Legislature(1993 - 1994)

02/08/1994 01:00 PM CRA

Audio Topic
* first hearing in first committee of referral
+ 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.                                                      
  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                                                                   
  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                         
  MR. COTTEN agreed and said, "They currently are the ones                     
  that review and sign off on the populations for the other                    
  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                          
  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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