Kenai Peninsula Borough residents with cars and trailers more than eight years old will now be able to secure permanent vehicle registrations for them.
The borough assembly passed an ordinance at its Tuesday meeting setting up a permanent registration system for non-commercial vehicles at least eight years old, which the state began allowing after former governor Sean Parnell signed House Bill 19 into law in June 2014. A permanent registration is good until someone sells the vehicle, at which point the new owner can get a permanent registration for it.
The ordinance, proposed by assembly member Dale Bagley, is targeted at people who own multiple older vehicles they only use occasionally, such as the beach trucks on setnet sites or trailers. Of the approximately 58,000 vehicles currently registered in the borough, about 45,000 are at least eight years old. Of the approximately 13,700 trailers, about 11,000 are at least eight years old, according to information from the Alaska Division of Motor Vehicles submitted to the assembly with the ordinance.
“Implementing a permanent registration for non-commercial motor vehicles and non-commercial trailers would be a convenience to the residents of the borough,” Bagley wrote in the memo.
Under the ordinance the assembly passed, a permanent vehicle registration will cost $125 for non-commercial motor vehicles and $25 for non-commercial trailers. If 50 percent of eligible vehicles participate, then the program will raise approximately $7.3 million over ten years, according to a memo from Bagley attached to an amendment to the assembly.
The cost for non-commercial motor vehicles was raised from $75 in the original ordinance to $125 in the amendment because of concerns about costs to the borough over time. The Kenai City Council passed a resolution opposing the ordinance as well when the fee for cars was set at $75, saying it would result in a loss over time. City Manager Rick Koch later submitted a memo saying the city would withdraw its objection if the fee were raised to $150, which would make it “revenue-neutral” to the city.
The payments for motor vehicle registrations are split between the state and the municipalities. In this case, the borough would get the $125, while the state would get another $125, resulting in a total fee of $250 for non-commercial motor vehicle registrations. For trailers, the $25 to the borough is added on top of $55 to the state for a total of $80, according to a Nov. 4 memo from Bagley to the assembly.
The debate on the assembly was limited to concern for borough revenues. Borough Mayor Mike Navarre said at the meeting he is concerned that the changes may result in a loss for the borough beyond the 10-year projections provided.
“We’re already looking to try to make up the state budget, and when you reduce revenues in one area, you’ve got to shift it somewhere else,” Navarre said. “… after 10 years, when you have more vehicles doing the permanent registration, I think after 10 years, the bulk of the revenues are already received by the borough, and after that, it ends up being a negative revenue.”
The Mat-Su Borough, where many people own old cars, has been running the permanent motor vehicle registration system for about two years, since the state began allowing it. Last year, the Mat-Su Borough Assembly moved to reconsider using the system because the borough would lose revenues over time. However, the borough assembly tabled the discussion in August 2015 and the permanent registration continued.
If 50 percent of eligible vehicles participate, the projected net revenue for the borough comes in approximately $427,550, Bagley said. However, there’s an estimated $88,000 net loss on the trailers, according to the DMV projections submitted to the borough. The amounts are moving targets, though, he said. Bagley said he thinks the projections might be a minimum, and that over the life of the permanent registration, it’s likely that some of the vehicles will have an accident or be sold, which will require new registration.
“If you have an eight-year-old vehicle and you do this for 10 years, that’s 18 years old on the vehicle, there’s a good chance there’s going to be an accident or a sale in there, and then somebody’s either doing a two-year or another permanent registration,” he said.
The ordinance passed 5-4, with assembly members Willy Dunne, Stan Welles, Wayne Ogle and Assembly President Kelly Cooper voting against.
Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.
