Legislature(1995 - 1996)

03/29/1995 01:40 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
         SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                         
                         March 29, 1995                                        
                           1:40 p.m.                                           
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
 Senator John Torgerson, Chairman                                              
 Senator Randy Phillips, Vice Chairman                                         
 Senator Tim Kelly                                                             
 Senator Fred Zharoff                                                          
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
 Senator Lyman Hoffman                                                         
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
 SENATE BILL NO. 96                                                            
 "An Act relating to municipal activities or services mandated by              
 state statute."                                                               
                                                                               
 SENATE BILL NO. 136                                                           
 "An Act making appropriations for capital project matching grant              
 funds and to capitalize funds; making, amending, and repealing                
 capital appropriations; and providing for an effective date."                 
                                                                               
  PREVIOUS SENATE COMMITTEE ACTION                                             
                                                                               
 SB  96 - See Community & Regional Affairs minutes dated                       
          3/8/95, 3/17/95, 3/22/95.                                            
                                                                               
 SB 136 - No previous action to record.                                        
                                                                               
  WITNESS REGISTER                                                             
                                                                               
 Josh Fink, Staff to Senator Kelly                                             
 State Capitol                                                                 
 Juneau, AK 99801-1182                                                         
  POSITION STATEMENT:   Offered information on amendments to                   
                      CSSB 96(CRA)                                             
                                                                               
 Charles McKee                                                                 
 P.O. Box 143452                                                               
 Anchorage, AK 99514                                                           
  POSITION STATEMENT:   Offered comments on CSSB 96(CRA)                       
                                                                               
 Scott Brandt-Erichsen                                                         
 Municipality of Anchorage                                                     
 P.O. Box 196650                                                               
 Anchorage, AK 99519                                                           
  POSITION STATEMENT:   Supports amendments to CSSB 96(CRA)                    
 Mayor Jerome Selby                                                            
 Kodiak Island Borough                                                         
 710 Mill Bay Road                                                             
 Kodiak, AK 99615                                                              
  POSITION STATEMENT:   Supports CSSB 96(CRA)                                  
                                                                               
 Scott Sterling                                                                
 Matanuska-Susitna Borough Assembly                                            
 Box 5                                                                         
 Wasilla, AK                                                                   
  POSITION STATEMENT:   Supports CSSB 96(CRA) & SB 136                         
                                                                               
 Tom Armour, Administrator                                                     
 Box 737                                                                       
 Pelican, AK 99832                                                             
  POSITION STATEMENT:   Supports CSSB 96(CRRA) & SB 136                        
                                                                               
 Kevin Ritchie, Executive Director                                             
 Alaska Municipal League                                                       
 217 Second St., Suite 200                                                     
 Juneau, AK 99801                                                              
  POSITION STATEMENT:   Voiced support for CSSB 96(CRA)                        
                                                                               
 Jack Fargnoli, Senior Policy Analyst                                          
 Office of Management & Budget                                                 
 P.O. Box 110020                                                               
 Juneau, AK 99811-0020                                                         
  POSITION STATEMENT:   Offered information on Capital Matching Grants         
              Program in SB 136                                                
                                                                               
 Walt Wrede, Manager                                                           
 Lake & Peninsula Borough                                                      
 Box 495                                                                       
 King Salmon, AK 99613                                                         
  POSITION STATEMENT:   Supports SB 136                                        
                                                                               
 Al Riog                                                                       
 HC60, Box 277                                                                 
 Copper Center, AK 99573                                                       
  POSITION STATEMENT:   Supports SB 136                                        
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
 TAPE 95-10, SIDE A                                                            
 Number 001                                                                    
           SB  96 UNFUNDED MANDATES ON MUNICIPALITIES                         
                                                                              
  CHAIRMAN TORGERSON  called the Senate Community & Regional Affairs           
 Committee meeting to order at 1:40 p.m.  He brought  SB 96  before            
 the committee and directed attention to proposed amendments to  CSSB
 96(CRA) , which was adopted as a working document at the March 22,            
 1995 meeting.                                                                 
                                                                               
 Number 025                                                                    
                                                                               
 SENATOR KELLY moved the adoption of the following amendment:                  
                                                                               
 Amendment No. 3                                                             
                                                                               
 Page 3, line 9:  Delete "new"                                                 
                                                                               
 Page 3, lines 14 & 15:  Delete ", and each regulation or other                
 administrative order adopted after January 1, 1996,"                          
                                                                               
 Page 3, line 17, after "division.": Insert "Each regulation or                
 administrative order adopted under the authority of a bill enacted            
 after January 1, 1996, that applies to municipalities must include            
 findings regarding its effect on municipalities prepared by the               
 Department of Community and Regional Affairs."                                
                                                                               
 Page 4, line 21, through page 5, line :  Delete all material                  
                                                                               
 JOSH FINK, aide to Senator Kelly, addressing Amendment No. 3,                 
 explained that the current subsection (b) in Section 2 requires               
 that Legislative Finance prepare findings on any bill, regulation             
 or executive order that effects municipalities.  The amendment                
 provides that Legislative Finance prepare a finding on a bill, but            
 on a regulation or executive order, the Department of Community &             
 Regional Affairs would prepare the finding.  As a result of this              
 change, Section 3, the fiscal note section, was deleted from the              
 committee substitute.                                                         
                                                                               
 Hearing no objection to the adoption of Amendment No. 3, SENATOR              
 TORGERSON stated the motion carried.                                          
                                                                               
 Number 058                                                                    
                                                                               
 JOSH FINK explained that Amendment No. 4 would delete the second              
 half of the definition of "new funding" because it is not a                   
 workable definition and it is already covered by the mechanism set            
 up in Section 2.                                                              
                                                                               
 SENATOR KELLY moved the adopted of Amendment No. 4:                           
                                                                               
 Amendment No. 4                                                             
                                                                               
 Page 4, lines 26 - 27:  Delete "it does not include transfers or              
 reductions in another appropriation;"                                         
                                                                               
 Hearing no objection, SENATOR TORGERSON stated the motion carried.            
                                                                               
 Number 077                                                                    
                                                                               
 SENATOR TORGERSON, speaking to Amendment No. 5 explained he                   
 believes the first part of the amendment is necessary to further              
 give explanation to  the meaning of subsection (a) in Section 2.              
 The second part of the amendment is clarifying language.                      
                                                                               
 SENATOR KELLY moved the adoption of the following Amendment No. 5:            
                                                                               
 Amendment No. 5                                                              
                                                                               
 Page 3, line 13:  Delete "revoked" and insert "inoperative in its            
 effect upon a municipality until significant state funds are                  
 available to pay the operational costs directly required for the              
 actual performance of the activity, service or program."                      
                                                                               
 Page 4, line 30:  After "$20,000 in" insert new language to read:             
 "each of"                                                                     
                                                                               
 Hearing no objection to the adoption of Amendment No. 5, SENATOR              
 TORGERSON stated the motion carried.                                          
                                                                               
 Number 185                                                                    
                                                                               
 SENATOR TORGERSON opened the hearing to public comment.                       
                                                                               
 CHARLES MCKEE, testifying from Anchorage, spoke to his financial              
 duress because of the state having subservient action over the                
 municipalities, as well as the bond debt that the residents of all            
 municipalities are suffering under.                                           
                                                                               
 Number 196                                                                    
                                                                               
 SCOTT BRANDT-ERICHSEN, representing the Municipality of Anchorage,            
 stated he was present to respond to questions and further stated              
 that the municipality agrees with the amendments to the bill.                 
                                                                               
 Number 215                                                                    
                                                                               
 JEROME SELBY, Mayor the Kodiak Island Borough, voiced their support           
 for CSSB 96(CRA).  They think it is positive legislation that                 
 creates a process whereby the people who live in the state at least           
 can be assured that there will be thoughtful consideration given to           
 them and the costs of government as bills are considered by the               
 legislature in the future.                                                    
                                                                               
 Number 240                                                                    
                                                                               
 SCOTT STERLING, a member of the Mat-Su Borough Assembly, said                 
 although the assembly has not officially adopted a position on CSSB
 96(CRA), he believes that it has their support.  One way it effects           
 his borough is that DEC regulations regarding operation of water              
 and sewer systems require them to obey those regulations as does              
 Anchorage or Fairbanks or the larger municipalities, and this tends           
 to drive their costs up quite high.  This legislation would help in           
 a situation like that.                                                        
                                                                               
 Number 268                                                                    
                                                                               
 TOM ARMOUR, Administrator, City of Pelican, stated the city council           
 has not adopted a position on CSSB 96(CRA), but he believes it will           
 go a long way in helping administrators run their communities, as             
 well as improving the legislature's credibility.                              
                                                                               
 Number 280                                                                    
                                                                               
 KEVIN RITCHIE, Executive Director, Alaska Municipal League, stated            
 the League strongly supports the legislation as amended and urges             
 it passage out of committee.                                                  
                                                                               
 Number 290                                                                    
                                                                               
 There being no further testimony on SB 96, SENATOR TORGERSON asked            
 for the will of the committee.                                                
                                                                               
 SENATOR R. PHILLIPS moved that CSSB 96(CRA) and its accompanying              
 fiscal note be passed out of committee with individual                        
 recommendations.  Hearing no objection, it was so ordered                     
         SB 136 APPROP: FY 96 CAPITAL PROJECTS BUDGET                       
                                                                              
 Number 310                                                                    
                                                                               
 SENATOR TORGERSON brought  SB 136  before the committee as the next           
 order of business and stated it was his intention to only take                
 testimony on sections relating to the Capital Matching Grants                 
 Program.  He then invited Jack Fargnoli to the table to respond to            
 questions regarding the program that were directed to the Office of           
 Management & Budget in a memo dated March 23, 1995.                           
                                                                               
 JACK FARGNOLI, Senior Policy Analyst, Office of Management &                  
 Budget, said the program has been existence since 1993.                       
 Essentially, there are two programs:  one addresses municipalities            
 in the Department of Administration and the other addresses                   
 unincorporated communities in the Department of Community &                   
 Regional Affairs.  They are referred to collectively as the                   
 Matching Grant Program, but there are two separate funds, one in              
 each department to which money is appropriated.  From OMB's                   
 perspective, the program is running well.  The few main concerns              
 they've had from municipalities and unincorporated communities                
 they've been able to address, and the feedback has been mainly                
 positive with little on the negative side.                                    
                                                                               
 Speaking to the equity issue, OMB believes that the program is                
 functioning as it was intended to function.  The two groups of                
 grantees in the two programs are treated differently from other.              
 The municipalities have a much more elaborate set of criteria and             
 a set of factors that influence the distribution of money.  The               
 unincorporated communities basically divide up whatever amount of             
 money is funded to the program.  For the municipalities, all                  
 grantees in both programs are subject to a maximum percentage match           
 of 30 percent.  For the unincorporated communities, it is a flat 5            
 percent.  So for the municipalities there is some shifting, by                
 policy in the legislation, that shifts more money to smaller                  
 municipalities and provides less of a burden in terms of the match            
 required for them.  The larger and more wealthy the municipality is           
 the higher their match tends to be.  Mr. Fargnoli said OMB is not             
 aware of any equity concerns or problems.                                     
                                                                               
 Number 400                                                                    
                                                                               
 Mr. Fargnoli said there has been a question of a policy call nature           
 before them and before the legislature the last couple of years               
 which involves unincorporated communities lying within boroughs.              
 Under the current legislation those entities are not grantees.  The           
 unincorporated community program that's in place only addresses               
 those located in the unorganized borough.  The rationale for                  
 treating them this way is not to establish any inequity between               
 unincorporated communities lying within and without of boroughs so            
 much as to not supplant the capital project planning authority that           
 is set out through a constitutional basis for boroughs.                       
                                                                               
 OMB feels that the boroughs are the proper planning authority for             
 capital project planning, so they are "happy" with the program the            
 way it stands now.  Further, Mr. Fargnoli said part of the                    
 operational problem or difficulty  they would have in making                  
 amendments to change the program in this regard is the definitional           
 problem of trying to identify unincorporated communities located              
 within a borough.                                                             
                                                                               
 Number 431                                                                    
                                                                               
 Addressing the future of the program, Mr. Fargnoli stated the new             
 administration is finding its own level of comfort with the                   
 program.  It has been communicated to him that the program will go            
 forward and the Governor's capital budget is proposing to fund the            
 program at the same $20 million level as it has been funded in the            
 past.                                                                         
                                                                               
 Number 437                                                                    
                                                                               
 SENATOR R. PHILLIPS recalled that a 10 percent administrative cost            
 for doing  a project had been added to the statute, and he asked              
 Mr. Fargnoli how that was working out.  JACK FARGNOLI said he is              
 not aware of there being any problem with the provision.                      
                                                                               
 Number 445                                                                    
 SENATOR KELLY questioned 1993 population figures being used for a             
 program that is going into effect in 1996.  He said he thought the            
 Anchorage figure was considerably higher than what was shown on the           
 chart.  JACK FARGNOLI responded that it was a footnote mistake on             
 the chart and should read July 1, 1994.  The numbers in the model             
 are taken each year and certified by the commissioner of the                  
 Department of Community & Regional Affairs.  That has been done               
 again for this year so those are the correct figures.  SENATOR                
 KELLY commented that he would have staff check with the                       
 municipality on those figures for the Anchorage area.                         
                                                                               
 Number 511                                                                    
                                                                               
 SENATOR TORGERSON stated public testimony would be taken on SB 136.           
                                                                               
 TOM ARMOUR, Administrator, City of Pelican, voiced his strong                 
 support for the Capital Matching Grants Program, encouraged its               
 continuation, and stated its works particularly well for the                  
 smaller communities like Pelican.                                             
                                                                               
 Number 549                                                                    
                                                                               
 SENATOR KELLY informed the committee he had received the updated              
 population figures from the Municipality of Anchorage, and the                
 unofficial figure for 1994 is 250,006.  The state will come out               
 with the official 1994 figures in September.                                  
                                                                               
 Number 561                                                                    
                                                                               
 SCOTT STERLING, a member of the Mat-Su Borough Assembly, stated the           
 Capital Matching Grants Program works well for the Mat-Su Borough.            
 He noted they are the fastest growing municipality in the State of            
 Alaska and have more road miles to take care of and the program               
 helps them in that way.                                                       
                                                                               
 Number 583                                                                    
                                                                               
 WALT WREDE, Manager of the Lake & Peninsula Borough, stated the               
 borough likes the program and agrees with it in principle, but they           
 have an equity issue.  The borough has 17 villages, five of them              
 are incorporated and twelve of them are not.  They feel there is an           
 equity issue in that regard because part of those villages are not            
 guaranteed the $25,000 that unincorporated villages receive.                  
                                                                               
 TAPE 95-10, SIDE B                                                            
 Number 001                                                                    
                                                                               
 As an example, Mr. Wrede pointed out that in this year's Governor's           
 budget the Lake & Peninsula Borough would receive $44,000 for 12              
 communities.  He noted that they tried to rectify this inequity               
 last year with legislation, but it failed to pass the legislature.            
 However, it is their intent to have legislation reintroduced again            
 this session.                                                                 
                                                                               
 Number 020                                                                    
                                                                               
 AL RIOG, a resident of Kenny Lake testifying via the teleconference           
 network, stated his support for the Capital Matching Grants Program           
 and encouraged its continued funding.                                         
                                                                               
 Number 566                                                                    
                                                                               
 There being no further witnesses to testify on SB 136, SENATOR                
 TORGERSON asked for the will of the committee.                                
                                                                               
 SENATOR ZHAROFF moved that SB 136 be passed out of committee with             
 individual recommendations.  Hearing no objection, it was so                  
 ordered.                                                                      
 SENATOR TORGERSON informed the committee it was his intent to                 
 introduce a bill on behalf of the committee similar to HB 185,                
 which relates to the senior citizen property tax exemption.  He               
 said it basically lowers the limit to $75,000.  He then adjourned             
 the meeting at 3:30 p.m.                                                      
                                                                               

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