Legislature(2007 - 2008)BELTZ 211
02/27/2007 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Overview: Local Boundary Commission | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 27, 2007
3:31 p.m.
MEMBERS PRESENT
Senator Donny Olson, Chair
Senator Joe Thomas
Senator Gary Stevens
MEMBERS ABSENT
Senator Albert Kookesh, Vice Chair
Senator Thomas Wagoner
COMMITTEE CALENDAR
Overview: Local Boundary Commission
PREVIOUS COMMITTEE ACTION
No action to report.
WITNESS REGISTER
DARROLL HARGRAVES, Chair
Local Boundary Commission
Wasilla, Alaska
POSITION STATEMENT: Presented an overview of the Local Boundary
Commission (LBC).
DAN BOCKHORST
Division of Community Advocacy
Department of Commerce, Community & Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding the Local
Boundary Commission.
ACTION NARRATIVE
CHAIR DONNY OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:31:46 PM.
Senators Olson and Thomas were present at the call to order.
Senator Wilken was also present.
3:32:27 PM
^Overview: Local Boundary Commission
CHAIR OLSON announced an overview of the Local Boundary
Commission.
DARROLL HARGRAVES, Chair, Local Boundary Commission (LBC), said
he serves on the commission at large and has provided the LBC
report for the current legislative session.
3:34:28 PM
MR. HARGRAVES said the report has three sections: an overview of
the commission; a summary of municipal boundary activity; and a
discussion of public policy issues. Of 100 state boards and
commissions, the LBC is one of two executive branch boards named
in our constitution, he said. The framers wanted to insure that
boundaries be dealt with fairly and from a statewide
perspective. Local governments are critical to the effective
delivery of public services. The LBC judges proposals for
incorporation; reclassifications; annexations; attachments;
dissolutions; and merger and consolidation of cities and
boroughs. Anytime a city wants to change its status in any way,
the LBC is likely to get involved, he said. Other duties include
an obligation to make studies of local government boundary
problems and adopt regulations for establishing standards and
procedures for boundary actions. He introduced the other members
of the LBC, and all serve at the pleasure of the governor.
3:36:58 PM
MR. HARGRAVES said the commissioners are not compensated for
their service. The Department of Commerce, Community & Economic
Development (DCCED) provides staff support. The report outlines
various municipal boundary activities across Alaska. For 2006,
there were activities related to city incorporation in six
communities. The LBC acted on one formal petition to incorporate
a second-class city on Prince of Wales Island in the unorganized
borough. About ten city governments have inquired about possible
annexations. There have been city dissolutions, but none were
actually accomplished last year. "Some years ago we saw interest
and a problem with some of the second-class cities, and there
was considerable activity in the dissolution of some of those."
At the present time, there is no information that any cities are
in serious trouble or contemplating dissolution, he stated.
3:39:43 PM
CHAIR OLSON asked how many communities have asked for
dissolution over the past year compared with five years ago.
MR. HARGRAVES said none in the past year, and there were several
prior to five years ago.
CHAIR OLSON asked how many communities are delinquent.
3:40:10 PM
DAN BOCKHORST, Division of Community Advocacy, Department of
Commerce, Community & Economic Development (DCCED), said the LBC
is his principal responsibility, and there are no current active
considerations of dissolution that he is aware of. He has seen
some reports that have suggested that there are a number of
communities that are experiencing financial difficulties. He
said he is not prepared to discuss that today.
CHAIR OLSON asked how long a community remains delinquent before
there is some type of assistance or penalty.
MR. BOCKHORST said there is a statutory obligation for the DCCED
to investigate communities that are inactive, but none are being
investigated in that context. There is substantial effort in
other parts of the DCCED to provide assistance to local
government, but the LBC is not involved in those activities.
3:42:22 PM
CHAIR OLSON said people have left Ivanof Bay.
MR. HARGRAVES said apparently they have not made it known to the
LBC. Because of lack of dissolutions, he assumes that things are
holding pretty well. There have been 16 areas this last year
that has had some level of activity with regards to borough
incorporations. Three petitions were pending before the LBC last
year. He said there have been borough annexations to deal with,
and one is pending. There has been interest in borough
detachments by six boroughs in 2006, but no petitions have been
filed. There have been activities with consolidations, and in
one case, the LBC acted on a petition for consolidation of the
City of Ketchikan and the Ketchikan Gateway Borough, and that
took a lot of energy. He said there has been major activity in
revising the rules and regulations of the LBC, and that has been
a priority, including extensive rewrites and hearings. He
reported that the LBC will travel for hearings around the state
the following day, and he encouraged the committee to get the
revisions and join the LBC for the hearings.
3:46:07 PM
MR. HARGRAVES said there will be meetings in Nome, Dillingham,
Bethel, Cordova, Craig, and Juneau. He said he is pleased that
legislation is being discussed this session. There are five
issues of importance to the LBC, and they relate to increasing
difficulties in rendering borough boundary decisions. He said
revisions will help, but it is a huge job for the LBC and the
petitioners when the LBC judge borough boundary decisions. "The
general lack of incentives for borough incorporation…we propose,
now for the third year, that we look heartily toward
incentives." There could be penalties as well. He noted the
absence of standards and methods for establishment of
unorganized boroughs. He suggested providing funding for borough
feasibility studies.
3:48:40 PM
MR. HARGRAVES said the constitution calls for all of Alaska to
be in boroughs, organized or unorganized, according to standards
and methods set in law. It also calls for a minimum number of
boroughs--the smallest number possible. It also requires that
each borough embrace an area and population with common
interest. In 1963, there was only one tiny borough formed in
Alaska. That legislature, with the endorsement of Governor Egan,
mandated that eight specific regions of the state form boroughs.
At the time, the eight regions encompassed about 80 percent of
Alaskans. Today 84 percent of all Alaskans reside in those
boroughs that were mandated. It is noteworthy that most members
of the Senate Community and Regional Affairs Committee live in
boroughs that weren't mandated by the 1963 legislature, he said.
3:51:08 PM
MR. HARGRAVES said after 1963 the state returned to the policy
of voluntary borough incorporation. The North Slope Borough
stepped forward to organize. There is a common misperception
that unorganized areas cannot afford to operate boroughs. There
have been studies that indicate that the perception is accurate
for a few areas, but it is not accurate for many other areas.
There are hot spots in Alaska where the wealth per capita
exceeds what is in many organized boroughs, so with the right
incentives and the right approach, "perhaps we could see people
need and want the independence [and] the local control that
would come with the organization of incorporation."
3:52:52 PM
MR. HARGRAVES said last year the legislature provided $237,500
for borough studies in four regions; however, there is no source
of funding for new studies. The LBC urges the legislature to
fund such studies. He said the report discusses compensation. It
is a difficult request, but the time put into the LBC is beyond
reasonable for a volunteer. The growing number and complexity of
proposals requires devoting more and more time. One proceeding
alone required about 350 hours for one member, which is nearly
nine 40-hour work weeks. He is not proposing salaries, but other
boards get a stipend that lets the members know that their work
is appreciated. He said he is not saying there will be better
commissioners, but some measure of compensation is deserved.
3:55:57 PM
MR. BOCKHORST said Ivanof Bay is an unincorporated community in
the Lake and Peninsula Borough, so there is no issue before the
LBC for dissolution, because there is no city government.
SENATOR THOMAS asked about the eight mandatory boroughs.
MR. HARGRAVES said the 1963 Act incorporated eight.
MR. BOCKHORST said seven formed after that, so there are 16. He
noted that 84 percent of Alaskans live in the eight mandated
boroughs, and four percent live in the eight boroughs that were
formed voluntarily.
SENATOR THOMAS surmised that 16 percent of Alaskans live in the
remaining unincorporated areas.
MR. BOCKHORST said 12 percent.
3:58:50 PM
GEORGIANNA ZIMMERLE, Commissioner, Local Boundary Commission,
Ketchikan, said she stands ready to "assist you with what we
presented to you to try and get resolutions to some of our
problems and some of the state's problems."
4:00:37 PM
SENATOR STEVENS said he appreciates the work of the LBC, and he
asked about potential new boroughs. He asked about two or three
mining areas considering formation.
MR. BOCKHORST said there are two pending petitions. One is to
create a unified borough government in the Delta/Greely regional
educational attendance area, headquartered in Delta Junction.
The LBC will conduct a public hearing in about two weeks. There
is also a petition about a Wrangell-area borough, and there is
one for annexation of territory to the existing Ketchikan
borough. There are formal studies ongoing in the Kuspuk regional
educational attendance area, and there is a borough feasibility
study for the Chatham/Glacier Bay region. There is a study
funded by the legislature of the fiscal viability of detaching
the Eagle River/Chugiak area from Anchorage. He noted a nearly-
complete study for forming a borough in the Yukon Flats region,
and Petersburg is in final efforts for a petition to form a
borough, which might be filed in two or three months.
4:03:50 PM
MR. HARGRAVES noted that the incentives could be cash or lands
with timber. But one thing that stimulates people the most is
starting some kind of resource development so that local people
can protect the area or have some local control.
SENATOR WILKEN asked for an update of the Donlin Mine area.
4:04:46 PM
MR. BOCKHORST said the prospective Donlin Creek Development is
in the Kuspuk borough boundary. The borough feasibility study is
nearing completion and was funded by the legislature last year
at a cost of $60,000. He added that the LBC approved a Skagway
borough which involved dissolution of the city.
MR. HARGRAVES said commissioners and staff have expertise and
should be considered a resource for any developing legislation.
4:07:06 PM
TIM BOURCY, Mayor, City of Skagway, said he has a tremendous
amount of experience in what it takes to form a borough, and it
is extremely expensive and time-consuming. It was not always a
favorable process, but he stands behind the concept of
organizing; it is important to the future of the state. There
are problems with the process, he stated. There are 18 standards
to qualify for a borough, and they are big hoops. A majority of
them are appropriate, but the major problem "is that there is
kind of an idea of what a borough should be, and that idea
is…being laid on top of the state." There are numerous areas in
the state that want to form boroughs, but they can't because of
some of the regulations, including the model-borough boundaries
that are put there as guidelines, "but it is a lot more than
that when it's actually applied on the ground. I think if the
legislature relaxed the way they look at it and allowed the
state to form naturally, these areas would organize. Southeast
would organize fairly rapidly," he said, including Wrangell,
Petersburg, Kake, and Angoon. The process lasted more than six
years for the City of Skagway, he noted.
4:10:07 PM
MR. BOURCY said he has heard from many people who watched what
Skagway had to go though, and a lot are asking themselves, "why
would we bother with what you guys have gone through; why would
we bother to spend the time and the energy just to get kicked in
the face?" He said he doesn't have an answer for them.
Incentives are needed. It cost Skagway over $200,000. He said
last year he was in Juneau talking about the administrative
borough, "and some of these incentives where you didn't even
have to pay for government. Well, that's not what we want. We
want governments to step forward; we want them to be functional;
we want them to provide services." That is the ultimate goal, he
stated. The idea of the borough boundaries is old. "The U.S.S.R.
no longer exists, the Berlin wall is gone. Countries have
changed." He noted that the LBC has rewritten regulations of
over 180 pages, and he doesn't think that is the right
direction. "It's just adding more layers, more regulations, and
making it more difficult," he opined.
4:12:13 PM
MR. BOURCY said an alternative would be to write legislation and
organize the state, "and get it done." There are areas in the
state that will never have the tax base or resources to form,
but there is the other 90 percent of the state that is quite
capable of it. Given the opportunity and incentives, they would
form. He said he doesn't envy the commission--they deserve to be
compensated in some manner for the large amount of work they do.
4:13:37 PM
MR. BOURCY said he has been mayor for six years.
SENATOR STEVENS asked what the hurdles were and what the
incentives were.
MR. BOURCY said there are incentives in statute, which include
money for schools and for writing the charter. But Skagway
declined those because those incentives were used as
disincentives-as a reason not to allow the Skagway petition to
move forward because it was going to cost the state money.
Skagway has the ability to pay for its school, and it didn't
want to walk away from that responsibility. Other than that,
there is no incentive--it is a cost. The boundary of Skagway
will be what abuts the Haines Borough, and it happens to be the
boundaries of the city, including Dyea, he said.
4:15:36 PM
SENATOR WILKEN asked for a list of what should be changed.
MR. BOURCY said he has been working on it and making comments.
4:16:27 PM
CHAIR OLSON asked about compensation.
MR. HARGRAVES said he doesn't want salaries, just a stipend per
meeting, similar to other boards that receive compensation.
Currently, travel expenses are covered, so a stipend on top of
that to recognize their work would be appreciated.
CHAIR OLSON asked about other state boundary commissions.
MR. HARGRAVES said most states have some kind of planning
commissions, but most lands are all organized into counties.
CHAIR OLSON asked if others are compensated.
MR. HARGRAVES said some are full-time professionals.
CHAIR OLSON asked if the LBC has had a recent audit.
MR. HARGRAVES said any audit would be done within the
department. There are no contained funds for travel, he added.
4:20:57 PM
CHAIR OLSON asked about the time and financial expense of the
organizing process.
MR. HARGRAVES said some areas could get a grant from the
legislature, and he noted that there have been some specific
appropriations for some areas to do their planning. Some
communities have gotten grants from other sources, even private
grants. The communities need to know that "after they do get
incorporated, they've got some money coming by statute."
CHAIR OLSON said the incentives are all after the fact.
MR. HARGRAVES said he has been on the record encouraging direct
grants for communities that have a high level of interest.
CHAIR OLSON asked if he would be in favor of incentives being
given before the actual incorporation.
4:22:37 PM
MR. HARGRAVES said, "I am not sure it's the same incentive, but
an incentive of a grant to help them with their organization
would be appropriate." A lot of the work at the local level is
to try to get the residents geared up. By the time they come to
the LBC, they have made a considerable effort, he stated.
4:23:20 PM
CHAIR OLSON asked "what was bought" with the $250,000 spent for
borough studies last year.
MR. BOCKHORST said the LBC took a hands-off position with regard
to the administration of those programs; it was assigned to
others in the DCCED. The approach was to solicit proposals from
private contractors to conduct the studies, which are ongoing
and nearing completion. He has a copy of the contracts and the
requests for proposals. There is a divide that exists between
conducting the study and taking the next step to petition for
incorporation, he explained. The study for the Kuspuk region is
nearing completion, and there is interest in taking the next
step. He doesn't know if the Chatham/Glacier Bay area will
pursue incorporation of the large region, but there is interest
in forming smaller boroughs. The third area under study was the
viability of detaching Eagle River, and that is not completed.
4:26:07 PM
MR. BOCKHORST said the department granted $30,000 to a group in
the Yukon Flats region to do a borough feasibility study.
CHAIR OLSON said boroughs have value by providing services, and
he asked the LBC view of tribal governments, especially since
they provide public safety, roads, and erosion control.
MR. HARGRAVES said when a petition comes to the LBC all the
players have been involved. There is no LBC position. There have
been discussions about natural resources as incentives, and
another might be the outsourcing of state services to the local
boroughs, like jails, clinics, or Head Start, for example.
4:28:27 PM
SENATOR STEVENS said 88 percent of the population is in
boroughs, but there are many areas that are decades from being
ready for a borough government. If the previously-mentioned
pending areas were included, that would be a high percentage of
the population. Not everyone should be in a borough, because
some are just too rural to form a government.
SENATOR WILKEN suggested compensation of $150 per day. In Senate
Finance there was a bill that looked at the board stipend for
Alaska Housing. He thought that bill could be resurrected. If
there is a commission that deserves some sort of stipend, the
LBC does, because it is the most difficult and underappreciated
board in state government. It is important enough to be written
into the constitution with the vision that local government is
the best government. Most people are worried about what is
around the corner, and the LBC is looking at the next generation
and beyond. The issues carry a lot of angst about change. Alaska
is the only state with unorganized areas. Local government
works, and it is the bedrock of America's system.
4:32:17 PM
SENATOR WILKEN said the commission works hard, and he noted the
service of Tony Nakazawa and Robert Hicks. The state is at a
spot where it can become a bunch of boroughs without bringing
the surrounding areas into the discussion. The state is headed
toward Donlin Creek and perhaps Delta, "where we carve out
little enclaves of wealth, and those little wealthy areas are
very happy because they'll have a big tax base; they'll provide
very little, if anything, of local support." The people that
aren't considered will look back and ask what happened. Donlin
Creek is coming at us, he said. "There's going to be a group
that wants Donlin Creek to be this sweet little borough and
without regard" for others. He warned against allowing those
"little pockets of wealth." He said the state has to be careful,
"and we've taken the first step with the current situation of
starting that, and that is very distressing to me." Delta is
close to that with regards to the gas line, and the areas left
out may never have the resources for self governance.
4:35:28 PM
SENATOR WILKEN called it the Balkanization of Alaska. The LBC's
job is terribly difficult, he concluded.
CHAIR OLSON said there are parts of Alaska that want to
organize. The Balkanization is interesting; you don't want
someone from the Soviet Union dictating to them what they should
do. He said the bulk of what he hears from areas that are not
organized is that they are taken into consideration and not
overrun by the U.S.S.R-type people that were so dominant in that
Balkan area prior to them coming together. He doesn't want it to
turn into an us-versus-them thing.
The meeting was adjourned at 4:37:53 PM.
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