Legislature(1993 - 1994)

02/22/1994 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                        February 22, 1994                                      
                            1:00 p.m.                                          
  MEMBERS PRESENT                                                              
  Representative Harley Olberg, Chairman                                       
  Representative Con Bunde                                                     
  Representative Cynthia Toohey                                                
  Representative Ed Willis                                                     
  Representative John Davies                                                   
  Representative Bill Williams                                                 
  MEMBERS ABSENT                                                               
  Representative Jerry Sanders                                                 
  OTHER LEGISLATORS PRESENT                                                    
  COMMITTEE CALENDAR                                                           
  *HB 427:    "An Act relating to compensation for                             
               members of the Local Boundary Commission."                      
               PASSED FROM COMMITTEE WITH INDIVIDUAL                           
  *HB 393:    "An Act relating to the unincorporated                           
               community capital project matching                              
               grant program; and providing for an                             
               effective date."                                                
               PASSED FROM COMMITTEE AS COMMITTEE                              
  (* First public hearing)                                                     
  WITNESS REGISTER                                                             
  DARROLL HARGRAVES, Chairperson                                               
  Local Boundary Commission                                                    
  3343 Denali                                                                  
  Ketchikan, AK  99901                                                         
  Phone: 225-8090                                                              
  POSITION STATEMENT:  Provided information on the                             
                       Local Boundary Commission                               
                       and HB 427                                              
  DAN BOCKHORST, Supervisor                                                    
  Local Boundary Commission Staff                                              
  Department of Community and Regional Affairs                                 
  333 W. 4th Avenue, Suite 220                                                 
  Anchorage, AK  99501-2341                                                    
  Phone: 269-4559                                                              
  POSITION STATEMENT:  Provided information on the                             
                       Local Boundary Commission                               
  H. TONI SALMEIER                                                             
  Local Boundary Commission                                                    
  P.O. Box 141345                                                              
  Anchorage, AK  99514                                                         
  Phone: 333-7692                                                              
  POSITION STATEMENT:  Provided information on the                             
                       Local Boundary Commission                               
  MYRTLE JOHNSON                                                               
  Local Boundary Commission                                                    
  P.O. Box 608                                                                 
  Nome, AK  99962                                                              
  Phone: 443-2842                                                              
  POSITION STATEMENT:  Provided information on the                             
                       Local Boundary Commission                               
  FRANCES HALLGREN                                                             
  Local Boundary Commissioner                                                  
  403 Lincoln Street                                                           
  Sitka, AK  99835                                                             
  Phone: 646-6909                                                              
  POSITION STATEMENT:  Provided information on the                             
                       Local Boundary Commission                               
  SHELLEY DUGAN                                                                
  Local Boundary Commission, Vice Chairperson                                  
  219 Kody                                                                     
  Fairbanks, AK  99701                                                         
  Phone: 453-8950                                                              
  POSITION STATEMENT:  Provided information on the                             
                       Local Boundary Commission                               
  KAREN BRAND, Staff                                                           
  Representative Carl Moses                                                    
  State Capitol, Room 204                                                      
  Juneau, AK  99801-1182                                                       
  Phone: 465-4451                                                              
  POSITION STATEMENT:  Staff to Prime Sponsor of                               
                       HB 393                                                  
  MICHAEL CUSHING, Research Analyst                                            
  Department of Community and Regional Affairs                                 
  P.O. Box 112100                                                              
  Juneau, AK  99811-2100                                                       
  Phone: 465-4890                                                              
  POSITION STATEMENT:  Provided information on CSHB 393                        
  CHRYSTAL SMITH                                                               
  Alaska Municipal League                                                      
  217 Second Street, Suite 200                                                 
  Juneau, AK  99801                                                            
  Phone: 586-1325                                                              
  POSITION STATEMENT:  Opposed CSHB 393                                        
  LAMAR COTTEN, Lobbyist                                                       
  Lake and Peninsula Borough                                                   
  P.O. Box 103733                                                              
  Anchorage, AK  99801                                                         
  Phone: 258-7143                                                              
  POSITION STATEMENT:  Supported CSHB 393                                      
  PREVIOUS ACTION                                                              
  BILL:  HB 427                                                                
  JRN-DATE     JRN-PG               ACTION                                     
  02/02/94      2219    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/02/94      2220    (H)   CRA, FINANCE                                     
  02/22/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  BILL:  HB 393                                                                
  SPONSOR(S): REPRESENTATIVE(S) MOSES                                          
  JRN-DATE     JRN-PG               ACTION                                     
  01/21/94      2125    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/21/94      2125    (H)   CRA, STATE AFFAIRS, FINANCE                      
  02/08/94              (H)   CRA AT 01:00 PM CAPITOL 124                      
  02/08/94              (H)   MINUTE(CRA)                                      
  ACTION NARRATIVE                                                             
  TAPE 94-8, SIDE A                                                            
  Number 000                                                                   
  CHAIRMAN HARLEY OLBERG called the meeting to order at 1:03                   
  p.m.  He noted for the record Representatives Toohey, Bunde,                 
  Davies and Willis were present and noted that a quorum was                   
  Representative Bill Williams joined the committee at 1:04                    
  Number 034                                                                   
  HB 427 - COMPENSATION; LOCAL BOUNDARY COMMISSION                             
  stated, "The Local Boundary Commission acts on petitions for                 
  city and borough incorporation, annexation, detachment,                      
  dissolution, merger and consolidation.  The commission's                     
  role is to objectively consider arguments for and against                    
  such proposals, taking areawide and statewide needs into                     
  consideration.  The commission is one of five boards or                      
  commissions with origins in Alaska's Constitution.  The                      
  commission consists of five members.  One is appointed from                  
  each of Alaska's four judicial districts; the fifth member                   
  is appointed at large.  Procedures used by the Commission                    
  are designed to secure the reasonable, timely and                            
  inexpensive determination of municipal boundary proposals.                   
  These procedures include extensive public notice and                         
  opportunity for comment, thorough study, public                              
  informational meetings, public hearings, a decisional                        
  meeting of the commission and opportunity for                                
  reconsideration.  A summary of these procedures is provided                  
  on pages two through five of the commissions's January 19,                   
  1994, report to the legislature.  (A copy of this report is                  
  on file.)  Decisions of the commission are based upon                        
  criteria or standards set out in statutes or regulations.                    
  The Department of Community and Regional Affairs (DCRA)                      
  provides staff support to the commission.  During 1993, the                  
  commission held 20 meetings.  Annexations were implemented                   
  or approved in Cordova, Palmer, Hoonah, Haines, Fairbanks,                   
  Seldovia, Soldotna, Thorne Bay and King Cove.  The                           
  commission also denied one annexation proposal."                             
  MR. HARGRAVES continued, "The commission filed three formal                  
  recommendations for annexation with the legislature on                       
  January 19, 1994.  Under provisions of the Constitution and                  
  statutes, the legislature has 45 days to consider the                        
  proposed annexations, or until the end of the session,                       
  whichever occurs first.  If the legislature takes no action,                 
  the annexations gain automatic legislative approval 45 days                  
  after the recommendations were filed by the commission.  In                  
  this case, the 45-day review period expires Saturday, March                  
  5, 1994.  Alternatively, the legislature may deny any one or                 
  more of the annexations by adopting `a resolution concurred                  
  in by a majority of the members of each house' on or before                  
  March 5.  The three recommendations for annexation are                       
  addressed in moderate detail on pages 18 through 37 of the                   
  commission's report to the legislature.  However, I will                     
  discuss them very briefly here.  The first involves the                      
  proposed annexation of 21 square miles to the city of King                   
  Cove.  King Cove is located 1,100 miles southwest of here in                 
  the Aleutians East Borough.  While the area proposed for                     
  annexation is inhabited by only eight residents, it holds                    
  substantial development.  The area includes all of one                       
  subdivision and part of another, the community's airport, a                  
  portion of the city's landfill and the city's hydroelectric                  
  project, currently under construction.  The area also                        
  includes sites proposed for the construction of a new port                   
  facility and a new water utility system."                                    
  Number 179                                                                   
  REPRESENTATIVE JOHN DAVIES asked why two regions were                        
  excluded in the city of King Cove annexation.                                
  DEPARTMENT OF COMMUNITY & REGIONAL AFFAIRS, replied, "Those                  
  areas were originally included within the petition.  The                     
  city did concur with the DCRA recommendation that those                      
  areas not be included within the action taken by the                         
  commission.  They didn't really meet the standards for                       
  annexation so they accepted the exclusion of that                            
  MR. HARGRAVES said, "Oftentimes the hearing process, the                     
  petition process does bring out factors that cause some                      
  reconsideration of what the municipality first wanted.  I                    
  think, that was the case here."  He then proceeded with his                  
  presentation saying, "Seldovia, the second and third                         
  recommendations involve the proposed annexation,                             
  respectively of 42.8 acres and 1.8 acres to the city of                      
  Seldovia.  Seldovia is a community located 650 miles west of                 
  here in the Kenai Peninsula Borough.  Most of the territory                  
  proposed for annexation consists of that portion of the                      
  Seldovia airport not presently within the boundaries of the                  
  city.  Because the city's boundaries bisect the community's                  
  airport, confusion and uncertainty exist with respect to the                 
  levy of city sales taxes and property taxes at the airport.                  
  The same holds true for the extension of municipal services                  
  and other jurisdictional issues at the airport.  The                         
  remaining area proposed for annexation contains 13 enclaves                  
  or holes in the area under the city's jurisdiction.  Until                   
  recently, those enclaves were believed to have been formally                 
  included within the corporate boundaries of the city as such                 
  those have traditionally been taxed by the city of Seldovia.                 
  So it came as a surprise to them when they realized those                    
  areas weren't in their boundaries.  For the past 25 years or                 
  so, the city has taxed those properties and has extended                     
  full services to them.  The enclaves are reportedly                          
  inhabited by three individuals.  Again, the third                            
  recommendation proposes a separate annexation of 1.8 acres                   
  to the city of Seldovia.  That area consists of a segment of                 
  the airport that the city had inadvertently omitted from its                 
  petition.  The commission filed a separate recommendation                    
  for the annexation of that property for procedural reasons.                  
  If the committee desires additional details concerning any                   
  of the three recommended annexations, I can provide you with                 
  a copy of the appropriate decisional documents..."                           
  Number 255                                                                   
  REPRESENTATIVE CON BUNDE asked, "Why didn't you include the                  
  area around the runway which, of course, would be                            
  developable land at one time or another?"                                    
  MR. HARGRAVES said, "I think the original boundary that                      
  you're looking at, that they requested, tailed off into kind                 
  of a slough.  This had to be filled and really there was                     
  nothing that's going to be developed in those wetlands.                      
  You're point's well taken.  In many instances, we don't like                 
  to see things shoot off like that, but in this instance I                    
  guess there was an exception made for the airstrip."                         
  Number 276                                                                   
  REPRESENTATIVE DAVIES asked, "In this case, is the city of                   
  Seldovia basically in support of these two actions?"                         
  MR. HARGRAVES replied, "We have substantial support for                      
  that.  We did have opposition out there and there have been                  
  subsequent actions, which no doubt have been launched                        
  because of the prior actions..."  He then continued with his                 
  presentation, "There is legislation pending right now in                     
  this legislative session that we'd like to call your                         
  attention to.  CSSB 164 makes technical amendments to the                    
  law that has been sought by the Local Boundary Commission                    
  (LBC) for the past several years.  This bill is vital to the                 
  mission of the Local Boundary Commission, we would                           
  appreciate this committee's support in the House if that                     
  bill gets to you.  SB 291 is an Act whose express purpose                    
  is, `to eliminate the unorganized borough by including all                   
  regions of the state in an organized borough or unified                      
  municipality.'  The commission recognizes that there are                     
  legitimate arguments on both sides of that very thorny                       
  issue.  In the commission's view, this matter is a political                 
  issue to be addressed by the legislature.  The commission                    
  feels that a neutral stance is critical to maintaining the                   
  integrity of its mission - to objectively consider arguments                 
  for and against the establishment or alteration of specific                  
  municipal boundaries.  We went through the long process of                   
  the Model Borough Boundary creation.  That was never, and we                 
  always went on record as saying, that was not in any way our                 
  way to step into mandatory boroughs.  Since that bill has                    
  been introduced this year, there's been some attachment of                   
  it to the actions of this commission and we just want that                   
  in the record.  HB 427 is one that's been before you in                      
  prior years, introduced by your committee, provides                          
  compensation for the commission.  While the commission                       
  recognizes that today's economic climate is less than ideal                  
  for such a proposal, it feels strongly that the measure                      
  deserves serious consideration.  Some of us just happen to                   
  be at a point in time in our life when we're able to do this                 
  kind of work, so we volunteer and do it, but there are some                  
  ramifications of not paying this commission anything.  One                   
  of things is simply that sometimes we may not be able to get                 
  the people that have to leave a days work so they can serve                  
  on it.  The DCRA has issued a position paper in support of                   
  the measure...you have the fiscal note."                                     
  MR. HARGRAVES proceeded, "I will end my prepared remarks                     
  with a brief summary of proposals currently being                            
  contemplated for presentation to the LBC.  These are based                   
  upon reports from the DCRA.  In nearly all cases, the                        
  reports stem from direct contact between the department and                  
  local officials or residents.  However, in a few cases, the                  
  accounts may stem from unsubstantiated reports.  While it is                 
  not possible to accurately predict how many of these                         
  proposals will be formally presented to the commission, the                  
  length and diversity of the list suggest that 1994 will be                   
  another active and interesting year for the commission.  The                 
  list of prospective activities includes proposals for                        
  incorporation of eight boroughs, and six cities, annexation                  
  to one borough and eight cities, detachment from four                        
  boroughs and two cities, dissolution of twelve cities and                    
  one borough, and merger or consolidation of municipal                        
  governments in three regions."                                               
  Number 412                                                                   
  CHAIRMAN OLBERG asked, "Is there presently the ability to                    
  incorporate a city and borough as a single entity?.. to                      
  city-boroughize an existing city?  I'm thinking of my                        
  hometown, Delta Junction, which is a third class city.  Does                 
  it have the capacity to become the City and Borough of Delta                 
  MR. BOCKHORST said, "It does not under current law however,                  
  SB 164, would provide for the incorporation of a unified                     
  municipal government, so that would facilitate or allow that                 
  to occur."                                                                   
  REPRESENTATIVE CYNTHIA TOOHEY asked, "What is a city                         
  MR. HARGRAVES said, "You simply dissolve the city, municipal                 
  government and it just becomes a nonentity.  In some cases,                  
  there could be a group of people on the side of a borough                    
  that would want to break off and dissolve."                                  
  REPRESENTATIVE TOOHEY asked, "Why is Seldovia doing that, is                 
  there any reason, other than they don't want to pay city                     
  MR. HARGRAVES said, "Keep in mind, that we haven't seen a                    
  petition from those folks.  There have been inquiries..."                    
  Number 451                                                                   
  MR. HARGRAVES introduced the other LBC Commissioners, who                    
  spoke briefly.                                                               
  TONI SALMEIER introduced herself, and MYRTLE JOHNSON spoke                   
  FRANCES HALLGREN said, "One thing we have seen as necessary,                 
  is the passage of (CSSB) 164.  It's going to enable some of                  
  these communities to reclassify, to go from second class                     
  into home rule in a one step process, rather than having to                  
  be this, dissolve that, form this, do the whole works, and                   
  it addresses several other different reclassification type                   
  issues.  The second thing I'd like to address is (SB) 291.                   
  It's putting the fear into the hearts of those and they're                   
  scrambling to put together single city boroughs and things                   
  like that.  Until (CSSB) 164 is addressed, I definitely                      
  think that SB 291 is premature."                                             
  Number 545                                                                   
  REPRESENTATIVE TOOHEY said, "The City of Girdwood which I                    
  used to be a resident in, they were a first class city of                    
  their own, and they were incorporated into the Municipality                  
  of Anchorage against their wishes and against their will.                    
  The vote in Girdwood was `No, we don't want it.'  Does any                   
  of this 164 address that?"                                                   
  MR. BOCKHORST said, "No, it does not.  That occurred through                 
  the process of unification.  Girdwood, under the law does                    
  have the opportunity to detach from the Municipality of                      
  Anchorage, so the option exists."                                            
  CHAIRMAN OLBERG asked about the minimum population of a                      
  MR. BOCKHORST said, "There is no statutory standard that                     
  governs incorporation of boroughs, with respect to                           
  population.  The commission has what's called a rebuttable                   
  presumption that there would be at least a thousand people                   
  in any area in order to form a borough.  However, it is a                    
  rebuttable presumption and upon a showing of good cause, the                 
  commission can allow an area that has area fewer than a                      
  thousand people to incorporate."                                             
  Number 580                                                                   
  SHELLEY DUGAN, COMMISSIONER, LBC, said, "In the process of                   
  doing the Model Borough Boundary study, one of the biggest                   
  issues that we had to deal with up front, before we could                    
  even get people to participate in the process, was to assure                 
  them that we were not out to do any mandatory boroughs.                      
  What we were doing in 1989, there were three petitions that                  
  were filed fairly close together, all reaching outside their                 
  existing boundaries fairly obviously to enhance their                        
  revenue base, and what that made us aware of is that there                   
  was going to be a trend as state revenues declined, we were                  
  going to see more and more of this sort of thing, and we                     
  could see ourselves getting into a situation where we needed                 
  to stop the process, take a look at the state                                
  comprehensively and we did that.  And, so the only thing I                   
  want to make clear today, is that the language in SB 291                     
  that references about boundary study has nothing to do with                  
  it, there is no connection with (SB 291 and) the boundary                    
  study that we have already done.  They're not connected in                   
  any way.  And we think it's real important for the public to                 
  know that we did that study for exactly the reasons that we                  
  said we did it.  We, the commission wanted that to be on the                 
  Number 638                                                                   
  There was discussion regarding the Constitution and whether                  
  it prescribes boroughs for the purpose of taxation.                          
  There was discussion as to the motives behind municipal                      
  MR. HARGRAVES said, "One of the things that I've observed                    
  since I've been on this commission is that, it appears that                  
  whatever it is today the grass will be greener on the other                  
  side of the fence tomorrow, and this hopping back and forth                  
  and trying to reconfigure and seek advantage through the                     
  different options that are available."                                       
  REPRESENTATIVE BUNDE asked, "Is there a statute of                           
  limitations, so that if they were actually able to dissolve                  
  a city can they next year now petition to reform the city?"                  
  MR. HARGRAVES said, "You could have a petition going forward                 
  to dissolve and you could have another group running a                       
  petition to reconstitute at the same time, and we'll listen                  
  to petition from any source or group."                                       
  REPRESENTATIVE BUNDE said, "Perhaps there's a need to                        
  address that.  These folks are having to meet 25 times a                     
  year now, and if you've got three different factions in a                    
  community, maybe there's some sort of `you change now, you                   
  don't get to change for the next five years'."                               
  CHAIRMAN OLBERG asked, "Is any of this addressed in SB 164?"                 
  MR. BOCKHORST said, "No it is not.  The commission has                       
  adopted it's own regulations kind of in that same sense,                     
  that if somebody comes before the commission with a petition                 
  and either the voters reject it or the state                                 
  legislature...they reject it, then they're precluded from                    
  coming back to the commission for a period of 24 months.                     
  But there's no provision if you dissolve, and then you are                   
  permitted to reincorporate.  Obviously you couldn't have                     
  concurrent petitions to dissolve and incorporate.  If you                    
  dissolve, you have to have a city government to exist                        
  already.  Certainly there is a potential of these                            
  overlapping, interrelated proposals coming quickly upon one                  
  another, but I don't really see that as a problem in a                       
  practical sense."                                                            
  REPRESENTATIVE BUNDE clarified, "If a city petitions for                     
  some boundary change of some kind and it's denied, they                      
  cannot petition for another 24 months.  If it's approved                     
  however, they can repetition immediately?"                                   
  MR. BOCKHORST said, "There are threshold standards that have                 
  to be met in order for people to qualify as petitioners.  I                  
  don't want to leave the impression that there's opportunity                  
  for frivolous petitions.  There are standards that have to                   
  be met and there's a lot of work that's put into petitions."                 
  TAPE 94-8, SIDE B                                                            
  Number 000                                                                   
  REPRESENTATIVE TOOHEY asked, "Is there any sharing of costs                  
  on this?"                                                                    
  MR. BOCKHORST said, "Yes, there is.  The petitioner is                       
  required to pay for a portion of the cost of the notices.                    
  The expense to the petitioner could be as high as $600 for                   
  publicational notices."                                                      
  REPRESENTATIVE BUNDE asked about other costs incurred by the                 
  MR. BOCKHORST said, "The petitioner is totally responsible                   
  for publication of the notice of the filing of the petition,                 
  which is required at least three times.  They have to pay                    
  for production of copies of the petitions to go to the LBC,                  
  as well as copies of the petitions to be sent out to                         
  interested parties that are designated to the department.                    
  So they are responsible for notice and preparation of                        
  documents upon the filing of the petition and our acceptance                 
  of the petition.  So they pay...probably a third of the                      
  Number 080                                                                   
  There was discussion regarding state monies in dissolutioned                 
  CHAIRMAN OLBERG clarified, "I think perhaps Representative                   
  Bunde was just sending a message that we wouldn't                            
  necessarily encourage dissolutions at a time when there's                    
  obviously a movement afoot to organize everybody and I think                 
  he's right...people see dissolutionment as a means of                        
  avoiding payment of something.  I don't think anybody sees                   
  it as revenue enhancement.  All communities will be treated                  
  the same under the Constitution and the statutes.  There's                   
  no penalty for dissolving a city government."                                
  Number 100                                                                   
  MS. SALMEIER asked, "Isn't there paperwork to keep (the                      
  cities) in the proper line of being a city?"                                 
  MR. BOCKHORST said, "There is a requirement for annual                       
  elections, and five of the eleven communities listed there                   
  who are being considered for dissolutionment are, in DCRA's                  
  view, inactive cities.  And under the statutes our agency                    
  has the duty and responsibility, the mandate to investigate                  
  inactive city governments.  We're doing that now."                           
  REPRESENTATIVE BUNDE said, "The point I was trying to make                   
  is, when you dissolve local government, I think you should                   
  expect a decrease in services.  The state's not going to                     
  pick up the tab entirely."                                                   
  REPRESENTATIVE DAVIES pointed out that there are some                        
  incentives for not incorporating as a city.                                  
  Number 162                                                                   
  MR. HARGRAVES brought up HB 427, "We're talking less than                    
  $15,000.  I know that some of these folks have lost days of                  
  work.  We had a professional person on here in times past,                   
  he billed for his services at a rate of $120 an hour, so                     
  maybe he could afford it; but the point is being away from                   
  his job cost him dearly and he was a good commissioner.  I                   
  think that's the kind of people you need on this                             
  CHAIRMAN OLBERG formally brought HB 427 before the committee                 
  and reminded the committee of the fiscal note amount and the                 
  committee's sponsorship.                                                     
  REPRESENTATIVE BUNDE said, "I support the idea of                            
  compensation, obviously these people are meeting 25 times a                  
  year, and to expect them to do it totally as volunteers is                   
  expecting too much.  They...have a thankless task as it is                   
  and it shouldn't have to cost them.  It still may cost them                  
  money, but at least this would, in part, reimburse them for                  
  their cost.  Having said that, I support the idea; however,                  
  facing the fiscal realities we're facing, I would also then                  
  express my intent that the $15,000 come out of current DCRA                  
  budget and not be additional general funds."                                 
  CHAIRMAN OLBERG said, "My position is the same as yours, up                  
  until that last part where...I am perfectly willing to                       
  support HB 427 and carry it to Finance and see if somewhere                  
  within the system there isn't $14,805.  But your point is                    
  well taken.  It is a tight year, but why didn't we do this                   
  while we had money is always the question."                                  
  Number 248                                                                   
  REPRESENTATIVE TOOHEY moved that HB 427 be passed from                       
  committee with individual recommendations with the fiscal                    
  note attached.                                                               
  There were no objections.                                                    
  HB 393 - UNINCORPORATED COMMUNITY CAP PROJECT GRAN                           
  CHAIRMAN OLBERG called an at ease from 2:00 p.m. to 2:06 p.m                 
  when HB 393 was brought forth.  He said, "I think there was                  
  some degree of consensus that perhaps all small communities,                 
  similarly situated within the state, be treated the same and                 
  there was some reading of the original HB 393 that it was                    
  treating similarly situated communities somewhat                             
  differently, because they're connected to the rest of us by                  
  road versus the not connected by road aspect," and he asked                  
  if the amendments provided to the committee address this.                    
  Number 298                                                                   
  393,  stated, "Amendment number one...there was talk about                   
  having the borough sign off on or approve any projects that                  
  unincorporated communities within them wanted.  So that is                   
  addressed in amendment number one.  All it says is that the                  
  borough has to sign off the project.  And amendment number                   
  two simply omits the sections that we had included in the                    
  bill that would make the requirement contingent on being off                 
  of the road system.  So that just omits that part.  In fact,                 
  what it does is simply open it to now 60 eligible                            
  communities instead of the 24 that used to be just off the                   
  road system.  Between those two amendments, I think the                      
  concerns that were brought up in the last meeting are                        
  probably addressed.  The other concern that Representative                   
  Davies brought up regarding the population data on the last                  
  page of the bill, we had written a memo to Representative                    
  Davies simply explaining that to add a qualifier...that                      
  would simply be redundant because that section is already                    
  referring to statute that says that DCRA has authority over                  
  the population data that's used."                                            
  REPRESENTATIVE DAVIES clarified that the determination of                    
  population is found somewhere else in statute.                               
  CHAIRMAN OLBERG said, "There's a fiscal impact.  Not by way                  
  of a fiscal note so much as a redelineation of who gets                      
  AND REGIONAL AFFAIRS, testified, "With regard to the fiscal                  
  impact, basically we're looking at three situations under                    
  the current law there are 68 eligibles and if the program                    
  were fully funded we would have $1.7 million for that                        
  program.  With the amendments that we have before us here,                   
  we're estimating our best conservative guess would be, we'd                  
  have 60 new eligible unincorporated communities.  If the                     
  funding in that unincorporated account would remain the same                 
  at $1.7 million, there are provisions in the current law                     
  that provide for prorating.  So that you'd now have 128                      
  communities sharing $1.7 million and instead of getting the                  
  $25,000 each per community, each would get about $13,281.                    
  The other option would be to fully fund the unincorporated                   
  account.  It would require a funding level of $2.2 million,                  
  an additional $1.5 million what's currently in the account."                 
  CHAIRMAN OLBERG said, "So it will have the effect of                         
  diluting but, what we're trying to do is make sure that                      
  small unincorporated communities within boroughs are treated                 
  the same as incorporated cities.  And I don't see anything                   
  wrong with doing that, but we do need to recognize that the                  
  incorporated cities within boroughs and the boroughs                         
  themselves are going to supply the funds for this to happen                  
  in theory."                                                                  
  MR. CUSHING said, "In theory, it could happen a number of                    
  ways:  If the overall capital match funding levels were to                   
  remain the same, say $20 million, then you have the choice                   
  of either funding the unincorporated account out of the                      
  municipal account or leaving it at its current level and                     
  prorating it.  But in theory you could add, you could have a                 
  $21.5 million program and everybody could be pretty much in                  
  status quo."                                                                 
  CHAIRMAN OLBERG agreed.                                                      
  MR. CUSHING continued, "But given a fixed funding level,                     
  your choices are either to prorate the unincorporateds or to                 
  fully fund the unincorporated and take it out of the                         
  municipal account."                                                          
  REPRESENTATIVE DAVIES asked, "Do we know which ones of these                 
  are the new eligibles?  It seems to me the one possibility                   
  is that, if you looked at this thing at kind of a borough                    
  basis, that adding the new eligibles might not necessarily                   
  increase the total amount of money that would go into that                   
  borough.  It would simply allocate it differently."                          
  MR. CUSHING said, "It's a case by case situation; in the                     
  Lake and Peninsula Borough for instance, that borough                        
  is...(getting) $35, $40 thousand, and when it's divided up                   
  amongst the unincorporates, they're getting three, four                      
  thousand dollars apiece, which is how they're appropriating                  
  it out there now.  Under the new scenario, they'd be getting                 
  $25,000 per each of those ten communities.  So you'd be                      
  looking at $250, $300, thousand going into that borough as                   
  opposed to the $35 or $40 (thousand) that's going into there                 
  CHAIRMAN OLBERG said, "I'm inclined to think that perhaps it                 
  might be worthy of considering lowering the minimum.  But                    
  I'm not sure that's something we want to do... the dollar                    
  REPRESENTATIVE DAVIES said, "I would agree that probably the                 
  appropriate committee to deal with that issue would be the                   
  Finance Committee.  Perhaps this committee should just flag                  
  that as an issue, that they think they ought to consider as                  
  to what the effects are in redistribution under these                        
  various plans."                                                              
  CHAIRMAN OLBERG said, "An accompanying memo of intent from                   
  Community and Regional Affairs perhaps to (the Finance                       
  Committee), State Affairs is also a committee of referral.                   
  Number 443                                                                   
  REPRESENTATIVE BUNDE said, "To reflect my wishes, it would                   
  be for reallocation rather than additional money.                            
  Reallocation of the money that's available, rather than                      
  additional money."                                                           
  CHAIRMAN OLBERG said, "I think we're all thinking that                       
  way...I don't think we're thinking of increasing the funding                 
  of the Capital Matching Grants project as much as we are                     
  MS. BRAND said, "I just want to put on the record that                       
  Representative Moses would also like to see the same thing.                  
  His intention was to suggest that the money simply be                        
  reallocated, not necessarily an addition to the program."                    
  Number 457                                                                   
  REPRESENTATIVE DAVIES moved to adopt amendment number one.                   
  There was no objection.                                                      
  REPRESENTATIVE TOOHEY moved to adopt amendment number two.                   
  There was no objection.                                                      
  CHAIRMAN OLBERG stated, "We are now dealing with committee                   
  substitute of HB 393."                                                       
  LEAGUE, testified,  "I feel that the Municipal League needs                  
  to go on record at this point, since you have indicated an                   
  interest in this committee of reallocating the funds.                        
  Apparently the total amount of funds which would cause a                     
  definite negative impact on organized municipalities.  The                   
  Municipal League, and in fact I believe it's the basic                       
  principal of many parts of the state government, are                         
  committed to encouraging the incorporation of                                
  municipalities.  The Municipal League as an organization has                 
  a commitment to making sure that there are incentives to                     
  incorporation and incentives to organizing to provide basic                  
  services at the local government level, so that the state                    
  doesn't have to come in and provide a lot of services.  I                    
  would just like to say, that if, in fact you are to take the                 
  entire pot, whatever size it is and spread it out to an                      
  additional 60 communities and give those the same $25,000                    
  minimum entitlement, then we're looking at additional                        
  disincentives to incorporation."                                             
  REPRESENTATIVE BUNDE said, "I think you did also mention                     
  that you were encouraging looking at reducing the minimum                    
  CHAIRMAN OLBERG said, "That's one way it could be addressed,                 
  and I agree with Representative Davies that probably Finance                 
  is best equipped to do the actual nuts and bolts.  But we                    
  should certainly send on our thoughts about not adding to                    
  the overall cost, and perhaps looking at a reduced minimum                   
  as a way to more fairly treat the organized municipalities                   
  at this point."                                                              
  testified via teleconference, saying, "We concur with the                    
  comments made by Representative Moses's staff on this issue.                 
  The other comment I would make is that, with reference to                    
  Chrystal Smith's comment, I understand her concerns about                    
  the incentives and disincentives for municipal                               
  organizations.  I would take it from a little different                      
  tack, and that is we're talking about unorganized                            
  communities within a borough.  I think the fact that                         
  boroughs that have unorganized communities within them, that                 
  are treated differently than unorganized communities outside                 
  a borough, is a disincentive for areas to organize as a                      
  borough.  So, I realize that's a small point, but I think                    
  it's an important one with respect to other regional areas                   
  of the unorganized borough that are looking at future                        
  organization in the years ahead."                                            
  Number 534                                                                   
  REPRESENTATIVE BUNDE moved CSHB 393 out of committee with                    
  individual recommendations and an accompanying intent memo.                  
  There were no objections.                                                    
  CHAIRMAN OLBERG adjourned the meeting at 2:27 p.m.                           

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