04/03/2008 01:30 PM House FINANCE

SENATE BILL NO. 303                                                                                                           
                                                                                                                                
     An Act relating to certain grants awarded by the                                                                           
     Department of Environmental Conservation.                                                                                  
                                                                                                                                
2:04:48 PM                                                                                                                    
                                                                                                                                
GINGER BLAISDELL,  STAFF, SENATOR LYDA GREEN,  explained that                                                                   
the  bill changes  the  population requirements  for  certain                                                                   
match  rates from  5,000 to  10,000  for a  grant that  would                                                                   
receive 70%  state funding  with a  30% municipal match.  She                                                                   
referred to a community population  list (Copy on File), that                                                                   
shows Anchorage, Fairbanks, and  Juneau at over 30,000; eight                                                                   
communities  between  10,000  and  5,000;  the  remainder  of                                                                   
Alaskan communities  are under  five thousand. Current  match                                                                   
rates are:  communities 5,000 and  higher pay a  50/50 match;                                                                   
$1,000 to  5,000 pay  70/30; and below  1,000 pay  85/15. The                                                                   
main reason to change the population  criteria is to bring in                                                                   
the  eight communities  just above  5,000 to  give them  more                                                                   
state  participation for  water and  sewer projects.  Rapidly                                                                   
escalating  prices  in  steel and  construction  costs  means                                                                   
smaller communities cannot make the 50/50 match.                                                                                
                                                                                                                                
Representative Thomas pointed  out that Haines was not on the                                                                   
list. Ms. Blaisdell  assured him that Haines  and Skagway are                                                                   
still eligible.                                                                                                                 
                                                                                                                                
Co-Chair Meyer OPENED PUBLIC TESTIMONY.                                                                                         
                                                                                                                                
2:08:05 PM                                                                                                                    
                                                                                                                                
JOHN COMBS,  MAYOR, CITY OF PALMER,  spoke in support  of the                                                                   
legislation.  He represented  not  only  Palmer but  Wasilla,                                                                   
Kenai, Homer,  Ketchikan, Sitka, Kodiak, Bethel,  Haines, and                                                                   
Skagway. Palmer has  3200, and cannot absorb  the expenses of                                                                   
water and  sewer projects.  Local projects  are on  the shelf                                                                   
due  to an  inadequate economic  base. He  asserted that  the                                                                   
issue is public safety.                                                                                                         
                                                                                                                                
BILL ALLEN,  CITY MANAGER,  PALMER, spoke  in support  of the                                                                   
bill. He  referenced a  letter from  Alaska Municipal  League                                                                   
Executive   Director  Kathie   Wasserman   (Copy  on   File).                                                                   
Communities  that  are  growing  find  themselves  supporting                                                                   
infrastructure  and  utilities  that  supply  more  and  more                                                                   
people, yet are  eligible for less grant money.  He added the                                                                   
cities of Barrow, Unalaska and  Valdez would soon be impacted                                                                   
as well.  Palmer has  50-year-old, thin-wall  pipes that  are                                                                   
failing. Pressure  tests have revealed a 40%  leakage rate in                                                                   
the water supply. They have also  been notified that they are                                                                   
out of  compliance with  the Environmental Protection  Agency                                                                   
for water safety. The cost of  coming into compliance is over                                                                   
$1 million.  There is not a  large enough tax-paying  base to                                                                   
raise that much money.                                                                                                          
                                                                                                                                
2:15:25 PM                                                                                                                    
                                                                                                                                
PUBLIC TESTIMONY CLOSED.                                                                                                        
                                                                                                                                
Vice-Chair Stoltze commented on  the difficulty of explaining                                                                   
why  other  parts   of  the  state  get  grants   when  large                                                                   
neighborhoods  attached to  larger cities  have many  similar                                                                   
problems. He  voiced his frustration  and listed  problems in                                                                   
the city of Anchorage.                                                                                                          
                                                                                                                                
2:18:41 PM                                                                                                                    
                                                                                                                                
Representative Thomas asked if the program was capped.                                                                          
                                                                                                                                
BILL  GRIFFITH, FACILITY  PROGRAMS  INSPECTOR, DEPARTMENT  OF                                                                   
ENVIRONMENTAL  CONSERVATION, answered  that  the program  was                                                                   
not capped but limited by the  amount of money made available                                                                   
each year for capital projects.                                                                                                 
                                                                                                                                
Representative  Thomas asserted that  water and sewer  were a                                                                   
priority  and  thought more  money  should  be put  into  the                                                                   
program.                                                                                                                        
                                                                                                                                
SB  303  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.