Legislature(1995 - 1996)
02/14/1996 01:37 PM Senate CRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 207 REVENUE BONDS: WATER & WASTE PROJECTS
Number 138
CHAIRMAN TORGERSON brought up SB 207 as the next order of business
before the Senate Community & Regional Affairs Committee. He
stated it is his intent today to concentrate on the cap level we
want imposed. There are several recommendations in members' bill
packets.
Number 114
SENATOR ZHAROFF asked which communities would actually be affected
by SB 207.
CHAIRMAN TORGERSON thinks that would depend on the language we put
in the bill now. Currently, he thinks everyone supports that every
municipality must have a revenue stream. Senator Hoffman has asked
the committee to expand this and look at housing authorities. If
we do get into housing authorities, the scope of this bill will be
changed to bring in things that aren't a municipality. There are
currently 162 municipalities in the State of Alaska.
KEITH KELTON, Department of Environmental Conservation, stated, in
answer to Senator Zharoff's question, that in members' bill packets
is a list of the communities that DEC has made loans to in the six-
year history of this program. They are primarily larger, urban
communities that have a dedicated revenue stream. This does not
preclude a smaller community with a revenue stream from entering in
to this program. Any incorporated community with a revenue stream
is eligible. He believes there have been 24 loans to date. One
third of which have gone to Anchorage; that third represents about
60% of the money that has been loaned. It is anticipated that some
of the smaller communities will participate in this program. But
it is fair to say that the program is predominately designed to aid
the larger communities.
Number 070
CHAIRMAN TORGERSON asked Mr. Kelton if he's reviewed the amendment
that Mr. Sharp sent to the committee defining "other qualified
entity" and changing the name from state agencies. It goes on to
say "regional housing authority". Do you support that amendment?
What would the impact of that amendment be?
MR. KELTON responded that he sees no problem with that amendment.
He really doesn't see an impact to the program with that amendment.
The amount to be loaned will depend upon the ability to repay the
loan. For a regional housing authority to qualify, it is his
understanding that this can only happen if they're tied in with a
municipal government, and the municipal government remains
responsible for repaying the loan. The government would remain the
responsible entity. He asked for verification of his analysis of
the amendment.
CHAIRMAN TORGERSON thinks Mr. Kelton's analysis is correct. The
chairman asked Mr. Sharp if he would like to make a statement.
Number 030
LEE SHARP, testifying from Anchorage, thinks that once there is an
agreement, the regional housing authority could exercise all of the
authority of the municipality with respect to that particular
facility. However, the state would still be in control of which
entity they're going to lend the money to.
TAPE 96-7, SIDE A
Number 001
MR. SHARP stated that the municipality is the entity that would
ultimately be responsible for repaying the loan.
Number 010
CHAIRMAN TORGERSON asked Mr. Sharp how he reads the agreement
between a municipality and a service area. Is that covered in the
interagency language? Or is the intent to include a service area?
MR. SHARP responded that there is no intent to include a service
area. He still thinks that ultimately, it is the borough that
would be the responsible agency. You could have a service area for
the purpose of establishing a sewer system. But it would still be
the borough that would be responsible for establishing fees to be
charged and ensuring repayment of the loan.
Number 040
CHAIRMAN TORGERSON asked if there could be a service area and a
mill rate levied instead of a fee. Also, if the municipality could
then dedicate that money as a revenue source.
MR. SHARP responded there would have to be a vote to do something
like that.
CHAIRMAN TORGERSON asked if that could be done on just the service
area level.
MR. SHARP responded that it could.
CHAIRMAN TORGERSON asked, would the creation of a service area,
with the intent of entering into this agreement, establish that?
He thinks it would. He asked if a municipality would have the
power to raise taxes for one service area, or if it would have to
be voted on by residents of the area.
MR. SHARP replied that unless it is a home-rule municipality, there
are some additional restrictions on the formation of service areas.
The borough assembly can create a service area, then once it's
approved by the voters in the service area, the assembly then has
the authority to raise taxes in that area. The assembly does need
the voters' approval if they're going to raise the sales tax just
in that area.
Number 109
CHAIRMAN TORGERSON stated he does not want municipalities to be
precluded from entering into service area agreements with areas.
The chairman stated that the amendment needs to cite federal
statute USC 1383. The chairman has no idea what that is.
MR. SHARP replied that is the Clean Water Act.
CHAIRMAN TORGERSON asked how many regional housing authorities
there are in the State of Alaska right now.
MR. KELTON thinks there are 12 or 13.
Number 155
SENATOR KELLY asked who Government Finance Associates, Inc. is.
MR. KELTON responded that they are the financial advisors to the
State Bond Committee in the Department of Revenue. That company
was used as bond counsel to develop SB 207.
Number 188
CHAIRMAN TORGERSON stated that the Municipality of Anchorage had
submitted some suggested amendments, but he thinks they want to
withdraw those amendments.
SENATOR KELLY asked Mr. Evans if the municipality still wants the
amendments adopted, or if they want them withdrawn.
BOB EVANS, Lobbyist, Municipality of Anchorage, thinks they are,
but he hasn't talked to them recently. There are a number of
committees to which the bill still will go, so he thinks there will
be opportunities to address that later.
SENATOR KELLY thinks maybe they just don't want to submit them in
the C&RA committee because of committee member opposition.
CHAIRMAN TORGERSON stated it is the committee's intent to work out
most of the problems before releasing SB 207 from committee.
Number 199
GEORGE KEENEY, City Planner and Public Works Director, City of
Cordova, testifying from Cordova, stated he supports SB 207. It
will give municipalities another option for funding these projects.
CHAIRMAN TORGERSON asked Mr. Keeney if he would like to see any
amendments to the bill, or if he is happy with it as it is.
MR. KEENEY responded he is happy with the way it is, except he
would like to know about the ceiling on the bonds.
CHAIRMAN TORGERSON replied that is currently not in the bill, but
it is something the committee is discussing. He stated that SB 207
will be held over for one more meeting, and he asked committee
members to think about what kind of cap they'd like to see. He is
hopeful that a couple of the other committee referrals will be
waived if the problems can be resolved in this committee.
SENATOR ZHAROFF asked if the cap wasn't simply determined by the
funds available.
CHAIRMAN TORGERSON stated there is no cap now. They could sell as
many revenue bonds as there is demand.
MR. KELTON added that it would depend on what the market would
bear.
SENATOR KELLY stated that one assumption is that it would be
stretched out quite a ways.
CHAIRMAN TORGERSON responded that's where we might start.
SENATOR ZHAROFF stated his concern with a cap would be that smaller
communities might be edged out of the running for funds.
CHAIRMAN TORGERSON replied that one suggested option would be to
put a $250,000,000 cap and sunset it, so it comes back before us.
There are members who think this program is circumventing the
appropriations process.
SENATOR ZHAROFF is concerned that some communities might not be
able to get involved if the cap has been reached.
CHAIRMAN TORGERSON thinks the division has criteria and a point
system in use.
SENATOR KELLY asked if they have had the ability to do this in the
past.
Number 255
MR. KELTON responded the way it's worked in the past is that DEC is
under some federal requirements for the administration of the
program. One of those is that we have to go out and solicit input
on an annual basis from those communities interested in the
program. We then rank those projects, put them out for a public
hearing, and develop an annual intended use plan. So it's unlikely
that there will be a need that we haven't anticipated. The only
problem he can foresee is if there is a rapid increase in demand
above the current level of demand, the cap might cause a problem.
If you set the cap on a gross amount, say it can't go over
$100,000,000 on an annual level, or put some kind of an upset limit
on an annual basis, if we get one large project--normally we could
fund $15,000,000 a year, with an upset provision on a single year
base of another $5,000,000 or something, he thinks they could
handle any of the concerns he can foresee happening in the
immediate future. So he does not think it's a significant problem.
SENATOR ZHAROFF asked if the committee could get something along
those lines drawn up.
CHAIRMAN TORGERSON asked Mr. Kelton if he could draw up something
like that.
MR. KELTON responded he would certainly give it a try.
SENATOR KELLY commented that if this were a grant program, there
would be no shortage of applicants, however, since it's a loan
program, DEC doesn't anticipate such a big rush of applicants.
MR. KELTON stated DEC has seen an increase. The first four years
of the program, it was averaging about $7,000,000 per year. The
last two years it's been 12-13 million. As the general fund
capital budget gets harder to produce, he anticipates an increase.
But he doesn't think it will be a dramatic amount. As the chairman
has pointed out, DEC would have the opportunity to come back to the
committee with problems. He doesn't see it as a problem that can't
be taken care of.
CHAIRMAN TORGERSON asked Senator Zharoff what exactly he wanted
drafted up.
Number 270
SENATOR ZHAROFF responded that if there is any type of a safety
measure that could be put in SB 207 allowing some flexibility, he
would like to see that.
CHAIRMAN TORGERSON asked if the federal 80/20 match for this
program was gone.
MR. KELTON responded that is a good question, and until they
reauthorize the Clean Water Act, they won't know for sure. DEC
expects the Act to be reauthorized, even though they think it will
be at a lower rate.
CHAIRMAN TORGERSON stated he would get together with Senator
Zharoff on the language and intent. He will reschedule SB 207 as
soon as possible.
SENATOR KELLY sees what Senator Zharoff is worried about: one of
the larger cities taking all the money.
CHAIRMAN TORGERSON shares that concern. In the past, DEC has
handled that through their ranking system.
SENATOR KELLY thinks that a lot of the communities getting the
80/20 money now won't be eligible for the loan money.
CHAIRMAN TORGERSON also thinks there would be different
requirements than the federal requirements.
MR. KELTON noted that the requirements become less, as the money
cycles through.
CHAIRMAN TORGERSON adjourned the Senate Community & Regional
Affairs Committee meeting at 3:32 p.m.
| Document Name | Date/Time | Subjects |
|---|