Legislature(1999 - 2000)
04/21/1999 08:07 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 147
"An Act relating to local contributions under the
village safe water program; and providing for an
effective date."
Senator Dave Donley spoke to the bill. This was a Senate
Finance Committee bill that applied the same guidelines for
the Municipal Matching Grants program to the Village Safe
Water program.
Co-Chair John Torgerson referred to the text in Section 2
that determined the local municipality asking if that was
currently in statute. Senator Dave Donley answered that
used the same standards as were used in the Municipal
Matching Grants program.
Co-Chair John Torgerson noted the committee did receive a
$304,000 fiscal note from the department to implement the
legislation. The costs would mainly cover the tests
dictated in the bill on how to determine the required local
effort.
DAN EASTON, Director, Facilities Construction, Department
of Environmental Conservation testified in opposition to
the bill. He had seven concerns to bring before the
committee.
He began with saying there was nothing wrong with the idea
of local communities contributing to the projects. That
was done currently in that they were asked to contribute
based on what they had. This bill would create a "one size
fits all," criteria and not all communities would be able
to meet the requirement. The department was particularly
concerned that some of the communities with more severe
health and sanitation problems would be the ones that would
have the most trouble meeting the standard match
requirement.
He stated the program would lose federal fund if this bill
were implemented.
Tape: SFC - 99 #102, Side B 9:07 AM
Of the 71 projects waiting to begin on July 1 if the
funding was approved. Of those, 44 projects could be
considered new projects and would be subject to the match
requirement. The communities did not currently have any
idea that they would have to meet a match requirement.
While the Environmental Protection Agency funding could
wait for communities to collect match funding, the US
Department of Agriculture funding could not wait. Alaska
was in competition with other states for those funds.
Senator Dave Donley wondered if the simple fix would be to
change the effective date to July 1, 2000. Dan Easton
replied that the department would consider that a vast
improvement.
Senator Randy Phillips asked if the department would still
oppose the bill.
Dan Easton listed the third concern was that the match
calculations were complex. He recommended that an engineer
reviews and simplifies the calculations. He said the
department oversaw other match programs that were more
straightforward. The Municipal Water, Sewer and Solid Waste
Matching Grant (AS 46.03.) program in statute was one of
those simpler match programs. This program was for larger
communities.
Co-Chair John Torgerson asked if the recommendation was to
adopt the criteria for that program into this bill. Dan
Easton suggested looking at those statutes and regulations
as a guide for a simpler way to calculate matching
requirements.
The fourth concern was the proposed thirty-percent cap
would actually exceed the match requirement in the
Municipal Water, Sewer and Solid Waste Matching Grant
program. The smaller communities served by this program
could actually be required to provide a larger match than
larger communities. Co-Chair John Torgerson assured him the
committee would look at the formula.
The fifth concern was that the proposed method for which
the match requirements were calculated required an
evaluation assessment for first and second class cities.
Those assessments were not available from any communities,
according to the state assessor, and they would have to be
done. It was not a matter of compiling data at hand. There
was more to it than that.
He continued with the sixth concern. The legislation would
increase operating costs for the program. He noted the
fiscal note. The changes would complicate the accounting
process. Not only would the department have to track state
and federal funds, it would also have to track local funds.
The department would also have to place values on the in-
kind contributions. He felt it was a good thing that the
state allowed such contributions done as part of the local
match. However, the worth would have to be determined.
Finally, this would require the department to do an audit
of every project to track local funds. This was not
normally done.
Co-Chair John Torgerson asked how would this effect the
next phases of ongoing projects. Dan Easton interpreted
the bill, as those projects under current construction
would be exempt. However, that was a broad stipulation. If
the original project was to build a road to a dump, what
happens to the status of the project when the dump needed
to be constructed? Would that be the same project?
Co-Chair John Torgerson repeated the question and wanted to
know if those projects would proceed with no match. He
asked how many current projects there were. Dan Easton
answered 140. Co-Chair John Torgerson asked what percent
would be as described as road/dump type projects. Dan
Easton responded fifty percent.
Dan Easton gave another example of a project to put water
pipe into a certain area of a town. Phase two would put the
pipes into another area.
Co-Chair John Torgerson stated that the committee then
needed to better define the on-going projects.
Senator Al Adams referred to the formula on page two and
wanted to know if the state assessor was going to testify
on the assessment. He noted that many of the affected
communities were in his district that had never been
assessed. He wanted someone to walk through the process and
explain it to the committee.
Co-Chair John Torgerson stated his intent was to have a
simpler formula. He didn't oppose a match requirement but
did not want it to incur further expenses to calculate.
He also understood there were some areas of the state that
could not afford any match. The bill would have to apply a
grant similar to that for the underground storage tank
programs.
Senator Loren Leman suggested simplifying the formula to a
five-percent match requirement. He supported community
investment into projects. He felt the facilities would be
better cared for. However, he knew there were some that
could not afford it and he wanted better flexibility. He
talked about in-kind services.
He spoke to the stated need for audits. He wanted to know
where that information came from. If an audit were not
required for every project under state and federal funding,
why would it be required for a municipal match? Dan Easton
said that was a good point. Internal audits would ensure
the matches were made. He felt it was a policy call.
Senator Loren Leman suggested the department engineer could
place a value and make a reasonable assumption of in-kind
services.
Senator Dave Donley understood this was the same formula
used by Department of Community and Regional Affairs for
community matching grants. How difficult could it be? He
did support the co-chair's efforts to simplify. He felt
there were strong incentives in the bill. He was in favor
of volunteer labor and material and donated land, etc.
Co-Chair John Torgerson noted that the Department of
Community and Regional Affairs did not have a formula for
unincorporated communities. That was were the difficulties
would arise.
Senator Al Adams added that those formulas did not go up to
the thirty-percent necessary for this program. Until all
communities were assessed, the formula won't work.
Senator Loren Leman asked what first class cities were
eligible. Dan Easton answered that first class city with a
population less than 600. Seldovia was one example. All
second class cities were eligible.
GREG CAPITO, Program Manager, Village Safe Water Section,
Division of Facility Construction and Operation, Department
of Environmental Conservation came to the table to say that
Galena and St. Mary were two eligible first class cities.
He had a list to hand out to the committee.
Senator Loren Leman felt this matter would be an easy fix.
He then referred to page one lines 13 and 14 addressing
local contributions required for each draw of monies. He
thought that could be cumbersome and suggested that the
match be required before the project was completed rather
than for each draw.
Co-Chair John Torgerson requested Dan Easton draft language
to incorporate the formula used for the other water and
sewer program. He asked if the department would oppose any
local contribution requirement or if they wanted the
program to work right. Dan Easton felt the current system
worked well and a more complicated formula would not
benefit.
Co-Chair John Torgerson requested match information for
current projects for comparison.
TOM COLLIDGE, Indian Health Service, Alaska Area Native
Health Service, and Director, Office of Environmental
Health and Engineering, testified via teleconference from
Anchorage. He worked with the Village Safe Water program.
He did not think the proposed changes would achieve the
goal of the safe water projects for the following reasons.
It would eliminate grants for some communities that could
not afford the five-percent match. It would be hardest on
small communities that the needed the sanitation
improvements the most. The short timeframe for
implementation could delay existing and new projects. It
would result in a loss of federal funds. It was unlikely to
result in new additional federal funds. Likely no new local
resources would be generated by this effort. It would
increase the administrative hurdles on existing sanitation
projects.
It was already the practice of the Indian Health Service to
require in-kind contributions from communities. He saw
little benefit of spending resources determine the value of
in-kind contributions in detail.
He saw no gain for the state at the expense of slowing
rural health. He suggested there could be higher costs in
other areas.
TINA LONG, Coordinator, Rural Alaska Sanitation Coalition,
Member, Alaska Native Health Board testified via
teleconference from Anchorage. Speaking for the two groups
and as an individual, she opposed the bill. She detailed
the missions and efforts of the organizations. She felt
this would disenfranchise rural communities.
SHEILA SELKREGG, Director for Rural Development, US
Department of Agriculture, testified from Anchorage. She
spoke to the federal funding available. She worked to
coordinate federal and state funding. She warned of the
risk of the funds being sent to other states. She stressed
the contributions already made by the communities.
TIM GILMARTIN, Mayor, City of Metlakatla, testified via
teleconference from Metlakatla. He spoke of the pending
projects in his community and the state of the economy in
Southeast Alaska that would prohibit them from coming up
with matching funds.
GINNEY TIERNEY, City Administrator, City of Thorne Bay and
Community Member, Governor's Rural Sanitation Council,
testified via teleconference from Thorne Bay in opposition
to the bill. She would hold the remainder of her comments
until the revised version was release and she could review
it.
Co-Chair John Torgerson noted there would be a committee
substitute for the bill.
PAUL ERHART testified via teleconference from Tanana. He
spoke of a sewage plant under construction. This bill would
delay the project. He spoke about the slow economy in
Interior Alaska due to a poor commercial fishing season.
BRENT URSEL, Mayor, City of McGrath, testified via
teleconference from McGrath in opposition to the bill. The
average family in the community paid $100 a month for water
service. With cuts proposed to the Power Cost Equalization
program and other services, they could not afford any other
costs. He pointed out the efforts of the community in
providing maintenance and operation of the facilities.
LORETTA LOLNITZ, Mayor, City of Koyikuk, Member, Governor's
Council on Rural Sanitation, and Member, Rural Alaska
Sanitation Coalition, testified via teleconference from
Koyikuk. She opposed the bill. She told the committee about
the current water facility and the need for improvements
She also told about the hazards of honey buckets.
[Teleconference interrupted at the request of the co-
chair.]
JOANNE BECK, Second Chief, Eagle Village Council, testified
via teleconference from Eagle Village. She opposed the
bill. She didn't believe her community could meet the match
requirements. She told of the difficulty for residents to
earn a living.
JAMES NATHANIEL, Environmental Coordinator for EPA/GAP
Program, testified via teleconference from Chalkyitsik, in
opposition of the bill. He told of problems with current
water and sewer systems and the hazards of these.
Co-Chair John Torgerson said the bill would be worked on
and some of the concerns voiced by the witnesses would be
addressed. He ordered the bill held in committee.
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