Legislature(2017 - 2018)BARNES 124
02/07/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Overview & Updates from Municipalities by Kathie Wasserman, Executive Director, Alaska Municipality League | |
| Presentation: Akosh & Wage and Hour Investigators | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 7, 2018
3:21 p.m.
MEMBERS PRESENT
Representative Sam Kito, Chair
Representative Adam Wool, Vice Chair
Representative Andy Josephson
Representative Louise Stutes
Representative Chris Birch
Representative Gary Knopp
Representative Colleen Sullivan-Leonard
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Bryce Edgmon (alternate)
OTHER LEGISLATORS PRESENT
Representative Justin Parish
Representative Dan Saddler
Representative DeLena Johnson
COMMITTEE CALENDAR
OVERVIEW & UPDATES FROM MUNICIPALITIES
- HEARD
PRESENTATION: AKOSH & WAGE AND HOUR INVESTIGATORS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
KATHIE WASSERMAN, Executive Director
Alaska Municipal League (AML)
POSITION STATEMENT: Gave a presentation entitled, "Overview &
Updates from Municipalities".
CHRIS DIMOND, Representative and Organizer
Pacific Northwest Regional Council of Carpenters (PNRCC)
Juneau, Alaska
POSITION STATEMENT: Gave a presentation on the Alaska
Occupational Safety and Health (AKOSH) and Wage and Hour
investigators.
REPRESENTATIVE JUSTIN PARISH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Participated in the discussion on
municipalities.
REPRESENTATIVE DELENA JOHNSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Participated in the discussion on municipal
government.
ACTION NARRATIVE
3:21:16 PM
CHAIR SAM KITO called the House Labor and Commerce Standing
Committee meeting to order at 3:21 p.m. Representatives Kito,
Wool, Birch, Josephson, Knopp, and Sullivan-Leonard were present
at the call to order. Representative Stutes arrived as the
meeting was in progress. Also present were the following
members of the House Community and Regional Affairs Standing
Committee: Representative Justin Parish, Representative Dan
Saddler, and Representative DeLena Johnson.
^Overview & Updates from Municipalities by Kathie Wasserman,
Executive Director, Alaska Municipality League
Overview & Updates from Municipalities
3:22:24 PM
CHAIR KITO announced that the first order of business would be a
presentation from Kathie Wasserman of the Alaska Municipal
League (AML).
CHAIR KITO stated the purpose of the meeting was to begin a
discussion about the municipalities and recent shifts in the
responsibility between state and local governments. He said he
wanted to initiate a conversation about the appropriate level of
service by the state and municipalities and the impacts of those
responsibilities. He specified the meeting's discussion would
be focused on public safety.
3:24:34 PM
KATHIE WASSERMAN, Executive Director, presented an overview and
updates from municipalities. She expressed appreciation for
the involvement of municipalities in the discussion. She
described the cost-cutting measures AML had adopted, adding that
dues for membership had not increased in 25 years. She outlined
the work of AML, which includes lobbying for municipalities on
the state and federal levels, the organization of four
conferences each year, and local government assistance and the
distribution of a publication entitled "Local Government Primer"
[included in committee packets]. She said she had found that
often legislators do not know how local government operates when
crafting legislation that affects municipalities. The League
also creates a salary survey showing local government salaries
around the state.
3:27:21 PM
MS. WASSERMAN stated Article 10 of the state constitution
establishes local government and stipulates the state will
operate with maximum local self-government. She stated AML
opposes bills that involve an unfunded mandate or take away
local control. She identified the state has 165 municipalities,
19 boroughs, 145 cities, and 1 federal reservation (Metlakatla).
A municipality as defined in state law is a city or a borough.
She added 97 percent of the state population lives in an
organized government (a borough or a city) and 3 percent in
unorganized boroughs. She reminded that the legislature is the
assembly for all unorganized boroughs.
3:29:07 PM
CHAIR KITO asked whether that meant legislators were non-dues-
paying members.
MS. WASSERMAN answered the legislature had never been billed for
dues. She outlined all boroughs have three duties under the
state constitution - education, planning and zoning, and land
use. She highlighted planning and zoning in the unorganized
borough is something the legislature would have to examine very
closely should any property tax be proposed, as property in
unorganized boroughs has not been assessed. She explained
creating the tax would entail sending state assessors out to
assess all the land in unorganized boroughs, making it very
difficult.
MS. WASSERMAN said she had been looking at resolutions about
federal overreach. She stated she had replaced "federal" in the
resolutions with "state", and then with "local", and saw that
the objections were similar. She highlighted that often
municipalities are informed of legislative action after it
occurs, whereas local government could be instrumental in
addressing issues that affect municipalities.
MS. WASSERMAN addressed the fiscal plan, stating it is very
difficult for municipalities to plan without a budget. She
added money to municipalities has dropped from $141 million
shared between 160 municipalities in 1985 to sharing $30 million
with 20 communities on top of the 160 municipalities.
Additionally, there were recent cost shifts from the state to
municipalities.
3:33:40 PM
MS. WASSERMAN addressed public safety budget cuts, highlighting
the strain from the opioid crisis. She gave the example of
Kotzebue, Alaska, where there is no jail because people who were
arrested would be transferred to Anchorage, Alaska, and pointed
out that the weather had to be good to allow those people to be
flown to Anchorage and said crime generally happens in the
middle of the night. There had to be somewhere for people to go
in the meantime. She addressed adding responsibilities to
municipalities such as fingerprinting and background checks.
She underlined the FBI does not answer phone calls from
municipalities.
3:36:59 PM
CHAIR KITO asked for some background on the powers of boroughs
including the level at which municipalities accept policing
powers and to what degree those policing powers are required by
the constitution, statute, or the municipality.
MS. WASSERMAN answered not all boroughs have adopted police
powers, sometimes the city within the borough has those powers.
She added that most small communities don't have police powers,
some have village public safety officers (VPSOs) furnished
through the state.
CHAIR KITO surmised that when municipalities are forming, they
are not required to adopt police powers unless it is in their
charter.
MS. WASSERMAN answered that was correct. Police power insurance
is very costly and that often prohibits smaller communities from
adopting policing powers.
3:39:16 PM
REPRESENTATIVE KNOPP commented that many municipalities have
planning powers but not all have adopted zoning powers. He gave
the example of the Kenai [Peninsula] borough, which cannot adopt
police powers without a vote of the people.
MS. WASSERMAN added there are many classifications of cities and
boroughs and each was different. She said she believed
approximately 20 cities in the unorganized borough have sale
tax. All but three boroughs have sales taxes. Second-class
cities may or may not have sales tax. Some depend almost
entirely on community assistance and fees.
CHAIR KITO mentioned one city that operates a liquor store.
3:41:41 PM
REPRESENTATIVE WOOL indicated a chart in the publication and
commented it appears there is only one first-class borough in
the state.
MS. WASSERMAN answered there used to be a third-class borough in
Haines, Alaska, but there are none now.
REPRESENTATIVE WOOL spoke to the statewide smoking ban and
surmised AML would oppose it since it went against local
control.
MS. WASSERMAN clarified the board had taken a stand in favor of
[the statewide smoking ban] since it was an issue of public
health.
3:43:33 PM
REPRESENTATIVE BIRCH spoke to Anchorage, Alaska, issues on
police service areas, stating Seward Highway between Potters
Marsh and Portage has been a point of contention as state
troopers had historically monitored the area but had stopped.
He asked whether AML supports uniform services across Alaska and
whether it had stepped into the discussion on behalf of the
municipality of Anchorage.
MS. WASSERMAN stated AML doesn't deal with individual
municipalities and advocates for all municipalities. She gave
examples of smaller communities with no police presence at all
and added the cuts to the Department of Public Safety (DPS)
affected the entire state.
CHAIR KITO spoke to the situation in Haines, Alaska, where there
was historically a trooper presence in the borough which had
been removed due to budget cuts. He underlined that the
legislature should understand that cuts to DPS put pressure on
local governments, some of which may not have the structure in
place to accommodate the added responsibility. He stated it was
a statewide issue.
3:47:55 PM
REPRESENTATIVE JOSEPHSON spoke to the transfer of duties from
the state to the municipalities and asked why Alaska did not
have a system of government closer to that of the Lower 48.
MS. WASSERMAN stated she had served on the Local Boundary
Commission for around 12 or 14 years. She said the intent was
to avoid problems that had arisen in the Lower 48 and to provide
more local control. She highlighted the many differences
between Alaska and the Lower 48, including sheriffs and
counties, and pointed out the responsibilities are not the same.
She gave some history of how the state was organized at
statehood. She expressed her wish that the legislature and the
municipalities would craft something that works for all and
would allow municipalities to perform duties that the
legislature cannot. She said there had not been much room to
discuss issues outside Robert's Rules of Order.
3:52:16 PM
CHAIR KITO commented that the tax base is a consideration. He
explained when the state was being formed, model borough
boundaries were created in the attempt to move from territory to
organized state. Some of the unorganized boroughs were examined
recently for a tax base and it was determined that coming up
with economic drivers for local government was difficult. In
Alaska, rather than highway patrol as in other states, the
troopers became police for the state and originally held
investigative powers in smaller communities. He said Alaska is
a hybrid with opportunities to craft solutions.
MS. WASSERMAN added the VPSO works for the state, the tribal
corporation, and the mayor, but as a state employee is not
allowed to carry out municipal law enforcement. She said there
were a lot of communities with "just a lid on things,"
especially remote communities.
3:55:55 PM
REPRESENTATIVE JUSTIN PARISH, Alaska State Legislature, asked
about the magnitude of the cost shifts around public safety.
MS. WASSERMAN said she would have to ask each municipality in
order to get that information. She added as the state has less
and less money, there was less community help that state
departments offer. She added she works with Department of
Commerce, Community & Economic Development (DCCED) to put those
figures together.
3:57:19 PM
CHAIR KITO asked whether impacts of cost shifts to
municipalities vary by municipality.
MS. WASSERMAN stated there is less state presence in rural
communities and the biggest impact is already observable in
small communities. She gave an example of the mayor of Diomede
being asked whether it was true, as Governor Palin stated, that
they could see Russia from there. The mayor had responded,
"Yes, we can see Russia. Who's Governor Palin?" She stated the
state presence has disappeared from many of the smaller
communities.
3:58:45 PM
REPRESENTATIVE WOOL mentioned Fairbanks, Alaska, and "pockets of
government" and asked why some areas of the state had a city and
a borough.
MS. WASSERMAN replied she had been in Fairbanks, Alaska, twice
for large meetings on the issue. She said the legislature has
allowed it to go into the hands of local government. She
mentioned that twice in 12 years Fairbanks, Alaska, had not come
together to change the structure of its local government.
4:00:43 PM
REPRESENTATIVE BIRCH pointed to Venitie and Metlakatla and asked
about their city status.
MS. WASSERMAN explained Venitie was not a city and AML only
represented municipalities.
CHAIR KITO clarified Metlakatla had special status as a
reservation and was organized completely under the federal
government, whereas Venitie and Arctic Village had requested but
not been granted reservation status.
MS. WASSERMAN addressed the issue of jobs and moving money
throughout the state. She expressed surprise that
municipalities were not included in discussions of jobs. She
said she would like the state to recognize municipalities as a
financial driver in the state, as municipalities provide jobs in
communities where there are no other jobs. Additionally,
municipalities move money around the state through taxation.
4:03:39 PM
REPRESENTATIVE BIRCH asked where Ms. Wasserman saw the state's
obligations and role in municipal services such as water and
sewer or police powers.
MS. WASSERMAN answered she saw it as an important role, not to
provide the services, but for help with deferred maintenance
including on water and sewer systems. She stated many
communities were discussing raising local taxes and said she
thought it was a bit unfair for the state not to raise revenues
but find it fine for municipalities to do so.
REPRESENTATIVE BIRCH said typically the expectation was that
when a service is voted in, there is a responsibility to pay for
it. He said there is around $60 billion in state financial
assets and asked what role those assets would play in supporting
municipalities.
4:07:41 PM
MS. WASSERMAN referenced a letter from the Alaska Conference of
Mayors (ACoM), who were "very strong" in putting forth ideas for
a fiscal plan involving earnings of the Permanent Fund (PF) and
a broad-based tax. She added ACoM was "OK with cuts but at some
point, when we can no longer provide a safe community, we need
to stop the cuts and perhaps look at more revenue." She
mentioned letters sent to each member of the committee asking
for a fiscal plan to budget for the municipalities.
4:08:42 PM
REPRESENTATIVE PARISH spoke to page 10 of the Local Government
Primer, "Issues with Sizable Impacts on Alaska's
Municipalities", and mentioned payment in lieu of taxes (PILT)
doesn't currently have a funding source, resulting in a $33
million loss to municipalities. He asked for more information
on the historic funding source and the current outlook.
MS. WASSERMAN said PILT is going the direction of timber
receipts and Congress has not found a place in which to insert
that funding. She added in speaking with United States Senator
Lisa Murkowski, the senator had said PILT will probably be
inserted into some bill, and PILT would probably take the place
of property taxes that municipalities give up for a federal
building or federal land. The federal government pays a very
small amount on the dollar of what the tax rate would be and can
pick their tax rate. She reiterated Senator Murkowski was
fairly confident PILT would be funded.
CHAIR KITO stated there are different sources of funding and
different beneficiaries of PILT, such as PILT on impacts of
military bases, PILT on impacts of ownership of federal land,
and Tongass timber receipts.
MS. WASSERMAN clarified that PILT is on all federal land except
military bases, which pay through another fund. She added
timber receipts were outside of PILT and is no longer in effect.
CHAIR KITO asked for confirmation that timber receipts had been
for securing funding for rural schools.
MS. WASSERMAN added it had been used to secure funding for
schools and roads in communities within the Tongass and Chugach.
4:11:51 PM
REPRESENTATIVE SULLIVAN-LEONARD stated when working with [the
Division of] Community and Regional Affairs (DCRA), local
government specialists were used to work with communities for
grant funding and federal matching grants. She asked whether
there was still that presence in rural areas.
MS. WASSERMAN answered when state agencies began to be cut
heavily, the only funding for DCRA for local government was from
the federal government. This had meant local government
specialists could only be used for Rural Utility Business
Advisor Program (RUBA), whereas historically the specialists had
helped with elections and other local government issues. She
stated a lot of the calls were coming to AML.
CHAIR KITO clarified RUBA was federally funded and provides
training and support to local governments to support their water
and wastewater systems.
4:14:13 PM
REPRESENTATIVE PARISH asked how much money from [timber
receipts] had been in an average year.
MS. WASSERMAN answered that Southeast Alaska alone was getting
$76 million, almost 3 times the amount of revenue sharing for
the entire state, and it is gone. Chugach was receiving a
little over $2 million. In addition to losing revenue sharing,
the state had lost $80 million, split between about 30
municipalities.
REPRESENTATIVE PARISH asked whether there was any prospect for
the funding to return and whether the national delegation was
working on the issue.
MS. WASSERMAN answered the state legislature has a resolution;
however, the act had been expired for two years. She said she
speaks to Senator Murkowski on the issue of timber receipts and
that Congressman Don Young had been supportive. She added many
states without timber don't feel it is fair to send money to
communities to cut wood when no wood was being sold. She said
there had been talk of forest management fees, and the state and
federal government managing the forests.
4:17:39 PM
REPRESENTATIVE JOSEPHSON asked how long Southeast communities
had received [timber receipts].
MS. WASSERMAN answered it had originally started as stumpage
fees. When the timber crash occurred, the education and roads
programs left those communities. The federal government gave
money to states that lost revenue from timber as compensation -
at a 5-year rolling average of the stumpage fees - for losing
the large timber industry. She added there need to be tools in
place to compensate for industries in the event timber receipts
go away.
4:19:28 PM
REPRESENTATIVE DELENA JOHNSON, Alaska State Legislature, asked
whether there had been any discussion about asking the state of
Alaska to pay PILT to communities.
MS. WASSERMAN answered she had never broached the subject.
REPRESENTATIVE JOHNSON remarked that she was currently in a
position to do so.
CHAIR KITO added there had been some discussion about a
community dividend as an alternative to revenue sharing.
4:21:53 PM
REPRESENTATIVE PARISH asked Ms. Wasserman what she saw "coming
down the pike." He asked whether there were any other sources of
federal funding which the state should be advocating to avoid
losing, or whether she anticipates other cuts from the federal
government to municipalities.
MS. WASSERMAN answered the state should always keep an eye on
PILT as it provides money to every municipality in the state.
She added sometimes unfunded mandates come down from the federal
government. She mentioned a bill to allow ambulance services to
receive money through Medicaid. She said she thought it would
mean almost $1 million for Anchorage, Alaska.
4:24:00 PM
CHAIR KITO said he was interested in further discussion of
responsibilities of the state and municipalities, perhaps on the
topic of roads and the shift of responsibility.
MS. WASSERMAN spoke to bills affecting municipalities, such as
regulations in smaller communities. She gave the example of
pesticide regulation in Pelican, Alaska. The regulation
required a certified person come take care of a wasp's nest on a
public building, meaning the local government would have to fly
someone out to Pelican and in shoulder season would have to
overnight that person. She underlined there were the
limitations of smaller communities to consider.
^Presentation: AKOSH & Wage and Hour Investigators
Presentation: AKOSH & Wage and Hour Investigators
4:27:58 PM
CHAIR KITO announced that the final order of business would be a
presentation on Alaska Occupational Safety and Health (AKOSH)
and Wage and Hour Investigators.
4:29:10 PM
CHRIS DIMOND, Representative and Organizer, Pacific Northwest
Regional Council of Carpenters (PNRCC), presented on Alaska
Occupational Safety and Health (AKOSH) and Wage and Hour
investigators. He mentioned a January 31 letter he had sent to
the committee [included in committee packets] and offered
concern that wage and hour inspectors were not properly funded.
MR. DIMOND explained part his job as representative of the PNRCC
is to ensure men and women working on job sites are working in
safe conditions and receiving pay for their work according to
Title 36 rules. He stated he had taken information to the
Department of Labor and Workforce Development (DWLD), who had
responded "we do not have the funding to go after this." He
mentioned he did not see the issue so much in Juneau and he said
he thought Anchorage, Alaska and Fairbanks, Alaska did not have
the same problem as there are 2 wage and hour investigators in
Juneau, Alaska, 8 in Anchorage, Alaska, and 3 in Fairbanks,
Alaska.
MR. DIMOND stated a lot of state money is being spent on
construction projects and some contractors are finding ways to
get around prevailed rate and workers are not being paid Title
36 rates. He gave the example of a Craigslist ad from Oregon
for work in Alaska at $20 per hour, and prevailing rate at the
time for the work was $60 per hour. The contractor was paying
$40 less per worker per hour for the job, thereby preventing
contractors who "play by Alaska rules" from getting the jobs.
That case is still ongoing three years later, for $100 thousand
in back payroll. He stated when an investigator with a case is
spending their time in court, their time to go out and
investigate other projects is taken up.
MR. DIMOND said he was asking legislators what can be done to
protect the state money being invested in capital projects and
to ensure workers are not being cheated out of their wages and
therefore that money is not being spent in the community.
4:33:48 PM
REPRESENTATIVE BIRCH stated he had experience monitoring
construction projects and surmised what Mr. Dimond had described
was "out-and-out fraud."
CHAIR KITO commented he thought there were some gray areas. He
said contractors can hire subcontractors who may have different
rates.
MR. DIMOND replied to Representative Birch that it was out-and-
out fraud and stated Chair Kito was also correct that "there are
some independent contractor situations," but legislation had
been passed to ensure the terminology was not misused.
REPRESENTATIVE BIRCH spoke to varying rates across different
regions for services and for workmanship.
MR. DIMOND stated the work the carpenters do is hard, and they
should be compensated accordingly.
CHAIR KITO added the prevailing wage around the state varies in
different regions. He opined it is unfair to compare the
prevailing wage in Oregon with that in Alaska as the wage for a
well-qualified worker who comes to Alaska may be high, but the
wages are not being spent locally.
4:37:42 PM
REPRESENTATIVE SULLIVAN-LEONARD asked whether Mr. Dimond was
seeing low bidding on state projects in the request for proposal
(RFP) process.
MR. DIMOND answered abnormally low bids were beginning to
appear, adding that part of his job is to act as a resource for
Department of Labor & Workforce Development (DLWD) and report
issues to the department.
4:38:44 PM
REPRESENTATIVE JOSEPHSON asked whether the request for the
legislature was to be aware of the situation and that it needed
more enforcement.
MR. DIMOND answered he thinks there is a need for enforcement
resources to investigate projects. He added when he was working
in the field, he saw DLWD out on a public works job only once.
CHAIR KITO reiterated there was enforcement in more urban
centers, but not on remote projects. He surmised some
contractors knew that and the fine would be less than they were
saving on inappropriate use of labor.
MR. DIMOND said he had heard mention of assessing fines
differently. He gave the example of a project in Sitka, Alaska,
in which contractors were getting around certified payroll. The
paperwork listed 1,200 hours of the 1,500 hours on the project
as "paint and prep." He emphasized there is no way that was
accurate for a concrete job.
CHAIR KITO asked whether that meant they were being reimbursed
at a higher rate as a result.
MR. DIMOND clarified it meant the workers were being paid far
beneath the carpenter rate and the savings adds up and gives a
huge advantage to contractors when they figure out how to get
around certified payroll.
4:41:45 PM
REPRESENTATIVE WOOL asked Mr. Dimond in what capacity he was
carrying out investigations.
MR. DIMOND answered his organization worked to keep a running
market survey to see which projects were going on around the
state.
CHAIR KITO suggested it was to support PNRCC members.
MR. DIMON answered in the affirmative, adding it supported non-
members as well.
REPRESENTATIVE WOOL asked about approaching contractors on a
non-union site about payroll.
MR. DIMOND explained contractors do not provide payroll. Anyone
can go to DLWD and request certified payroll.
4:44:27 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:44 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AKOSH Wage and Hour Background info.pdf |
HL&C 2/7/2018 3:15:00 PM |
Presentation Presentation AKOSH |
| AKOSH Wage and Hour Letter to HLAC.pdf |
HL&C 2/7/2018 3:15:00 PM |
Presentation AKOSH |