Legislature(2005 - 2006)HOUSE FINANCE 519
03/16/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB441 | |
| SB157 | |
| HB478 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 176 | TELECONFERENCED | |
| + | HB 271 | TELECONFERENCED | |
| + | HB 441 | TELECONFERENCED | |
| + | SB 157 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 478 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
March 16, 2006
1:45 p.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:45:36 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Beth Kerttula
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
None
ALSO PRESENT
Representative Norman Rokeberg; Representative Bill Thomas;
Kate Giard, Chair, Regulatory Commission of Alaska; Jim
Posey, Anchorage Municipal Light and Power, Anchorage; Ian
Fisk, Staff, Representative Thomas; John Stone, President,
Alaska Association of Harbor Masters; Kurt Reynertson,
Manager, City of Seldovia; John Makinnon, Deputy
Commissioner, Transportation and Public Facilities.
PRESENT VIA TELECONFERENCE
Ted Moninski, Director of Regulartory Affairs, Alaska
Communication Systems; Bill Saupe, AT&T Alascom; Dan
Dieckgraeff, Treasurer of Finance and Rates, Enstar; Jim
Rowe, Executive Director, Alaska Telephone Association; Alan
Sorum, Valdez Harbormasters; Gary Hennigh, Manager, City of
King Cove; Greg Meissner, Harbormaster, City of Wrangell;
Valery McCandeless, Manager, City of Wrangell; Alan Sorum,
Harbor Master, City of Valdez; Scott Ransom, Harbor Master,
City of Seward; Ray Majeski, City and Borough of Sitka.
SUMMARY
HB 441 "An Act relating to operating or driving a motor
vehicle, aircraft, or watercraft while under the
influence; relating to mitigating factors in
sentencing; amending Rule 35, Alaska Rules of
Criminal Procedure; and providing for an effective
date."
CS 441 (FIN) was REPORTED OUT of Committee with a
Do Pass Recommendation and seven zero fiscal
notes: four new (ADM; DPS; HSS, COR) and three
previously published (ADMIN; Courts; LAW).
CSSB 157(FIN)
"An Act relating to the maximum annual regulatory
cost charge collected from certain regulated
public utilities and pipeline carriers and to
public utility liability associated with operating
certain transmission lines under a Regulatory
Commission of Alaska order for joint use and
interconnection; and providing for an effective
date."
CSSB 157 (FIN) was REPORTED OUT of Committee with
Individual Recommendations and one new fiscal note
(HFC for DCED).
HB 478 "An Act relating to the municipal harbor facility
grant program; and providing for an effective
date."
HB 478 was HEARD and HELD for further
consideration.
HB 176 "An Act exempting the state and its political
subdivisions from daylight saving time."
HB176 was SCHEDULED AND NOT HEARD.
HB 271 "An Act relating to limitations on overtime for
registered nurses in health care facilities; and
providing for an effective date."
HB271 was SCHEDULED AND NOT HEARD.
HOUSE BILL NO. 441
"An Act relating to operating or driving a motor vehicle,
aircraft, or watercraft while under the influence; relating
to mitigating factors in sentencing; amending Rule 35,
Alaska Rules of Criminal Procedure; and providing for an
effective date."
Representative Stoltze MOVED to ADOPT Work Draft 24-
LS1295\F, Luckhaupt, 3/8/06. There being NO OBJECTIONS, the
Committee Substitute was ADOPTED.
REPRESENTATIVE NORMAN ROKEBERG, SPONSOR, summarized the
intent of the bill as conforming and updating statutes to
the therapeutic court model in the State of Alaska for the
DUI or alcohol related courts. He noted the success of the
program, as well as the proposed savings to the general
fund. He referred to previous testimony citing a ten to one
savings ratio from hard dollars to general fund savings. He
observed that an initial review of the pilot program
revealed a two to one potential savings, and submitted that
the most important element was the saving of lives by
successful rehabilitation. He stated that the first program
would begin in Juneau, and referred any questions to his
staff member, Heather Norbrega.
Representative Rokeberg referenced the zero fiscal note,
based on previously authorized expenditures under the
initial bill of HB 172, the initial DUI felony court levels,
and subsequent legislation that authorized the necessary
positions. There has been some discussion regarding the
national highway safety funds. He noted that $669 thousand
had been received from the National Highway Safety
Transportation Fund with the adoption of the mandatory
seatbelt law. He noted that some confusion existed
regarding the local State match of $344 thousand in order to
utilize the appropriation. He concluded that there had
been issues with the Public Defender's Office, the
Department of Law, the Department of Corrections, the
Courts, and other issues of expense as a part of the General
Fund appropriations. He noted that newer incoming funds
would be used to establish new programs, such as in
Fairbanks and Ketchikan.
Representative Weyhrauch asked whether the bill established
a separate court. Representative Rokeberg replied that the
program initiated a court within a court or a type of
process within the district and superior court levels. He
noted that it also established a statutory framework which
gave judges some flexibility in granting sanctions and
concessions to program participants as long as they meet the
requirements.
Representative Joule observed that a recent Alaska Budget
Report indicated budget changes made by the Court System
sub-committee and wondered if they correlated to the bill.
Representative Rokeberg stated that the program was not
affected by budget changes since it carried a zero fiscal
note. However, he stressed that in order for the program to
succeed, it required not only policy support but also
financial support by the Legislature. He stated that they
were currently able to leverage substantial federal dollars
by use of minimal General Funds. He noted historic problems
culturally with some agencies that did not support such
concepts, but acknowledged current progress.
1:53:14 PM
Vice-Chair Meyer opened the floor to public testimony.
There being no comments from the floor, testimony was
invited via teleconference. There being no comments, public
testimony closed.
Representative Foster MOVED to REPORT CS 441 (FIN) out of
Committee with individual recommendations and attached
fiscal notes. There being NO OBJECTIONS, it was so ordered.
CS 441 (FIN) was REPORTED OUT of Committee with a Do Pass
Recommendation and seven zero fiscal notes: four new (ADM;
DPS; HSS, COR) and three previously published (ADMIN;
Courts; LAW).
CS FOR SENATE BILL NO. 157(FIN)
"An Act relating to the maximum annual regulatory cost
charge collected from certain regulated public utilities and
pipeline carriers and to public utility liability associated
with operating certain transmission lines under a Regulatory
Commission of Alaska order for joint use and
interconnection; and providing for an effective date."
Representative Stoltze MOVED to ADOPT Work Draft 24-
GS1138\I, Wayne, 3/8/06. There being NO OBJECTION, the
Committee Substitute was ADOPTED.
1:57:24 PM
KATE GIARD, CHAIR, REGULATORY COMMISSION OF ALASKA testified
regarding the bill. She indicated that the bill would
provide a funding mechanism for the purchase and
implementation of data systems that would allow regulated
utilities and pipeline companies in Alaska access to a secure
web-based RCA portal, through which all day to day business
transactions could be performed electronically. The project
was valuated by a user utility committee and underwent a
public process with the RCA in 2004/05, and is supported by
utilities companies as a positive move for the regulatory
environment in the State. She noted that the bill would
increase utility cost for consumers by approximately $1 per
year, since the costs were spread over a very large rate
base. She requested that the Committee pass the legislation
as a good policy for Alaska.
Representative Hawker asked about the AIDEA receipts as a
funding source. Ms. Gaird noted that these were actually
Regulatory Cost Charge (RCC) receipts. Representative Hawker
proposed that the fiscal note be changed to reflect the
correction in the funding source.
Vice-Chair Meyer opened the floor to public testimony.
TED MONINSKI, DIRECTOR OF REGULARTORY AFFAIRS, ALASKA
COMMUNICATION SYSTEMS, testified via teleconference. He
noted that ACS was supportive of RCA plans to update its
internal case management systems, and strongly supports its
plans to create an electronic filing capability and enhanced
searchable data system.
2:00:49 PM
Mr. Moninski noted his experience in the field, representing
public utilities before the RCA, and stressed the value of
automating the operations of these agencies. He outlined
ACS's experience with the Federal Communications System,
implementing tools for efficiency such as its EDOC system and
various searchable data bases. He proposed that such systems
would ultimately pass benefits on to utility customers.
2:02:12 PM
Mr. Moninski also expressed concern about whether certain
modules of the system would not be implemented if not
adequately funded. He noted the importance of such
efficiency tools, while acknowledging the impact on
consumers, and the importance to carefully evaluate any
increased rates. ACS recommended that that Legislature and
RCA work together to ensure a real rate of return on rate-
payers' investment. He proposed that once the funding
increased over a two year period - and stated support of an
increase of the RCA cap to $1.9 for two years - it may
generate an amount of funding that allowed consumers to be
refunded rate increases. He urged legislators to consider
this forward thinking legislation.
2:04:17 PM
BILL SAUPE, AT&T ALASCOM, testified via teleconference. He
stated that he has worked with the Anchorage law firm of
Ashburn and Mason, representing utility companies before the
RCA since 1985. He stated that AT&T Alascom believed that
the proposed $3 million increase in the Regulatory Cost
Charge was the most reasonable means to upgrade the RCA's
computer systems.
Mr. Saupe noted their understanding that the funds would be
administered by a users committee, made up of a broad
spectrum of utility industry and public interest
representatives. The committee would work to create an
improved computer system to allow for a searchable data base
as well as other improvements to the agency's efficiency, and
quality of its orders. He also surmised that it would save a
great deal of money in terms of time savings. He raised
concern that if implemented in stages, there was a risk that
some aspects would not be completed. He also suggested that
any surplus would be passed back to the consumers in savings.
He proposed that they ensure that Regulatory Commission of
Alaska increase be sufficient to provide adequate funding for
the entire project developed by the user committee.
2:07:27 PM
DAN DIECKGRAEFF, TREASURER AND MANAGER OF FINANCE AND RATES,
ENSTAR NATIONAL GAS COMPANY, testified via teleconference.
He noted his experience with the company and the spectrum of
his company's service in Alaska.
2:09:21 PM
Mr. Dieckgraeff stated that Enstar supported the RCA's
initiative to update its information systems and to fund it
with the proposed two-year limited increase in the RCC. He
indicated the advantages for the utility companies, such as
tracking of cases and cost of cases, making information
available faster and easier, and savings in storage and
filing. He concluded that it was important to his
corporation that RCA have the necessary funding to complete
all aspects of the project.
2:10:54 PM
Mr. Dieckgraeff recounted a recently completed project during
which historical information had been added into a data base,
similar to the system proposed by the Commission. He stated
his belief that this would be a very helpful system.
2:11:39 PM
JIM POSEY, MANAGER, ANCHORAGE MUNICIPAL LIGHT AND POWER,
ANCHORAGE, testified in support of the bill. He noted the
complicated nature of dealings with the Commission in terms
of filing documents and information. He confirmed that
having a simultaneous filing of information would enable
communication with regulators, noting that recent filing of
information had decreased the amount of time spent in such
endeavors.
2:14:43 PM
JIM ROWE, EXECUTIVE DIRECTOR, ALASKA TELEPHONE ASSOCIATION,
testified via teleconference in support of the increase in
the RCC charge for the reasons outlined by previous
testimony.
Mr. Rowe noted that in rural areas, the FCC electronic filing
has saved a great deal of time. He suggested that for the
Regulatory Commission of Alaska to have the same type of
filing system would be of similar benefit. He noted that all
of his directors supported the legislation for its potential
increase in efficiency. He read a note from an employee with
Matanuska Telephone Association. The letter expressed the
lessening burden of filing through new FCC electronic system,
but asked about the extent of document filing. Mr. Rowe
concluded that such efficiency would pass along savings to
customers.
2:18:23 PM
Representative Stoltze asked whether there was a point when
accumulated regulatory charges might comprise more than half
of a service rate, and if in such cases this might represent
a concern of public policy.
Mr. Rowe acknowledged that half of the companies in his
membership were cooperatives, and were experiencing a
significant amount of service charges. He acknowledged that
these breakout charges were not formerly seen on bills, but
that total customer charges may not actually have increased.
2:19:36 PM
He acknowledged that network access fees had been reduced
recently at the request of cooperatives. He noted the
perception that some local phone calls were "free", and that
in fact charges were sometimes not what they appeared.
2:21:01 PM
Representative Stoltze noted the improvements in phone
charges.
There being no further public testimony, Vice-Chair Meyer
closed public testimony.
Representative Kerttula asked regarding Sections 3 and 6 of
the bill, regarding retroactivity and liability for damages.
She wished to ensure that she did not have a conflict of
interest, since her family had a current law suit pending.
Ms. Gaird confirmed that the retroactivity only deals with
damages after December 1, 2004.
2:22:40 PM
Representative Kerttula asked if the state of Alaska would
become liable if damages were awarded.
Ms. Giard explained that the amendment resulted from a
Regulatory Commission of Alaska order requiring MEA to
provide service to the Alaska intertie in the Matanuska
valley. She explained that the MEA was the only utility in
this area using its own facilities to provide its own
intertie service. The RCA ordered the utility to provide the
service at 138 kilovolts, and the utility's design was for a
lower power production level. She proposed that this section
of the bill was in the public interest, because it exempts
MEA from liability should any harm result from running the
line at this reduced level.
2:24:23 PM
Representative Kerttula followed up and Ms. Giard confirmed
that the state of Alaska has assumed liability for any
plaintiff damages.
Representative Kertulla wished to ensure that no sovereign
unity or waiver would be put forward. Ms. Giard noted that
the bill had been evaluated by Legislative Budget and Audit
and the Attorney General's office when it had been heard in
Senate Finance the previous year. She noted that at that
time, no discussion occurred around the possibility of a
plaintiff not being able to seek recovery.
2:25:20 PM
Representative Kerttula expressed her dissatisfaction with
the directness of this response, and stated that she would
follow up with the Attorney General's office.
Representative Chenault asked if the Regulatory Commission of
Alaska had already been out for bid on the project, and if
the funds were truly adequate to provide the proposed system.
Ms. Giard explained that that system was comprised of three
primary components: first building the system core of an
electronic case management system; a content management
system which will maintain data for a goal of seven years,
allowing companies to research data for that time; and the
ability of the utilities and pipeline companies to use the
web interface to file with the Regulatory Commission of
Alaska and eliminate paper filing.
2:27:54 PM
Ms. Giaird noted that she had originally estimated a $1.5
million budget on the project. She went on to explain that
utilities during public process indicated that this was not
sufficient. A utility user committee was formed, and a
conceptual budgeting process ensued, developing a range of
budgets between $890 thousand and $2.2 million. Within that
process, the committee added the ability for companies to
view old data, relying on pictures of data that had been
taken in past years, something not included in the current
funding. She noted that utilities had expressed a desire to
compile historical information into searchable data. She
reiterated that this historical research was not part of the
currently proposed funding.
In response to a follow up question by Representative
Chenault, Ms. Giard confirmed that she was comfortable with
the proposed funding level of $1.5 million to build the
three-part core system.
2:30:36 PM
Ms. Giard noted that the second phase of the project would
require a range of $.5 million to $1.0 million to convert
historical information into searchable data. She stated that
this funding was contained in the version of the bill passed
by the Senate Committee, but not in the current Committee
Substitute. She stated that while there was every
opportunity for utilities to return and request future
increases of the RCC, it was not likely that the RCA would
make such a request.
2:31:41 PM
Representative Kelly speculated that a future request might
be made for the second phase of the project. He pointed out
that he had met with the Commissioner on this issue to ensure
that future projects might receive consideration. He
proposed that the project may then be extended if
appropriate.
Commissioner Giard stated that utilities would need to
approach the legislature for such action, and noted that the
RCA was scheduled to sunset, and would not be likely to ask
the administration to sponsor a future bill.
2:33:18 PM
Representative Foster MOVED to REPORT CS SB 157 out of
Committee with individual recommendations and attached fiscal
notes. There being NO OBJECTIONS, it was so ordered.
CSSB 157 (FIN) was REPORTED OUT of Committee with Individual
Recommendations and one new fiscal note (HFC for DCED).
HOUSE BILL NO. 478
"An Act relating to the municipal harbor facility grant
program; and providing for an effective date."
MOVED to ADOPT Work Draft 24-LS1694\I, Cook, 3/15/06
Representative Stoltze MOVED to ADOPT Work Draft 24-
LS1694/I, Cook, 3/15/06. There being NO OBJECTION, the
Committee Substitute was ADOPTED.
2:35:38 PM
REPRESENTATIVE BILL THOMAS, SPONSOR, stated that this was a
companion bill to SB 291 (Sen. Steadman). He noted that the
bill had been introduced to respond to the State process of
transferring harbors to municipalities, and discovering
funding shortfalls needed to complete necessary repairs.
The bill developed through comments from the Alaskan
Association of Harbormasters throughout Alaska. The bill
will create a harbor facility grant fund, using funds such
as fisheries business tax or fuel tax and other taxes. The
Department of Administration would administer the grants.
He pointed out the requirement of a 50/50 grant match from
municipalities, requiring commitment on the local level.
The funding would provide repair or major maintenance in
communities, and be limited to one grant per year per
facility. Some communities may have more than one harbor,
but would be limited to a $5 million aggregate cap.
2:38:08 PM
Representative Thomas noted that to qualify for a grant, a
municipality must demonstrate the ability to operate
independently of state aid in the future, and noted that
several communities were making this adjustment by
increasing harbor rates. He pointed out that new
construction received the lowest priority in the project
list. The proposed effective date of the legislation is
July 1, 2006.
2:39:33 PM
IAN FISK, STAFF, REPRESENTATIVE THOMAS, noted the change in
the grammer on Page 2, line 14, from "should be" to "is". He
also noted that on lines 19 to 23, language was inserted to
clarify the types of funds that could be used for the
municipal match, especially the shared portions of the
fisheries business tax. He also pointed out that language
regarding municipal revenue sharing was also included in
case those monies became available in the future. He noted
that previous language added by the Community and Regional
Affairs Committee had prohibited any state funds from being
used in the municipal match, and stated the Sponsor's desire
that certain state funds be excepted.
2:40:52 PM
Representative Kerttula observed that Page 3, line 5,
limited municipalities to only one grant. She asked if this
referred to just this program, or any programs, and
suggested the need for a technical amendment.
Mr. Fisk responded that this limitation pertained only to
the program, and conceded that an amendment might be
helpful.
Representative Kerttula asked for the reason of the program
limitation to one grant. Mr. Fisk responded that the
program was limited to address the deferred maintenance
needs carrying over from the State transfer. He noted that
they wished to ensure that a municipality was able to meet
those needs not properly addressed by the State.
2:42:54 PM
Representative Hawker observed that if one grant was
received, another grant could not be obtained. He asked
hypothetically if during a granting period, all requests
except one were minimally funded, this would leave all
funding available for the unfunded project in the subsequent
year. Representative Thomas stated that projects would be
prioritized by community need. He noted that some
communities had more than one harbor, and could apply for
one harbor per year. He conceded that some projects may
have to wait a few years to receive funding. He gave the
example of Yakutat, when a transferred harbor experienced a
shortfall in maintenance funding. Representative Hawker
acknowledged the intent, but suggested more work on the
language to close a potential loophole.
Vice-Chair Meyer expressed his intent to HOLD the bill in
order to receive more testimony and potential amendment.
Representative Kelly asked if the list of transferred habors
was all-inclusive. Representative Thomas replied that there
could be other harbors being transferred this year that were
not yet on the list.
2:47:15 PM
JOHN STONE, PRESIDENT, ALASKA ASSOCIATION OF HARBOR MASTERS
AND PORT ADMINISTRATORS testified in support and gratitude
for the bill. His organization represents 27 municipal
harbor systems throughout the state. He noted that they had
been working on this problem for many years. He expressed
support of the bill and the matching grant program. He
noted that he had provided the committee with written
comments (copy on file.)
Mr. Stone pointed out that much of the harbor structure
being transferred to municipalities had been built in the
1960's through 1980's. He showed the Committee an outdated
power cable from Harris Harbor in Juneau that fed 40, 30-amp
shore power services. The cable was indicative of the
electrical code of the 1960's. He compared it to the newly
installed cable. He emphasized the expense involved in
trying to recapitalize the infrastructure.
Mr. Stone referred to a question about page 3, regarding the
one-time grant. He explained that the intent of the Harbor
Masters was to ensure that grants were used for rebuilding a
facility on a one-time basis.
2:52:26 PM
Representative Kelly asked about the transfer of the
facilities and the amount of funding that accompanied the
transfer. Mr. Stone replied that the purpose was to bring
the harbors to good condition. He stated that the funding
was far short of what was needed to restore facilties, even
in terms of code requirements. He also noted that user
needs had also changed, with larger float systems now
required. The money provided was only one quarter to one
third of what the communities actually needed.
Representative Kelly asked how the amount of funding had
been determined. Mr. Stone replied that the formula used
was consistent, but overall quite low.
Representative Holm asked whether, when the transfer
occurred, there was a misunderstanding about the facility
requirements. Mr. Stone stated that the money was intended
to restore facilities to good condition, but it that it fell
far short. He suggested that this may have been because
many facilities were at the end of their useful life,
requiring more than simply maintenance. He also noted a
difference in code, rather than a depreciation of an
investment.
Representative Holm asked if the intent was to build new
facilities. Mr. Stone confirmed that this may be what
occurs, although various communities will try to refurbish
as they can. Representative Holm expressed concern over the
matching funds, and wondered if a better formula was now in
place to determine the amount of funding needed. Mr. Stone
explained that a consulting engineer would be hired to
develop a cost estimate to be used to apply for the grant.
Representative Kerttula asked how much funding per year was
spent by the City and Borough of Juneau to maintain harbors,
and how much would be saved by the State by transferring
this maintenance to communities. Mr. Stone replied that
the operating cost for maintaining the float system in
Juneau was approximately $2 million a year. Representative
Kerttula observed that this did not cover all of the costs,
and only represented one community.
2:59:45 PM
Representative Kelly asked how it could be prevented that a
grant accompanying a transfer was not being wasted on
maintenance that would eventually be replaced in a rebuild.
Mr. Stone stated that DOT would watch for this during the
grant process, but that in each case the most economical
rebuild would be considered.
3:01:01 PM
KURT REYNERTSON, MANAGER, CITY OF SELDOVIA, testified in
support of the legislation. He noted that they had recently
passed a resolution through their city council. He
explained that when they took over from harbormasters, they
received $2.6 million from the State. After an engineer's
estimate of $3.4 million, they discovered an $800-900
thousand shortage in order to provide good harbor standards.
He stated that this amount was insurmountable for a
community of their size. He commented that the bill would
help to provide needed municipal services.
3:02:55 PM
Representative Kelly asked if the $2.6 million for
refurbishment was included in the amount for the rebuild of
the harbor. Mr. Reynertson replied that engineering
designs cost approximately $250 thousand, and the remaining
funding would be utilized to complete the actual harbor
rehabilitation.
3:03:50 PM
GARY HENNIGH, MANAGER, CITY OF KING COVE, testified via
teleconference. He expressed support for the bill and for
the harbormasters for their work on the topic. He explained
that their community was one of the first to take over
management of their harbor from the State. He noted that
the management has been more difficult than anticipated. He
explained that the harbor was in poor condition, affecting
the local residents who use the harbor. He stated his
opinion that dedicating the fisheries tax as a funding
source was a good idea. He noted that between $4 and $5
million had been paid into harbor repair by local fishers.
He observed that linking this income to solving the harbor
problem spoke well of legislators working with local
harbormasters. He suggested that on page 2, lines 17 and
18, language be changed so that State Revenue funds from
revenue sharing or a legislative grant could be used as a
match. He suggested that these sources of municipal funding
would be driven predominately by oil and gas revenues
experienced by other areas of the state.
3:07:41 PM
He also suggested that on Page 3, lines 1 and 2, to add a
provision allowing those communities that first accepted
harbor transfers receive a small "head start" in applying
for funds, allowing for some portion of the funding in the
first two years to be set aside for communities which had
initially taken over harbor management. He emphasized that
in past years, DOT had no formula to assist municipalities
in determining the amount needed to bring the harbor up to
reasonable standards. He noted that $352 thousand received
in the early 1990's did not make a legitimate contribution.
3:09:05 PM
Representative Kelly commented that Hooonah, Juneau and
Valdez had implemented significant fee increases in their
harbors, and asked what fee increases had been experienced
by their community.
Mr. Hennigh responded that for fifteen years the fee for
moorage had increased by only 25 percent. He noted the need
for a local fee increase, but observed that currently the
residents might be unwilling to pay increased fees on a
harbor that was in ill repair. He proposed that support for
fees would increase when they could be assured that there
would be building improvements.
3:10:31 PM
Representative Kelly asked how many were on the waiting list
for slips. Mr. Hennigh responded that there was no waiting
list, since unless one was a commercial fisher, they would
not be docking there. He noted that their waterfront was
very busy, although the community was often overlooked. He
stated they were the largest per capita fish producing area
in that part of the state of Alaska.
3:11:42 PM
Vice-Chair Meyer stated that HB176 would not be heard;
likewise he stated that HB271 would not be heard in the
meeting.
Public Testimony continued.
3:12:59 PM
GREG MEISSNER, HARBORMASTER, CITY OF WRANGELL, testified in
support of the bill. He voiced concern over page 3, line 9,
regarding the one time only nature of a grant per facility.
He asked what qualified as a "facility"; he pointed out that
perhaps each float would be considered a facility within a
single harbor, and suggested that it might make sense for a
community to refurbish one float at a time.
Mr. Meissner then referred to Line 16 of the bill and noted
that a replacement cost for a concrete float would be $5
million, vs. $3 million for a repair, and suggested that it
would be more cost effective to replace rather than repair.
3:15:04 PM
Mr. Stone responded that the definition of facility was an
issue being addressed with the Department of Transportation
and Public Facilities. He suggested that the cases would be
addressed on an individual basis. He stated that he would
be glad to speak directly with Mr. Meissner regarding his
questions.
3:16:02 PM
VALERY MCCANDELESS, MANAGER, CITY OF WRANGELL, testified via
teleconference in support of the bill. She expressed her
pleasure that the bill was addressing specific work on each
harbor.
3:16:49 PM
ALAN SORUM, HARBOR MASTER, CITY OF VALDEZ, testified via
teleconference in support of the bill. He noted that many
of the boats harbored in their city were from the city of
Fairbanks. He voiced his support for working with the
Department of Transportation and Public Facilities, with
whom they've worked on grants for harbor projects.
3:18:25 PM
SCOTT RANSOM, HARBOR MASTER, CITY OF SEWARD, testified via
teleconference in support of the bill. He noted that his
community had taken over the management of their harbor in
1999, and currently had over $6 million in deferred
maintenance. He noted that these were the oldest floats in
the harbor, installed after the earthquake. He stated that
they had two rate increases to support the harbors. The
bill will help with the deferred maintenance.
3:19:31 PM
RAY MAJESKI, HARBORMASTER, CITY AND BOROUGH OF SITKA,
testified via teleconference, in support of the bill. He
explained that the city had taken over three harbors from
the State, and after doing so discovered that Thompson
Harbor needed to be replaced, at a cost estimated at $6.7
million. He stated that $3 million of $4.4 million from the
State was spent on the other two harbors, with $1 million
remaining to replace Thompson Harbor. He noted that repairs
had added 15 more years to the other two harbors, but
stressed that Thompson Harbor was beyond repair. He
expressed concern regarding the statement that grant
applications must be filed in the fiscal year immediately
preceding February 1. He pointed out that they were
currently replacing the harbor and receiving bids, beginning
construction by mid-August. He hoped that the bill, if
passed, would cover their current process. He noted that in
the past six years, they'd raised moorage rates more than
100 percent. The bill would help the community members.
3:22:25 PM
He noted that to be able to take the burden off of harbor
users in his community, the bill would allow them to raise
them to raise rates at an acceptable level. He concluded
that the bill was a positive step.
3:23:08 PM
There being no further testimony, public testimony was
closed.
JOHN MAKINNON, DEPUTY COMMISSIONER, TRANSPORTATION AND
PUBLIC FACILITIES, responded to a question by Representative
Kelly regarding the original formulation of funding when
harbors were originally transferred from the State to
municipalities.
3:25:07 PM
He explained that most of the harbors discussed as
"underfunded" were part of the November 2002 statewide bond
issue, allocating $30 million to ten communities and 26
facilities. The numbers used for allocations resulted from
a 1992 Core of Engineers' condition survey of all boat
harbor facilities in Alaska. In 2002, the Department was
asked to develop a list of harbors for repair and amounts
for deferred maintenance. The numbers from the 1992 study
were adjusted for inflation and also for additional deferred
maintenance. He stated that it was unclear as to whether
those numbers were accurate. He conceded that the level to
which they aspired was not that which was desired by many
communities. He referred to testimony by Mr. Stone
regarding changes in codes, but noted that community changes
also resulted in different harbor user needs. Some harbors
had changed from working harbors into recreational harbors.
He stated that changes in community expectations were not
reflected in the numbers devised by the harbor engineer
involved in the bond study. He concluded that this
accounted for the discrepancy between the estimates.
3:27:39 PM
Responding to another question by Representative Kelly, Mr.
Makinnon noted that some harbors were very difficult to
transfer due to a difference in expectation. He noted that
communities were reluctant to raise rates to pay for
improvements.
3:28:45 PM
Representative Hawker noted his experience with the transfer
of the harbor at Whittier, stating clearly that there was no
State responsibility following the transfer of the harbor.
However, he noted the significant need at some of the harbor
facilities. He also proposed that harbors should be in
"excellent" condition rather than "good" as is stated in
current policy, along with the transfer of harbor
responsibility to local authorities.
3:30:42 PM
Representative Kelly observed that harbor masters found it
difficult to balance the amount of repairs needed with funds
available. He asked how the Legislature could avoid another
problem with deferred maintenance in the future.
Mr. Makinnon recommended a change in the definition of
"facility", including "portion thereof". A facility might
decide to improve a separate finger each year, and that
could be considered a separate facility. The intent is
that once the various portions are completed, it becomes the
responsibility of the community to collect adequate fees for
maintenance so as not to approach the State in another 15
years for replacement costs. He stressed that communities
need to take on the responsibility.
HB 478 was HEARD and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 3:32 PM
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