Legislature(1995 - 1996)
02/13/1996 01:16 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 13, 1996
1:16 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Ivan Ivan, Co-Chair
Representative Kim Elton
Representative Al Vezey
Representative Pete Kott
Representative Irene Nicholia
MEMBERS ABSENT
Representative Jerry Mackie
COMMITTEE CALENDAR
HOUSE BILL NO. 409
"An Act combining parts of the Department of Commerce and Economic
Development and parts of the Department of Community and Regional
Affairs by transferring some of their duties to a new Department of
Community and Economic Development; transferring some of the duties
of the Department of Commerce and Economic Development and the
Department of Community and Regional Affairs to other existing
agencies; eliminating the Department of Commerce and Economic
Development and the Department of Community and Regional Affairs;
adjusting the membership of certain multi-member bodies to reflect
the transfer of duties among departments and the elimination of
departments; and providing for an effective date."
- HEARD AND HELD
BRIEFING BY LOCAL BOUNDARY COMMISSION TO INCLUDE LAKE LOUISE
DETACHMENT FROM MAT-SU BOROUGH
PREVIOUS ACTION
BILL: HB 409
SHORT TITLE: DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT
SPONSOR(S): REPRESENTATIVE(S) KELLY, Therriault, James, Kohring
JRN-DATE JRN-DATE ACTION
01/11/96 2409 (H) READ THE FIRST TIME - REFERRAL(S)
01/11/96 2409 (H) CRA, FINANCE
01/16/96 2456 (H) COSPONSOR(S): KOHRING
02/01/96 (H) CRA AT 01:00 PM CAPITOL 124
02/01/96 (H) MINUTE(CRA)
02/03/96 (H) CRA AT 01:00 PM CAPITOL 124
02/03/96 (H) MINUTE(CRA)
02/06/96 (H) CRA AT 01:00 PM CAPITOL 124
02/06/96 (H) MINUTE(CRA)
02/13/96 (H) CRA AT 01:00 PM CAPITOL 124
WITNESS REGISTER
KEITH GERKEN, Architect
Central Office
Division of General Services
Department of Administration
P.O. Box 110210
Juneau, Alaska 99811-0210
Telephone: (907) 465-5683
POSITION STATEMENT: Presented department's position and answered
questions on HB 409.
JEFFREY W. BUSH, Deputy Commissioner
Office of the Commissioner
Department of Commerce and Economic
Development
P.O. Box 110800
Juneau, Alaska 99811-2100
Telephone: (907) 465-2500
POSITION STATEMENT: Presented department's position and answered
questions on HB 409.
DARROLL R. HARGRAVES, Chairperson
Local Boundary Commission
P.O. Box 226
Tok, Alaska 99780
Telephone: (907) 883-5151
POSITION STATEMENT: Presented Local Boundary Commission briefing.
PATRICK K. POLAND, Director
Central Office
Division of Municipal and Regional Assistance
Department of Community and Regional Affairs
333 West Fourth Avenue, Suite 319
Anchorage, Alaska 99501
Telephone: (907) 269-4578
POSITION STATEMENT: Presented department's position and answered
questions on Local Boundary Commission issues.
DAVID GILILA, Administrator
City of Akiak
P.O. Box 187
Akiak, Alaska 99552
Telephone: (907) 765-7936
POSITION STATEMENT: Testified regarding dissolution of City of
Akiak.
OWEN IVAN, Member
Akiak IRA Council
General Delivery
Akiak, Alaska 99552
Telephone: (907) 765-7112
POSITION STATEMENT: Testified regarding dissolution of City of
Akiak.
MARJORIE VANDOR, Assistant Attorney General
Civil Division (Juneau)
Governmental Affairs Section
Department of Law
P.O. Box 110300
Juneau, Alaska 99811-0300
Telephone: (907) 465-3600
POSITION STATEMENT: Answered questions regarding dissolution of
City of Akiak.
DAN BILLMAN
HC01, Box 1706
Glennallen, Alaska 99588
Telephone: (907) 822-5566
POSITION STATEMENT: Supported Local Boundary Commission decision
on Lake Louise.
ROBERT WELLS, Assembly Member
Matanuska-Susitna Borough
350 East Dahlia Avenue
Palmer, Alaska 99645-6488
Telephone: (907) 745-4801
POSITION STATEMENT: Opposed Local Boundary Commission decision on
Lake Louise.
ART GRISWOLD
North Pole Borough Planning Commission
873 Runamuck
North Pole, Alaska 99705
Telephone: (907) 488-7805
POSITION STATEMENT: Testified about Local Boundary Commission.
DONALD MOORE, Manager
Matanuska-Susitna Borough
350 East Dahlia Avenue
Palmer, Alaska 99645-6488
Telephone: (907) 745-9689
POSITION STATEMENT: Opposed Local Boundary Commission decision on
Lake Louise.
JACK HANSEN, Owner
Evergreen Lodge
HC01, Box 1709
Glennallen, Alaska 99588
Telephone: (907) 822-3250
POSITION STATEMENT: Testified on Local Boundary Commission
decision on Lake Louise.
MICHAEL GATTI, Attorney
Matanuska-Susitna Borough
350 East Dahlia Avenue
Palmer, Alaska 99645-6488
Telephone: (907) 745-4801
POSITION STATEMENT: Testified on Local Boundary Commission
decision on Lake Louise.
ACTION NARRATIVE
TAPE 96-12, SIDE A
Number 0001
CO-CHAIR ALAN AUSTERMAN called the House Community and Regional
Affairs Committee meeting to order at 1:16 p.m. Members present at
the call to order were Representatives Austerman, Elton and Kott.
Members absent were Representatives Ivan, Mackie, Vezey and
Nicholia. Co-Chair Austerman noted that a quorum was not yet
present.
HB 409 - DEPT OF COMMUNITY & ECONOMIC DEVELOPMENT
CO-CHAIR AUSTERMAN told the committee that the Department of
Administration had come up with estimated moving costs associated
with HB 409, for which the department would provide an explanation.
Number 0063
KEITH GERKEN, Architect, Central Office, Division of General
Services, Department of Administration, referred to a hand-out
entitled "HB 409 Estimated Moving Costs" and said the costs were
based on actual expenditures for several moves within the last year
or two. The hand-out portrayed how the department had arrived at
the unit cost of $5,000 per position. Mr. Gerken explained that
actual costs varied tremendously, depending on the changes
necessary. However, the amounts averaged $5,060, which had been
rounded to $5,000.
Number 0240
MR. GERKEN pointed out the estimate did not include significant
building changes; building code improvements that might be
required; Adults with Disabilities Act (ADA) accessibility
improvements that might be required; or purchasing of new computer
equipment or furniture. He said it should be viewed as rule-of-
thumb, with different costs for smaller or larger moves. It was as
accurate as the department could come up with, given the level of
information on what moves might be made.
Number 0298
REPRESENTATIVE PETE KOTT asked if the estimate included any
administrative-type supplies.
MR. GERKEN replied the moves were made with agencies absorbing
administrative costs of doing the work. For example, there was no
overhead for a department to do design work or for construction
administration. Mr. Gerken said the positions were in fairly small
increments of 10 - 30 people. Essentially, there was no overhead;
the amounts were contractual costs.
Number 0355
REPRESENTATIVE KOTT asked if the estimate included items like
changes in stationery, letterhead and so forth.
MR. GERKEN replied no. The Department of Administration had looked
at it purely as a moving cost. For other programmatic impacts of
moving, each agency would have to identify those.
Number 0387
REPRESENTATIVE KOTT wondered, if the move were to occur, whether it
would be administered by taking the low bid or would the state,
within the confines of its operations, make the move.
MR. GERKEN responded that essentially, all the items were
contractually acquired, based upon proposals. Whether the bids
were formal or informal would depend on their size, with bids over
$25,000 apiece being formal. The amounts, he said, were determined
by at least getting informal proposals from movers and contractors.
For phones and computers, he added, for the most part, there was an
existing, standing contract through Information Services. For
example, to move a phone anywhere in Juneau, whether across the
room or across town, there was a unit price that had been bid on a
multi-year contract. Basically, all the costs were competitively
acquired and done through contractors.
Number 0492
REPRESENTATIVE KIM ELTON referred to the proposed combination of
departments and said he had assumed, using Juneau as an example,
that one of two things would probably happen. First, the likely
scenario would be that few positions would move from one building
to another. A second, less likely scenario, would be needing to
find a building where the entire new department could be
accommodated, for reasons of efficiency. He asked Mr. Gerken to
address that.
Number 0558
MR. GERKEN replied that Representative Elton was trying to envision
the exact scenario in both Juneau and Anchorage, where most of the
estimated 160 positions were. That, he said, was why the
Department of Administration had included the amount of $25,000 in
each location, to actually prepare a space plan prior to a move.
There were a lot of questions, he said, in terms of the best fit,
where people logically should ultimately reside. Mr. Gerken
suggested that the agencies did not know who would actually go
where. He thought there had been an effort in the agency analysis,
where they had come up with 160 positions to move, to try to place
next to each other those functions which needed to be adjacent.
However, they did not yet have a picture of that. He did not know
how to answer that question.
Number 0626
MR. GERKEN acknowledged that there would need to be, in the new
department, some sort of identity as to where they were. He said
the department wanted to avoid leasing new space, preferring to
make use of what they already owned. However, at least in Juneau,
that was probably not going to happen entirely. One of the
concerns was lack of an elevator in the existing DCRA building. It
was an old building and could not be significantly remodeled
without some higher expense than that already being considered. It
would take a practical approach to make a shift that did not
escalate the cost beyond current estimates. However, Mr. Gerken
said, he did not yet have enough information to make that leap.
Number 0727
JEFFREY W. BUSH, Deputy Commissioner, Office of the Commissioner,
Department of Commerce and Economic Development (DCED), discussed
the department's estimate of 160 people who would tentatively be
moved under HB 409. It was a very rough number, Mr. Bush stated.
He explained that DCED had taken the premise that the sponsor's
intent was to create a cohesive economic development department.
Those people would be put in one place, with everything else
shaking out from there.
Number 0764
MR. BUSH explained that the minimum amount of moves possible was
proposed, moving people to create space for the new department.
The intent was that the existing space, both in Anchorage and
Juneau, would be utilized. There would not be new space. For
example, the DCRA building would either be used for the new
department or for a unit from another department that could stand
alone, such as the Division of Occupational Licensing.
Number 0818
REPRESENTATIVE ELTON expressed that for private people, a change in
a building would trigger new requirements such as adequate parking.
He asked if that applied when the state changed the use of one of
its existing buildings.
MR. BUSH replied that was a question probably better asked of Mr.
Gerken. He said, for example, there were ADA concerns with the
existing DCRA building. They could not, in essence, move walls or
perform structural changes without running into ADA problems. They
therefore had assumed they would not do that.
Number 0871
CO-CHAIR AUSTERMAN asked if there were questions; there were none.
He informed the committee that no further testimony would be taken
that day on HB 409. On Thursday, February 22, the committee
planned to take amendments and then vote on the bill.
BRIEFING BY LOCAL BOUNDARY COMMISSION TO INCLUDE LAKE LOUISE
DETACHMENT FROM MAT-SU BOROUGH
Number 0906
CO-CHAIR AUSTERMAN noted that the second order of business was a
presentation by the Local Boundary Commission, including discussion
of the Lake Louise detachment and the Akiak dissolution.
Number 0947
DARROLL R. HARGRAVES, Chairperson, Local Boundary Commission (LBC),
said he resided in Tok. He mentioned that one member of the
commission, Vice-Chairperson Kathleen Wasserman, had not yet made
it in from Sitka. He introduced members Nancy Cannington from
Unalakleet, Toni Salmeier from Anchorage and William Walters from
Fairbanks. Other staff present were Pat Poland, Kim Metcalfe-
Helmar and Lamar Cotten from DCRA, as well as Marjorie Vandor from
the Department of Law, who provided legal counsel to the
commission.
Number 1026
MR. HARGRAVES explained the Local Boundary Commission was
presenting the annual report required of them each year. The
report had been filed with the legislature on January 17, 1996,
with copies subsequently provided to all members of the House and
Senate.
Number 1066
MR. HARGRAVES stated that the roles and duties of the LBC were
established in the Alaska constitution to ensure that proposals to
create or alter cities, boroughs and unified municipalities would
be considered objectively and from a broad perspective. Of the 130
or so state boards and commissions, the LBC and four others were
established in the Alaska constitution. The kinds of matters they
dealt with the previous year, and which typically came before the
LBC, included matters of incorporation, annexation, detachment and
dissolution of municipalities. The LBC could also consider
petitions for mergers, consolidation and reclassification of
cities.
Number 1128
MR. HARGRAVES pointed out that the Local Boundary Commission
consisted of five members, one from each of Alaska's four judicial
districts plus a fifth, appointed at large, who served as the
chairperson. The members served at the pleasure of the Governor
and were appointed for overlapping five-year terms. The commission
members volunteered their services and received no compensation.
However, they had staff support provided by DCRA.
Number 1160
MR. HARGRAVES explained that the Local Boundary Commission met 17
times the past year. During that time, they resolved a six-year-
long dispute over the northwest boundaries of the Lake and
Peninsula Borough; finalized action approving incorporation of the
City of Egegik; approved a petition for dissolution of the City of
Akiak; approved a petition for annexation to the City of Wasilla;
approved a petition for detachment of Lake Louise from the
Matanuska-Susitna Borough; and considered revisions to the LBC's
regulations, which was an ongoing process. Two of these actions,
the Wasilla annexation and the detachment of Lake Louise from the
Matanuska-Susitna Borough, were subject to review by the
legislature, he noted.
Number 1226
MR. HARGRAVES explained that Article X, Section 12, of Alaska's
constitution provided the legislature 45 days in which to review
the actions taken by the Local Boundary Commission. This 45-day
review period, which began with the filing of the LBC's report with
the legislature on January 17, 1996, would run until March 2, 1996.
Under the constitution, legislative approval was automatic unless
the House and Senate adopted a joint resolution rejecting the
commission's actions.
MR. HARGRAVES noted that Kathleen Wasserman had arrived at the
meeting.
Number 1286
MR. HARGRAVES briefly mentioned the Wasilla annexation. The
proposal was relatively straight-forward, involving the annexation
of 83.71 acres to the city. He stated that unless the House
Community and Regional Affairs Committee had questions, he did not
expect to discuss that action further.
Number 1320
MR. HARGRAVES noted that in contrast, the Lake Louise detachment
was complex, involving a number of fundamental public policy
matters. He explained that Lake Louise was located on the eastern
edge of the Matanuska-Susitna Borough ("Mat-Su Borough"),
approximately 45 miles from Glennallen and three times that
distance from Palmer. The boundaries of the borough were initially
set under the 1963 Mandatory Borough Act; in the case of the Mat-Su
Borough, the boundaries were the same as for the state election
district. In April, 1995, residents of Lake Louise petitioned the
LBC for detachment of 648 square miles from the Mat-Su Borough.
Chief among their concerns was the belief that they had much
greater social, cultural and economic ties with the adjacent Copper
River Basin than with the Mat-Su Borough, as well as the belief the
Mat-Su Borough could not serve them efficiently and effectively.
For example, Lake Louise students attended school in the adjacent
Copper River School District. Lake Louise voters were
disenfranchised with respect to school matters since they could
neither serve on the school board for the district attended by
their children nor vote for members of that board.
Number 1390
MR. HARGRAVES discussed Mat-Su's primary emergency medical
services, which ended at milepost 23 of the Glenn Highway, 54 miles
from Lake Louise. The nearest Mat-Su Borough public library was a
230-mile round trip. Yet, taxes levied were not commensurate with
the levels of service provided. Lake Louise property owners paid
the same areawide and non-areawide borough taxes as residents who
lived, for example, in the core Wasilla-Palmer area.
Number 1421
MR. HARGRAVES noted that throughout the Lake Louise proceedings,
the Mat-Su Borough vigorously opposed the detachment proposal. In
its capacity as staff to the LBC, the DCRA had recommended approval
of the detachment of only 252 square miles, with that approval
subject to certain stipulations. Those stipulations included that
the Mat-Su Borough be held harmless by Lake Louise with regard to
impacts on state education foundation aid and with regard to bonded
indebtedness. There also had to be provisions made for the septic
tank dump facility in that area.
Number 1455
MR. HARGRAVES said the Local Boundary Commission held two lengthy
hearings on the matter, one at Lake Louise and the other at
Wasilla. Following the final hearing, the LBC granted the
detachment of 252 square miles, with the stipulation that Lake
Louise become part of another organized borough, presumably a
Copper River Basin borough, by March, 1998. Subsequent to that
action, the LBC was asked to reconsider, which they did. Mr.
Hargraves said the stipulations imposed reflected the importance
the LBC placed on the principle in Article X, Section 1, of
Alaska's constitution, which called for maximum local self-
government. The LBC's initial review, allowing Lake Louise to be
part of the unorganized borough, would have resulted in an
abdication of local self-government.
Number 1500
MR. HARGRAVES said in addition to the constitutional principle
involved, there were fundamental needs for municipal government at
Lake Louise. Paramount among these were the need for municipal
regulation of planning, platting, land use and water quality. No
stipulations were made with respect to specific services needed at
Lake Louise. The LBC also deferred action on the matter of holding
the Mat-Su Borough financially harmless. Mr. Hargraves said the
LBC planned to take those matters up in the context of any future
Copper River Basin borough proposal.
Number 1534
MR. HARGRAVES noted that both the Lake Louise petitioners and the
Mat-Su Borough filed requests for reconsideration. Lake Louise
wanted the Local Boundary Commission to add an option which would
allow detachment if the area formed a second-class city. The Mat-
Su Borough wanted the LBC to specify measures to hold it
financially harmless if Lake Louise detached. Upon
reconsideration, the LBC modified its decision to allow detachment
if Lake Louise formed a second-class city. From a public policy
standpoint, the commission had expressed a strong preference for
the inclusion of Lake Louise in a Copper River Basin borough.
However, the circumstances in this particular case had compelled
the LBC to reconsider and allow the option of forming a second-
class city, Mr. Hargraves explained.
Number 1586
MR. HARGRAVES said the LBC had also imposed the following
conditions. First, the future city of Lake Louise or future Copper
River borough must pay $160,000 to the Mat-Su Borough within two
years of incorporation. The payment was to offset impacts to the
Mat-Su Borough for the debt service and local contributions to
education. Mr. Hargraves explained that $93,000 of that $160,000
stipulated payment was the result of an interpretation by the
Department of Education that the value of taxable property at Lake
Louise must be included, for two years after the detachment
occurred, in the calculation of the Mat-Su Borough's required local
contribution in support of education. Mr. Hargraves noted that the
LBC had provided, in their decision, that if the law were amended
or if the interpretation changed so that the borough was not
required to make that contribution, then the payment required by
Lake Louise would be adjusted accordingly.
Number 1637
MR. HARGRAVES noted that the successor city or borough also had to
assume responsibility for the following: the Lake Louise sewage
management site; solid waste collection and disposal; and planning,
platting, land use regulations and emergency medical services. He
said, "To ensure financial viability and cooperation of a city was
also a condition upon the passage of a proposition authorizing the
city to levy a property tax at a rate that would guarantee
sufficient revenue to carry out the duties and reasonable
anticipated functions of the city."
Number 1666
MR. HARGRAVES explained that the foregoing were his major remarks
regarding the actions taken by LBC in the previous year. He
directed the committee's attention to page 63 of the written report
dated January 17, 1996. There were several matters of policy and
other concerns, he said, which the commission really could do
nothing about except to point out to the legislature that these
were areas developing rapidly across the state as a matter of
concern. One of the conclusions he had come to in the last couple
of years, especially, was that there was great discontentment
across the state and thinking that the grass was greener on the
other side. Organized cities wanted to become unorganized. Cities
in a borough wanted to break off. These detachments were of
concern, he said, and should be considered by the legislature for
appropriate action.
Number 1734
MR. HARGRAVES spoke about the promotion of maximum common interest
within boroughs. The LBC was finding people "just can't get
satisfied or happy with the situation that they're in." The
requirement for local contribution for education, libraries or the
operation of local government concerned people who were in
organized municipalities. "They look across the way and see
somebody else that isn't paying anything," he said. He reiterated
that issues of equity and requirements of local contributions were
causing discontent. Sometimes, he said, that lead to an interest
in dissolution and reentering the unorganized borough with no local
governments at all.
Number 1778
MR. HARGRAVES referred to page 67, which discussed the lack of
limitations on authority of municipalities to levy certain taxes.
The taxing structures in place were becoming a concern, he said.
There were situations where people could call upon taxation on a
local natural resource, for example, and generate tremendous
revenue. However, another community close at hand might have no
such natural resource to raise local monies.
Number 1813
CO-CHAIR AUSTERMAN said the first three questions that had jumped
into his mind were the exact three things Mr. Hargraves had
discussed last. He referred to the interest in detachments, common
interests and lack of limitations on certain taxes. He asked Mr.
Hargraves if there were recommendations in the written report of
what the LBC thought the legislature ought to be doing.
Number 1834
MR. HARGRAVES replied that as a commission, the LBC did not
generally offer recommendations. Instead, it pointed out the
problems in the hope that the legislature would come up with
solutions. The commission itself had never taken any specific
positions on those problems. They simply recognized them.
Number 1854
CO-CHAIR AUSTERMAN asked if, in the past, the Local Boundary
Commission had been requested to give recommendations but not felt
it was the commission's duty.
MR. HARGRAVES responded he did not know that the commission had
been requested to do that. If so, he said, the commission would
probably refer it to the DCRA staff, who were probably the
appropriate ones to pinpoint recommendations. He added that if the
committee wished to discuss any one of the issues, they could ask
staff to join them at the table for discussion.
CO-CHAIR AUSTERMAN replied that was a good idea.
Number 1891
PATRICK K. POLAND, Director, Central Office, Division of Municipal
and Regional Assistance, Department of Community and Regional
Affairs, pointed out that while there were no specific
recommendations in the Local Boundary Commission's report, there
were a number of options laid out addressing each of those
problems. There were potential solutions, although the commission
had chosen not to select any.
CO-CHAIR AUSTERMAN responded that he would read those three areas
of the report. He suggested that the committee wanted to digest
the ideas that had been presented.
Number 1938
MR. HARGRAVES emphasized that the Local Boundary Commission
certainly had staff available to discuss it, including Mr. Poland
and Dan Bockhorst, who worked directly with them out of the DCRA.
CO-CHAIR IVAN said he had yet looked at the report completely. He
wished to digest it first and then bring up questions at a later
time, if it pleased the chair.
Number 1966
REPRESENTATIVE KOTT suggested that since the LBC members were
present, he wished to have them briefly elaborate on compensation
for the commission.
MR. HARGRAVES responded they made a big point out of being a
volunteer lay group that contributed a public service. As far as
he went back, and as far as he had looked at the record, the
recommendation for compensation had always been in there, he said.
He noted that compensation would cost approximately $15,000 per
year. He said the concern came from the fact that the LBC was
doing work as important as that done by paid commissions.
Number 2036
REPRESENTATIVE ELTON agreed with Co-Chair Ivan that at some point
this year, the committee should have a work session on some of the
suggestions made. He remembered some of the same suggestions from
the previous year. If the LBC thought they were important enough
to recommend to the legislature, Representative Elton thought it
was important enough to review.
Number 2053
CO-CHAIR AUSTERMAN expressed that the committee did not plan on any
action that day on the report or regarding Wasilla or Lake Louise,
for which they had 45 days to act from the day of the report.
CO-CHAIR IVAN brought up the topic of dissolution and explained
that the community of Akiak had petitioned for dissolution two
years ago and gone through all the commission and statutory
requirements. However, when the election was held, it was via a
mail ballot. When the first ballot was found to be incorrect, a
second ballot was sent out. Although, technically, the election
was done by the book, there was still confusion. The City of Akiak
wanted the LBC to look at the situation and provide the community
with a course of action.
Number 2230
DAVID GILILA, Administrator, City of Akiak, noted that he was also
a member of the IRA Council. Although the city had gone through
the necessary procedures, it was the first time an election had
been conducted by mail. Mr. Gilila indicated that one registered
voter had approached him about not receiving a ballot. He had also
heard of other people not receiving ballots, but none of those
others had approached him. He understood that the LBC was the only
entity that could decide to hold another election within the 24-
month period. He added that he had not felt the voter
participation was as high as it should have been.
Number 2335
MR. GILILA referred to a regulation requiring the election to be
challenged within a 10-day period and said he personally never
received the results following the election. He did not know who
phoned for the election results, but it happened after the 10-day
period had elapsed. He was asking the LBC to consider whether the
City of Akiak might hold another election before the 24-month
period elapsed.
Number 2382
MR. GILILA explained that most of the voters had been confused
because they had never received a ballot in the mail before. Most
of them either had not opened it or had just left it there, he
said. Mr. Gilila referred to another option that had been
discussed; he did not specify what that option was but expressed
that he personally did not feel that was the way to go. He said he
preferred to see the community decide whether to dissolve the city
or not.
Number 2422
OWEN IVAN, Member, Akiak IRA Council, testified that he had
received two different ballots by mail, which was confusing. He
expressed that it was not right to be voting by mail in the
village. He said that some registered voters in Akiak had not
received ballots.
TAPE 96-12, SIDE B
Number 0001
MR. O. IVAN said the "very last chance of getting rid of the City
of Akiak would be through complete resignation" by the voters and
council members. He said he knew that had been done before in
other villages. He said he himself was not worried about the 24-
month delay. "Nobody's going to decide for us in Akiak," he said,
"because we'd like to control our own destiny."
Number 0059
CO-CHAIR IVAN commented that the community, the Lieutenant
Governor's office and the Department of Law had discussed the
issue; all the concerns were answered by the Division of Elections.
However, with the statutory time line and requirements, the
division could not call for another meeting. The community of
Akiak would have an opportunity to address the Local Boundary
Commission, he explained, but he had wanted to let the Akiak
residents bring the committee up to speed on some of the
dissolution questions and actions happening in Western Alaska.
Number 0108
REPRESENTATIVE ELTON asked how common it was for dissolution
elections to be held by mail.
CO-CHAIR AUSTERMAN asked if the department conducted the election.
REPRESENTATIVE ELTON responded he thought the Division of Elections
did.
Number 0130
REPRESENTATIVE AL VEZEY commented that although he had never been
involved in a dissolution election, every annexation election he
had been involved in had been done by mail.
REPRESENTATIVE ELTON asked whether a mail ballot for dissolution
was, then, not unusual.
Number 0146
MARJORIE VANDOR, Assistant Attorney General, Civil Division
(Juneau), Governmental Affairs Section, Department of Law, noted
that she had been at the meeting at the Lieutenant Governor's
office where staff from the Division of Elections was present. As
to the dissolution election, she said, this was probably the first
one to be held where it was a petition by the community asking to
dissolve. The other elections held the previous October, on a
general election date, had been advisory elections. In fact, that
was why they had been held on the day of the normal election and
had been in person.
Number 0168
MS. VANDOR explained there had been a timing problem as to when the
dissolution petition was approved by the LBC. When enough time had
passed so that an election could be held, it was November, past the
normal date in October for an in-person election. Due to financial
problems, about which Ms. Vandor said the Division of Elections was
very honest, elections could not always be held in rural villages
in person. There had been, however, an Division of Election
official in Akiak to answer questions. Ms. Vandor explained that
there had been a problem with one of the ballots. The printer had
made a mistake and printed the name of another city on the second
question referring to the transfer of assets. When that error was
discovered, since there was still plenty of time for the mail
ballot, a second ballot was printed and mailed out with an
explanation. The election official in town had been informed that
the second ballot was coming. If either ballot was voted, Ms.
Vandor said, it was counted; if both were voted, only one was
counted.
Number 0230
MS. VANDOR concluded that she could not say it was common, as the
Akiak election had been one of the first ones held. Mail-in
elections did not always work for all people at all times.
However, they were certainly common for Rural Education Attendance
Area (REAA) elections, annexations and many other elections in the
state.
CO-CHAIR AUSTERMAN asked about the 24-month rule.
Number 0246
MS. VANDOR replied that was a regulation of the Local Boundary
Commission.
CO-CHAIR AUSTERMAN asked if the LBC could override that rule.
MS. VANDOR affirmed that was correct. Although she had no copy of
the regulation with her, she said it would be for extenuating
circumstances, for good cause shown.
Number 0257
CO-CHAIR AUSTERMAN asked Mr. Hargraves about the LBC's position on
doing another ballot.
MR. HARGRAVES responded that he wished to have Patrick Poland
address that. He explained that the LBC had not discussed the
matter as a commission. He wanted to ask Mr. Poland what the LBC's
options were.
Number 0280
MR. POLAND said it was DCRA's intention to present this to the
Local Boundary Commission with their options. He explained the LBC
was meeting that afternoon and the following day. Mr. Poland noted
that there had been a scheduled meeting the previous day with the
representatives of Akiak; however, neither he nor Mr. Bockhorst had
made it in because of bad weather. Mr. Poland said they were
intending to pursue that. He expressed sensitivity to the problem
that had been created and said they were looking for a solution,
which they believed existed. They did need to sit down with the
LBC and have them make a decision, he added.
Number 0300
CO-CHAIR AUSTERMAN requested that once the discussions had taken
place and the decision had been made, the committee be given
something in writing.
MR. POLAND agreed.
Number 0308
MR. HARGRAVES said that "the thing you could find comfort in is
that we did approve it the first time." He noted that the Local
Boundary Commission was fully in concurrence with the action
previously taken. He thought it had become clear that it was not
the LBC that did the election, he added. If the LBC needed to do
something to remedy the problem, Mr. Hargraves felt confident they
would.
Number 0342
DAN BILLMAN testified via teleconference from Glennallen regarding
the Lake Louise detachment. He noted that he was president of the
Copper Valley Chamber of Commerce. He spoke in support of the
LBC's decision and commended the thorough report prepared by DCRA.
He felt Lake Louise's situation was unique because they were so
connected to the Copper River Basin in all economic and social
ways. As part of their petition, Lake Louise had suggested that
there be changes in the future to equalize the school tax. Mr.
Billman expressed that Lake Louise was willing to be responsible
for their school tax, as well as their share of the bonded
indebtedness.
Number 0429
ROBERT WELLS, Assembly Member, Matanuska-Susitna Borough, testified
via teleconference, saying he represented District 6. He explained
that the Local Boundary Commission, after reconsidering its
original decision authorizing detachment of Lake Louise if the area
became part of an organized borough, amended that decision to allow
detachment if the area became a city in the organized borough. He
expressed extreme dismay at that decision and disappointment with
the legislature's failure to consider a joint resolution rejecting
that decision. Mr. Wells said the LBC's decision undermined the
existing boundaries and tax base of the Mat-Su Borough, which was
an integrated local government that provided services to the Lake
Louise area.
Number 0471
MR. WELLS predicted the Lake Louise decision would become a
precedent for the detachment of other areas that disliked paying
taxes. He also believed the LBC's decision violated Article X of
Alaska's constitution, because it undermined the principles that
boroughs were the preferred form of local government and that local
government powers should be exercised with a minimum of local
government units, without duplication of tax-levying jurisdictions.
Boroughs were specifically designed to provide services to sparsely
populated areas, Mr. Wells said. In this case, the LBC's decision
did not promote any of these ideas. He said it was also difficult
to understand the DCRA's policy recommending detachment. Mr. Wells
believed DCRA's decision was contrary to Alaska's constitution and
the facts of this case. He explained that DCRA had conducted a
study of model borough boundaries sometime around 1991 or 1992.
That study did not state that the 1964 legislature erred in
establishing the Mat-Su Borough boundaries, he pointed out, nor
that Lake Louise should detach. In fact, he said, the model
borough boundary study addressed the viability of the formation of
a borough in the Copper River Basin area.
Number 0528
MR. WELLS stated, "This study concluded that a hypothetical borough
exercising the minimum powers required by law in education and
planning is quite viable. In fact, it was projected that the
potential borough could operate on state and federal funding alone,
due largely to the way in which one particular state funding
program operated. Not only could it operate without local taxes,
but generous state and federal aid would permit it to accumulate a
surplus of funds estimated at more than $5 million at the end of
the first four years of operation. In the event that taxes ever
did become necessary, the region was found to have the capacity to
generate significant revenues with minimal rates of taxation. This
should come as no surprise, since 94 percent of the taxable value
of the region stems from the 150 miles of the Trans-Alaska Pipeline
system within the REAA."
Number 0566
MR. WELLS continued, "DCRA and the boundary study concluded that
there is more than enough assessed valuation to warrant the
establishment of a borough in the Copper River Basin. Now, even
though nothing has changed, they have advocated detachment of the
lands from an integrated borough rather than borough formation.
Because a borough in the Copper River Basin is feasible, the
legislature should require formation of one prior to the detachment
of the Lake Louise area from the Matanuska-Susitna Borough. Please
remember that local governments are incorporated to provide local
services which cost money. In fact, local governments are required
to contribute a local contribution to education, while unorganized
areas receive 100 percent of state funding.
"This inequity cannot continue, particularly in an era where state
funding of local governments is substantially reduced. Every year,
there is a reduction in municipal assistance and revenue sharing,
which must be borne by local taxpayers. The unorganized area does
not suffer the same penalty. In the Matanuska-Susitna Borough, an
area with one of the lowest abilities to pay for local services, a
property tax levy is the primary method to raise local revenues for
local services. When the state advocates the elimination of
approximately $11 million in assessed valuation of recreational
property with absentee land owners, it compounds the fiscal deficit
problem with the local government again being responsible to fill
in the gaps.
"Because the legislature continues to ratchet down more fiscal
responsibility without additional revenue upon local government,
and because you apparently intend to tacitly approve this
detachment, I conclude the legislature has no political will to
consider a joint resolution rejecting the Local Boundary
Commission's ill-advised decision or simply does not care about
local government. Some legislators, however, have stated they
support a mandatory borough act. I hope the support of a mandatory
act is not simply political lip service because at the moment it is
convenient as a political answer to a serious problem. If you are
serious about passing another mandatory borough act, it should not
be referred to a number of committees. Instead, it should be
promptly and honestly debated and then adopted by the legislature
for the Governor's signature. Only when other areas of the state
that are currently receiving 100 percent state funding contribution
to local services will the serious inequities currently existing be
remedied.
"Alternatively, other tools are available to the legislature to
remedy this problem. The legislature is the assembly for the
unorganized areas and could levy a property tax and require local
contribution from the unorganized areas. It's time for you to
exercise your legislature duty to plug this financial vacuum on the
unorganized borough. I strongly urge you to exercise one of these
options. Let me assure you that the Matanuska-Susitna Borough will
be watching this issue very carefully to see how its delegation and
the remainder of the legislature tackle these issues."
Number 0734
MR. WELLS concluded, "In summary, while it is too late for you to
act responsibly on Lake Louise, it is not too late for you to adopt
a mandatory borough act or tax the unorganized areas and require
those areas of the unorganized borough to provide funding for local
services." He thanked the committee and noted that borough
attorney Mike Gatti was available to answer any technical
questions.
Number 0762
REPRESENTATIVE ELTON asked whether Mr. Wells had worked with his
local legislative delegation and what their response had been to
the borough's request. Specifically, he wondered if it had been an
official borough request and whether they had adopted a resolution
and sent it to the legislature. Representative Elton expressed
hesitation to "jump into the middle of something that's going on
far, far away" because of lack of local knowledge.
Number 0790
MR. WELLS responded that the resolution Representative Elton had
spoken about had been adopted by the borough assembly and forwarded
to their delegation in Juneau. The borough manager was in Juneau,
he said, and was pursuing the issue with their delegation.
CO-CHAIR AUSTERMAN noted for the record that Representatives Ivan,
Nicholia and Vezey were present.
Number 0834
REPRESENTATIVE VEZEY asked Mr. Wells if it was his position that
the members of the boundary commission were not reasonable people.
MR. WELLS replied of course not. He said he just did not agree
with the decision they had made, which he felt had broad
implications for the state. He felt the legislature should address
those considerations.
Number 0851
REPRESENTATIVE VEZEY pointed out that this was the second or third
time since he had been a legislator that a decision of the LBC had
come before them. In those cases, the legislature had decided to
accept the LBC's report in every case of which he was aware.
Number 0868
MR. WELLS responded that may be; however, he asked that the
legislature look at the broad implications of this issue. The Mat-
Su Borough did not have the tax base of many other areas, he said.
If these kinds of decisions continued, legislators would have to
face funding 100 percent of a lot larger school districts, he said.
Number 0895
REPRESENTATIVE VEZEY replied that he did not know why Mr. Wells was
saying that; the last time he had looked, the Mat-Su Borough had a
tax base of $197,000 per capita, whereas the Fairbanks North Star
Borough had a tax base of $201,000 per capita. He asked why Mr.
Wells felt his borough was discriminated against.
Number 0905
MR. WELLS said he would defer to Don Moore, manager for the
borough, to address those figures.
Number 0934
ART GRISWOLD, North Pole Borough Planning Commission, testified via
teleconference, saying he had been listening and was concerned
about the discussion of DCRA's recommendations. He complimented
Mr. Poland and his staff and said before any changes were made, he
hoped DCRA would consider public hearings to allow people to voice
opinions on changes in the regulations or procedures.
Number 1037
DONALD MOORE, Manager, Matanuska-Susitna Borough, testified in
person that he appreciated the work of the Local Boundary
Commission and found them to be reasonable people in every sense of
the word. These were major public policy questions the LBC was
wrestling with, he said. He asked for confirmation that the LBC
had made a decision which was overturned by the legislature in 1988
or 1989, concerning the Fairbanks North Star Borough. He recalled
that the recommendation had been to annex an area to the north,
which the legislature reversed.
Number 1108
CO-CHAIR AUSTERMAN responded that according to DCRA, Mr. Moore was
correct about that.
MR. MOORE explained that like many issues driving decisions in the
legislature, this one concerned money and taxation. Things needing
to be taken into account were money, taxes and fundamental
fairness. He noted that the Matanuska-Susitna Borough, which was
created by the legislature rather than by public vote, was formed
to be, first and foremost, a school district. In accordance with
state law, the borough now taxed themselves more than twice what
the state required of a second-class borough in order to support
its schools. The LBC decision would begin to erode this local tax
base, he said, by allowing approximately $11 million in resort and
recreation property to be removed from the borough. Mr. Moore
pointed out that these were not indigent rural residents trying to
get out from under an oppressive government. The property was
resort and recreation property primarily owned by people living in
Anchorage, Palmer, Wasilla and Fairbanks.
Number 1192
MR. MOORE addressed the borough's tax base, saying the Mat-Su
Borough's assessed value per capita was approximately $40,000 per
person. The Lake Louise area's assessed value was approximately
$200,000 per person, whereas the Copper River Basin REAA's was
approximately $220,000. Looking at the fundamental reason of
forming the borough in the first place, which was to support a
school system, he suggested it might be more valuable to look at
the assessed value per student, which in the Mat-Su Borough was
$175,000 per student. In the Copper River REAA, where Lake Louise
was going, the assessed value per student was $1,084,000 dollars.
They were far more capable of supporting their school system with
their local tax base, which was available to them but that they did
not tax, than the Mat-Su Borough was with their tax base that they
did tax, and heavily. Mr. Moore noted that the state required
residents of a borough to tax themselves both to build schools and
operate them, while the REAA's expenses were paid for by the state.
Number 1277
MR. MOORE commented that the previous week, the local newspaper
reported the Mat-Su Borough might have to pink-slip 125 teachers
the next year. He asked how many the Copper River REAA was laying
off.
MR. MOORE said the original decision of the LBC was very wise to
allow the detachment so long as the area attached to an organized
borough. This would meet everyone's need, he said, by allowing the
petitioners to join with an area geographically dear to them, yet
protecting the financial integrity and best interests of the
detached area, the borough and the state. The decision before the
committee really did none of those things, Mr. Moore said. It
simply removed a large, valuable recreation area from the
obligation of taxation and made it a part of the "vacuum of the
unorganized borough." The decision started to unravel the borders
of a borough that had existed 33 years, he said. He noted that the
questions of detachment had been asked and answered more than 13
years ago, at which time it had been left as it was.
Number 1351
MR. MOORE asserted that the LBC's decision would be detrimental to
the Mat-Su Borough and contrary to Alaska's constitution, its
statutes and even common sense. "We would ask that you please do
not do this," he concluded.
Number 1368
REPRESENTATIVE ELTON responded that he shared the concern about
narrowing the tax base. However, he said, from the testimony
received and information presented, he wondered how many of the
pink-slipped teachers were serving Lake Louise. He said it sounded
to him as if all those students, as well as their families that the
Mat-Su Borough was taxing, would be going somewhere else, with the
Mat-Su Borough no longer responsible for them or providing public
transportation for them.
Number 1406
MR. MOORE replied that the borough had, in the past, provided
public transportation there. The students were going somewhere
else, he said, because their parents chose to send them somewhere
else. The same educational services and facilities were available
to those students, he said, as to any other rural student in the
borough.
Number 1430
REPRESENTATIVE ELTON asked how far those students were traveling to
school at present.
MR. MOORE replied they attended school in Glennallen, for which he
did not know the exact mileage. He suggested someone present would
know the mileage.
REPRESENTATIVE ELTON asked if that school was much closer than the
nearest borough school.
MR. MOORE replied yes.
Number 1461
REPRESENTATIVE ELTON said to him, it seemed somewhat unfair to
characterize it as "parents choosing to send their kids elsewhere,"
when the schools for which they were being taxed were a lot farther
away.
MR. MOORE said there were other choices. The school district
offered correspondence courses for situations with few students,
for example. Where there was a concentration of students large
enough to merit a school, the borough provided one. Furthermore,
there had been planning to provide a school at the Lake Louise
area, but those plans had not materialized. Frankly, he said, the
student population went away. There were very few students in that
area right now.
Number 1500
REPRESENTATIVE ELTON said he had understood there would be a
requirement that Lake Louise reorganize into a second-class city or
affiliate with an adjacent borough. However, upon hearing Mr.
Moore's and Mr. Wells's testimony, it sounded as if they believed
there was no intent to do either.
Number 1540
MR. MOORE responded that the original Local Boundary Commission
decision was that the area attach to another borough. To that, he
said, the borough had no objection. Upon reconsideration, however,
the LBC allowed Lake Louise to form a second-class city, which by
law could not provide education, among other things. They would
become another second-class city inside the Copper River REAA.
REPRESENTATIVE ELTON noted that was where they were now receiving
most of their services.
MR. MOORE replied yes.
Number 1592
REPRESENTATIVE IRENE NICHOLIA pointed out that the decision
permitting the detachment of Lake Louise from the Mat-Su Borough
was conditioned upon formation of a second-class city in the next
two years. She said she found it ludicrous that the borough would
rather have the students go to the Mat-Su Borough school, more than
70 miles away from Lake Louise. She suggested that would be like
sending students from Nenana to school in Fairbanks. Furthermore,
while correspondence might be fine for some, she understood that
the residents of Lake Louise did not want to do that. Instead,
they chose to send their students to the Copper River Basin schools
in the REAA system.
Number 1667
MR. MOORE responded that he did not prefer that parents send their
children to any school or another. Rather, he preferred that the
parents have a choice. He said if he lived in the area, most
certainly his children would go to the Glennallen schools. There
were provisions in the borough to allow for that.
Number 1693
REPRESENTATIVE NICHOLIA agreed with the people from Lake Louise
that it was their choice as to which government they wanted to be
in. They chose not to be in the Mat-Su Borough, she stated.
Instead, they chose to become a second-class city and to be part of
the REAA.
Number 1779
REPRESENTATIVE VEZEY said they had been looking at tax base figures
a number of years ago and he did not remember if they had been
looking at per capita or per person taxation. He had thought it
was per capita. He asked Mr. Moore if the borough tax base was
$40,000 per capita.
MR. MOORE replied yes.
Number 1770
REPRESENTATIVE VEZEY responded that sounded awfully low. He said
he remembered looking at the tables, which had been comparing
apples to apples. He noted that had been just a couple of percent
below the Fairbanks North Star Borough.
Number 1779
MR. MOORE replied that he believed the assessed value per student
in the Fairbanks North Star Borough and the Mat-Su Borough were
similar. For that matter, the Kenai Peninsula Borough was only
slightly below both of those. He hoped he had pointed out in his
testimony that the Mat-Su Borough also agreed with choice.
However, they had been given no choice in the formation of a
borough in the first place. If the window was now open where they
could remove themselves from the borough and join the REAA,
resulting in the state picking up 100 percent of the cost, Mr.
Moore felt certain that would prevail if it were put to a vote in
his borough.
Number 1857
JACK HANSEN, Owner, Evergreen Lodge, testified that he was the
petitioners' representative for the Lake Louise detachment
petition. He said Lake Louise had no objections to becoming part
of the borough in the Copper River Basin area, if and when that
should happen. Clearly, he said, they belonged to the Copper River
Basin in every way, shape and form. They were willing to become a
second-class city and take on responsibilities for garbage disposal
and sewage, as well as the financial requirements of a second-class
city. In fact, he said, they were probably already in the process
of doing that. He referred to the DCRA's report and said it was
clearly not harmful to the borough for Lake Louise to exit. In
some ways, Mr. Hansen thought it was beneficial to them. He
foresaw Lake Louise becoming a financial liability to the Mat-Su
Borough if it stayed in the borough and received the services for
which it was taxed.
Number 2067
CO-CHAIR AUSTERMAN noted that concluded the schedule for the day
and thanked the Local Boundary Commission members. He reminded the
committee that any legislator could put together a concurrent
resolution to disallow the LBC's actions, if they so chose,
regarding the Wasilla annexation and Lake Louise detachment issues.
He informed the committee that the boundary commission's report
would be addressed at a future time. He noted that Thursday's
meeting would include a briefing by DCRA on the Service Block Plan
State Plan, as well as a briefing by the Alaska Native Health
Board.
Number 2181
MICHAEL GATTI, Attorney, Matanuska-Susitna Borough, testified via
teleconference. He referred to a question to Mr. Wells pertaining
to whether the borough assembly had passed a resolution requesting
the legislature to adopt a joint resolution opposing the Lake
Louise detachment. Indeed they did, he said. As he understood it,
that resolution had been forwarded to each legislator.
Number 2237
MR. GATTI also noted that Senator John Torgerson was currently
reviewing the constitutionality of conditions placed by the LBC on
the detachment decision. Specifically, Senator Torgerson had
questioned whether the commission had authority to impose some of
the conditions. Mr. Gatti said his borough had similar concerns,
particularly about the continuing jurisdiction to arbitrate
disputes between the petitioners and the borough, as well as some
other stipulations. Mr. Gatti concluded by saying the other
borough representatives had adequately and eloquently expressed the
position of the borough.
Number 2323
CO-CHAIR AUSTERMAN noted that the committee had copies of the
resolution in question.
ADJOURNMENT
There being no further business to conduct, CO-CHAIR AUSTERMAN
adjourned the House Community and Regional Affairs Committee at
2:46 p.m.
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