Legislature(2007 - 2008)BELTZ 211
02/28/2008 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB254 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 254 | TELECONFERENCED | |
SB 254-AK REGIONAL ECONOMIC ASSISTANCE PROGRAM
3:32:53 PM
CHAIR OLSON announced the consideration of SB 254.
JODY SIMPSON, Staff to Senator Charlie Huggins, Alaska State
Legislature, said SB 254 extends the date of the Alaska Regional
Economic Assistance program, [which enables the creation of
Alaska Regional Development Organizations (ARDORs)]. ARDORS have
been reauthorized every three years since their inception in
1998. This bill extends the termination date for five years.
There are 11 ARDORs across the state, and they serve as the
state's contribution to economic development in Alaska's urban
and rural areas. They enable local officials and businesses to
pool their limited resources and work together on economic
development projects, develop public and private partnerships,
and provide technical assistance. The ARDORs are successful and
have coordinated 50 regional efforts this past year. They have
raised $1.178 million in private sector funds to leverage for
the program, and they met 84 percent of their goals. The five-
year extension was recommended by the ARDOR members. Allowing
for a longer sunset facilitates long-term planning. She said the
Mat-Su RC&D [Resource Conservation and Development] would like
to set up a revolving loan fund, for example.
3:36:01 PM
CHAIR OLSON asked about a fiscal note.
MS. SIMPSON said there are two fiscal notes. The total budget is
$4.476 million, and that money is an administration fee. The
organizations divide up the balance, which gives them about
$53,000 each out of the total amount that they are requesting.
MICHAEL HANZUK, Coordinator, Alaska Regional Development
Organizations, Office of Economic Development, Department of
Commerce, Community & Economic Development said his office
supports the program.
CHAIR OLSON asked about the fiscal notes showing flat funding.
MR. HANZUK said it is up to the ARDORs to ask for an increase.
He supports an increase. They leverage their money successfully,
and "with the inflation and needs, it is something that probably
should be looked into in the very, very near future."
3:38:22 PM
WAYNE STEVENS, President, Alaska State Chamber of Commerce, said
the chamber supports the bill and believes in ARDOR's
cooperative, regional model. It is successful. ARDORs provide
greater local expertise and services with more efficiency and
less administrative burdens of state agencies. The Southwest
Alaska Municipal Conference's successful handling of the Steller
sea lion mitigation funds is an example. It put almost $30
million into the regional economy.
3:40:13 PM
MARTY METIVA, Executive Director, Mat-Su Resource Conservation
and Development Council, said there is not much more he can add.
In 1988 the ARDORs were formed in state statute, and at that
time the state believed that each region has its own concerns
and challenges, and the best strategy is to approach economic
development with partners. ARDORs are non-partisan and can bring
entities together for common goals and increase economic
development in the regions. The ARDORs have leveraged the state
funding by at least three to one, and last year it was almost
eight to one. He likes the five-year sunset. He thought it would
be prudent to prioritize a five-year reauthorization over asking
the state for additional funding. If the legislature would like
to give them more money, he would not turn it down.
3:42:17 PM
CHAIR OLSON asked why an ARDOR is needed in the Mat-Su Valley,
which is the economic hotspot of the state.
MR. METIVA said Wasilla is a hotspot, but he also works in other
areas of the valley. He spoke of a mentorship with entrepreneurs
in helping small businesses get started and be sustainable. "We
bring other partners together." He works closely with the small
business development center and the chambers of commerce.
SENATOR THOMAS asked about where other funds come from. He sees
large sums of money coming from non-government entities.
3:43:48 PM
MR. HANZUK said he has broken down the funds on page 7. Non-
state and non-federal money can come from other organizations.
Each ARDOR could provide their particular funding sources.
Private funds could come from businesses.
SENATOR THOMAS said he sees the general categories, and he is
curious where the money was coming from.
3:45:41 PM
KATHRYN DODGE, Economic Development Specialist, Fairbanks North
Star Borough and ARDOR Director, said the other funds come from
many sources. In Fairbanks they come from the municipal tax
base, federal grants, and state grants, and one was just matched
with a grant with the Mental Health Trust Fund. There are
private members with investors. "We just look for many partners
as we move forward."
SENATOR THOMAS said he wanted more specifics. Funds other than
state dollars add up to several million dollars. Federal funds
are less than $1 million, and he was curious what organizations
the money comes from.
MS. DODGE said, "at times there has been ARDOR money set aside
that we have come together and done a project for, so that would
be another 'other state fund.'" The Mental Health Trust would be
another. Federal funds come from DOD [Department of Defense]
BRAC money and the EDA [Economic Development Administration].
Private sector money comes from property taxes or an investor-
based organization. There are four economic development
districts, which are federal recognized, "so EDA brings in
federal moneys there or contributes money."
3:48:41 PM
CHAIR OLSON asked about the acronyms she used.
MS. DODGE said BRAC stands for Base Realignment and Closure, and
Eielson [Air Force Base] was on that list, and "there was some
DOD moneys that we used in Fairbanks to develop an economic
development diversification strategy."
SENATOR THOMAS asked if he needs each ARDOR to send him their
financial statements.
MS. DODGE said Mr. Hanzuk could give him that, but each ARDOR is
different and it changes every year.
SENATOR THOMAS said it is good to know where money comes from.
3:50:18 PM
MICHAEL CATSI, Executive Director, Southwest Alaska Municipal
Conference (SWAMC), said the private funding that SWAMC gets
includes $44,500 from membership dues, $38,000 from conference
earnings, $25,000 from sponsorship, $36,000 from interest
earnings, and it has some reserves for tight years. ARDORs are
all very different, which is allowed by the flexibility built
into the program for working with each region. The ARDORs build
partnerships with a multitude of businesses and state and
federal agencies to meet the development needs of each region.
The success of the program is based on it not being one-size-
fits-all. He emphasized the need for a five-year re-
authorization because SWAMC has a five-year comprehensive
economic development strategy.
3:53:04 PM
WANETTA AYERS, Executive Director, Western Alaska Community
Development Association, said she was once an ARDOR director,
and the ARDOR program has been straight-line funded for at least
13 years. There are challenges facing the state, and it's an
indication of Alaska's priorities to not help these
organizations keep pace with their regional challenges. She said
to think about the value of creating greater incentives. The
ARDORs are able to significantly leverage state money. She spoke
of the efforts on the gas line and other big projects, but
Alaska's economy will be built and strengthened locally. The
ARDORs are a good investment, and she encouraged equalizing
their funding after more than 13 years of straight-line funding.
3:55:15 PM
CHAIR OLSON asked why a five-year sunset wasn't in place before.
MS. SIMPSON said she doesn't know.
SENATOR KOOKESH moved to report SB 254 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, the bill moved out of committee.
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