Legislature(1999 - 2000)
02/24/2000 08:10 AM House CRA
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JOINT MEETING
HOUSE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
SENATE COMMUNITY AND REGIONAL AFFAIRS
STANDING COMMITTEE
February 24, 2000
8:10 a.m.
COMMITTEE CALENDAR
Local Boundary Commission Report
TAPE(S)
00-11, SIDE A
00-12, SIDE A
CALL TO ORDER
Representative Harris, Co-Chairman, House Community & Regional
Affairs Standing Committee, convened the joint meeting of the
House and Senate Community and Regional Affairs Standing
Committees at 8:10 a.m.
PRESENT
At the call to order, members present from the House committee
were Representatives Harris, Morgan, Murkowski, Dyson, Joule and
Kookesh; members present from the Senate committee were Senators
Kelly and Hoffman. Representative Halcro and Senator Phillips
arrived as the meeting was in progress.
SUMMARY OF INFORMATION
KEVIN WARING, Chairman, Local Boundary Commission (LBC), read
from a document entitled "Remarks to the Joint House-Senate
Community & Regional Affairs Committee of the Second Session of
the 21st Alaska Legislature." The aforementioned document is
available in the committee packet and is attached to this
document. Mr. Waring informed the committee that the LBC filed
its annual report with an addendum. The report provides the
following information: an overview of the LBC; a summary of the
LBC's activities last year along with pending proposals; the
LBC's recommendations with regard to the annexation of territory
to the City of Ketchikan and the City of Aleknagik; and a
discussion of important public policy issues concerning local
government in Alaska.
MR. WARING reviewed the aforementioned issues and discussed in
depth the need to eliminate certain ambiguities in the law
involving boundary changes, the Alaska Housing Finance
Corporation Rural Housing Loan Program, and the incentives and
disincentives to borough government development. He encouraged
the committees to consider a new concept, which creates a new
process for borough incorporation, proposed by the City of
Cordova.
There was a question-and-answer session that addressed such
topics as the difference between home-rule and first-class cities
and why a community would choose one organization over another.
There was also discussion with regard to specific areas such as
Talkeetna, Adak, the City of Ketchikan and Cordova.
COMMITTEE ACTION
The committee took no action.
ADJOURNMENT
The meeting adjourned at 9:24 a.m.
NOTE:
The meeting was recorded and handwritten log notes were taken. A
copy of the tape(s) and log notes may be obtained by contacting
the House Records Office at 129 6th Street, Suite 229, Juneau,
Alaska 99801, (907) 465-2214, and after adjournment of the
second session of the Twenty-first Alaska State Legislature this
information may be obtained by contacting the Legislative
Reference Library at 129 6th Street, Suite 102, Juneau, Alaska
99801, (907) 465-3808.
ATTACHMENT:
Remarks to the Joint House-Senate Community & Regional Affairs
Committee
of the Second Session of the 21st Alaska Legislature
Kevin Waring, Chairman, Local Boundary Commission
February 24, 2000 B 8:00 a.m.
Capitol Room 124{tc "Capitol Room 124" \l 3}
Introduction
Good morning. I am Kevin Waring, Chairman of the Local Boundary
Commission. I appreciate the opportunity to address you in
person at your joint meeting today. Other Commission members
participating by teleconference are: Kathleen Wasserman, Vice-
Chairman, of Pelican, appointed from the First Judicial District;
and Nancy Galstad, of Kotzebue, from the Second Judicial
District.
Two members of the Commission were unable to participate by
teleconference today. They are: Allan Tesche, of Anchorage,
from the Third Judicial District; and Ardith Lynch, of Fairbanks,
from the Fourth Judicial District.
Annual Report Filed
The Local Boundary Commission filed its annual report with the
Legislature on January 19th of this year. A copy was provided to
each member of the House and Senate. The Commission's report
addresses four principal topics.
Chapter 1 provides an overview of the Commission;
Chapter 2 summarizes the Commission's activities last
year along with pending proposals;
Chapter 3 presents the Commission's recommendations to
the Legislature for annexation of territory to the City
of Ketchikan and the City of Aleknagik; and
Chapter 4 discusses important public policy issues
concerning local government in Alaska.
I will speak briefly about the first three topics, in order to
allow time to address three important public policy issues.
Overview
Alaska's Constitution established the Local Boundary Commission
to ensure that proposals to create and boroughs or alter their
boundaries would be dealt with objectively and from a statewide
perspective.
The Commission's responsibilities include judging proposals for:
incorporation of cities and boroughs;
annexation to cities and boroughs;
detachment from cities and boroughs;
reclassification of cities;
dissolution of cities and boroughs; and
merger and consolidation of cities and boroughs.
The Commission has other powers and duties established in law,
including a duty to make studies of local government boundary
problems.
The Commission consists of five members who are appointed by and
serve at the pleasure of the Governor. One member is appointed
from each of Alaska's four judicial districts. The fifth member
is appointed at-large and serves as chair. Members are appointed
for overlapping five-year terms. Commission members donate their
time as a public service. They receive no compensation for the
time they contribute to Commission activities. The Department of
Community and Economic Development provides staff support to the
Commission.
1999 and Prospective Activities of the Commission
The Commission met eleven times in 1999. Eight of those meetings
were by teleconference. Collectively, the five members of the
Commission spent all or part of 85 days conducting the business
of the Commission. In all, Commission members volunteered many
hundreds of hours reviewing and analyzing documents filed in
proceedings and on other Commission business.
Specifically, during 1999 the Commission addressed proposals for:
annexation of 5,524 square miles to the Ketchikan Gateway
Borough;
annexation of 19.5 square miles to the City of Kodiak;
annexation of 24.29 square miles to the City of Aleknagik; and
annexation of 1.2 square miles to the City of Ketchikan.
Several proposals are now pending before the Commission or are
expected to be filed shortly. These include petitions for:
incorporation of the City of Adak as a second-class city;
incorporation of Talkeetna as a home rule city;
annexations to the cities of Palmer, Wrangell, Ketchikan, and
Homer;
consolidation of the City of Ketchikan and the Ketchikan Gateway
Borough;
consolidation of the City of Fairbanks and the Fairbanks North
Star Borough; and
dissolution of the City of Skagway and concurrent incorporation
of a Skagway Borough.
Recommendations
Article 10, Section 12 of Alaska's constitution requires the
Local Boundary Commission to present proposed local government
boundary changes to the legislature during the first ten days of
a regular session. The constitution further provides that the
change shall become effective forty-five days after presentation
or at the end of the session, whichever is earlier, unless
disapproved by a resolution concurred in by a majority of the
members of each house.
This year, the LBC has approved and recommends two boundary
changes for legislative review. The background for these
recommendations is found on pages 27 through 64 of the Report and
in the Commission's addendum of January 19, 2000 to Senate
President Pearce and House Speaker Porter.
On November 29, 1999, the Commission unanimously approved the
City of Aleknagik's petition to annex 24.29 square miles.
On December 4, 1999, the Commission unanimously approved the City
of Ketchikan's petition to annex 1.2 square miles.
Subsequently, on January 19, 2000, the day it filed its Report
to the Legislature, the Commission amended its original
decision to defer the effective date of the Ketchikan
annexation to January 1, 2001. The Commission took this
unusual action at the joint request of the City of Ketchikan,
Ketchikan Gateway Borough, and the Shoreline Service Area, the
area affected by the annexation, so they could have a window
of time to consider city-borough consolidation before
annexation was finalized.
The Commission's action in this case warrants an aside. Two
years ago, Senator Mackie and Representative Kookesh provided
positive leadership to help resolve a controversial annexation in
Haines. This year, Representative Bill Williams deserves credit
for his peace-making efforts on a divisive annexation proposal
involving his Ketchikan constituents. Representative Williams,
assisted by City and Borough leaders, helped bridge the divisions
and bring about a compromise, so Ketchikan residents could pursue
a broad solution - city-borough consolidation - to deliver local
government services more equitably and more efficiently.
Representative Williams helped keep this controversy from
escalating to the legislature and perhaps the courts, and saved
both local and state governments a great deal of time and money.
The Commission acted on two other annexation petitions this past
year.
On March 31, 1999, the Commission voted unanimously not to
approve the Ketchikan Gateway Borough's petition to annex
5,524 square miles; and
On August 28, 1999, the Commission determined that the City of
Kodiak's annexation petition satisfied all the requirements in
law and unanimously approved the petition. Local voters,
however, rejected the proposed annexation at local election.
No legislative action is called for on these two failed
annexation petitions.
I am pleased to report for the third year in a row that there is
no outstanding litigation of any Commission decision.
Introduction to policy issues
Next, I would like to turn to three public policy issues that the
Commission raised in its Report to the Legislature. In raising
these issues, the Commission is fulfilling its duty to address
local government boundary problems.
These issues concern:
Several ambiguities in state law that affect boundary changes;
AHFC's Small Communities Housing Assistance Program; and
Disincentives to borough incorporation, and an innovative
proposal to create an additional process for borough
incorporation.
Need to Eliminate Certain Ambiguities in the Law Involving
Boundary Changes
This year, as last year, the Commission is asking for
consideration of proposed legislation to clarify several
statutory provisions that may affect boundary changes. Here, I
would like to take a moment on behalf of the Commission to thank
the Committee Chairs, Senator Kelly, Representative Harris, and
then Co-Chair Representative Halcro, along with committee
members, for their support last session for Senate Bill 156,
which was recommended by the Commission and approved by unanimous
vote of both houses and signed into law.
This year, the Commission wishes to direct legislative attention
to continuing uncertainty over the authority of municipalities to
levy property taxes during the initial calendar year in an area
that has been incorporated or annexed after January 1. State law
is also ambiguous about the effect of incorporations and boundary
changes upon service areas of organized boroughs and the
unorganized borough. Lastly, the Commission believes that
municipal governments should expressly be given limited
extraterritorial power to levy taxes in an area that has been
detached from a municipality. This would ensure that the
detached area could be held accountable for its prorated share of
municipal debts and other costs associated with detachment.
These issues are addressed in pages 71-74 of the Commission's
Report.
These issues concern the Commission because they may cloud
implementation of boundary changes. We have drafted conceptual
legislation to resolve the issues, as outlined on pages 73-74 of
the Report. We recognize, however, that these issues are of even
greater interest to municipal governments. Therefore, we asked
several parties with a fundamental interest in these matters to
review the proposed legislation, and comment to the Legislature.
These parties included the Alaska Municipal League, the Alaska
Municipal Attorneys' Association, and the Alaska Association of
Assessing Officers. The State Assessor reports that the
conceptual legislation has the support of the Alaska Association
of Assessing Officers. Kevin Ritchie, Executive Director of the
Alaska Municipal League, is available this morning to offer his
views on the matter. The Commission invites and welcomes
legislative attention to this matter.
AHFC Rural Housing Loan Program
The Local Boundary Commission has become increasingly aware that
certain eligibility provisions in the Alaska Housing Finance
Corporation's Small Communities Housing Assistance program have
influenced the outcome of important municipal boundary
determinations. Briefly, incorporation, annexation, or
consolidation may result in local loss of eligibility for
reduced-interest home loans. This prospect has generated local
opposition to some proposed boundary changes. Details of this
issue are addressed on pages 74 and 75 of the Commission's
report. The Commission encourages the Legislature to explore
ways to maintain this worthwhile program, but eliminate the
unintended adverse impacts that it has on legitimate municipal
boundary proposals. Coincidentally, this is the same AHFC
program that prompted the City of Kenai to adopt a resolution in
support of legislation to equalize AHFC mortgage loan rates
inside and outside cities, because the current program promoted
growth outside city boundaries to the city's detriment.
Borough Government Incorporation
Finally, we come to the topic of incentives and disincentives to
borough government development, and to an innovative concept
advanced by the City of Cordova for legislation to create an
additional route to borough incorporation and borough annexation.
Incentives for incorporation have always been an element of the
State's local governmental policy. Constitutional delegates
preferred a voluntary approach to borough formation, coupled with
adequate incentives to encourage residents to form boroughs.
They intended that organized boroughs exist in every area of
Alaska that met appropriate standards. Further, the founders
took the position that if citizens failed to form boroughs where
needed, the State should intervene and compel the creation of
boroughs in those areas.
Over time and with the best on intentions, we have stood the
notion of incentives for borough development on its head. For
many years, the Commission has stated its concern about the
disincentives that inhibit the ongoing development of local
government, especially borough government, in Alaska. Most
often, these disincentives are good programs with unwelcome,
unintended side-effects. State financial support for local
education in the unorganized borough is the prime example of a
good program that can work at cross-purposes with the
constitutional goal of borough self-government. The Small
Communities Housing Assistance program I just spoke of is another
typical example.
This year, the Commission would like to restate its concern about
the inhibiting effect of disincentives. But we would also like
to encourage the Legislature to consider a new concept proposed
by the City of Cordova, itself a city in the unorganized borough,
to create a new process for borough incorporation. The proposal
outlines a case-by-case proactive approach to borough
incorporation that side-steps the current impasse.
The proposed concept has three features:
Every year, the Local Boundary Commission shall identify
areas of the unorganized borough that meet existing
standards for second class borough incorporation or for
annexation to a borough or unified municipality.
The Commission shall prepare a written decision that
explains the basis for any proposed borough
incorporation or annexation, and sets out an
incorporation plan. The decision shall be distributed
to all affected communities and local governmental
units for comment. Based on comments received, the
Commission may reconsider and modify its original
decision.
The Commission shall submit any proposed incorporation or
annexation for legislative review, a requirement that
does not now apply to borough incorporations.
To these three features, the Commission would add a fourth - that
the Commission also hold public hearings in the affected areas
before it prepares its written decision proposing incorporation
or annexation.
The appeal of this straightforward concept is that it takes a
proactive approach to borough incorporation in a way that
respects established standards and practice, and provides
accountability for Commission decisions. In the view of the
Commission, the concept:
Fulfills the intent of Article X of the Constitution to "provide
for maximum local self-government with a minimum of local
governmental units" and to divide the State "into boroughs,
organized or unorganized . . . [each of which] shall embrace
an area and population with common interests to the maximum
degree possible";
Maintains existing substantive standards, and with incorporation
of the Commission's suggested public hearing provision,
maintains essential procedural standards for borough
incorporation or annexation; and
Provides for legislative review and oversight for any borough
incorporations and annexations proposed by the Commission.
The concept is consistent with the Alaska Municipal League's
policy statement on borough government. While expressing the same
preference for voluntary borough formation held by the
Constitutional convention delegates 45 years ago, Governor
Knowles has acknowledged that the lack of incentives has stymied
borough incorporation prospects. Consequently, Governor Knowles
encouraged the City of Cordova to pursue its proposal for reform
of current laws relating to this matter.
In conclusion with respect to this issue, the Commission
respectively urges the Legislature to give thoughtful
consideration to any proposed legislation that incorporates the
conceptual approach I have outlined.
The Commission has no illusion that effective action to advance
borough development in unorganized areas that meet borough
incorporations standards will be easy or quick. Commission
members have discussed at length the time and effort this
proposal would require of them. We would anticipate a time-
consuming, painstaking case-by-case process that will prove well
worth the effort in the long run.
Conclusion
Thank you. That concludes my prepared remarks. If you have
questions on any of these matters, I will do my best to respond.
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