Legislature(1993 - 1994)

03/04/1993 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                          March 4, 1993                                        
                            1:00 p.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Jerry Sanders, Vice-Chairman                                  
  Representative Con Bunde                                                     
  Representative John Davies                                                   
  Representative Cynthia Toohey                                                
  Representative Ed Willis                                                     
  Representative Bill Williams                                                 
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Representative Harley Olberg, Chairman                                       
                                                                               
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  *HB 124:  "An Act relating to grants to municipalities,                      
            named recipients, and unincorporated communities;                  
            establishing capital project matching grant                        
            programs for municipalities and unincorporated                     
            communities; establishing a local share                            
            requirement for capital project grants to                          
            municipalities, named recipients, and                              
            unincorporated communities; and providing for an                   
            effective date."                                                   
                                                                               
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
                                                                               
  *HB 125:  "An Act making appropriations for capital project                  
            matching grant programs; and providing for an                      
            effective date."                                                   
                                                                               
            HELD IN COMMITTEE FOR FURTHER CONSIDERATION                        
                                                                               
  (* first public hearing)                                                     
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Shelby Stastny, Director                                                     
  Office of Management and Budget                                              
  Office of the Governor                                                       
  P.O. Box 110020                                                              
  Juneau, AK  99811-0020                                                       
  Phone: 465-3568                                                              
  POSITION STATEMENT: Supported HB 124 & HB 125                                
                                                                               
  Jack Fargnoli, Policy Analyst                                                
  Office of Management and Budget                                              
  Office of the Governor                                                       
  P.O. Box 110020                                                              
  Juneau, AK  99811-0020                                                       
  Phone: 465-3568                                                              
  POSITION STATEMENT: Responded to questions related to HB 124                 
                      and HB 125                                               
                                                                               
  Jim Kohler, Executive Director                                               
  124 West 5th Street                                                          
  Juneau, AK  99801                                                            
  Phone: 463-3445                                                              
  POSITION STATEMENT: Asked questions related to HB 124 and HB
                      125                                                      
                                                                               
  Bruce Geraghty, Deputy Commissioner                                          
  Department of Community and Regional Affairs (DCRA)                          
  P.O. Box 112100                                                              
  Juneau, AK  99811                                                            
  Phone: 465-4700                                                              
  POSITION STATEMENT: Rendered information of the DCRA's                       
                      fiscal notes of HB 124                                   
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 124                                                                
  SHORT TITLE:  CAPITAL PROJECT GRANTS                                         
  BILL VERSION:                                                                
  SPONSOR(S):  RULES BY REQUEST OF THE GOVERNOR                                
  TITLE: "An Act relating to grants to municipalities, named                   
  recipients, and unincorporated communities; establishing                     
  capital project matching grant programs for municipalities                   
  and unincorporated communities; establishing a local share                   
  requirement for capital project grants to municipalities,                    
  named recipients, and unincorporated communities; and                        
  providing for an effective date."                                            
  JRN-DATE     JRN-PG               ACTION                                     
  02/03/93       216    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/03/93       216    (H)   CRA, STATE AFFAIRS, FINANCE                      
  02/03/93       216    (H)   -3 FNS (CRA, CRA, ADM)  2/3/93                   
  02/03/93       216    (H)   -3 ZERO FNS (DCED, DEC, LABOR)                   
                              2/3/93                                           
  02/03/93       216    (H)   GOVERNOR'S TRANSMITTAL LETTER                    
  03/04/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
                                                                               
                                                                               
  BILL:  HB 125                                                                
  SHORT TITLE:  APPROP:  CAPITAL PROJECT MATCHING GRANTS                       
  BILL VERSION:                                                                
  SPONSOR(S):  RULES BY REQUEST OF THE GOVERNOR                                
  TITLE: "An Act making appropriations for capital project                     
  matching grant programs; and providing for an effective                      
  date."                                                                       
  JRN-DATE     JRN-PG               ACTION                                     
  02/03/93       218    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/03/93       218    (H)   CRA, STATE AFFAIRS, FINANCE                      
  02/03/93       218    (H)   GOVERNOR'S TRANSMITTAL LETTER                    
  03/04/93              (H)   CRA AT 01:00 PM CAPITOL 124                      
                                                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-10, SIDE A                                                           
  Number 000                                                                   
                                                                               
  VICE-CHAIRMAN JERRY SANDERS called the meeting to order at                   
  1:10 p.m.  He noted for the record that Representatives                      
  Bunde, Williams and Willis were present.                                     
  HB 124:  CAPITAL PROJECT GRANTS                                              
  HB 125:  APPROP: CAPITAL PROJECT MATCHING GRANTS                             
                                                                               
  Number 035                                                                   
                                                                               
  SHELBY STASTNY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,                   
  OFFICE OF THE GOVERNOR, testified on both HB 124 and HB 125.                 
  He began, "HB 124, being the governor's capital matching                     
  grants program, a program that the governor is extremely                     
  interested in and feels is an equitable way to allocate some                 
  of the capital dollars throughout the State of Alaska.  The                  
  governor for some time now has been concerned that...                        
  usually that capital money is allocated to the communities                   
  through their representatives to the communities that have                   
  the most able representation.  ...And it isn't always the                    
  projects that the local people necessarily are in favor of."                 
                                                                               
  MR. STASTNY continued, "Another concern that he (the                         
  governor) had was that many times, the money for projects is                 
  100 percent granted to a community and whenever there's 100                  
  percent granted to a community, it isn't necessarily a                       
  project that they had to buy into...  In order to solve both                 
  of these problems, the governor suggested that we have a                     
  program that attempts to equitably allocate, across the                      
  state, some portion of the capital budget.  ...Small                         
  communities, their population counts two for one...there are                 
  some medium size communities whose population counts one and                 
  a half to one and the larger communities are one to one.  So                 
  there's a little bit of skewing in the allocation."                          
                                                                               
  MR. STASTNY said, "The other thing we attempted to do then                   
  was put a match in, that when a community is allocated                       
  money, they have that money available for projects, but they                 
  have to come up with some share of the project...and this is                 
  a sliding scale as to how much they have to come up                          
  with...based on a community's ability to come up with a                      
  match.  The bill (HB 124) that you see before you, is a bill                 
  that's simpler than the prior bills.  In last year's (1992)                  
  bill we had what some people said was a pretty complex                       
  formula that calculated ability to pay."                                     
                                                                               
  Number 155                                                                   
                                                                               
  MR. STASTNY continued, "Another thing that the bill (HB 124)                 
  does is it allows communities to accumulate their allocation                 
  for five years.  So if 150,000 dollars is allocated to a                     
  community and that's not large enough to do the project they                 
  want to do, in effect they have a savings account of 150,000                 
  that they can keep in the "bank" and if there's another                      
  appropriation next year then they can continue to keep that                  
  for a period of five years and utilize the money when they                   
  have the match."                                                             
                                                                               
  MR. STASTNY also stated, "There was some concern that a lot                  
  of smaller communities didn't have the cash available for                    
  match and so we tried to make it as liberal as possible that                 
  a community can come up with land, they can use sweat                        
  equity, whatever way they can come up with the match."                       
                                                                               
  Number 177                                                                   
                                                                               
  REPRESENTATIVE CYNTHIA TOOHEY asked if, in the case of Lime                  
  Village, native lands could be matched for a sewer project.                  
                                                                               
  MR. STASTNY said Lime Village would generally be allocated                   
  $25,000 under HB 124 which would only cover small projects.                  
                                                                               
  Number 199                                                                   
                                                                               
  REPRESENTATIVE BILL WILLIAMS ensured that lands matched                      
  would not be from Native corporations.                                       
                                                                               
  MR. STASTNY concurred and said, "The way the formula works                   
  Anchorage, for example, would get a significant part because                 
  it is based pretty much on population.  This year the                        
  appropriation bill (HB 125) that you have is $67 million                     
  dollars... (but) no community gets less than $25,000...                      
  It's not for big projects obviously in the smaller                           
  communities."                                                                
                                                                               
  Number 233                                                                   
                                                                               
  REPRESENTATIVE TOOHEY asked if the communities receiving                     
  money would have to use union labor.                                         
                                                                               
  MR. STASTNY said, "Whatever the community can do, I'm not                    
  really familiar with all those rules..."                                     
                                                                               
  Number 245                                                                   
                                                                               
  REPRESENTATIVE CON BUNDE said, "There may be some problems                   
  with the Little Davis-Bacon Act."                                            
                                                                               
  JACK FARGNOLI, POLICY ANALYST, OFFICE OF MANAGEMENT AND                      
  BUDGET, OFFICE OF THE GOVERNOR, responded, "According to the                 
  Department of Labor, the communities will not run into any                   
  problems with Little Davis-Bacon."                                           
                                                                               
  VICE-CHAIRMAN SANDERS referred to a letter sent to Senator                   
  Randy Phillips from Mayor Tom Fink of Anchorage supporting                   
  the Senate companion bills to HB 124 and HB 125, SB 88 and                   
  SB 89.  (A copy of this letter may be found in the House                     
  Community and Regional Affairs Committee Room, Capitol #110,                 
  and after the adjournment of the second session of the 18th                  
  Alaska State Legislature, in the Legislative Reference                       
  Library.)                                                                    
                                                                               
  Number 276                                                                   
                                                                               
  JIM KOHLER, EXECUTIVE DIRECTOR, SOUTHEAST CONFERENCE,                        
  testified, "I'm not here to speak really in support or                       
  against this particular bill (HB 124), but rather I bring                    
  with me a couple of questions that I have been asked over                    
  the last few weeks by members of our organization...  Is the                 
  degree to which the dollars that it would be appropriated to                 
  the execution of this particular program, to what degree                     
  that other dollars are available for projects, be they                       
  larger projects or perhaps be they projects that go beyond a                 
  single municipality, they may be regional in nature, etc.,                   
  are accessible in what a lot of municipalities feel is a                     
  traditional approach, that is through your legislature,                      
  trying to access the dollars.  ...To what degree do these                    
  dollars usurp perhaps, the dollars that traditionally                        
  representatives and senators try to pass down into their                     
  districts from a larger capital pot, basically."                             
                                                                               
  MR. KOHLER continued, "Secondly, is their the availability                   
  either through this program or through other capital                         
  appropriation activities that will allow a matching grant                    
  project but of a regional nature?"                                           
                                                                               
  Number 330                                                                   
                                                                               
  REPRESENTATIVE TOOHEY asked for an example of a state                        
  project that has not benefited a specific municipality.                      
                                                                               
  Mr. KOHLER gave a hypothetical example.                                      
                                                                               
  Number 375                                                                   
                                                                               
  REPRESENTATIVE BUNDE said, "Capital budgets, like other                      
  budgets, are finite budgets and if we take this amount out                   
  there will be that much less available for these other                       
  projects that you address and I don't see anything coming                    
  down the pike that will be available for regional                            
  (projects).  I think that would require strong cooperation                   
  among the various cities, villages of the region."                           
                                                                               
  MR. KOHLER explained he was trying "to make sure that                        
  municipalities have a clarification as to what is accessible                 
  under what circumstances, and where to invest their energies                 
  for different types of projects."                                            
                                                                               
  Number 392                                                                   
                                                                               
  MR. FARGNOLI clarified saying, "This is not designed for                     
  regional projects...(but) if they do wish to use these                       
  grants, even though they are intended for smaller                            
  projects...they are unfettered...we intentionally did not                    
  try to clutter up that pathway to prohibit them from forming                 
  associative relations on joint projects."                                    
                                                                               
  REPRESENTATIVE JOHN DAVIES asked, "What's the intent here?                   
  What is this new approach in allocating capital funds trying                 
  to fix?  Why do we need to do this?"                                         
                                                                               
  Number 436                                                                   
                                                                               
  MR. FARGNOLI said, "The governor's trying to do three things                 
  basically with the bill (HB 124).  He's trying to increase,                  
  enhance, or improve the ability of local communities to                      
  select the projects they feel are most important...  Second                  
  reason he wanted to give this the priority that he has, is                   
  to leverage state dollars in terms of limited capital to                     
  make state capital grant dollars go further.  ...Third                       
  reason...was to help by establishing a sense of local                        
  ownership, to have that be an effective screening devise so                  
  they would result in better projects...  These kinds of                      
  grants tend to be treated as the discretionary capital                       
  grants that get usually allocated at the very end of                         
  session, and it's in everyone's interest to have that                        
  process be as little chaotic as possible."                                   
                                                                               
  Number 467                                                                   
                                                                               
  REPRESENTATIVE DAVIES described the current process for                      
  funding capital projects.  "(HB 124) imposes another                         
  administrative level in between the local community and the                  
  representatives who openly allocate the funds...  We add                     
  another administrative hoop to jump through rather than                      
  making it a process that somehow gets the people's choice                    
  allocated more clearly."                                                     
                                                                               
  MR. FARGNOLI responded, "I agree with you in that respect.                   
  The process is certainly on the executive branch side fairly                 
  chaotic.  ...We'll have fewer dollars to give to these kinds                 
  of projects over the next decade or whatever.  In the past,                  
  a lot of projects had been funded with very little                           
  forethought at the local level or the state level, to be                     
  candid about it.  So we think there is some improvement                      
  there, certainly on our side in helping the governor                         
  establish what his selections or decision would be, vis-a-                   
  vis, the governor's economic development strategies or                       
  community infrastructure development strategies."                            
                                                                               
  Number 511                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked if Bruce Geraghty, the DCRA's                     
  Deputy Commissioner, would elaborate on the DCRA fiscal                      
  note.                                                                        
                                                                               
  BRUCE GERAGHTY, DEPUTY COMMISSIONER, DCRA, said, "When the                   
  governor first proposed this, of course, the department had                  
  the resources with which to not have to deal with fiscal                     
  notes.  I believe last year's fiscal notes were zero to very                 
  insignificant.  Due to budget cuts last year and loss of                     
  some people we've had to submit a fiscal note with regard to                 
  travel and doing the normal monitoring that we do with                       
  regard to grant projects, the internal accounting and the                    
  administrative section."                                                     
                                                                               
  REPRESENTATIVE BUNDE asked for details on the travel budget.                 
                                                                               
  MR. GERAGHTY indicated it was for follow-up and "if they run                 
  into problems with the project and they need to amend..."                    
                                                                               
  Number 556                                                                   
                                                                               
  REPRESENTATIVE ED WILLIS asked if Vice-Chairman Sanders                      
  intended to move HB 124 and HB 125 out of committee today.                   
                                                                               
  REPRESENTATIVE SANDERS said, "No, we're just going to take                   
  testimony."                                                                  
                                                                               
  REPRESENTATIVE WILLIS asked if there was a Municipal League                  
  representative present to testify.                                           
                                                                               
  VICE-CHAIR SANDERS said the Municipal League representative                  
  was out of town "that's why he sent" the letter the members                  
  have in their packets.  (A copy of this letter may be found                  
  in the House Community and Regional Affairs Committee Room,                  
  Capitol #110, and after the adjournment of the second                        
  session of the 18th Alaska State Legislature, in the                         
  Legislative Reference Library.)                                              
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  Number 567                                                                   
                                                                               
  VICE-CHAIR SANDERS adjourned the meeting at 1:42 p.m.                        

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