Legislature(2003 - 2004)

02/12/2003 08:00 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
    HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                   
                       February 12, 2003                                                                                        
                           8:00 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
SENATE COMMUNITY AND REGIONAL AFFAIRS                                                                                           
 Senator Thomas Wagoner, Chair                                                                                                  
 Senator Georgianna Lincoln                                                                                                     
 Senator Kim Elton                                                                                                              
HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                            
 Representative Carl Morgan, Chair                                                                                              
 Representative Kelly Wolf, Vice Chair                                                                                          
 Representative Tom Anderson                                                                                                    
 Representative Mike Chenault                                                                                                   
 Representative Sharon Cissna                                                                                                   
MEMBERS ABSENT                                                                                                                
SENATE COMMUNITY AND REGIONAL AFFAIRS                                                                                           
 Senator Robin Taylor                                                                                                           
HOUSE COMMUNITY AND REGIONAL AFFAIRS                                                                                            
 Representative Ralph Samuels                                                                                                   
 Representative Albert Kookesh                                                                                                  
COMMITTEE CALENDAR                                                                                                            
Local Boundary Commission Annual Report                                                                                         
WITNESS REGISTER                                                                                                              
Sally Saddler                                                                                                                   
Legislative Liaison                                                                                                             
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Introduced Gene Kane                                                                                      
Gene Kane                                                                                                                       
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Delivered Boundary Commission Report                                                                      
Dan Bockhorst                                                                                                                   
Local Boundary Commission (LBC)                                                                                                 
Department of Community & Economic Development                                                                                  
PO Box 110800                                                                                                                   
Juneau, AK 99811-0800                                                                                                           
POSITION STATEMENT: Answered questions on LBC Report                                                                          
ACTION NARRATIVE                                                                                                              
TAPE 03-2, SIDE A [SENATE CRA TAPE]                                                                                           
CHAIR  THOMAS WAGONER  called  the joint  meeting  of the  Senate                                                             
Community and  Regional Affairs Standing Committee  and the House                                                               
Community  and Regional  Affairs Standing  Committee to  order at                                                               
8:00   a.m.  Present   were  Senators   Wagoner  and   Elton  and                                                               
Representatives Morgan, Anderson and Cissna.                                                                                    
The  meeting was  called to  hear the  Local Boundary  Commission                                                               
Annual Report.                                                                                                                  
SALLY  SADDLER,   legislative  liaison  for  the   Department  of                                                               
Community and  Economic Development  (DCED), introduced  Mr. Gene                                                               
Kane who read the following into the record:                                                                                    
     Good morning.   I am Gene Kane, from  the Department of                                                                    
     Community and Economic Development.                                                                                        
     Kevin Waring,  Chair of  the Local  Boundary Commission                                                                    
     asked  me  to convey  his  regrets  that he  could  not                                                                    
     appear personally today due to previous obligations.                                                                       
     The other  members of the commission  are Myrna Gardner                                                                    
     from Juneau,  Robert Harcharek of Barrow,  Allan Tesche                                                                    
     of  Anchorage,  and Ardith  Lynch  of  Fairbanks.   Dan                                                                    
     Bockhorst, commission staff, is  on line from Anchorage                                                                    
     to   answer   questions  regarding   the   commission's                                                                    
     Annual Report Filed                                                                                                    
     The Local  Boundary Commission filed its  annual report                                                                    
     with the  legislature on  January 30 of  this year.   A                                                                    
     copy  was provided  to  each member  of  the House  and                                                                    
     Senate.    The   commission's  report  addresses  three                                                                    
     principal areas.                                                                                                         
     Chapter 1 provides an overview of the commission;                                                                          
     Chapter 2  summarizes the commission's  activities last                                                                    
     year along with pending proposals; and                                                                                     
     Chapter  3 discusses  several  important public  policy                                                                    
     issues concerning local government in Alaska.                                                                              
     Alaska's  Constitution established  the Local  Boundary                                                                    
     Commission to  ensure that  proposals to  create cities                                                                    
     and boroughs  or alter their boundaries  would be dealt                                                                    
     with objectively and from a statewide perspective.                                                                         
     The   commission's  responsibilities   include  judging                                                                    
     proposals for:                                                                                                             
        · Incorporation of cities and boroughs                                                                                  
        · Annexation to cities and boroughs                                                                                     
        · Detachment from cities and boroughs                                                                                   
        · Reclassification of cities                                                                                            
        · Dissolution of cities and boroughs; and                                                                               
       · Merger and consolidation of cities and boroughs                                                                        
CHAIR WAGONER called for the record to reflect Representative                                                                   
Chenault joined the meeting.                                                                                                    
     The  commission   has  other  powers   and  obligations                                                                    
     established in  law, including a  duty to  make studies                                                                    
     of local government boundary issues.                                                                                       
     Commission  members  donate  their  time  as  a  public                                                                    
     service.   They  receive no  compensation for  the time                                                                    
     they contribute to commission activities.                                                                                  
     The  Department of  Community and  Economic Development                                                                    
     provides staff support to the commission.                                                                                  
     Boundary Decisions During 2002                                                                                           
     The  commission met  14  times in  2002.   To  minimize                                                                    
     costs,  the  commission  tries  to  deal  with  several                                                                    
     issues  at  each  meeting,  and  conducts  meetings  by                                                                    
     teleconference when practical.                                                                                             
     Collectively,  commission members  spent many  hundreds                                                                    
     of  hours reviewing  and analyzing  documents filed  in                                                                    
     proceedings and on other commission business.                                                                              
     During 2002, the commission addressed proposals for:                                                                       
        · Consolidation of the City of Haines and the                                                                           
          Haines Borough;                                                                                                       
        · Incorporation of a Skagway Borough;                                                                                   
        · Annexation to the City of Wasilla                                                                                     
        · Annexation to the City of Palmer                                                                                      
     The commission approved  the proposal for consolidation                                                                    
     of the  City of Haines  and Haines Borough.   Voters in                                                                    
     Haines   subsequently    approved   the   consolidation                                                                    
     proposal.  As of October  17, 2002, the two governments                                                                    
     were consolidated as the home rule Haines Borough.                                                                         
     The  commission  denied  the Skagway  Borough  proposal                                                                    
     because it did not  meet constitutional, statutory, and                                                                    
     regulatory standards for borough incorporation.                                                                            
     The commission  approved an annexation of  314 acres to                                                                    
     the  City of  Wasilla.   As this  was an  annexation by                                                                    
     local  action,  it is  not  subject  to review  by  the                                                                    
     Finally, the  commission approved an annexation  to the                                                                    
     City of Palmer,  after reducing the area  to be annexed                                                                    
     from the city's proposed  921.34 acres to 861.44 acres.                                                                    
     The Palmer annexation proposal is  subject to review by                                                                    
     the Legislature.                                                                                                           
     The commission has  presented its formal recommendation                                                                    
     to  the legislature  for  the  Palmer annexation  under                                                                    
     Article X, Section 12 of  the Constitution of the State                                                                    
     of  Alaska.   As  provided  by  the constitution,  "The                                                                    
     change  shall become  effective  forty-five days  after                                                                    
     presentation or  at the end  of the  session, whichever                                                                    
     is   earlier,  unless   disapproved  by   a  resolution                                                                    
     concurred  in by  a  majority of  the  members of  each                                                                    
CHAIR WAGONER called for the record to reflect Representative                                                                   
Wolf joined the meeting.                                                                                                        
     Changes  to  the  Regulations  of  the  Local  Boundary                                                                  
     During the  past two years,  the commission  has worked                                                                    
     to update and revise its  regulations in Title 3 of the                                                                    
     Alaska  Administrative  Code.  The  last  comprehensive                                                                    
     review  of the  commission's regulations  occurred more                                                                    
     than ten years  ago.  Since then, there  have been many                                                                    
     changes in  state statutes that govern  the commission.                                                                    
     The regulatory changes proposed  by the commission also                                                                    
     address   ambiguities   in  current   regulations   and                                                                    
     streamline procedures  for non-controversial proposals.                                                                    
     The commission has also proposed  a new requirement for                                                                    
     a   local   public   hearing  on   legislative   review                                                                    
     annexation proposals  before they are submitted  to the                                                                    
     Local Boundary Commission.                                                                                                 
     Pending Activities of the Commission                                                                                     
     One   petition   is   currently  pending   before   the                                                                    
     Incorporation of Gustavus as a second-class city                                                                           
     Policy Issues                                                                                                            
     The commission presents three  public policy issues for                                                                    
     consideration by the legislature.   I am aware that the                                                                    
     commission will  likely be meeting  with the  House and                                                                    
     Senate Community and  Regional Affairs Committees later                                                                    
     this month  concerning the commission's  pending review                                                                    
     of the  unorganized borough.   Ideally,  any discussion                                                                    
     of the policy matters could be reserved until then                                                                         
     Thank you.   That  concludes my  prepared remarks.   If                                                                    
     you  have  questions  on  any  of  these  matters,  Mr.                                                                    
     Bockhorst will respond.                                                                                                    
CHAIR WAGONER called for the record to reflect Senator Lincoln                                                                  
joined the meeting.                                                                                                             
REPRESENTATIVE ANDERSON referred to Chapter 3 of the LBC report                                                                 
regarding acreage in the Palmer annexation. The initial request                                                                 
was to  add 921.34 acres. He  asked for a summary  of the reasons                                                               
for the reducing the request to 861.44 acres.                                                                                   
MR. KANE explained the commission  excluded an area that was self                                                               
sufficient in terms of wells and road maintenance.                                                                              
REPRESENTATIVE  ANDERSON  referenced  page  29 and  asked  for  a                                                               
summary of the reasons for opposition to the annexation.                                                                        
MR.  KANE pointed  out annexations  are  often controversial  and                                                               
many  associate  the extension  of  municipal  boundaries with  a                                                               
reduction of  local control. The commission  repeatedly urged the                                                               
City  of Palmer  to  take  a pro-active  rather  than piece  meal                                                               
approach to  annexation to address  the tremendous growth  of the                                                               
Palmer area.                                                                                                                    
REPRESENTATIVE ANDERSON asked two additional questions:                                                                         
   · Is there a disruption of services during the transition and                                                                
     where does the tax comes from for the transfer?                                                                            
   · Will the assembly boundaries change for the October 2003                                                                   
MR. KANE  explained residents would  continue to pay  the borough                                                               
area  wide  property taxes,  but  upon  annexation non-area  wide                                                               
taxes decrease.  The city worked  with the borough  in developing                                                               
its petition  as required  by the  Administrative Code  and there                                                               
were  no  significant  costs associated  with  the  extension  of                                                               
He was unable to answer the second question.                                                                                    
SENATOR LINCOLN  referred to  pages 13 and  14 and  noted Skagway                                                               
wasn't  included  in  the  list of  areas  proposed  for  borough                                                               
incorporation  or  examination  of  issues  relating  to  borough                                                               
incorporation. She asked whether  the Skagway petition, which was                                                               
denied  for  technical  reasons,  could be  successful  if  those                                                               
deficiencies were met and a new proposal filed.                                                                                 
DAN   BOCKHORST,   Local  Boundary   Commission   representative,                                                               
testified  via  teleconference.  He explained  the  LBC  narrowly                                                               
construes the  direction it  is given  by the  state legislature.                                                               
Skagway  was excluded  because the  commission  did not  consider                                                               
areas that might meet standards  for annexation of territory into                                                               
model  borough  boundaries  and   because  the  Skagway  petition                                                               
proposed to  incorporate a  first class borough  in place  of the                                                               
first class  City of  Skagway. The  commission asserts  there are                                                               
fundamental   distinctions  between   community  based   city  or                                                               
municipal governments and the regional borough governments.                                                                     
SENATOR  LINCOLN   said  she  would   contact  him   for  further                                                               
discussion, but his answer was sufficient for the joint meeting.                                                                
SENATOR ELTON noted the Skagway petition  failed to meet 10 of 18                                                               
applicable standards for borough  incorporation. He asked whether                                                               
those applicable standards were set in statute or regulation.                                                                   
MR.  BOCKHORST  replied  the  Skagway  proposal  failed  to  meet                                                               
standards  found   in  the  Alaska  State   Constitution,  Alaska                                                               
Statutes and  the Administrative Code. The  commission's detailed                                                               
statement of decision regarding  the Skagway action was available                                                               
upon request.                                                                                                                   
SENATOR ELTON agreed that would be helpful.                                                                                     
CO-CHAIR MORGAN asked how many  boroughs have received their land                                                               
entitlement from the state.                                                                                                     
MR. BOCKHORST  explained each  newly formed  municipal government                                                               
is  entitled to  10 percent  of the  vacant, unappropriated,  and                                                               
unreserved  state  land within  its  boundaries  at the  time  of                                                               
incorporation.  He  said he  would  follow  up with  the  program                                                               
administrator, the Alaska Department of Natural Resources (DNR).                                                                
CO-CHAIR  MORGAN said  he would  appreciate a  follow up  because                                                               
this is an advantage to incorporation.                                                                                          
SENATOR ELTON  noted he would  like the commission to  inform the                                                               
both Community  and Regional Affairs  Committees what  10 percent                                                               
of the vacant  unappropriated state land would be in  each of the                                                               
proposed eight boroughs.                                                                                                        
MR. BOCKHORST agreed to ask DNR for the information.                                                                            
SENATOR LINCOLN observed a number  of the petition denials in her                                                               
district  were  for  technical   deficiencies  and  asked  for  a                                                               
definition  for  that  type  of  deficiency.  She  asked  for  an                                                               
explanation of  the difference between  the Skagway  petition and                                                               
some of the others that were incorporated as a single site.                                                                     
MR. BOCKHORST  characterized the commission's decision  to reject                                                               
the Skagway proposal  as a fundamental question  about the nature                                                               
of borough government and not  simply technical deficiencies. The                                                               
proposal  was  to  convert  the  city  government  with  existing                                                               
boundaries, population  and powers  into a borough  government by                                                               
changing  the  name from  the  City  of  Skagway to  the  Skagway                                                               
Borough. Both the department [DCED]  and commission find there is                                                               
a fundamental distinction between  those two types of government.                                                               
The  Yakutat  Borough  was  recently  formed  and  has  a  single                                                               
community in  the borough.  That decision  was difficult  for the                                                               
commission  given its  unique  geographic circumstances.  Skagway                                                               
has frequent  interaction with Haines while  Yakutat is isolated.                                                               
He  agreed  to provide  LBC  decisional  statements for  Skagway,                                                               
Yakutat and any others that members might desire.                                                                               
CO-CHAIR WAGONER  confirmed he  should do  so then  asked whether                                                               
the commission had taken a position on SB 63.                                                                                   
MR. BOCKHORST  advised members the commission  reviewed a similar                                                               
proposal that dealt with legal  ambiguities regarding the levy of                                                               
municipal property  taxes following an annexation  or detachment.                                                               
The  commission   unanimously  endorsed  that   proposal  thereby                                                               
endorsing the  substance of SB  63 with two  stipulations. First,                                                               
the  legislation   should  be   modified  to   include  municipal                                                               
incorporations   because  the   same   rules   should  apply   to                                                               
incorporation, annexation and  detachment. Second, any provisions                                                               
in the legislation should not  impact flexibility with respect to                                                               
how annexations  and incorporations transition from  a status quo                                                               
to implementing the annexation or incorporation.                                                                                
SENATOR LINCOLN  asked how the  LBC defines "economic  base" with                                                               
regard to borough formation.                                                                                                    
MR.  BOCKHORST explained  state  statutes  impose three  specific                                                               
duties  on any  organized borough.  First comes  education, which                                                               
includes   the   obligation   to  make   the   local   supporting                                                               
contribution. This  is equivalent to  a 4-mil property tax  or 45                                                               
percent  of basic  needs whichever  is  less. Next  there is  the                                                               
obligation  for  planning,  platting, and  land  use  regulation.                                                               
Finally there is the requirement to assess and collect taxes.                                                                   
The  statutes in  the Administrative  Code list  factors the  LBC                                                               
must  consider when  evaluating the  economy. This  includes land                                                               
use  evaluation,  property values,  and  personal  income of  the                                                               
proposed borough,  resource and  commercial development,  as well                                                               
as  the  anticipated functions  of  the  borough. The  commission                                                               
reviews proposed  expenses and income  to determine  the economic                                                               
viability of the area.                                                                                                          
There were no other questions.                                                                                                  
CO-CHAIR WAGONER adjourned the meeting at 8:40 a.m.                                                                             

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