond measure was approved by voters before 2011, he said. If approved, the current bond proposal would be the fifth such measure approved to fund road construction packages in 15 years and the third since 2020.

That total includes a list of 2021 projects that have not yet required bond sales to fund, Brown said, and a ballot measure passed by voters last year that approved 17 projects as long as half the construction costs were funded through a federal or state grant. Money for those projects was not included in the 2025 state budget signed by Gov. Mike Dunleavy earlier this month; the projects remain unfunded.

Road bond measure proposed for 2024 ballots

The new proposal does not require state or federal funding. Three of the projects approved by voters last year are also in the new measure because completing them is a priority, and approving them without a match requirement would move them forward, Brown said. An additional four projects included in the proposal are newly selected for work, according to the proposal.

The previously approved projects are:

• Grading, paving and related reconstruction of Green Forest Drive, which connects Palmer-Wasilla Highway to Bogard Road. Estimated cost: $6.2 million. Project completion year: 2027.
• Traffic and safety improvements around Shaw Elementary School on Wasilla-Fishhook Road include adding access to the school from East Foxtrot Avenue. Estimated cost: $12 million. Project completion year: 2027.
• Grading, paving, drainage, and related reconstruction of King Arthur Drive between No Name Hill Drive and George Parks Highway. Estimated cost: $2.1 million. Project completion year: 2026.

The newly selected projects are:

• A nearly 1-mile northern extension of Engstrom Road to Tex Al Drive. Estimated cost: $6.1 million. Project completion year: 2027.
• Improvements to nearly 2 miles of Johnsons Road, which runs from Hollywood Road to George Parks Highway, including grading, drainage, paving and shoulder widening. Estimated cost: $3.3 million. Project completion year: 2026.
• Paving, resurfacing and related improvements on about 1.5 miles of Settlers Bay Drive between Turner Drive and Knik-Goose Bay Road. Estimated cost: $2.7 million. Project completion year: 2026.
• Paving, resurfacing and related improvements on about 1 mile of Lakeview Road between Wasilla-Fishhook Road and Seldon Road. Estimated cost: $920,000. Project completion year: 2026.

The proposal could be amended by the assembly next month before it is approved for the November ballot, with projects added or removed.

A second bond measure, also scheduled for consideration Aug. 6, would seek voter approval for $58 million in funding for building expansions or new construction at three borough school district charter schools. Combined, the two measures would authorize about $100 million in bond debt.

The area-wide mill rate for 2024 paid by all borough property owners is 8.748 mills, or $874.80 per $100,000 of assessed property value. This rate includes levies for a variety of previously approved bond packages while also covering most borough and Mat-Su Borough School operating costs not paid for by federal or state grants or allocations. Of that 0.521 mills, or $52.10 per $100,000 of assessed property value, covers borough-wide nonschool debt.

Residents who live outside Palmer, Houston or Wasilla city limits also pay a non-area-wide rate of 0.38 mills, or $38 per $100,000 of assessed value.

If approved, the proposed road measure would add as much as $18.30 per $100,000 to tax bills, effective once the bonds are sold.

The ordinance that would place the road projects bond measure on the ballot also asks the assembly to approve a funding increase for four projects approved by voters for bond funding in 2021.

Brown said those projects need an additional $18.5 million because of inflation-related cost increases. Because bond sales must be authorized by the assembly even after they are approved by voters, a vote by the assembly is needed to move forward with the additional funding.

The projects that require additional funding are:

• Extension of Hemmer Road to connect Valley Pathways School on France Road to Palmer-Wasilla Highway. Estimated cost: $6.5 million. Project completion year: 2027.
• Upgrades, reconstruction and a bicycle lane for Fern Street between Fairview Loop Road and Knik-Goose Bay Road. Estimated cost: $4 million. Completion date: 2026.
• Reconstruction, a turn lane to Tanaina Elementary School and upgrades to a bike lane on Lucille Street from Spruce Street to Seldon Road. Estimated cost: $4 million. Completion date: 2027.
• Extension of Tex Al Drive from its existing terminus west of Palmer-Fishhook Drive to Engstrom Road to create a major collector for three miles from Wasilla-Fishhook Drive to Palmer-Fishhook Drive; improvements to the existing section of Tex Al Drive. Estimated cost: $4 million. Completion date: 2028.

Borough residents can give public comment on the bond measures or any other issue during the Aug. 6 assembly meeting, scheduled for 6 p.m. in the assembly chambers at the Borough Administration Building in Palmer.

-- Amy Bushatz can be contacted at abushatz@matsusentinel.com.