Legislature(2007 - 2008)BARNES 124
03/25/2008 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB369 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 369 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 25, 2008
8:10 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Kurt Olson
Representative Sharon Cissna
MEMBERS ABSENT
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Woodie Salmon
COMMITTEE CALENDAR
HOUSE BILL NO. 369
"An Act relating to certain grants awarded by the Department of
Environmental Conservation."
- MOVED HB 369 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 369
SHORT TITLE: SANITATION AND WATER GRANTS
SPONSOR(s): REPRESENTATIVE(s) GATTO
02/19/08 (H) READ THE FIRST TIME - REFERRALS
02/19/08 (H) CRA, FIN
03/25/08 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
REPRESENTATIVE CARL GATTO
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 369.
RICK VANDERKOLK, Staff
to Representative Carl Gatto
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 369, answered
questions.
MARIT CARLSON-VAN DORT, Legislative Liaison
Office of the Commissioner
Department of Environmental Conservation
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 369, answered
questions.
DON BAIRD, City Manager
City of Bethel
Bethel, Alaska
POSITION STATEMENT: Testified in support of HB 369.
KATHIE WASSERMAN
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 369.
BILL ALLEN, City Manager
City of Palmer
Palmer, Alaska
POSITION STATEMENT: Testified that the passage of HB 369, with
it's proposed reduction in local contribution, would go far in
helping the City of Palmer expand.
GINGER BLAISDELL, Staff
to Senator Lyda Green
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 369, provided
information.
BILL GRIFFITH, Program Manager
Facility Programs
Division of Water
Department of Environmental Conservation
Anchorage, Alaska
POSITION STATEMENT: During hearing of HB 369, answered
questions.
ACTION NARRATIVE
CO-CHAIR GABRIELLE LEDOUX called the House Community and
Regional Affairs Standing Committee meeting to order at 8:10:25
AM. Representatives LeDoux, Fairclough, Olson, and Cissna were
present at the call to order.
HB 369-SANITATION AND WATER GRANTS
8:10:42 AM
CO-CHAIR LEDOUX announced that the only order of business would
be HOUSE BILL NO. 369, "An Act relating to certain grants
awarded by the Department of Environmental Conservation."
8:11:04 AM
REPRESENTATIVE CARL GATTO, Alaska State Legislature, speaking as
the sponsor of HB 369, explained that this legislation raises
the population of communities allowed such that the state can
grant funds to municipalities to fix leaky pipes. He noted that
although the fiscal note is [rather large], it's a one-time
expense. He mentioned that there are communities with
populations below 1,000 and those receive 100 percent funding
through the Village Safe Water [Act]. Therefore, HB 369 allows
communities with populations above 5,000-10,000 to take
advantage of the program such that [the grants] allow them to
fix issues related to public health.
8:12:44 AM
CO-CHAIR LEDOUX asked if the term municipalities includes
boroughs.
REPRESENTATIVE GATTO confirmed that the term municipalities
includes [cities and boroughs].
8:13:38 AM
CO-CHAIR LEDOUX surmised then that the City of Kodiak, with its
population of about 6,000, would be eligible for a grant under
HB 369.
REPRESENTATIVE GATTO replied yes, adding that the legislation
increased the grant allowance.
8:14:55 AM
CO-CHAIR LEDOUX related her understanding then that the Kodiak
Borough, with a population of around 14,000, would only qualify
for the 50 percent [grant allowance].
8:15:25 AM
RICK VANDERKOLK, Staff to Representative Carl Gatto, Alaska
State Legislature, responded yes, adding that [the legislation]
doesn't change the [percentage] threshold. "This is just
dealing with that 5,000-10,000 [population] threshold," he
clarified. He mentioned that currently eight communities would
be impacted by this.
8:15:51 AM
CO-CHAIR LEDOUX inquired as to what would occur to the fiscal
note if the threshold was increased to a population of 15,000.
MR. VANDERKOLK deferred to DEC.
8:16:22 AM
MARIT CARLSON-VAN DORT, Legislative Liaison, Office of the
Commissioner, Department of Environmental Conservation, said
that it doesn't look as if the fiscal note would be
significantly impacted, if at all, by increasing the population
threshold to 15,000. In further response to Co-Chair LeDoux,
Ms. Carlson-Van Dort said that an increase in the population to
15,000 would include the following cities: Sitka, Ketchikan,
Kenai, Wasilla, Kodiak, Bethel, Palmer, and Homer.
8:17:35 AM
CO-CHAIR FAIRCLOUGH requested that Ms. Carlson-Van Dort speak to
the value of the program.
MS. CARLSON-VAN DORT related her understanding that this program
has been very beneficial to these smaller communities as it
allows those communities with smaller population bases and less
ratepayers to fund water and sewer projects without
significantly taxing the rate-paying population. Ms. Carlson-
Van Dort related DEC's support of HB 369.
8:18:32 AM
CO-CHAIR FAIRCLOUGH pointed out that she represents small
communities within the Municipality of Anchorage where there are
homeowners with five acre parcels that have effluent and
bacteria-laden water and have to haul water daily. These
homeowners can't afford the $90,000-$135,000 assessment to run
the water through on the 50:50 state match formula. She
inquired as to why the limitation is based on population rather
than density of population in an area, particularly if all
Alaskans are equal.
REPRESENTATIVE GATTO acknowledged such situations, but pointed
out that larger lots that are more remote tend to have a
personal septic system. The nearest sewer line from the city
would be quite a distance and thus it would be very costly to
extend it to remote areas.
8:20:35 AM
CO-CHAIR FAIRCLOUGH clarified that there are those inside the
Municipality of Anchorage who are struggling for both assistance
with septic disposal and water. She suggested that perhaps
density of population versus population should be utilized [when
determining these water and sewer allowances].
REPRESENTATIVE GATTO related his recent experience with
replacing his well pump and noted that some would be devastated
by such circumstances. This legislation offers help for some.
8:22:40 AM
CO-CHAIR FAIRCLOUGH inquired as to how many families the fiscal
note will serve.
REPRESENTATIVE GATTO answered that he didn't know.
8:23:03 AM
CO-CHAIR LEDOUX asked if the sponsor would have any problems
amending HB 369 to allow for 70 percent reimbursement for
communities with populations up to 15,000.
REPRESENTATIVE GATTO responded that he does have concern with
doing so because there is Senate legislation that will likely
move rapidly. He indicated his desire to have his legislation
match the Senate companion legislation in order that there is
more likelihood of success.
8:24:29 AM
DON BAIRD, City Manager, City of Bethel, testified in favor of
HB 369 as it will assist in the extension of [Bethel's] water
and sewer capabilities. Currently, Bethel is under the Village
Safe Water Program, which covers the installation and some
repairs of existing lines. Only about a third of Bethel's
population is on piped water and sewer while the remaining two-
thirds utilize hauled water and sewer. For 1,000 gallons a week
of water and sewer service, the cost is about $230 a month.
Increasing that would be devastating to the homeowners and
ratepayers. Establishing a higher limit and decreasing the
local share would be beneficial to those who have to pay the
cost.
8:26:13 AM
KATHIE WASSERMAN, Alaska Municipal League (AML), testified in
favor of HB 369. Ms. Wasserman informed the committee that
there are three communities on the cusp of populations
surpassing 5,000. Those communities are Unalaska, Valdez, and
Barrow. She pointed out that without the passage of HB 369 the
entire population of all eight of the impacted communities could
be negatively impacted because replacement of the pipes could
cause an increase in taxes. These are growing communities that
AML would hope would receive help in repairing and making
improvements to existing pipe systems.
8:27:16 AM
CO-CHAIR FAIRCLOUGH inquired as to how many more projects would
go forward with this $2.7 million fiscal note.
8:27:43 AM
MS. WASSERMAN, to Co-Chair LeDoux's earlier question,
highlighted that most boroughs don't usually exercise or have
the powers to address sewer and water. Furthermore, cities
usually perform water and sewer improvements and boroughs fall
under the definition of municipalities.
8:28:38 AM
BILL ALLEN, City Manager, City of Palmer, explained that current
statute specifies that the local contribution is based on the
reported population. The desire is to reduce the local
contribution by 20 percent with HB 369. As mentioned earlier,
there are eight communities that will be impacted with three on
the edge. From a local perspective, although Palmer has a
population of 5,574 and growing, it's unable to maintain or get
ahead of the infrastructure [needs] in terms of the growth
factor. Because of the high cost of heating fuel and the lack
of employment in rural communities, migration into the Palmer
area and the Mat-Su Borough as a whole is occurring. However,
[Palmer] doesn't have adequate sewer and water to serve the
population at the rate it's increasing. If the proposed law was
in place today, the funds would be used to improve the existing
system. He related that the City of Palmer has thin-walled
steel pipe for the water system that's almost 50 years old. The
water leakage rate is 40 percent; that is the city loses 40
percent of the water it generates because of corroded pipes. He
pointed out that across the 1,700 ratepayer base several million
dollars over several years results in a significant impact.
Furthermore, the City of Palmer is facing an issue of
noncompliance on the wastewater treatment plant because the
Environmental Protection Agency (EPA) has developed new
standards and the city has two years to comply with those. If
the City of Palmer did what was required to be in compliance
with the EPA for the wastewater plant, it would amount to over
$50 million. Therefore, the City of Palmer has approached
Wasilla and the Mat-Su Borough and suggested forming a regional
wastewater treatment plant. Although the aforementioned would
cost $100 million, the EPA only allows a permit for one outfall.
MR. ALLEN then pointed out that the City of Palmer is only 5
square miles and is reviewing an aggressive annexation.
Therefore, the city would like to be in a position to provide
city water and sewer within a certain timeframe. The passage of
HB 369, with it's proposed reduction in local contribution,
would go far in helping the City of Palmer expand. He noted
that the population requirements of [AS 46.03] haven't changed
since 1994.
8:35:22 AM
REPRESENTATIVE CISSNA remarked that the safe water aspect is
central to this [discussion]. She expressed interest in taking
into account the age of communities in relation to the decay of
infrastructure as it relates to safe water. She then asked if
DEC has a list.
8:37:56 AM
GINGER BLAISDELL, Staff to Senator Lyda Green, Alaska State
Legislature, explained that the fiscal note is for one year of
funding because each year cities must apply for the program.
The department doesn't know how many cities will apply or which
cities might apply. Therefore, DEC really doesn't know the out-
year costs, although there will be future costs. With regard to
how many people it will serve, she pointed out that will depend
upon who applies. Moreover, only a certain number of grants can
be approved due to legislative appropriation. Ms. Blaisdell
informed the committee that this program started as the Federal
Clean Water Act in the late 1980s, but changed to the Alaska
Clean Water Act in the late 1990s when the federal program [was
eliminated]. She noted the Alaska Clean Water Act follows the
same rules that were required under the federal Act.
8:39:59 AM
REPRESENTATIVE CISSNA surmised that due to the population
restrictions there is a limit as to the number of applicants.
MS. BLAISDELL highlighted that cities with a population of 1,000
or less have a 15 percent match. Those communities without an
economic base that can pay the 15 percent match may not apply.
Those cities with a population of up to 5,000 have to match 30
percent of the project. If DEC isn't convinced that applying
communities have the economic base to fund the match, then those
communities likely won't be ranked high enough to be awarded the
grant. This legislation addresses those communities with a
population of just over 5,000 up to a population of 10,000 and
changes the required match from 50 percent match to 30 percent.
8:41:59 AM
REPRESENTATIVE CISSNA inquired as to how many communities
applied last year. She also inquired as to whether the funds
were completely utilized or were funds left over.
MS. BLAISDELL related her understanding from DEC that although
it takes a couple of years for projects to reach completion, the
department anticipates the cities will use all the awarded funds
for the water and sewer projects.
REPRESENTATIVE CISSNA clarified that she's interested in the
total amount that the state has and the impact on the funds
allocated.
8:43:23 AM
BILL GRIFFITH, Program Manager, Facility Programs, Division of
Water, Department of Environmental Conservation, confirmed that
these [water and sewer] projects are typically multiple year
capital projects that can take anywhere from one year to five
years to complete. He also confirmed that it's DEC's experience
that communities requesting these funds do utilize them for the
intended purpose. Mr. Griffith added that for FY 09 funding,
DEC received about $52 million in grant requests and this year
the department is requesting about $26 million to be funded by
the legislature for these projects. Therefore, DEC is
requesting funds for about half of the overall requested
projects.
8:44:35 AM
MR. GRIFFITH, in response to Representative Cissna, specified
that this year the difference in cost to fund the same number of
projects is about $3.7 million. If HB 369 were to pass, the
extra cost to fund the same number of projects will depend on
the number of grant applications from the cities within the
population range. The aforementioned varies every year. As Ms.
Blaisdell mentioned, there's an annual grant application period
that runs from May through July and each year [the request]
depends upon which cities apply for funding, for how much they
apply, and how high the [project] scores. The department has a
prioritization system and scoring criteria. Mr. Griffith said
that although he doesn't know which communities will apply or
how well their projects will score, he said that one should
expect that each year there will be some additional costs to the
state as it will be paying a greater percentage of the overall
project costs in these cities.
8:48:01 AM
REPRESENTATIVE CISSNA remarked that some communities simply
don't have safe water. She then inquired as to the percentage
of communities applying that are remote or rural communities.
She also inquired as to how HB 369 helps increase the safety of
Alaska.
MR. GRIFFITH pointed out that there are two different programs
and capital funding requests are involved. This legislation
would impact the matching ratio for those communities applying
through the municipal matching grant program. Most small rural
communities are eligible for capital funding through the Village
Safe Water Program, which doesn't require a capital match. The
eligibility requirements of the Village Safe Water Program allow
all second class cities to apply as well as first class cities
and unincorporated communities with a population less than 600.
The aforementioned encompasses over 200 communities in the state
and most of the smaller rural communities. He noted that DEC
has a separate capital request for those projects under the
Village Safe Water Program. The department receives 75 percent
of the funding for projects under the Village Safe Water Program
from the federal government and the state is only required to
provide a 25 percent match with state funds. Generally, DEC
requests the required state match for federal funds available.
It's a separate decision for the legislature to determine how
much funding to provide for the municipal grant projects, he
explained.
8:51:53 AM
REPRESENTATIVE CISSNA requested information regarding the
Village Safe Water Program and the funding amount in order
compare to the existing systems.
8:52:34 AM
MS. BLAISDELL returned to an earlier question regarding the
impact of increasing the population threshold to 15,000. She
reminded the committee that it wasn't that long ago that
Ketchikan and Sitka were close to the 10,000 population
threshold. Changing the population to 15,000 would certainly
result in appreciation of a more attractive match rate. Ms.
Blaisdell specified that there aren't any specific cities with
populations between 10,000 and 30,000. Therefore, raising the
population threshold might result in an economic boost to those
communities close to 10,000. She indicated that Palmer, with
it's potential annexation, may fall into such a category. The
10,000 population threshold was chosen as the next rounded
number of population, which would include the few cities just
above the 5,000 threshold that don't have a high enough
population base to pay the additional costs of that economic
growth.
8:54:22 AM
CO-CHAIR LEDOUX, upon determining no one else wished to testify,
closed public testimony.
8:54:35 AM
CO-CHAIR FAIRCLOUGH moved to report HB 369 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, it was so ordered.
8:55:17 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 8:55:21 AM.
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