Legislature(2007 - 2008)SENATE FINANCE 532
03/26/2008 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB 303 | |
| SB185 | |
| HB 152 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 303 | TELECONFERENCED | |
| + | SB 185 | TELECONFERENCED | |
| + | HB 152 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 303
"An Act relating to certain grants awarded by the
Department of Environmental Conservation."
Co-Chair Stedman presented the opening remarks and overview
for the meeting.
9:13:30 AM
GINGER BLAISDELL, STAFF, SENATOR GREEN provided a technical
overview of SB 303. She noted that the bill reflected a
population change from 5,000 to 10,000 persons (Page 1, line
13 and Page 2, line 1-2). She referred to a "community
listing" with the current population of each city in Alaska.
She remarked that Legal Services indicated that changing the
population under this program would not impact any other
program in the state (copy on file). Ms. Blaisdell presented
a final note showing a three year listing of water and sewer
projects and the cities awarded these projects. She
maintained that although the listing reflected FY 07-09
projects, this bill would only deal with FY 09.
Co-Chair Stedman requested an explanation of the bill. Ms.
Blaisdell responded that the bill changes the population
criteria for the rates of community matching water and sewer
grants. She noted that the bill changes the population
criteria from a city of 5,000 to a city of up to 10,000. Ms.
Blaisdell cited that cites of 1000 or less can participate
in the program with a matching rate of eighty five percent
state funding to fifteen percent municipality funding. She
continued that cities between 1,001 and 5,000 have a funding
rate of seventy percent state to thirty percent municipality
participation and cities of 5,001 or higher was on a fifty
percent to fifty percent matching rate. She indicated that
the rational is that cities beginning to grow beyond the
5,000 population mark are experiencing a significant rise in
costs for their expanding system of piped water and sewer.
This has pushed a higher tax burden on the citizens to pay
for the rising costs of steel and construction.
9:16:42 AM
Senator Dyson questioned the genesis of the bill. He also
asked if this involved an expansion of the sewer and water
system or the intensity in the treatment of the water and
wastewater.
9:17:07 AM
Ms. Blaisdell responded that the requests came from multiple
communities. She specified that the bill does not change the
program at all or the type of sewer system used in the
communities, but just helps newly growing communities.
9:17:48 AM
Senator Olson remarked that it would change the funding
structure for these communities and he wondered about the
size of the projects being considered. Ms. Blaisdell showed
that some of projects reflected a wide funding range from a
few hundred thousand to several million. She remarked that a
community has to follow a process by turning in an
application to the Department of Environmental Conservation.
This application is scored and ranked and then a decision
made on how much in general funds will be provided to pay
for the project. If the project costs more than the state
agrees to pay, the Legislature would decide how much of the
General Fund would be made available.
Senator Olson remarked that he does not see reflected in the
fiscal note what it will cost the state when the matching
fund rate changes from a fifty/fifty to a seventy/thirty
ratio.
Co-Chair Stedman answered that the Fiscal Note reflected
$3.72 million for one year.
9:19:32 AM
Ms. Blaisdell remarked that the Fiscal Note only reflects
one year because the number or type of applications that
will be received from the communities next year is not
known. She noted that the $3.72 million reflects the
projects that it is anticipated will be approved in the
budget.
9:20:08 AM
Senator Elton questioned why the grants are made at the
municipal rather than the borough level. Ms. Blaisdell
remarked that boroughs, and municipalities within the
boroughs, may have different powers. Senator Elton seemed to
see a significant difference between a borough with
incorporated municipalities, like the Kenai Borough, and the
boroughs, such as, the Northwest Arctic Borough. He believed
it might create an incentive for organized boroughs, with
municipalities within them, to switch their mode of
operations to access these funds.
9:22:18 AM
Ms. Blaisdell reported that she had never heard this
suggestion from any of the cities impacted by the bill.
Senator Elton mentioned that he understood the impacts for
the next fiscal year and how there is only a change in the
definition of population size but he wondered if there would
be a realistic way for the larger communities to grow
without the money growing. Ms. Blaisdell agreed that more
money would be needed. She stressed that if the fiscal note
for $3.72 million was not passed, then many of the planned
projects for FY 09 would have to be removed.
9:25:32 AM
KATHIE WASSERMAN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE supported SB 303 because it would help growing
communities boost local water and sewer projects. She
indicated that the 5,000 population number was an arbitrary
number in 1994, but since that time, costs have risen for
water and sewer projects so the intent of the bill is to
raise that arbitrary number to 10,000. She explained the
population number change would help eight communities in
dealing with aging water and sewer projects: Wasilla,
Ketchikan, Kenai, Sitka, Kodiak, Bethel, Palmer and Homer.
Ms. Wasserman answered the earlier question about borough
management by saying that boroughs usually do not have the
water and sewer rights unless it is a unified borough, like
Sitka, Juneau, and Yakatat. She advised that other boroughs
do not provide borough-wide water and sewer projects.
BILL ALLEN, CITY MANAGER, CITY OF PALMER supported SB 303.
He related that the smaller city of Palmer is dealing with
an aging infrastructure that contains lengths of steel wall
construction pipe with a forty percent leakage in the water
system. Mr. Allen pointed out that Palmer is very aggressive
in economic development however the city is only five square
miles which leaves the city trying to expand its boundaries
through annexation. Mr. Allen related that when trying to
annex outlying communities the benefits are important.
Palmer wants to be able provide city-wide safe water and
sanitation. Mr. Allen remarked that the local savings from
fifty percent to thirty percent makes a considerable
difference to the small tax base of Palmer. He remarked that
Palmer is also experiencing a migration into the city from
rural Alaska that is impacting the city's infrastructure.
9:33:29 AM
BILL GRIFFITH, FACILITY PROGRAMS MANGER, DIVISION OF WATER,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, testified via
teleconference, and advised that the department is not
opposed to this statutory change but it is viewed as a
policy decision by the Legislature to establish what share
of project costs should be born by both the state and the
local municipalities. He affirmed that for FY 09, under
these proposed changes and in order to provide funding for
the same number of projects, it would be necessary to
increase the Department of Environmental Conservation's
Capital Budget request. Or, he advised, the department could
fund fewer projects with the same amount of funding that has
already been requested. He indicated that in future years,
the department would incorporate the new matching ratios
into the department's budget request.
Senator Huggins questioned how many of the existing twenty-
six projects would be affected by this legislation. Mr.
Griffith responded that nine projects would be affected by
this change.
9:35:52 AM
Senator Elton remarked that nine communities would receive a
beneficial effect but there would be a potential negative
affect on smaller communities or larger communities unless
the amount of money grew. Mr. Griffith responded that most
communities of less than 1000 people are eligible for
village safe-water funding which is a separate funding
request the department makes every year.
Senator Elton remarked on the potential negative affect of
communities between 1,000 and 5,000 and the other potential
negative affect on those communities above 10,000, unless
the money grows by Legislative action. Mr. Griffin agreed
that either the money must grow in order to provide funding
for the same number of projects or the choice could be to
fund fewer projects.
9:38:15 AM
Co-Chair Stedman clarified that in the fiscal note, eight
projects are listed for FY 09:
Homer Water Treatment Plant Upgrade
Kenai New Water Transmission Main Phase Wellhouse
Kodiak Aleutian Homes Water & Sewer Replacement Ph 4
Palmer Steel Water Main Replacement Phase 6
Palmer Wastewater Treatment Plant Improvement Design
Palmer Southwest Utility Extension Phase II
Wasilla Mission Hills Water Extension
Senator Huggins observed that Mr. Griffith clarified that
there are only eight, not nine, community projects.
9:39:59 AM
ARCHIE GIDDINGS, PUBLIC WORKS DIRECTOR, CITY OF WASILLA,
testified via teleconference in support of this legislation.
He mentioned that projects are scored on a priority basis,
not necessarily the size of the project. He expressed the
ongoing difficulty in getting federal funding and stressed
that the increase in the state contribution would help
communities achieve the needed matching funds.
9:41:45 AM
Ms. Blaisdell referred to the population list and indicated
that most of the benefiting communities had a population of
approximately 3,000 in 1994. She remarked that these
communities are now in the 6,000 to 7,000 population range.
She described a large population gap until reaching the
higher population communities of Juneau and Fairbanks at
30,000. She explained that 10,000 was a good base number as
she is confident that neither Juneau nor Fairbanks would
fall below the 10,000 population mark.
9:43:25 AM
Co-Chair Hoffman MOVED to REPORT SB 303 out of Committee
with individual recommendation and the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
SB 303 was REPORTED out of Committee with a "do pass"
recommendation and an accompanying previously published
fiscal note from the Department of Environmental
Conservation.
AT EASE: 9:44:15 AM
RECONVENED: 9:44:35 AM
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