Legislature(2005 - 2006)CAPITOL 124
01/27/2005 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| Department of Commerce, Community, and Economic Development | |
| Department of Transportation & Public Facilities, Alaska Marine Highway System | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
January 27, 2005
8:04 a.m.
MEMBERS PRESENT
Representative Kurt Olson, Co-Chair
Representative Bill Thomas, Co-Chair
Representative Gabrielle LeDoux
Representative Mark Neuman
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
Representative Pete Kott
COMMITTEE CALENDAR
OVERVIEWS: ALASKA DEPARTMENT OF COMMERCE, COMMUNITY, and
ECONOMIC DEVELOPMENT; DEPARTMENT OF TRANSPORTATION, ALASKA
MARINE HIGHWAY
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
EDGAR BLATCHFORD, Commissioner
Department of Commerce, Community, and Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Presented an overview of DCCED.
GREG WINEGAR, Director
Division of Investments
Department of Commerce, Community, and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding DCCED's loan
programs.
JOELLEN HANRAHAN, Director
Division of Administration Services
Department of Commerce, Community, and Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding DCCED's
funding.
MIKE BLACK, Community Development Section Chief
Division Of Community Advocacy
Alaska Department of Commerce, Community, and Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions regarding DCCED's land
transfer programs.
TOM BRIGGS, Deputy Commissioner/Director of Marine Operations
Alaska Marine Highway System (AMHS)
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Presented an overview of the AMHS.
JOHN TORGERSON
Special Assistant
Department Of Transportation & Public Facilities
Juneau, Alaska
POSITION STATEMENT: Reported on the status of current labor
negotiations regarding the Alaska Marine Highway System.
ACTION NARRATIVE
CO-CHAIR KURT OLSON called the House Community and Regional
Affairs Standing Committee meeting to order at 8:04:06 AM.
Representatives Neuman, Salmon, Olson, and Thomas were present
at the call to order. Representatives Cissna and LeDoux arrived
as the meeting was in progress.
8:04:33 AM
^DEPARTMENT OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT
EDGAR BLATCHFORD, Commissioner, Department of Commerce,
Community, and Economic Development (DCCED), defined DCCED as a
"regulatory and advocacy" agency. He described its history and
said that DCCED is now large in terms of its responsibilities,
but small in terms of its allocation of general funds.
Commissioner Blatchford added that DCCED's mission is to promote
healthy economies in communities, protect consumers, and promote
a stable business climate. The department also assists local
governments with self-governance and promotes the expansion of
new and existing businesses.
COMMISSIONER BLATCHFORD listed the six divisions of DCCED, and
noted that there are six agencies that are closely affiliated
with the department, which include the Alaska Seafood Marketing
Institute, the Alaska Aerospace Development Corporation, the
Alaska Industrial Development and Export Authority, the Alaska
Energy Authority, the Alaska Railroad Corporation, and the
Regulatory Commission of Alaska. Commissioner Blatchford added
that, by law, he serves on a "good number of other boards and
commissions." The department employs 493 employees, located in
Anchorage, Bethel, Dillingham, Fairbanks, Juneau, Kotzebue,
Nome, and Tok. There is also a Seattle office maintained by the
Alaska Seafood Marketing Institute. He said last year the total
budget was $125.4 million, of which $7.8 million came from the
general fund.
COMMISSIONER BLATCHFORD stated that the Division of Community
Advocacy is the "heart and soul" of the department. The
division promotes healthy economies by providing technical and
financial assistance, training, and "other capacity building
resources." For example, the division helped communities with
the "bulk fuel issue;" provided on-site utility management
assistance to 102 communities; partnered with the National
Marine Fisheries Service to provide assistance with a new
fisheries program called Community Quotas Entity; administered
over $65 million in federal funds to rural communities; provided
a web-based assistance program for local governments; continued
to provide extensive support to local boundary commissions; and
assisted Delta in mitigating the impacts of the deployment of
the missile defense system at Fort Greely.
COMMISSIONER BLATCHFORD reported that the department plays a
"technical role" in the Denali Commission, the purpose of which
he described as "the delivery of federal services of the federal
government in the most cost-effective manner [practicable] by
reducing the administrative overhead costs." He said the Denali
Commission also provides "job training and other economic
development services in rural communities, particularly
distressed communities." The Denali Commission provides economic
development services such as power generation, transmission
facilities, water and sewer systems, and "addresses other
infrastructure needs."
COMMISSIONER BLATCHFORD related that the Division of Investments
plays a key role in fisheries issues by providing loans in areas
"not adequately served" by the private sector. In fact, the
division approved 133 loans totaling $15.2 million, including
loans for promoting resident fisheries, fisheries enhancement,
and rural develop initiatives. He expressed pride in the
volunteer tax and loan program effort, which assisted 5,800
people in preparing tax returns. He opined that the most
successful federal/state program is the Community Development
Quota System (CDQ), which assists with the development of
sustainable fisheries economies. He said the CDQ has provided
over $100 million in employment, education, and training
benefits since the program was created in 1992.
8:18:31 AM
COMMISSIONER BLATCHFORD spoke of the Fisheries Revitalization
Program, a multi-tiered program to increase innovation and
productivity within the salmon industry. He said the Division
of Banking, Securities and Corporations regulates the new
payday-lending program. He reported that the Alaska Industrial
Development and Export Authority (AIDEA) funded $78 million in
loans and sold its interest in the Seward coal loading facility.
He said AIDEA also negotiated an operating agreement with Alaska
Ship and Dry Dock for the Ketchikan shipyard, and it accepted
offers for the sale of the Alaska Seafood International
property. He pointed out that AIDEA issued revenue bonds for
the Fairbanks Memorial Hospital.
8:23:30 AM
COMMISSIONER BLATCHFORD highlighted some of the department's
initiatives for the upcoming two years, including creating
seafood processing and harvesting opportunities in the Gulf of
Alaska and Southeast communities; continuing to administer about
150 existing grants; promoting tourism in new areas; and working
with communities on competitive grants through the federal
Economic Development Administration to assist distressed
communities.
8:28:02 AM
COMMISSIONER BLATCHFORD related that the department is also
working on a web-based international marketing program for
selling local arts and crafts, he noted. He described the
Alaska Regional Development Organization (ARDOR), some of which
are created where there is no regional government. He explained
that ARDORs support economic development opportunities for local
people. He mentioned that the department continues to play a
key role as an advocate of mining.
8:30:56 AM
CO-CHAIR OLSON asked if DCCED had a representative in Anchorage
at the Board of Fisheries meetings.
COMMISSIONER BLATCHFORD answered that someone was there; the
department "pays very close attention to the activities" of both
the Board of Fisheries and the Board of Game.
REPRESENTATIVE NEUMAN inquired as to how closely DCCED works
with job-related groups like the Division of Vocational
Rehabilitation, local small-business development organizations,
and community centers. He expressed concern that there might be
duplication of these activities.
COMMISSIONER BLATCHFORD explained that the governor has divided
the cabinet into sub-cabinets of which DCCED is part of a sub-
cabinet with the Department of Labor & Workforce Development.
He added that the major initiative of the current administration
is to avoid duplication of effort or services.
REPRESENTATIVE NEUMAN related that he has worked with some of
the small-business and job-training groups, which he thought
were very beneficial. He expressed his hope that DCCED would
help with programs that "provide opportunities for small
businesses."
REPRESENTATIVE CISSNA noted her interest in how health relates
to the economies of small communities, where seniors are key to
the inner workings of these small communities. In fact, she
related that the "welfare to work program" was extremely
successful, partly because of the role of seniors.
8:35:13 AM
COMMISSIONER BLATCHFORD said that DCCED pays attention to what
is happening and what is successful in local communities. A
primary goal of the department, he related, is to "re-instill
the entrepreneurial spirit." Elders have a close tie to that
spirit, he said, and DCCED's major objective is to engage senior
entrepreneurs.
REPRESENTATIVE NEUMAN asked about the default level of the loans
to which Commissioner Blatchford referred earlier.
8:37:22 AM
GREG WINEGAR, Director, Division of Investments, Department of
Commerce, Community and Economic Development, responded that the
total delinquency rate is 14 percent. There are several
programs to deal with delinquency, such as the "soft collection
program," the loan extension program, and foreclosure. The
department does everything it can to seek solutions [before
foreclosure], he stated.
REPRESENTATIVE NEUMAN asked if DCCED works with the program that
utilizes retired people to help with developing small business
plans for others.
MR. WINEGAR replied that the department did not work directly
with that program.
8:38:55 AM
REPRESENTATIVE SALMON recalled that the Denali Commission was to
improve the bulk fuel facilities for the Yukon Flats area
several years ago, but he has not seen any improvements. He
asked how closely DCCED works with the Denali Commission on the
bulk fuel facilities for Alaska villages.
COMMISSIONER BLATCHFORD responded that DCCED has a staff person
in the offices of the Denali Commission, so it works as closely
as possible. However, he acknowledged that more work needs to
be done because it is a large challenge.
8:41:18 AM
COMMISSIONER BLATCHFORD, in response to Co-Chair Thomas, said
that DCCED is funded by business receipts, federal funds, and
licensing fees.
8:41:34 AM
JOELLEN HANRAHAN, Director, Division of Administration Services,
Department of Commerce, Community, and Economic Development,
listed the percentages of funding sources for the department.
CO-CHAIR THOMAS asked who was in charge of transferring land
during the Local Boundary Commission process.
COMMISSIONER BLATCHFORD noted that there are several land
programs in the state government, and most of the programs are
in the Department of Natural Resources (DNR). He pointed out
that DCCED has a responsibility with 14(c)(3) lands under the
Alaska Native Claims Settlement Act. Commissioner Blatchford
noted that DCCED manages the part of the Statehood Act which
requires that lands be transferred from the federal government
to the state. He acknowledged there is a backlog.
8:44:02 AM
MIKE BLACK, Community Development Section Chief, Division of
Community Advocacy, Alaska Department of Commerce, Community and
Economic Development, suggested that Co-Chair Thomas was
referring to the land entitlements for newly incorporated
municipalities, which is the responsibility of DNR.
CO-CHAIR THOMAS said there appears to be a disincentive to form
a new borough if no land is transferred, and he inquired as to
whom, in DNR, the legislature needs to talk with regarding this.
8:46:03 AM
MR. BLACK said he assumes it is the Division of Lands.
COMMISSIONER BLATCHFORD added that community sustainability in
rural Alaska hinges on the amount of private land that can
provide a tax base or natural resource development income.
8:47:32 AM
CO-CHAIR THOMAS said he supports programs that "bring people
back to the villages," and he is excited about the Community
Development Quota (CDQ) program.
8:49:21 AM
REPRESENTATIVE NEUMAN asked Commissioner Blatchford if there is
anything that the legislature could provide.
COMMISSIONER BLATCHFORD responded that he is a firm believer in
local control and local people having the "opportunity to seize
the local resources, the opportunities." He mentioned CDQs and
expressed his philosophy that local control results in the best
outcomes. The state's role is to "look over their shoulders and
... discourage the outward migration of capital and the outward
migration of employment opportunities."
8:52:27 AM
CO-CHAIR THOMAS announced that he and Co-Chair Olson have bill
language to reauthorize the ARDORs and to request funds for
"additional things."
COMMISSIONER BLATCHFORD offered assistance from the department.
REPRESENTATIVE CISSNA asked about prioritizing the desires of
the communities.
COMMISSIONER BLATCHFORD said the department looks to local
initiative to take the lead, and then DCCED will work with [the
local entity]. The locals have to own the idea, he said, but
DCCED needs to help re-establish entrepreneurial spirit.
REPRESENTATIVE CISSNA asked about developing facilities that
change the nature of how communities work.
COMMISSIONER BLATCHFORD responded that the CDQ program helps
communities define their own needs, and then DCCED can step in
to assist.
The committee took an at-ease from 8:50 a.m. to 9:02.
9:02:54 AM
^DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES, ALASKA MARINE
HIGHWAY SYSTEM
TOM BRIGGS, Deputy Commissioner/Director of Marine Operations,
Department of Transportation & Public Facilities, stated that
the Alaska Marine Highway System (AMHS) consists of 10 vessels
with an additional vessel coming in late spring. The AMHS is
the only marine highway in the United States adopted as a scenic
byway, which helps attract tourists. He stated that AMHS's
primary directive under Title 19 is to provide basic essential
service to the coastal communities of Alaska, and to provide
economic stimulus to those communities. The system has 33
terminals from Bellingham, Washington to Dutch Harbor, Alaska,
and about half of the docks are owned by the state while the
other [half] are owned by communities. He informed the
committee that AMHS carries about 300,000 passengers and 100,000
vehicles each year, and generates about half of its operating
budget. Mr. Briggs stated that AMHS is an extension of the
interstate highway system, providing access to isolated
communities. Although the system is criticized for being frugal
and cutting back service in the wintertime, service is reduced
in winter because ridership decreases and the vessels are
required to be dry docked and overhauled for safety reasons, he
said. He pointed out that although AMHS has an aging fleet, it
has just added the Fairweather and the Lituya.
9:15:43 AM
MR. BRIGGS related that the biggest issue of AMHS is fuel costs.
He stressed that AMHS is a road system and it's the only link to
many communities. Therefore, he can't see reducing the budget,
which [has led] AMHS to do more aggressive marketing that it
will ask the legislature to support. Mr. Briggs estimated that
the amount invested in marketing can bring in double the money
in revenues. He said most corporations spend 5 to 8 percent of
their operating budget for marketing, and AMHS does not have
"any where near that," and the state needs to do better. He
mentioned some challenges AMHS has faced and continues to face,
including fuel [costs]; labor costs; labor issues, which have
tied up the Fairweather; and the grounding of the LeConte.
MR. BRIGGS expressed concerned about what Alaskans have to pay
to ride the ferries, although increases have been necessary
because of the unpredictable price of fuel. A recent rate study
has shown that AMHS is a bargain, so rates are unlikely to
decrease, he said. Mr. Briggs noted labor contracts as a key
issue. He further noted that the system is reviewing overtime
costs, and it may add employees to reduce overtime. Although
AMHS has more staff than required by the Coast Guard, he
expressed his belief that AMHS is not overstaffed because it
provides food and lodging services on board. He commented on
the challenge of adding vessels without additional funds.
9:35:49 AM
JOHN TORGERSON, Special Assistant, Department of Transportation
& Public Facilities, discussed the three maritime unions with
which AMHS works. He said there are master and supplemental
agreements; the latter are being negotiated. He told the
committee that recent bargaining was declared to be at an
impasse.
REPRESENTATIVE CISSNA said she spent three weeks on the ferry
system this summer and would recommend the experience. She
inquired as to the level of foot traffic on the Chenega last
year.
MR. BRIGGS estimated that there were 140 passengers.
9:44:48 AM
CO-CHAIR THOMAS said he was familiar with the need for ferries
in Southeast and has received complaints regarding the
negotiations delaying service. He asked if there is there a way
to avoid being sued for providing emergency services.
MR. TORGERSON offered to research that issue.
9:48:09 AM
REPRESENTATIVE NEUMAN expressed his support of AMHS and asked
what the impacts on the system will be if the proposed road to
Juneau is built.
MR. BRIGGS responded that a road between Skagway and Juneau will
oblige the ferries to turn around at Juneau, so they will no
longer go up Lynn Canal.
REPRESENTATIVE NEUMAN asked if Mr. Briggs thinks this road will
have a positive effect on AMHS.
MR. BRIGGS voiced his support for such a road, but said it is
difficult to measure its impact on AMHS. He surmised that a
decrease in ridership will be negligible because AMHS will be
increasing marketing and increasing ridership in the Southwest.
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:51:25 AM.
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