Legislature(2003 - 2004)
05/06/2003 09:01 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 79
"An Act extending the termination date of the Alaska regional
economic assistance program; and providing for an effective
date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained that this bill sponsored by the House
Community and Regional Affairs Committee would reauthorize "the
Alaska Regional Economical Assistance Program, better known as
ARDOR [Alaska Regional Development Organization], for five years
until July 1, 2008. He announced he prepared a committee substitute
that would change the extension date to one year.
REPRESENTATIVE CARL MORGAN, Chair, House Community and Regional
Affairs Committee, read talking points into the record as follows.
The Alaska Regional Development Organizations (ARDOR) Program
is the State's contribution to regional initiatives for
developing Alaska's economy.
There are currently 13 ARDORS statewide.
The Legislature first created the ARDOR Program in 1988.
The ARDOR Program provides a network of organizations to plan
and support economic development at the regional level.
Board members participation reflects a local commitment.
Each ARDOR, with 15-20 members, constitutes 150 plus local,
civic minded individuals who volunteer their time to achieve a
stronger economic base in their region.
The ARDOR Program is providing a return for the State's
investment.
The State provides $620,000 in grant funds. The ARDORs [have]
used these grant funds to leverage over $3 million in other
funds.
House Bill 79 extends this successful program to July 1, 2008.
Representative Morgan noted each ARDOR receives over $47,000 in
State funding.
Co-Chair Wilken spoke to a proposed committee substitute to extend
the commission for one year instead of the five years provided in
the bill.
Co-Chair Green moved for adoption of HB 79, 23-LS0493\D as a
working draft.
Co-Chair Wilken objected to speak to the changes proposed in the
committee substitute. He pointed out the $620,000 cost to the State
to fund this program. He indicated the 2003 annual report submitted
to the Legislature by ARDOR [copy not provided], is unclear whether
each regional organization is successful. He noted the Southeast
Regional Conference demonstrates success and an ability to measure
that success; however, he commented that others are "a little lax
as to where and what they're spending their money on and whether
indeed there's any results."
Co-Chair Wilken referenced a letter dated April 11, 2003 from
himself to Commissioner Blatchford of the Department of Community
and Economic Development [copy on file], suggesting elimination of
the ARDOR Program in FY 05. However, rather than eliminating the
program, Co-Chair Wilken informed the Committee of his intention to
review the matter during the legislative interim to ensure funds
allocated to the program are used wisely.
Co-Chair Wilken next directed attention to a letter to the House
Community and Regional Affairs Committee from the Alaska Municipal
League, dated February 20, 2003 [copy on file]. He informed this
letter also requests implementation of performance measures.
Co-Chair Wilken surmised the Department is agreeable to this
intent. Therefore, he suggested extending the program only one year
to allow for review of the findings the following legislative
session. He assured that if no problems are identified, the program
could be extended further.
Senator Olson requested the opinion of sponsor regarding the
proposed committee substitute.
Representative Morgan qualified that he had not reviewed the
proposed committee substitute and that he had no control over the
will of the Senate Finance Committee.
Senator Olson shared the co-chair's concerns about accountability;
however he attributed this to the maturing process of the
participants. He questioned the "wisdom" of a one-year termination
date.
Co-Chair Wilken reiterated this change would focus effort on
"developing the worth of the $650,000 expenditure." He suggested
all or a portion of these funds might be better spent elsewhere.
Regardless, he said the expenditures should be reviewed and the
findings "embodied" in the FY 05 budget.
Senator Olson asked the amount of federal funding involved in the
program.
Representative Morgan replied that the State appropriation garners
over $13 million annually.
There was no objection and the committee substitute, Version "D",
was ADOPTED as a working draft.
KEVIN PEARSON, Anchorage Economic Development Corporation, and
ARDOR Director, testified via teleconference from Anchorage in
favor of extending the ARDOR Program. Although the ARDOR Program
provides a small percentage of the funding for economic development
activities in Anchorage, he emphasized the sole reliance on these
funds by outlying communities. He was also concerned with the
"message" an extension of only one-year would portray to investors.
Mr. Pearson charged that the onus is on the Legislature as to what
information is needed to measure the program's success and justify
the expenditure. He furthered that the program is successful and
information is available to demonstrate this.
SUE COGSWELL, Price William Sound Economic Development District,
testified via teleconference from Anchorage about the participation
in the ARDOR program since 1991 and as an economic development
district since 2001. She told of projects to build a seafood
processing plant in Valdez, an economic development summit held in
Cordova and the hope for additional economic growth.
WANETTA AYERS, Executive Director, Southwest Alaska Municipal
Conference (SWAMC), testified via teleconference from Anchorage in
favor of reauthorization of the ARDOR Program on behalf of the 54
communities and 131 members of the Conference. She informed that
the Conference was formed in 1986 and earned ARDOR designation in
1989. She reported that State funding comprises 22 to 25 percent of
the Conference's budget during the past several years; federal
funding comprises approximately 25 percent; and over 50 percent of
the funding is derived from earned income. She noted that as a
designated economic development district, SWAMC saves the
communities of Southwestern Alaska "hundreds of thousands of
dollars, if not millions" annually by reducing the local match
requirement for federally funded projects. She furthered that the
SWAMC allows area communities to be more efficient and in a "better
position to take advantage of market opportunities".
Ms. Ayers told the Committee that in FY 02, SWAMC was selected by
the US Congress to administer a $30 million stellar sea lion
mitigation fund. She noted that little direction was provided in
the enabling legislation, although review of other mitigation
programs, the SWAMC board established three goals: achieve the
soonest possible distribution of fund to those directly impacted
but federal fisheries closures and restrictions, to minimize
administrative costs to one percent or less, and develop a
negotiated settlement process that has widespread support from the
communities, businesses and individuals most impacted. She reported
that all three objectives were achieved. She stated this is one
example of accomplishments ARDOR groups could realize.
Ms. Ayers opined that a one-year extension rather than a four-year
extension of the program would be "an indication of the State's
lack of commitment to economic development." She stressed the need
for an on-going commitment.
Co-Chair Wilken assured that if review of the ARDOR Program
determines that the expenditures are justifiable, he would support
increased funding for the program.
JANET DAVISON, Community Research Center, Fairbanks North Star
Borough, testified via teleconference from Fairbanks about her job
duties in monitoring economic development activities in the Borough
and measuring "gains and losses" in the community. She suggested
the Entrepreneurial Statement report she produces is a "starting
place" for measuring the success of economic development efforts.
She stressed that the funds allow for economic development efforts
is rural communities. She spoke to the benefits of the ARDOR
Program and the economic development opportunities it continues to
provide in both urban and rural communities.
KATHRYN DODGE, Economic Development Coordinator, Fairbanks North
Star Borough, testified via teleconference from Fairbanks that
economic development is a long-term commitment and does not
demonstrate results overnight. She remarked that a five-year
extension of the ARDOR Program would send a message of commitment.
She expressed that the Fairbanks ARDOR Program "compels" the
community to focus on economic development and encourages the
development of public and private partnerships in the "pursuit of
future economic development for the Borough and for the State."
Ms. Dodge described the local program's development of a
comprehensive economic development strategy and the subsequent
increased momentum and prioritization of projects. She stated the
local ARDOR Program obtained $331,000 in economic development
grants secured using the $44,000 State appropriation during the
past year. She gave examples of expenditures of these funds,
including assistance commercial fish processors in the region,
hosting public safety regional training ranges and development
efforts to create a cold weather testing industry.
DEB HICKOK, President and Chief Executive Officer, Fairbanks
Convention and Visitors Borough, and member, Economic Development
Commission of the Fairbanks North Star Borough, testified via
teleconference from Fairbanks that she understood the hard budget
decisions faced by the Committee, but stressed that economic
development is important. She spoke to the opportunity for "grass
roots" or "bottom up" economic development. She attested to the
success of the ARDOR Program in Fairbanks and the resulting
"heightened climate of economic development" since inception of the
program. She described the history of the organization, now
operating under the direction of professionals and receiving a
larger percentage of funding from the Borough. She disagreed with
Co-Chair Wilken's proposal for one-year extension, as this is too
short a goal for measurement.
JIM DODSON, Chair, Fairbanks Economic Development Corporation,
testified via teleconference from Fairbanks that the Corporation is
a recipient of funding from the Fairbanks North Star Borough. He
encouraged support of original version of the bill. He spoke to
measurable results in economic development and stressed the need
for economic development opportunities in the State. He pointed
out that additional funds would be needed in the future. He
supported a five-year extension of the ARDOR Program.
Senator Olson asked the potential increase or decrease of federal
funds received if the Program were extended one year rather than
five.
Co-Chair Wilken suspected no impact.
LOREN GERHARD, Southeast Conference testified in Juneau, that the
$47,000 appropriation to the ARDOR Program provides one-third of
unencumbered funding for the Conference, which is leveraged
approximately ten-to-one to receive federal funds and other grant
program funding. He stated that all of the funds are used for
improving economic opportunities in the Southeastern region.
Outside Juneau, he pointed out, the region is suffering
economically, and remarked that the ARDOR Program is a cost-
effective way to ensure that regions are addressing economic
development specific to each region.
Co-Chair Wilken opined that the report prepared by the Southeast
Conference is superior to the reports submitted by the other ARDOR
Programs. He expressed that this report would be used as an example
in efforts to improve the Program.
Senator Olson asked the impact a shorter termination date would
have on the Southeast Conference.
Mr. Gerhard replied that it would not affect the Program and the
receipt of federal funds, although it could effect planning for
future projects. He emphasized the benefits of the ability to
utilize the State appropriation as unencumbered funds to leverage
federal funding.
Senator Taylor offered a motion to report HB 79, 23-LS0493\D from
Committee with individual recommendations and accompanying fiscal
note.
Without objection, SCS HB 79 (FIN) with the $650,000 fiscal note #2
from the Department of Community and Economic Development, MOVED
from Committee.
| Document Name | Date/Time | Subjects |
|---|