Legislature(2007 - 2008)HOUSE FINANCE 519
04/10/2008 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB218 | |
| SB119 | |
| SB303 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 119 | TELECONFERENCED | |
| += | SB 303 | TELECONFERENCED | |
| += | SB 259 | TELECONFERENCED | |
| + | SB 218 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 120 | TELECONFERENCED | |
SENATE BILL NO. 303
An Act relating to certain grants awarded by the
Department of Environmental Conservation.
GINGER BLAISDELL, STAFF, SENATOR LYDA GREEN, addressed the
impact of the bill by changing the population criteria for
certain match requirements on water and sewer projects,
increasing the municipality size from 5,000 to 10,000. The
changes would impact positively eight communities. There
are only three communities above the 10,000 mark -
Anchorage, Fairbanks & Juneau.
She noted that the cost for construction projects has
significantly especially for costs associated with steel and
concrete. Some projects have become unattainable because of
these costs. The bill provides a higher State matching
rate, which provides communities opportunity for improved
water and sewer systems.
Co-Chair Meyer questioned why the three largest communities
had been excluded.
9:32:39 AM
Ms. Blaisdell agreed every community has been impacted by
high construction costs, yet, the hope is that the denser
populated areas could absorb costs easier.
Vice-Chair Stoltze countered the reasoning, pointed out an
infrastructure project ongoing in Palmer. Ms. Blaisdell
agreed.
9:34:02 AM
Representative Thomas questioned how the 15,000 number had
been determined. Ms. Blaisdell said 10,000 was a good cut
off point; she did not know why a higher number had not been
considered.
Vice-Chair Stoltze observed that 10,000 is a consistent
number for determining a small community and is used over
and over in the State. Co-Chair Meyer was more comfortable
with the 5,000 resident number because that group has a tax
base. Co-Chair Meyer observed that SB 303 is another
revenue sharing bill. Ms. Blaisdell agreed it helps with
municipal revenue.
Representative Kelly interpreted that it is a "weighted"
revenue sharing bill.
9:36:12 AM
Co-Chair Meyer referenced Page 1, Line 14, recommending
changing 50% to 60%. Ms. Blasdell responded that would be
acceptable. She recommended that if that change was made,
then Page 2, Lines 1-5 should be deleted, following
"persons".
Representative Gara referenced the $3.7 million dollars
fiscal note asking why it was projected to end in FY09.
When the grant ends, would the Department then cover the
remaining costs. Ms. Blasdell explained that the way the
municipal matching grant program works for water and sewer
projects is that the communities send in extensive
applications and then those are ranked by Department of
Environmental Conservation and the highest priority is
determined. The determination regarding whether a project
is included or not is determined by the appropriation cap.
Currently, the Governor's Office has requested $26 million
General Fund matching dollars for those projects. The
proposed fiscal notes assume that the same projects, which
would have been matched under the $26 million dollar amount,
would have a higher match rate and would provide the
additional cost for the impacted programs. The zero
indication for FY10 resulted because the Department has not
considered any applications yet.
9:39:10 AM
Representative Gara asked if the State currently only spends
$26 million dollars on grant programs. Ms. Blaisdell
replied that was correct for the General Fund dollars only
and that there are also federal clean water funds.
Representative Gara attempted to determine if the request
was a "reshuffling of the spending dollars".
BILL GRIFFITH, FACILITIES PROGRAM MANAGER, DIVISON OF WATER,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION testified via
teleconference, advised that the fiscal effect of the bill
would be that the Department would need more General Funds
to provide grants for the same number of projects. Each
year, the Department provides a new priority list including
the grant requests made that year. Funds would need to be
allocated by the Legislature each year to fund the projects.
Representative Gara worried about the proposed expense
associated with the projects. He indicated concerns for
communities that currently have no water and/or sewer. He
mentioned the need to make changes for communities currently
using "honey-buckets". He asked what portion goes to those
communities. Mr. Griffith replied those projects are funded
through the Village Safe Water Program, federal funds, 75%
federal funds and 25% State match dollars. That is a
separate program and separate budget request. The municipal
matching grant projects are 100% State funding.
9:42:44 AM
Representative Gara inquired the current amount the State
spends on the Village Safe Water projects and if there is a
back log for those projects. Mr. Griffith responded that
each year, the Department attempts to capture all the
available federal funds for such projects and requests the
necessary State dollars to capture those fund matches.
Representative Gara reiterated concern for areas of the
State that do not have flush toilets and asked if those
projects would be fully funded. Mr. Griffith did not have
the numbers available; typically, the Department requests
the same or more than the State portion. The funding for
the Village Safe Water projects this year was around $30
million dollars. He advised that the Department captures
three times that amount in federal funds.
Representative Gara inquired if there was a project backlog.
Mr. Griffith replied there is a backlog and that currently,
there is an unfunded need for both the Village Safe Water
projects & the municipal matching grant projects. The
Department is never able to fully fund all the requests each
year.
9:45:19 AM
Vice-Chair Stoltze pointed out that last year, a total
spending of $120 million dollars was provided to Alaska. He
pointed out that there are people in his district that do
not have safe drinking water and have failed septic tank
issues. The problems are not regional and placing
infrastructure near regional hospitals is important. He
suggested the needs were being presented from a one-sided
point of view and that there are areas in urban Alaska that
also have serious concerns.
9:47:49 AM
Representative Hawker echoed similar sentiments. He
commented on the allocation and rationing of the State's
capital investment and the consideration of how well managed
the money is spent and how extensive the projects are. The
Village Safe Water projects has experienced financial
mismanagement over the years. The Department has undertaken
a significant effort to remedy the situation. He warned
that it is important to know all the facts that are involved
in making allocation choices.
Co-Chair Meyer questioned how the program would be affected
if the percentage was changed from 50% to 60%. Mr. Griffith
responded that the Department was working on a fiscal note
indicating those changes and acknowledged it will require
additional funds.
Representative Gara wanted to see "honey-buckets" disappear
in Alaska. Any community that is still using them has
serious needs. He stressed that mismanagement of the
program should not result in people being deprived of proper
water and sewer.
Representative Gara did not agree with spending more money
on the larger municipality size from 5,000 to 10,000 and
then 50,000 to 60,000 for Anchorage. He worried about the
smallest communities with fewer than 1,000 receiving the 85%
match. He believed that the amendment would help the mid
and big size communities but would leave the small
communities without funding dollars. He urged that all
community size numbers be adjusted.
9:51:05 AM
Representative Nelson addressed the Village Safe Water
Program concerns. She noted that she had worked for a
contractor in that program. She emphasized that many of the
villages have had their concerns addressed. The ones
currently on the list are the ones that are the most
challenging and expensive. She acknowledged there are unmet
village needs, while pointing out how expensive those
projects will be. She reiterated the challenges.
9:53:01 AM
Representative Kelly requested a list of the statewide
locations that have more than 50 people still on the "honey-
bucket" system. He appreciated the progress the State has
made. He worried about the lower limit and encouraged
focusing on the areas with a population density. He
reminded members that the bill is about revenue sharing and
that he intended to vote against it.
9:55:00 AM
Co-Chair Meyer acknowledged the increase to steel and pipe
costs and realized there is a need and demand in his own
area.
Co-Chair Meyer MOVED to ADOPT Amendment 1 to Page 1, Line
14, deleting "50" and inserting "60". There being NO
OBJECTION, it was adopted.
Co-Chair Meyer MOVED to ADOPT Amendment 2 to Page 2,
deleting all language on Line 1 to the end of the bill from
"however, if a municipality.." There being NO OBJECTION, it
was deleted.
Representative Gara MOVED to ADOPT Amendment 3, Page 1, Line
11, deleting "1,000" and inserting "2,000". Representative
Hawker OBJECTED.
9:56:26 AM
Representative Hawker asked which communities would be
affected by that change. Representative Gara did not know
but wanted to make sure that all statewide communities were
taken care of.
Vice-Chair Stoltze pointed out that technically, Line 13
would also need to be changed.
Representative Nelson interjected that she only knew one
village over 1,000, Hooper Bay. Representative Hawker
listed the other areas affected by that change: Wrangell,
North Pole, Houston, Hooper Bay, Craig and Delta Junction.
9:57:21 AM
In response to Representative Kelly, Mr. Griffith explained
that communities would be able to participate in either one.
In order to be eligible for the Village Safe Water, all
second class cities would be if they were over 1,000
residents. The municipal matching grants are distributed to
the first class cities with a population of over 600.
Representative Kelly believed that information clarifies
that that the scale should not be adjusted; he spoke against
the amendment.
Representative Gara WITHDREW Amendment 3.
9:59:43 AM
Representative Kelly agreed that when the State grows into
that situation, the idea should be revisited.
Representative Nelson asked the position of Hooper Bay on
the Village Safe Water list. Mr. Griffith interjected that
the Department currently has a large, aggressive project to
pipe water and sewer system into that area. Funding is
available for that project from the three year priority list
to keep the project going for the next 2-4 years.
Representative Nelson asked if Amendment 3 would have been
beneficial for that community. Mr. Griffith responded that
the amendment would not have affected that project. Hooper
Bay is eligible under the Village Safe Water program for
100% grants.
10:02:07 AM
Vice-Chair Stoltze MOVED to REPORT HCS SB 303(FIN) out of
Committee with individual recommendations and with the
accompanying zero note. There being NO OBJECTION, it was so
ordered.
HCS SB 303(FIN) was reported out of Committee with a "do
pass" recommendation and with a new zero note by the House
Finance Committee.
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