Legislature(1999 - 2000)
02/17/1999 01:32 PM Senate CRA
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* first hearing in first committee of referral
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SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
February 17, 1999
1:32 p.m.
MEMBERS PRESENT
Senator Tim Kelly, Chair
Senator Jerry Mackie, Vice Chair
Senator Randy Phillips
Senator Lyman Hoffman
MEMBERS ABSENT
Senator Jerry Ward
COMMITTEE CALENDAR
OVERVIEW BY LOCAL BOUNDARY COMMISSION VICE-CHAIR KATHLEEN
WASSERMAN. COMMISSIONERS NANCY CANNINGTON AND ALLAN TESCHE
PARTICIPATED VIA TELECONFERENCE, AND DANIEL BOCKHORST FROM THE
DEPARTMENT OF COMMUNITY AND REGIONAL AFFAIRS (DCRA) WAS PRESENT.
ACTION NARRATIVE
TAPE 99-2, SIDE A
Number 001
CHAIRMAN TIM KELLY called the Senate Community & Regional Affairs
Committee meeting to order at 1:32 p.m. Present were Senators
Mackie, Hoffman, and Kelly, Chairman. The meeting was convened to
hear an overview by members of the Local Boundary Commission (LBC).
KATHY WASSERMAN, LBC Vice-Chair, noted Chairman Waring was unable
to attend today's meeting, however Commissioners Cannington and
Tesche were participating via teleconference. She discussed the
four topics covered in the 1998 LBC annual report, filed on January
28, 1999. Those topics are: an overview of the LBC; prospective
and 1998 issues before the LBC; a formal recommendation to the
Legislature by the LBC to annex 6.5 miles to the City of Haines;
and policy issues before the LBC.
MS. WASSERMAN noted the LBC provides tools to Alaska's 145 city
governments, 16 organized boroughs, and unorganized areas to govern
their local affairs and cope with the financial challenge of
providing local services. One of Alaska's larger cities is facing
an annual loss of $2 million in local revenues because of
commercial development shifting outside of its corporate limits.
That city will petition the LBC next month to expand its
boundaries. Such proposals have a great impact on the state and
its finances. The LBC was established in Alaska's Constitution to
ensure that proposals to create and alter cities and boroughs would
be dealt with objectively, from a statewide perspective. The LBC
is comprised of five members: one from each judicial district and
a fifth member, the chair, appointed at large. It's functions
include incorporation of, annexation to, detachment from, and
dissolution of cities and boroughs; reclassification of cities; and
mergers and consolidations of cities and boroughs. The LBC is also
charged with studying local government boundary problems. DCRA
provides staff assistance to the LBC.
MS. WASSERMAN said in 1998 the LBC addressed proposals for
annexation to the Ketchikan Gateway Borough, the City of Haines,
the City of Thorne Bay, the City of Palmer, the City of Fairbanks,
the City of Wasilla, and consolidation of the Haines Borough and
the City of Haines. Other proposals, expected to be filed shortly,
include petitions for consolidation of the Fairbanks North Star
Borough and the City of Fairbanks, incorporation of Talkeetna as a
home rule city, and annexation to the cities of Kodiak, Ketchikan,
Palmer, Alegnagek, Wasilla, and Craig. City governments in
Wrangell, Skagway, Nome, and Petersburg are reportedly developing
petitions for borough incorporation. The LBC also spent
considerable time improving its regulations and will continue that
effort in 1999.
Regarding the recommendation to the Legislature to annex 6.5 square
miles to the City of Haines, MS. WASSERMAN explained Article 10,
Section 12, of Alaska's Constitution provides that the LBC may
present proposed local government boundary changes to the
Legislature during the first 10 days of session. The change will
become effective 45 days after presentation or upon adjournment,
whichever is earliest, unless disapproved by a majority of the
members of each house. An LBC proposal for Haines annexation was
voted down by the Legislature in 1984. The LBC approved a similar
Haines annexation proposal in 1997 but deferred filing a
recommendation for that annexation with the Legislature last year
at the urging of the City of Haines, Haines Borough, and others.
Those parties requested, and were granted by the LBC, a one-year
deferral to allow voters to consider consolidation of the two local
governments as an alternative to annexation. All parties agreed,
beforehand, that if the consolidation effort was unsuccessful, the
Haines Borough and other opponents would discontinue their
opposition to annexation. The LBC held a hearing in Haines in
August of 1998 and subsequently granted the petition for
consolidation, which was defeated by Haines voters by a vote of 545
to 542. In accordance with the previous agreement, the LBC has
filed its formal recommendation for annexation. A clear need for
city government in the 6.5 square mile area exists, and the City of
Haines can best provide services to that area. The proposal meets
all other applicable legal standards.
MS. WASSERMAN discussed LBC policy issues and concerns. The LBC is
asking the Legislature to amend laws which govern the manner in
which the LBC acts on petitions. The proposed amendments (pages
55-57) have the sole purpose of eliminating ambiguities in the law
to avoid future litigation. She urged committee members to
introduce and support legislation to reduce the risk of litigation
and decrease costs.
MS. WASSERMAN raised the issue of disincentives to the extension of
borough government in Alaska and said the LBC is not concerned
about eliminating disincentives for the purpose of promoting more
government for its own sake, but rather because it is critical to
recognize the role of municipal and organized borough governments
in carrying out the duties of the state at a local level.
Organized boroughs share the financial burden of carrying out the
state's constitutional duty to provide public schools. Over the
years, boroughs have saved state government several billion dollars
in educational funding. The founders of the Alaska Constitution
hoped that state government would provide incentives to encourage
incorporation of organized boroughs. Over the last 40 years,
disincentives have grown substantially and only four percent of
Alaskans live in boroughs that were voluntarily formed. The
widespread assumption that the unorganized areas of Alaska lack the
readiness and capability to operate as organized boroughs is false;
many equal or exceed several of the regions organized under the
1963 Mandatory Borough Act. Those disincentives weigh heavily on
the State in terms of addressing state and local fiscal problems.
MS. WASSERMAN noted a second policy concern centers around borough
boundary issues. The LBC believes that greater compliance with the
Alaska Constitution could be achieved with respect to the
unorganized borough if AS 29.03.010 were amended to divide the
single unorganized borough into multiple unorganized boroughs. The
foundation for such an effort already exists in the model borough
boundaries established by the LBC over 10 years ago, however
aspects of that model warrant further reflection. Another
principle policy concern of the LBC is the possible "balkanization"
of the unorganized borough, through the formation of numerous
single community borough governments. Last, while the LBC is
anxious to serve Alaska's local governments, it is also mindful of
the need for efficiency and economy. For that reason, it has begun
to place greater stress on more comprehensive approaches to
annexation by local governments. One city in Alaska has undertaken
42 separate annexations since 1970. Numerous piecemeal annexations
impose needless costs on the local government, LBC, and other state
and federal agencies and private organizations.
Number 295
SENATOR PHILLIPS asked if a hybrid borough could be created in
which the unorganized areas are organized only for the purpose of
granting school powers and collecting school taxes. He noted his
constituents are tired of seeing the unorganized areas pay very
little or nothing toward the costs of schools. The residents of
unorganized areas seem to oppose another layer of government. He
felt it is reasonable that the Legislature, as assembly members of
unorganized boroughs, ask residents of those areas to pay something
toward the cost of education.
COMMISSIONER ALLAN TESCHE, LBC, responded that issue merits a lot
of consideration by the Legislature at this time, particularly in
light of the budget shortfall. He hoped any legislative proposals
encourage the voluntary formation of new municipal governments,
rather than the involuntary imposition of governments on the
outlying areas of Alaska.
SENATOR PHILLIPS stated he thinks the unorganized areas are going
to have to "step up to the plate" and pay something toward the cost
of education and that some sort of mandatory school borough status
should be placed on the unorganized areas of the state.
Number 345
SENATOR MACKIE noted that areas that are not part of a borough are
not necessarily unorganized and not paying taxes. He pointed out
residents of Craig and other communities pay property and sales
taxes, and they contribute substantially to the local school
districts via a separate one percent tax. He clarified that some
areas, particularly REAAs, do not make a contribution toward
education.
SENATOR HOFFMAN referred to page 21 of the annual report, and asked
why those areas are considering borough organization, and whether
those areas will follow the proposed borough boundaries or the
boundaries proposed under the Mandatory Borough Act.
MR. DAN BOCKHORST, staff to the LBC, replied the primary interest
behind borough organization is the prospect that they will be
mandated to organize by the Legislature. Many of the listed
communities are exploring borough government to seize the
opportunity to create a borough government that the local community
prefers. In regard to the proposed boundaries, Mr. Bockhorst said
the boundaries being contemplated, with the exception of Delta-
Greeley, are quite a bit smaller than the model borough boundaries
defined by the LBC ten years ago.
SENATOR HOFFMAN asked how the LBC would respond if residents of
Unalaska Island and Prince of Wales Island wanted to incorporate,
using their islands as boundaries.
MR. BOCKHORST replied Prince of Wales Island conforms closely to
the model borough boundaries, but very little interest in actively
pursuing incorporation in that area exists. In the case of
Unalaska, the LBC's model borough boundaries envision a government
that would extend to the end of the Aleutian Islands. The LBC
would have to wrestle with some policy questions over such a
proposal.
SENATOR MACKIE thanked the Commissioners and Mr. Bockhorst for
their response to the dilemma in Haines and stated that he will not
vote against annexation. He asked for an update on the status of
the Ketchikan Gateway Borough's petition for annexation.
MS. WASSERMAN replied it is in the process of amending and
resubmitting its petition.
SENATOR MACKIE asked if the amended petition will include Meyers
Chuck and Hyder.
MR. BOCKHORST informed committee members the LBC imposed a March 12
deadline for an amendment from the Ketchikan Gateway Borough and,
to his knowledge; the amendment is to include Meyers Chuck and
Hyder.
SENATOR MACKIE asked what the LBC time line on the Ketchikan
proposal will be.
MS. WASSERMAN answered the hearings will most likely be scheduled
in September.
SENATOR MACKIE asked if hearings will be held in Hyder and Meyers
Chuck.
MS. WASSERMAN said the LBC will do as much as possible to hold
hearings in those communities but she was unsure how state travel
restrictions will affect the location of the hearings.
MR. BOCKHORST added LBC Chairman Waring wishes to hold hearings in
those two communities. The law provides that a hearing could be
held if two LBC members are physically present at the location.
Other members could participate via teleconference.
SENATOR MACKIE asked what DCRA's official position is on that
annexation.
MR. BOCKHORST stated DCRA recommended that the original petition be
denied; the exclusion of Hyder and Meyers Chuck being one reason.
DCRA has not taken a position on the prospective amended petition.
SENATOR HOFFMAN, in response to Senator Phillips' earlier comment,
pointed out that many unorganized areas of the state pay property
and sales taxes to support their communities. One of the major
disincentives for unorganized areas is that many are surrounded by
federal lands so no state lands are available for selection.
There being no further questions or testimony, SENATOR KELLY
announced committee staff will review the suggested legislation and
get back to LBC members. He adjourned the meeting at 2:05 p.m.
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