Legislature(2007 - 2008)

03/24/2008 04:36 PM RES


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04:36:08 PM Start
04:36:35 PM SB303
05:12:55 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
               SB 303-SANITATION AND WATER GRANTS                                                                           
                                                                                                                                
4:36:35 PM                                                                                                                    
CHAIR HUGGINS announced SB 303 to be up for consideration.                                                                      
                                                                                                                                
GINGER BLAISDELL,  staff to Senator  Green, explained SB  303 for                                                               
the  sponsor,  Senator Gary  Stevens.  She  said it  changes  the                                                               
population  requirements  for  the   different  match  rates  for                                                               
municipalities as  they are reimbursed  money from the  state for                                                               
doing  water  and   sewer  projects.  She  said   the  top  three                                                               
municipalities  -  Anchorage,  Juneau  and  Fairbanks  -  have  a                                                               
population of  30,000 or higher;  eight cities have  a population                                                               
of 5,000  to 30,000; and every  other city in the  state is below                                                               
5,000.  Changing the  lower end  of the  population criteria  for                                                               
receiving  a 50/50  state match  from  a population  of 5,000  to                                                               
10,000 will  allow eight communities  to finance water  and sewer                                                               
projects.                                                                                                                       
                                                                                                                                
4:39:45 PM                                                                                                                    
MS. BLAISDELL  said she asked  Legislative Legal Services  if any                                                               
other  programs  would be  impacted  by  changing the  population                                                               
criteria  and  they  couldn't  find   any.  She  also  asked  the                                                               
Department  of Environmental  Conservation  (DEC)  staff if  they                                                               
would need any regulation or  statutory change to accommodate the                                                               
change.  The only  thing  they  came up  with  is that  different                                                               
cities would be  allowed different match rates, but  it would not                                                               
change their program overall. DEC also  provided a list of 2007 -                                                               
09 water and  sewer projects to show how much  money the state is                                                               
spending  on them.  She pointed  out that  not being  able to  do                                                               
these projects  is also  a deterrent to  economic growth  for the                                                               
state.                                                                                                                          
                                                                                                                                
4:40:12 PM                                                                                                                    
SENATOR  GREEN said  the main  change is  that the  participation                                                               
rate  for some  municipalities  would drop  from  50/50 to  70/30                                                               
percent with the state paying 70 percent.                                                                                       
                                                                                                                                
CHAIR HUGGINS  asked if  Ms. Blaisdell  found any  aberrations of                                                               
demographic changes they should be aware of.                                                                                    
                                                                                                                                
MS.  BLAISDELL  replied that  no  communities  were shrinking  in                                                               
size. She explained that these  criteria were established in 1994                                                               
and the 5,000  cutoff seemed to meet most of  the smaller cities.                                                               
As  the  medium-sized cities  in  Alaska  have grown,  it's  more                                                               
difficult for them to afford  the water and sewer infrastructure.                                                               
Once  a population  of 20,000  to 25,000  is reached,  people can                                                               
afford to be taxed for these projects.                                                                                          
                                                                                                                                
CHAIR  HUGGINS asked  where the  cutoff  by community  is for  70                                                               
percent state participation.                                                                                                    
                                                                                                                                
MS. BLAISDELL answered currently the  cutoff is between Homer and                                                               
Valdez. Right  now Homer would  be paying  a 50/50 match.  If the                                                               
population  range  was changed  to  10,000  the cutoff  would  be                                                               
between  Sitka  and  Fairbanks  resulting  in  the  eight  cities                                                               
between  Sitka and  Homer  having  a 70/30  match  rather than  a                                                               
50/50.                                                                                                                          
                                                                                                                                
4:43:10 PM                                                                                                                    
CHAIR HUGGINS  asked what happens  to an organization  like Delta                                                               
Junction that  bounces bounce  up and  down on  each side  of the                                                               
minimum number (1,000).                                                                                                         
                                                                                                                                
MS. BLAISDELL replied someone from DEC could better answer that.                                                                
                                                                                                                                
4:43:54 PM                                                                                                                    
KATHY WASSERMAN, Alaska Municipal League  (AML), said a couple of                                                               
communities are on the cusp of  being over 5,000 and eligible for                                                               
the 70/30 match  - Valdez, Unalaska and Barrow. She  said the AML                                                               
supported SB 303.                                                                                                               
                                                                                                                                
4:46:04 PM                                                                                                                    
SENATOR  WAGONER said  the Kenai  Peninsula Borough  is a  second                                                               
class  borough,  but it  does  have  home  rule and  first  class                                                               
cities. Some  areas in  the borough  have already  received water                                                               
and sewer grants and he asked how that would be handled.                                                                        
                                                                                                                                
MS. WASSERMAN  answered that  the borough  would be  eligible for                                                               
the 50/50  amount and  the cities within  the borough  would fall                                                               
under the  amount of the  grant that pertained to  its population                                                               
as well  - unless the  borough could somehow exclude  the cities.                                                               
Bethel,  Kodiak,  Wasilla,  North  Slope  Borough  and  Northwest                                                               
Arctic Boroughs  would be included. They  are municipalities even                                                               
though they are unorganized.                                                                                                    
                                                                                                                                
MS. WASSERMAN  said the borough  would be eligible for  the 50/50                                                               
match.                                                                                                                          
                                                                                                                                
BILL GRIFFITH,  Facilities Programs  Manager, Division  of Water,                                                               
Department  of Environmental  Conservation (DEC),  explained that                                                               
normally local  municipalities such as  cities would all  come in                                                               
for  grant requests  on their  own because  they qualify  for the                                                               
least possible match requirement.  In other words, communities of                                                               
less than 1,000  request a grant on their own  rather than coming                                                               
in through the  borough because they will be able  to qualify for                                                               
a  lesser  percentage  local   match  requirement.  He  generally                                                               
doesn't see  requests from  boroughs for  water and  sewer grants                                                               
because  for the  most  part  they don't  own  and operate  those                                                               
systems; they are owned by the local municipalities.                                                                            
                                                                                                                                
4:48:40 PM                                                                                                                    
SENATOR WAGONER asked how Nikolai got a grant.                                                                                  
                                                                                                                                
4:49:32 PM                                                                                                                    
MR. GRIFFITH answered that Nikolai  was eligible to receive money                                                               
as  an unincorporated  community through  the Village  Safe Water                                                               
Program,  which does  not require  a local  match. In  cases like                                                               
that, some  entity has to agree  to own and operate  that system;                                                               
in  the   case  of  Nikolai   that  was  the   local  homeowner's                                                               
association.                                                                                                                    
                                                                                                                                
SENATOR WAGONER asked  if Port Graham or Nanavalik  applied for a                                                               
grant  through  Village  Safe  Water, would  one  of  the  tribal                                                               
councils be able to operate and maintain it.                                                                                    
                                                                                                                                
MR. GRIFFITH replied yes; if  there is no municipal government, a                                                               
tribal council can own and operate water and sewer facilities.                                                                  
                                                                                                                                
4:51:08 PM                                                                                                                    
SENATOR STEVENS  said this  list didn't have  any boroughs  on it                                                               
and asked if they wouldn't have access to these grants.                                                                         
                                                                                                                                
MR. GRIFFITH answered he didn't  think about boroughs when he saw                                                               
the bill,  but he would check  to see what it  does for boroughs.                                                               
His division  was looking at  the eight cities and  hadn't gotten                                                               
into  water and  sewer grants  for boroughs.  He doesn't  receive                                                               
grant  requests from  them even  though they  may be  eligible to                                                               
apply.                                                                                                                          
                                                                                                                                
4:52:14 PM                                                                                                                    
SENATOR WAGONER said  they should check that out.  Where he comes                                                               
from, counties operate as many  municipal water systems as cities                                                               
do. If  Sterling gets  a bigger population,  it could  generate a                                                               
request for  a water and  sewer system; it is  unincorporated and                                                               
could do it through the borough.                                                                                                
                                                                                                                                
SENATOR  STEVENS said  he didn't  think many  boroughs have  that                                                               
power under their charter.                                                                                                      
                                                                                                                                
4:53:30 PM                                                                                                                    
SENATOR  WAGONER said  the Kenai  Peninsula Borough  is a  second                                                               
class borough and it doesn't have  that power in its charter, but                                                               
the people  could vote to  give to provide it.  Service districts                                                               
could also be formed.                                                                                                           
                                                                                                                                
4:53:55 PM                                                                                                                    
JOHN  STEIN, Interim  Administrator  for James  Didley, City  and                                                               
Borough of Sitka,  said he is also  representing Mayor Dapcevich.                                                               
He said the DEC grants have been  used by the City and Borough of                                                               
Sitka, a unified municipality, on  a number of occasions. He said                                                               
they supported SB 303. He said  these are great programs and have                                                               
a long term benefit to communities and impact health issues.                                                                    
                                                                                                                                
4:55:45 PM                                                                                                                    
BILL  ALLEN,  City  of  Palmer,  said  SB  303  is  an  extremely                                                               
important piece  of legislation for  Palmer, a community  of over                                                               
5,000 people, because  it would change its  local contribution of                                                               
50  percent  down to  30.  He  said  that  Palmer has  a  growing                                                               
population,  however  he  sometimes  feel  like  they  are  being                                                               
penalized because of their  successful economic development plan.                                                               
As the  population increased, their local  contribution increased                                                               
by 20  percent. In addition  to the growing population,  he said,                                                               
Palmer is  getting in-migration  from rural  communities, because                                                               
people  have no  jobs and  heating fuel  costs $6-$7  there. That                                                               
adds to the cost of the infrastructure as well.                                                                                 
                                                                                                                                
4:58:56 PM                                                                                                                    
MR. ALLEN  explained that Palmer  has a very extensive  water and                                                               
sewer system,  but it  is made of  thin-walled steel  water pipes                                                               
that are failing.  Some are 50 years old; they  have a 30 percent                                                               
water leakage rate. Palmer has  1,700 rate payers and asking them                                                               
to approve bonds for a water  and sewer project, especially at 50                                                               
percent local contribution, is a stretch.                                                                                       
                                                                                                                                
He also said that Palmer is 5  square miles and it is running out                                                               
of  room;  so they  are  under  considerable annexation  at  this                                                               
point.  People who  are  getting  annexed ask  what  they get  by                                                               
joining their  city and he wants  to say they will  be provided a                                                               
clean and  safe water and sewer  system. Palmer also has  to come                                                               
into  compliance  with  the  EPA's   discharge  rules,  which  it                                                               
currently  can't  meet. The  price  tag  for  that is  about  $50                                                               
million. This  is a desperately  needed economic  development and                                                               
public health issue.                                                                                                            
                                                                                                                                
5:01:24 PM                                                                                                                    
SENATOR STEVENS said  this measure would save  citizens of Palmer                                                               
over $2 million.                                                                                                                
                                                                                                                                
SENATOR WAGONER asked  what the charge for water and  sewer is in                                                               
Palmer.                                                                                                                         
                                                                                                                                
MR. ALLEN replied $53/mo including $17 for garbage pick up.                                                                     
                                                                                                                                
SENATOR WIELECHOWSKI asked what the cost  would be if they had to                                                               
pay the $2 million.                                                                                                             
                                                                                                                                
MR. ALLEN didn't know. If that were  the only cost they had to be                                                               
concerned about,  he wouldn't  be that worried.  They have  to do                                                               
something about the leakage rate.                                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI said  his water and sewer  bill in Anchorage                                                               
is $66/mo without garbage pickup.                                                                                               
                                                                                                                                
5:03:13 PM                                                                                                                    
MAYOR JOHN COMBS, City of  Palmer, supported Mr. Allen's comments                                                               
except  he clarified  that the  increase is  not 20  percent, but                                                               
more like  67 percent.  Palmer doesn't have  a large  enough rate                                                               
payer base  to sustain the  50/50 match. These eight  cities have                                                               
outgrown the statute and they will continue to grow.                                                                            
                                                                                                                                
5:06:50 PM                                                                                                                    
DON  (WALLY) BAIRD,  City of  Bethel, supported  SB 303.  He said                                                               
while Bethel has the Village  Safe Water Program available to it,                                                               
significant  costs are  "looming"  before it  for  a waste  water                                                               
treatment facility that  is needed since the  landfill closed. It                                                               
also has to contend with the fact  that only about a third of the                                                               
population is  served by  piped water. To  expand piped  water to                                                               
more of  the city, an estimated  $26 million, they would  have to                                                               
use this  program, because a  match of 50 percent  is "completely                                                               
out  of the  realm of  possibilities."  He said  piped water  and                                                               
sewer  costs residents  pay  about $98/mo;  a  haul system  costs                                                               
$230/mo for 1,000 gallons.                                                                                                      
                                                                                                                                
5:08:56 PM                                                                                                                    
WAYNE OGLE, Director, Public Works,  City of Bethel, supported SB                                                               
303. He supported  the statement that the 50  percent match would                                                               
be hard for Bethel residents to deal with.                                                                                      
                                                                                                                                
5:10:02 PM                                                                                                                    
CHAIR HUGGINS  asked Mr. Griffith  who determines  the population                                                               
of an area.                                                                                                                     
                                                                                                                                
MR.  GRIFFITH replied  that  that number  comes  from the  annual                                                               
number  developed  by the  Department  of  Commerce, Community  &                                                               
Economic Development (DCCED).                                                                                                   
                                                                                                                                
5:11:49 PM                                                                                                                    
MS. BLAISDELL  added that  SB 303is  not retroactive  and doesn't                                                               
change or correct funding for FY'07 and '08 projects.                                                                           
                                                                                                                                
SENATOR  GREEN  moved  to  report  SB  303  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
were no objections and it was  so ordered. There being no further                                                               
business to  come before the  committee, Chair  Huggins adjourned                                                               
the meeting at 5:12:55 PM.                                                                                                    

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