Legislature(1993 - 1994)
02/08/1994 01:00 PM House CRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 393 - UNINCORPORATED COMMUNITY CAP PROJECT GRAN CHAIRMAN OLBERG brought forth HB 393. Number 581 REPRESENTATIVE MOSES, SPONSOR, testified, "HB 393 relates to the unincorporated community capital matching grant program. HB 393 amends AS 37.06.020, the eligibility requirements to participate in the unincorporated community capital matching grants program. Currently, only unincorporated communities outside of organized boroughs can participate directly in the program. Unincorporated communities within boroughs do not participate directly, and only receive a portion of the borough's allocation of the municipal capital matching grants program, if the borough sees fit. HB 393 will level the playing field for all unincorporated communities by allowing those outside of boroughs, and those inside of boroughs where 25 or more residents permanently reside, and where there is no roadway connection to other communities, to participate in the program currently administered from the Department of Community and Regional Affairs. The bill will take effect July 1, 1994. When the language to develop the Capital Matching Grants Programs was drafted, there was an oversight in recognizing that the Lake and Peninsula Borough, for instance, has 13 unincorporated communities that must share the pool of Municipal grant monies that the borough receives. I would appreciate prompt consideration for HB 393, so that the 24 unincorporated communities that will be made eligible to participate in the program can do so in FY '95. This tries to straighten out an inequity. What happens now, you penalize communities for becoming organized in a borough. JACK FARGNOLI, SENIOR POLICY ANALYST, OFFICE OF MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR stated, "Our position on the legislation is that we have no objection to this. We have discussed this with Lake and Peninsula Borough. While we don't have exactly the same view on whether or not it's unfair, we do understand where it's constituents are coming from insofar as whenever you draw a line someone's on one side of the line and someone's on the other side of the line. We do have one concern about it. Our point of view is that, as the legislation has been proposed, in its current form, it sets up two dynamics which are at odds with each other. One of which is the constitutional mandate that boroughs have the responsibility for planning their capital projects within their borough districts and the associated constitutional mandate to provide for the greatest level government with the fewest number of elements of local government. We feel that new unincorporated communities that are located within the boroughs grantees, would be at odds with that mandate. So we feel it would improve the legislation and be more in keeping with constitutional mandates, if the boroughs involved were required to have some approval over the capital projects that are being proposed by the new eligibles, if you will. This would allow the kind of coordination of capital project planning and development within boroughs which is the responsibility under the constitution of the boroughs." REPRESENTATIVE BUNDE said, "We'd like to encourage unorganized areas of the state to organize and take more local responsibility. Do you view that without this bill there's an impediment to organizing?" MR. FARGNOLI said, "Would a change in the legislation be enough to change a community's mind is the question really as it would be valuated by a community. There are lots of pluses and minuses in incorporating or staying unincorporated. In general, we don't feel it would be a large determinant in that decision. If this were a 300 million dollar program, whatever incentives were there or disincentives, would be proportionately larger. Certainly, at this current level, we don't think it would be a determining factor." Number 680 CHAIRMAN OLBERG clarified, "An organized city within a borough is already excluded and receives separate funding under this. On one level you can consider it as giving unincorporated cities and incorporated cities within the borough equal footing on a funding standpoint. The population of each of which is excluded from the grant for the borough itself." MR. FARGNOLI confirmed this, "Under Representative Moses' legislation, the proper populations are backed out so that there's no double counting of the populations." CHAIRMAN OLBERG said, "Borough oversight is a wonderful thing up to a point, but the moment you said that, `skimming' raced through my mind." MR. FARGNOLI said, "There are limitations in the existing law that would limit the administrative costs that can be taken by any pass through entity." REPRESENTATIVE BUNDE asked for a response from Representative Moses and Mr. Vernon on borough oversight. REPRESENTATIVE MOSES said, "I certainly don't have any problem with it, in fact I welcome it. There was no intent to circumvent the borough government. We welcome an amendment to take care of that." TAPE 94-6, SIDE B Number 000 MR. VERNON said, "Even under the present program the borough has taken the money that it's entitled to, which is a relatively small amount, a little over $39,000 to spread among 12 unincorporated communities, which gives each of them around $3300 as I recall. In any event, we would concur with the idea of the borough becoming a coordinator. In fact, with regard to the small amount of money which we have received under the fiscal '94 provision, that's exactly what we're doing." REPRESENTATIVE DAVIES asked, "How many such unincorporated communities are affected by this legislation in Lake and Pen and then statewide?" MR. FARGNOLI said, "We have a rough estimate so far from the Department of Community and Regional Affairs. We're looking at about 23 or 24 communities, approximately 10 of which are within Lake and Pen." Number 047 REPRESENTATIVE DAVIES said, "I would be interested in a little bit of sensitivity analysis to the number 25. How would those numbers change if we changed the limiting number of 25 persons." Number 055 MR. FARGNOLI said, "We had initially started out looking when we were exploring this topic with Lake and Peninsula Borough folks, of a potential population of about 78 eligibles and that was on a rather inclusive 25 people or more living as a coherent social unit and that list of criteria that are in the proposed legislation, the one that brought that down to 24, would be whether they're roadless or not." Number 076 REPRESENTATIVE SANDERS asked, "How many communities are currently participating in this?" MR. FARGNOLI replied, "Right now, we have about 67 in the '94 version of the program in the unincorporated community side and I think that becomes 68 in fiscal '95. So it would be 24 added to that." REPRESENTATIVE SANDERS continued, "If there's no fiscal note, that means you're just going to divide the pot out among more communities?" MR. FARGNOLI said, "The Department of Administration won't be affected by this. They would get adjusted population numbers and that would be the only difference they would see programatically. The DCRA feels... that the additional grant administration load that would come with 24 new eligible grantees could be done within their existing staffing. As far as the funding, that's a question that would be before the legislature as a whole and the governor. The question really would begin at what's the overall funding targets set by the governor and proposed and appropriated by the legislature for the municipal and the unincorporated programs. Would they look at those as one pot of money to be split two ways or two separate pots. Another option is to take money from the municipal side and move $600,000 over or add $600,000 to the unincorporated or keep the unincorporated at it's current and let everyone's allocation drop." REPRESENTATIVE DAVIES asked why there is a reference to the previous fiscal year in HB 393. MR. FARGNOLI said, "I think the emphasis on the previous fiscal year is that in the other parts of the existing statute, the eligibility...is driven by their standing as of the previous fiscal year." Number 222 LAMAR COTTEN, LOBBYIST FOR LAKE PENINSULA BOROUGH, testified in support of HB 393, saying, "Lake and Pen is like many other boroughs in rural Alaska where they work directly and are a chief source of funding for capital projects. It's not out of the ordinary for them to participate or provide oversight as it stands now for such projects. Typically, a lot of those projects relate back to the services that the borough, either directly or indirectly, provide. So I think the intent of oversight by the borough is compatible with how Lake and Pen and Aleutians East and other rural boroughs have operated. The constitution talks about limited number of governments in rural Alaska...I think it's unfair to some small communities that have reviewed the issue of incorporating but...shouldn't be forced into it simply to receive funds such as this program. So instead of adding another level of government...the basic function of government is being provided by one entity and simply adding another hat to a small group of people sometimes, I don't think really serves a greater purpose of providing services. With respect to the issue of population, I think the way this is written is good. All boroughs or communities are, for some reason or another, forced to go through this process of identifying who actually does live in a community for various grants. So I think they do update their population base every twelve months." REPRESENTATIVE DAVIES cautioned that the language regarding population data is vague in HB 393 and suggested that it specify that DCRA should arbitrate the population of communities. MR. COTTEN agreed and said, "They currently are the ones that review and sign off on the populations for the other programs." Number 294 KAREN BRAND, STAFF FOR REPRESENTATIVE MOSES, stated "The reason we put that qualifier in there is that without it, we were coming up with several definitions of communities that would now qualify. There were groups of residents, 25 or more, that would qualify as being a separate community and that was not the intent." CHAIRMAN OLBERG said, "But my little bity communities in organized boroughs are on the road system. Where does that leave them?" MS. BRAND said, "That's the other side of the hat. We had to come up with a qualifier and after many deliberations with the legal drafter of trying to pare down, it hurt some of our communities also, it omitted them." REPRESENTATIVE BUNDE reminded the committee, "There was some discussion of an amendment... that would keep the borough in the loop." CHAIRMAN OLBERG said, "My staff and Representative Moses' staff and the department may draft something in the way of a committee substitute." REPRESENTATIVE DAVIES said, "I was wondering if there might be a qualifier that depended on distance along the road." There was some discussion about possible qualifying language. CHAIRMAN OLBERG said, "I think this one needs a little reflection and work," and announced adjournment at 2:11 p.m.
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