02/15/1994 09:03 AM Senate CRA

 SENATOR RANDY PHILLIPS introduced  SB 282  (ELIGIBLE MATCH MONEY              
 WATER/SEWER GRANTS) as the final order of business.                           
                                                                               
 SENATOR ZHAROFF explained that SB 282 came about as a result of a             
 meeting with the Department of Environmental Conservation in trying           
 to resolve a water and sewer problem in Yakutat.  The community of            
 Yakutat was awarded a grant last year for a water and sewer                   
 project.  Before the money was transmitted to the community,                  
 Yakutat was incorporated as a borough and the borough is lacking              
 the required matching funds because they couldn't use federal                 
 dollars for a state match.  SB 282 allows a community to use                  
 federal funds to provide the local match in the state's matching              
 grant programs for water and sewer projects.                                  
                                                                               
 Number 460                                                                    
 KEITH KELTON, Director, Division of Facility Construction and                 
 Operation, said the statute that is in question was originally                
 enacted in 1972 and has been amended several times.  The original             
 portion of that statute tied federal funding to the state match,              
 and it was keyed to a federal program that has been out of                    
 existence for a long time.  However, they have found that the                 
 provision is now costing the state money.                                     
                                                                               
 Using Yakutat as an example of the problem, Mr. Kelton said Yakutat           
 was awarded a $500,000 grant and they also had $500,000 in federal            
 money from the Public Health Service to build a waste water                   
 treatment plant.  The way the statute is currently written, since             
 Yakutat had the $500,000 in federal money, the state can only put             
 in $250,000, which leaves $250,000 for the local government to come           
 up with.  This is preventing Yakutat from building a treatment                
 system unless they can find another source of funding.                        
                                                                               
 Mr. Kelton said because of this provision in statute these small              
 communities have to come up with a local match that they can't                
 afford, so instead of going after the federal dollars that they               
 can't match, they go after the state for 100 percent funding on               
 these projects.   DEC supports removing this clause from the                  
 statute because they believe it will save the state capital dollars           
 by encouraging the federal participation.                                     
                                                                               
 Number 511                                                                    
                                                                               
 SENATOR ADAMS asked if there was a priority list of communities               
 that do not have a water system or a sewer system and if they would           
 get first call on the funds.  KEITH KELTON responded that this                
 program is primarily the urban counterpart to the Village Safe                
 Water program.  Because this program has the matching requirement,            
 it has never been readily utilized by the smaller communities.  He            
 also explained that when Yakutat incorporated as a borough, their             
 population went over the 600 level and dropped them out of                    
 eligibility for the Village Safe Water program and put them into              
 the matching grants program of a 50/50 match.                                 
                                                                               
 Number 532                                                                    
                                                                               
 SENATOR LEMAN asked if legislation has been introduced to do                  
 additional cleanup to the statute as proposed by the department.              
 KEITH KELTON acknowledged that SB 330 has been introduced and it              
 addresses several other problems in the statute.                              
                                                                               
 Number 563                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked if this legislation would apply to               
 other areas of the state.  KEITH KELTON answered that the bill                
 would apply to all incorporated communities, and any community that           
 has the ability to get federal dollars or state dollars will be               
 treated equally under this legislation.  He explained that the                
 department sends out questionnaires to all the urban communities to           
 get their responses of water, waste water and solid waste projects            
 under this particular program.  Those projects are then ranked with           
 a criteria system that evaluates public health and environment.               
 Those factors go into a list that generates scores for these                  
 projects and the department prepares a priority list which is                 
 submitted as a governor's capital project list for urban                      
 communities.                                                                  
                                                                               
 TAPE 94-13, SIDE B                                                            
                                                                               
 SENATOR LEMAN commented that a pride of ownership encourages people           
 to take care of their facilities and maintain and operate them.               
 If a community has invested some of its own resources into a                  
 project, there is a higher likelihood that they will maintain it.             
 He asked if it was possible to get some consistency with these                
 programs.  KEITH KELTON responded that his point has been discussed           
 many times.  The last time it was actively debated was during the             
 governor's matching grants program where the question was whether             
 the Village Safe Water program could be included in that concept.             
 However, there is a very specific prohibition in the statutes                 
 against requiring a match for Village Safe Water projects.  The               
 Administration cannot require that match unless the Legislature was           
 to make a change authorizing in-kind service match.  He added that            
 it would be real difficult in most places to find much of a                   
 contribution other than maybe a gravel source or land for the                 
 treatment facility.                                                           
                                                                               
 SENATOR PHILLIPS said it was his intention to hold SB 282 until the           
 following week and take it up in conjunction with SB 330.