Legislature(1999 - 2000)
04/10/2000 01:55 PM Senate CRA
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SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
April 10, 2000
1:55 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chair
Senator Jerry Mackie, Vice Chair
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Jerry Ward
COMMITTEE CALENDAR
SENATE BILL NO. 304
"An Act relating to state aid to municipalities and certain other
recipients, and for the village public safety officer program;
relating to municipal dividends; and relating to the public safety
foundation program."
-HEARD AND HELD
CS FOR HOUSE BILL NO. 255(CRA)
"An Act relating to cities incorporated under state law that are
home rule communities."
-MOVED OUT OF COMMITTEE
SENATE CS FOR CS FOR HOUSE BILL NO. 133(STA)
"An Act relating to municipal service areas and providing for voter
approval of the formation, alteration, or abolishment of certain
service areas."
-HEARD AND HELD
PREVIOUS SENATE COMMITTEE ACTION
SB 304 - No previous Senate action
HB 255 - No previous Senate action
HB 133 - See State Affairs Committee minutes dated 2/24/00.
WITNESS REGISTER
Mr. Peter Torkelson
Legislative Staff for Representative Fred Dyson
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Commented on CSHB 255.
Mr. Pat Poland
Director of Municipal & Regional Assistance Division
Department of Community & Economic Development
333 W 4th Ave. Suite 220
Anchorage, AK 99501-2341
POSITION STATEMENT: Supports CSHB 255.
Ms. Patty Swenson
Legislative Staff for Representative Con Bunde
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Commented on SCS for CS for HB 133.
Representative Con Bunde
Alaska State Capitol
Juneau, AK 99811-1182
POSITION STATEMENT: Commented on SCS for CS for HB 133.
Mr. Mike Prax
Fairbanks North Star Borough Assembly
1015 Meadow Rue
North Pole, AK 99705
POSITION STATEMENT: Supports SCS for CS for HB 133.
Mr. Gershon Cohen
Address Not Provided
Haines, AK 99827
POSITION STATEMENT: Supports SCS for CS for HB 133.
Mr. Rob Goldberg
Address Not Provided
Haines, AK 99827
POSITION STATEMENT: Supports SCS for CS for HB 133.
Mr. Kevin Ritchie
Alaska Municipal League
217 Second Street, Suite 200
Juneau, AK 99801
POSITION STATEMENT: Opposes SCS for CS for HB 133.
Mr. Mike Scott
Mat-Su Borough Manager
350 East Dahlia Avenue
Palmer, AK 99645
POSITION STATEMENT: Opposed to SCS for CS for HB 133.
Mr. Jim Swing
Public Works Manager for Mat-Su Borough
350 East Dahlia Avenue
Palmer, AK 99645
POSITION STATEMENT: Opposed to SCS for CS for HB 133.
Mr. Ocie Adams
HB Box 200
Wasilla, AK 99654
POSITION STATEMENT: Commented on SCS for CS for HB 133 and supports
SB 304.
Mr. Jim Norcross
P.O. Box 242
Willow, AK 99688
POSITION STATEMENT: Commented on SCS for CS for HB 133.
Mr. Duane Udland
Chief of the Anchorage Police Department
4501 South Bragaw
Anchorage, AK 99507
POSITION STATEMENT: Supports SB 304.
Ms. Nadine Hargesheimer
Fairbanks North Star Borough
P.O. Box 71267
Fairbanks, AK 99707
POSITION STATEMENT: Supports SB 304.
Mr. Scott Malmquist
Fire Chief of the Soldotna Fire Department
231 South Binkley Street
Soldotna, AK 99669
POSITION STATEMENT: Supports SB 304.
Mr. Scott Walden
Assistant Fire Chief
City of Kenai
105 South Willow Street
Kenai, AK 99611
POSITION STATEMENT: Supports SB 304.
ACTION NARRATIVE
TAPE 00-04, SIDE A
Number 001
CHAIRMAN TIM KELLY called the Senate Community & Regional Affairs
Committee meeting to order at 1:55 p.m. Present were Senators Tim
Kelly, Mackie, Phillips, and Hoffman. The first order of business
to come before the committee was CSHB 255(CRA).
HB 255-HOME RULE COMMUNITIES
MR. PETER TORKELSON, staff to Representative Fred Dyson, stated the
goal of CSHB 255(CRA) is to allow small, unincorporated areas to
adopt a home rule charter and to allow existing second class cities
to adopt a home rule charter to let local governments adopt a more
flexible form of municipal government to address specific needs.
Currently, if a community has fewer than 400 people, the government
is prohibited from adopting a charter.
MR. TORKELSON explained that a home rule community entity was
created to ensure that CSHB 255(CRA) would be effective. Home rule
communities are not school districts nor are they required to file
a full financial audit. Currently, home rule cities are required
to zone and plot land. They would not be required to do so under
CSHB 255(CRA). He is unaware of any opposition to CSHB 255(CRA).
Number 067
MR. PAT POLAND, Director of the Municipal & Regional Assistance
Division for the Department of Community & Economic Development,
stated support for CSHB 255(CRA).
CHAIRMAN KELLY stated a proposed technical amendment will accompany
CSHB 255(CRA) to the Senate floor.
SENATOR MACKIE moved CSHB 255(CRA) and its accompanying amendment
from committee with individual recommendations. Without objection,
the motion carried.
HB 133-VOTER APPROVAL OF SERVICE AREA CHANGES
MS. PATTY SWENSON, staff to Representative Con Bunde, made the
following comments. SCS CSHB 133(STA) will strengthen local
control of service areas. Article 10, section 1, of Alaska's
constitution established a principle of maximum self-government. To
achieve maximum self-government, Article 10, section 5, provides
for the creation, alteration, and abolishment of service areas
subject to provision of law.
AS 29.35.450 codifies these constitutional provisions and
establishes a mechanism by which service areas are created,
altered, and abolished. A service area is one in which local
residents assess themselves to provide for a particular service.
Currently, there are over 250 service areas statewide.
SCS CSHB 133(STA) amends AS 29.35.450 to support local control by
prescribing a majority vote mechanism under three scenarios:
abolishment of a service area; abolishment and replacement of a
service area; and alteration of a service area or combining it with
another service area. SCS CSHB 133(STA) will settle the debate
about who is entitled to vote during the creation, alteration, or
abolishment of a service area.
REPRESENTATIVE CON BUNDE stated SCS CSHB 133(STA) allows for
smaller local government and to operate less expensive communities.
SENATOR MACKIE asked if there is any opposition to the bill.
REPRESENTATIVE BUNDE stated the Municipality of Anchorage (MOA)
opposes it because it limits the MOA's capabilities pertaining to
home rule.
CHAIRMAN KELLY asked if the bill will primarily pertain to road
service areas.
REPRESENTATIVE BUNDE stated it will apply mainly to road and fire
service areas.
SENATOR MACKIE asked if Fairbanks is concerned about the bill.
REPRESENTATIVE BUNDE stated yes, there are 180-190 limited road
service areas in Fairbanks. They would like to consolidate some of
those service areas and save administrative costs. This bill will
allow them consolidation but a variation in taxation.
MR. MIKE PRAX, Fairbanks North Star Borough Assembly, expressed
concern about trying to control the administrative expenses
generated by the diversity of services that people enjoy. Mr. Prax
stated support for SCS CSHB 133(STA).
MR. GERSHON COHEN, representing himself, stated Haines is the only
third class borough in Alaska. Mr. Cohen referred to a planning
and zoning issue that occurred in Haines two years ago which caused
the borough to change the planning and zoning service area
boundaries. As a result, 97 percent of the planning and zoning
service area was removed from the Mud Bay Land Use Service Area
(MBLUSA) and that removed control for planning and zoning. Mr.
Cohen stated support for SCS CSHB 133(STA).
MR. ROB GOLDBERG, Chairman of MBLUSA, stated the borough assembly
agreed to reduce the size of the service area and that
gerrymandered the borough's power. Next month, MBLUSA is facing
abolishment under a proposed ordinance, and the borough hasn't
given a reason for that. Mr. Goldberg stated support for SCS CSHB
133(STA).
CHAIRMAN KELLY asked if SCS CSHB 133(STA) authorizes planning and
zoning service areas.
MS. SWENSON stated she believes they are authorized.
CHAIRMAN KELLY asked if it was Mr. Goldberg's intention to set up a
planning and zoning service area.
MR. GOLDBERG stated yes. In a third class borough, the only way
citizens can get planning and zoning is through service areas and
the only power they have is to collect taxes for education. The
service area in Haines has been in place for 10 years.
CHAIRMAN KELLY stated this bill incorporates road service areas,
fire service areas and planning & zoning service areas.
SENATOR PHILLIPS added parks & recreation service areas.
MR. KEVIN RITCHIE, Alaska Municipal League (AML), stated the AML
focused mainly on section 3 which requires a vote within the old
and new service area. AML adopted a policy statement in November
that opposes legislation to mandate fragmented service area votes
in boroughs. Some boroughs now exercise this as a home rule power;
it is a decision that can be made locally. The people in that
community have the ability to work within that system to make
changes. The issue that could arise if a vote is mandated is that
if one service area exists with 150 people and a subdivision is
added, the vote must be affirmative in both old and new service
areas. AML believes voting is a choice that each municipality can
make. AML does not oppose the section allowing the municipality to
have differential rates within a service area. Mr. Ritchie stated
opposition for the bill but support for section 3.
MR. MIKE SCOTT, Mat-Su Borough Manager, stated SCS CSHB 133(STA)
implies the State is stepping in and stopping local control in an
area where there is an elected assembly. Every municipality has
the ability to put a petition together to appear on the local
ballot. SCS CSHB 133(STA) would limit local control in a second
class borough. Local assembly laws should not be undermined by a
mandatory State law. Mr. Scott stated opposition for SCS CSHB
133(STA).
MR. JIM SWING, Public Works Manager for the Mat-Su Borough, stated
the Mat-Su Borough has erosion control service areas, flood control
service areas, and water & sewer service areas. In Talkeetna,
water & sewer issues can only be served within the service area.
The borough has received requests for services from people adjacent
to the service area. Public works has no power outside the service
area. If SCS CSHB 133(STA) passes, it would require a vote of
people inside and outside that service area. If a borough is
serving people outside a service area, then the service area should
be expanded. Mr. Swing stated concern and opposition for SCS CSHB
133(STA).
Number 382
MR. OCIE ADAMS, representing himself, stated general support for
SCS CSHB 133(STA).
MR. JIM NORCROSS, representing himself, referred to the Mat-Su
Borough consolidation issue. Mr. Norcross asked Representative
Bunde to explain section 4(b).
REPRESENTATIVE BUNDE replied section 4(b) states that service areas
that want to maintain two different levels of service and
consolidate to save administrative costs can do so and maintain the
original level of taxation.
MR. NORCROSS asked if service area funds would be used to upgrade
services for the service area that was annexed.
REPRESENTATIVE BUNDE stated no, not without a vote of the people
who are effected.
CHAIRMAN KELLY asked Mr. Scott if the Mat-Su Borough had proposed
language for the bill.
MR. SCOTT stated yes. The borough has concerns about the tax cap,
home rule boroughs, and third class boroughs. He stated he would
speak with Mr. Grenn in Chairman Kelly's office.
Number 456
REPRESENTATIVE BUNDE stated no municipality likes to see its power
limited.
SB 304-MUNICIPAL DIVIDEND PROGRAM
MR. RITCHIE, AML, stated SB 304 provides permanent stable funding
for municipal revenue sharing, capital matching grants, and the
Village Public Safety Officer (VPSO) program. Mr. Ritchie referred
to graphs given to the committee. The reason for the change in the
municipal revenue sharing formula is that very few municipalities
know why they receive the money that they do. The allocation of
general funds to a municipality causes problems when the
legislature has to appropriate the money. With the new revenue
sharing formula everyone will understand why they are receiving
money and where it is being allocated. The new formula creates an
allocation for roads, similar to what currently exists. Every mile
of road maintained by a municipality would receive $2,000 per mile
and $10 per capita for its use volume.
SB 304 allocates funds for three different services in public
safety. If a municipality provides fire safety, the program would
get $20 per capita served, EMS would get $20 per capita served, and
police would get $20 per capita served. It maintains the existing
formula for hospitals and health facilities. It also provides a
base minimum funding for power services for municipalities and
allocates $45,000 for municipalities. SB 304 allows $10,000 for
unorganized communities; currently they receive $5,000.
The program reached the amount of $85.9 million for fiscal year
2001. The allocation formula transfers money from the excess
earnings of the PFD and is based on $150 multiplied by the number
of people who received dividends the previous year, allowing for a
population sensitive formula.
SB 304 uses the excess Permanent Fund earnings after full dividends
have been paid and after the fund has been fully inflation proofed.
Mr. Ritchie referred to graphs given to the committee. The impact
on the dividend would be negligible for the first five years,
during which time the public would receive, in addition to a PFD,
$150 in a local tax offset per person. This could be an additional
dividend program that could put more money into the pockets of
Alaskans.
CHAIRMAN KELLY explained the Alaska Permanent Fund Corporation
(APFC) has projected amounts for the dividend for the next 10 years
as follows:
2000 - approximately $1,960
2001 - approximately $1,980
2002 - approximately $1,980
2003 - approximately $1,900
2004 - approximately $1,840
2005 - approximately $1,880
2006 - approximately $1,950
2007 - approximately $2,020
The dividend will level off in the year 2007. SB 304 will make an
insignificant change to the growth of the dividend check as
Alaskans know it.
MR. RITCHIE agreed.
SENATOR PHILLIPS asked if SB 304 requires a vote of the people.
MR. RITCHIE answered no.
SENATOR PHILLIPS stated SB 304 will affect everyone so the public
should have the right to vote.
CHAIRMAN KELLY asked what the result will be on property tax owners
throughout the State.
MR. RITCHIE stated SB 304 will provide municipalities with a higher
level of support. Over time, SB 304 will stabilize revenue sharing
and property taxes. Mr. Ritchie referred to a poll taken by
Representative Jeanette James with significant support for SB 304.
SENATOR PHILLIPS stated he would not support SB 304 without an
advisory vote.
Tape 00-04, Side B
MR. DUANE UDLAND, Chief of the Anchorage Police Department, stated
a long-term ability for cities to plan a budget would be
beneficial. Mr. Udland stated support for SB 304.
MS. NADINE HARGESHEIMER, Fairbanks North Star Borough, stated
support for SB 304. SB 304 would create a stabilized funding
source that Fairbanks views as an asset. SB 304 would help all the
service areas around Fairbanks.
MR. LEN MALMQUIST, Fire Chief of Soldotna Fire Department, stated
support for SB 304. Three small volunteer fire departments
adjacent to the Soldotna Fire Department also cooperate, they have
no regular source of funding and SB 304 would provide stability for
them.
MR. SCOTT WALDEN, Assistant Fire Chief for the City of Kenai,
stated support for SB 304.
MR. ADAMS stated support for SB 304 and for a vote of the public.
CHAIRMAN KELLY asked how the funding would be split so both
homerule and municipalities receive funding.
MR. RITCHIE stated it would be divided by the population of those
service areas.
SENATOR PHILLIPS asked Mr. Scott if the Mat-Su Borough would
support a vote for SB 304.
MR. SCOTT stated if the legislature could maintain that the PFD
would stay intact, then there would be no problem with a vote of
the people.
Number 501
MS. LORRAINE DERR, Executive Director of the Alaska State Hospital
& Nursing Home Association, stated SB 304 would create a stabilized
funding base. Ms. Derr stated support for SB 304.
MR. CRAIG DUNCAN, City and Borough of Juneau (CBJ), stated support
for SB 304. CBJ is making budget reductions because of the
continued State shared municipal assistance reductions from last
year. CBJ is trying to make decisions on what budget to reduce.
CBJ doesn't want to see taxes increase, and is concerned that the
10 mill tax cap may pass. SB 304 would help fund education and
emergency services.
CHAIRMAN KELLY stated that because concerns about SB 304 have been
expressed, it will be held in committee.
There being no further business to come before the committee,
CHAIRMAN KELLY adjourned the meeting at 2:54 p.m.
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