Legislature(2007 - 2008)BELTZ 211

02/27/2007 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS


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03:31:46 PM Start
03:32:27 PM Overview: Local Boundary Commission
04:37:53 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview - Local Boundary Commission TELECONFERENCED
Bills Previously Heard/Scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                       February 27, 2007                                                                                        
                           3:31 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Donny Olson, Chair                                                                                                      
Senator Joe Thomas                                                                                                              
Senator Gary Stevens                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Albert Kookesh, Vice Chair                                                                                              
Senator Thomas Wagoner                                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Overview: Local Boundary Commission                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No action to report.                                                                                                            
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
DARROLL HARGRAVES, Chair                                                                                                        
Local Boundary Commission                                                                                                       
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT: Presented an overview of the Local Boundary                                                               
Commission (LBC).                                                                                                               
                                                                                                                                
DAN BOCKHORST                                                                                                                   
Division of Community Advocacy                                                                                                  
Department of Commerce, Community & Economic Development                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions regarding the Local                                                                    
Boundary Commission.                                                                                                            
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  DONNY  OLSON  called the  Senate  Community  and  Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  3:31:46  PM.                                                             
Senators  Olson and  Thomas were  present at  the call  to order.                                                               
Senator Wilken was also present.                                                                                                
                                                                                                                                
3:32:27 PM                                                                                                                    
^Overview: Local Boundary Commission                                                                                            
                                                                                                                                
CHAIR  OLSON   announced  an  overview  of   the  Local  Boundary                                                               
Commission.                                                                                                                     
                                                                                                                                
DARROLL HARGRAVES,  Chair, Local Boundary Commission  (LBC), said                                                               
he serves  on the commission  at large  and has provided  the LBC                                                               
report for the current legislative session.                                                                                     
                                                                                                                                
3:34:28 PM                                                                                                                    
MR. HARGRAVES said the report  has three sections: an overview of                                                               
the commission; a  summary of municipal boundary  activity; and a                                                               
discussion  of public  policy  issues. Of  100  state boards  and                                                               
commissions, the LBC is one  of two executive branch boards named                                                               
in our constitution,  he said. The framers wanted  to insure that                                                               
boundaries   be  dealt   with   fairly  and   from  a   statewide                                                               
perspective.  Local governments  are  critical  to the  effective                                                               
delivery  of  public  services.  The  LBC  judges  proposals  for                                                               
incorporation;   reclassifications;   annexations;   attachments;                                                               
dissolutions;  and   merger  and  consolidation  of   cities  and                                                               
boroughs. Anytime a  city wants to change its status  in any way,                                                               
the LBC is likely to get  involved, he said. Other duties include                                                               
an  obligation  to  make studies  of  local  government  boundary                                                               
problems  and adopt  regulations for  establishing standards  and                                                               
procedures for boundary actions.  He introduced the other members                                                               
of the LBC, and all serve at the pleasure of the governor.                                                                      
                                                                                                                                
3:36:58 PM                                                                                                                    
MR.  HARGRAVES said  the commissioners  are  not compensated  for                                                               
their service.  The Department of Commerce,  Community & Economic                                                               
Development (DCCED)  provides staff support. The  report outlines                                                               
various municipal  boundary activities  across Alaska.  For 2006,                                                               
there  were  activities  related  to city  incorporation  in  six                                                               
communities. The LBC acted on  one formal petition to incorporate                                                               
a second-class city on Prince  of Wales Island in the unorganized                                                               
borough. About ten city governments  have inquired about possible                                                               
annexations.  There have  been city  dissolutions, but  none were                                                               
actually accomplished last year. "Some  years ago we saw interest                                                               
and a  problem with  some of the  second-class cities,  and there                                                               
was considerable activity  in the dissolution of  some of those."                                                               
At the present time, there is  no information that any cities are                                                               
in serious trouble or contemplating dissolution, he stated.                                                                     
                                                                                                                                
3:39:43 PM                                                                                                                    
CHAIR   OLSON  asked   how  many   communities  have   asked  for                                                               
dissolution over the past year compared with five years ago.                                                                    
                                                                                                                                
MR. HARGRAVES said none in the  past year, and there were several                                                               
prior to five years ago.                                                                                                        
                                                                                                                                
CHAIR OLSON asked how many communities are delinquent.                                                                          
                                                                                                                                
3:40:10 PM                                                                                                                    
DAN  BOCKHORST, Division  of  Community  Advocacy, Department  of                                                               
Commerce, Community & Economic Development  (DCCED), said the LBC                                                               
is his principal responsibility, and  there are no current active                                                               
considerations of  dissolution that he  is aware of. He  has seen                                                               
some  reports that  have suggested  that  there are  a number  of                                                               
communities  that  are  experiencing financial  difficulties.  He                                                               
said he is not prepared to discuss that today.                                                                                  
                                                                                                                                
CHAIR OLSON asked how long  a community remains delinquent before                                                               
there is some type of assistance or penalty.                                                                                    
                                                                                                                                
MR. BOCKHORST said there is  a statutory obligation for the DCCED                                                               
to investigate communities that are  inactive, but none are being                                                               
investigated  in that  context.  There is  substantial effort  in                                                               
other  parts  of  the  DCCED   to  provide  assistance  to  local                                                               
government, but the LBC is not involved in those activities.                                                                    
                                                                                                                                
3:42:22 PM                                                                                                                    
CHAIR OLSON said people have left Ivanof Bay.                                                                                   
                                                                                                                                
MR. HARGRAVES said apparently they have  not made it known to the                                                               
LBC. Because of lack of  dissolutions, he assumes that things are                                                               
holding  pretty well.  There have  been 16  areas this  last year                                                               
that  has had  some level  of  activity with  regards to  borough                                                               
incorporations. Three petitions were  pending before the LBC last                                                               
year. He said  there have been borough annexations  to deal with,                                                               
and  one  is   pending.  There  has  been   interest  in  borough                                                               
detachments by six  boroughs in 2006, but no  petitions have been                                                               
filed.  There have  been activities  with consolidations,  and in                                                               
one case,  the LBC acted on  a petition for consolidation  of the                                                               
City of  Ketchikan and  the Ketchikan  Gateway Borough,  and that                                                               
took a  lot of energy. He  said there has been  major activity in                                                               
revising the rules and regulations of  the LBC, and that has been                                                               
a  priority,  including  extensive   rewrites  and  hearings.  He                                                               
reported that the  LBC will travel for hearings  around the state                                                               
the following  day, and  he encouraged the  committee to  get the                                                               
revisions and join the LBC for the hearings.                                                                                    
                                                                                                                                
3:46:07 PM                                                                                                                    
MR. HARGRAVES  said there will  be meetings in  Nome, Dillingham,                                                               
Bethel, Cordova,  Craig, and Juneau.  He said he is  pleased that                                                               
legislation  is  being discussed  this  session.  There are  five                                                               
issues of  importance to the  LBC, and they relate  to increasing                                                               
difficulties  in rendering  borough boundary  decisions. He  said                                                               
revisions will  help, but it  is a huge job  for the LBC  and the                                                               
petitioners when  the LBC judge borough  boundary decisions. "The                                                               
general lack of incentives  for borough incorporation…we propose,                                                               
now  for   the  third   year,  that   we  look   heartily  toward                                                               
incentives."  There could  be  penalties as  well.  He noted  the                                                               
absence   of  standards   and   methods   for  establishment   of                                                               
unorganized boroughs. He suggested  providing funding for borough                                                               
feasibility studies.                                                                                                            
                                                                                                                                
3:48:40 PM                                                                                                                    
MR. HARGRAVES  said the constitution  calls for all of  Alaska to                                                               
be in boroughs, organized or  unorganized, according to standards                                                               
and methods  set in law.  It also calls  for a minimum  number of                                                               
boroughs--the  smallest number  possible. It  also requires  that                                                               
each  borough   embrace  an  area  and   population  with  common                                                               
interest.  In 1963,  there was  only one  tiny borough  formed in                                                               
Alaska. That legislature, with the  endorsement of Governor Egan,                                                               
mandated that eight specific regions  of the state form boroughs.                                                               
At the  time, the eight  regions encompassed about 80  percent of                                                               
Alaskans.  Today  84 percent  of  all  Alaskans reside  in  those                                                               
boroughs that were  mandated. It is noteworthy  that most members                                                               
of the  Senate Community and  Regional Affairs Committee  live in                                                               
boroughs that weren't mandated by the 1963 legislature, he said.                                                                
                                                                                                                                
3:51:08 PM                                                                                                                    
MR. HARGRAVES  said after 1963  the state returned to  the policy                                                               
of  voluntary  borough  incorporation. The  North  Slope  Borough                                                               
stepped  forward to  organize.  There is  a common  misperception                                                               
that unorganized  areas cannot afford to  operate boroughs. There                                                               
have been studies  that indicate that the  perception is accurate                                                               
for a  few areas, but  it is not  accurate for many  other areas.                                                               
There  are  hot spots  in  Alaska  where  the wealth  per  capita                                                               
exceeds what  is in  many organized boroughs,  so with  the right                                                               
incentives and the  right approach, "perhaps we  could see people                                                               
need  and want  the  independence [and]  the  local control  that                                                               
would come with the organization of incorporation."                                                                             
                                                                                                                                
3:52:52 PM                                                                                                                    
MR. HARGRAVES  said last year  the legislature  provided $237,500                                                               
for borough studies in four  regions; however, there is no source                                                               
of  funding for  new studies.  The LBC  urges the  legislature to                                                               
fund such studies. He said  the report discusses compensation. It                                                               
is a difficult  request, but the time put into  the LBC is beyond                                                               
reasonable for a volunteer. The  growing number and complexity of                                                               
proposals requires  devoting more  and more time.  One proceeding                                                               
alone required  about 350 hours  for one member, which  is nearly                                                               
nine 40-hour work weeks. He  is not proposing salaries, but other                                                               
boards get a  stipend that lets the members know  that their work                                                               
is appreciated.  He said he  is not  saying there will  be better                                                               
commissioners, but some measure of compensation is deserved.                                                                    
                                                                                                                                
3:55:57 PM                                                                                                                    
MR. BOCKHORST said  Ivanof Bay is an  unincorporated community in                                                               
the Lake and  Peninsula Borough, so there is no  issue before the                                                               
LBC for dissolution, because there is no city government.                                                                       
                                                                                                                                
SENATOR THOMAS asked about the eight mandatory boroughs.                                                                        
                                                                                                                                
MR. HARGRAVES said the 1963 Act incorporated eight.                                                                             
                                                                                                                                
MR. BOCKHORST said  seven formed after that, so there  are 16. He                                                               
noted  that 84  percent of  Alaskans live  in the  eight mandated                                                               
boroughs, and four  percent live in the eight  boroughs that were                                                               
formed voluntarily.                                                                                                             
                                                                                                                                
SENATOR THOMAS surmised  that 16 percent of Alaskans  live in the                                                               
remaining unincorporated areas.                                                                                                 
                                                                                                                                
MR. BOCKHORST said 12 percent.                                                                                                  
                                                                                                                                
3:58:50 PM                                                                                                                    
GEORGIANNA  ZIMMERLE,  Commissioner, Local  Boundary  Commission,                                                               
Ketchikan,  said she  stands ready  to "assist  you with  what we                                                               
presented  to you  to  try and  get resolutions  to  some of  our                                                               
problems and some of the state's problems."                                                                                     
                                                                                                                                
4:00:37 PM                                                                                                                    
SENATOR STEVENS said  he appreciates the work of the  LBC, and he                                                               
asked about potential  new boroughs. He asked about  two or three                                                               
mining areas considering formation.                                                                                             
                                                                                                                                
MR. BOCKHORST  said there  are two pending  petitions. One  is to                                                               
create a unified borough government  in the Delta/Greely regional                                                               
educational  attendance area,  headquartered  in Delta  Junction.                                                               
The LBC will  conduct a public hearing in about  two weeks. There                                                               
is also  a petition about  a Wrangell-area borough, and  there is                                                               
one  for  annexation  of  territory  to  the  existing  Ketchikan                                                               
borough. There are formal studies  ongoing in the Kuspuk regional                                                               
educational attendance  area, and there is  a borough feasibility                                                               
study  for  the Chatham/Glacier  Bay  region.  There is  a  study                                                               
funded by  the legislature of  the fiscal viability  of detaching                                                               
the Eagle River/Chugiak  area from Anchorage. He  noted a nearly-                                                               
complete study for  forming a borough in the  Yukon Flats region,                                                               
and  Petersburg is  in final  efforts for  a petition  to form  a                                                               
borough, which might be filed in two or three months.                                                                           
                                                                                                                                
4:03:50 PM                                                                                                                    
MR. HARGRAVES  noted that the  incentives could be cash  or lands                                                               
with timber.  But one  thing that stimulates  people the  most is                                                               
starting some kind  of resource development so  that local people                                                               
can protect the area or have some local control.                                                                                
                                                                                                                                
SENATOR WILKEN asked for an update of the Donlin Mine area.                                                                     
                                                                                                                                
4:04:46 PM                                                                                                                    
MR. BOCKHORST  said the prospective  Donlin Creek  Development is                                                               
in the Kuspuk borough boundary.  The borough feasibility study is                                                               
nearing completion  and was funded  by the legislature  last year                                                               
at a  cost of $60,000. He  added that the LBC  approved a Skagway                                                               
borough which involved dissolution of the city.                                                                                 
                                                                                                                                
MR.  HARGRAVES said  commissioners and  staff have  expertise and                                                               
should be considered a resource for any developing legislation.                                                                 
                                                                                                                                
4:07:06 PM                                                                                                                    
TIM  BOURCY, Mayor,  City of  Skagway, said  he has  a tremendous                                                               
amount of experience  in what it takes to form  a borough, and it                                                               
is extremely  expensive and time-consuming.  It was not  always a                                                               
favorable  process,   but  he  stands   behind  the   concept  of                                                               
organizing; it  is important  to the future  of the  state. There                                                               
are problems with the process,  he stated. There are 18 standards                                                               
to qualify for  a borough, and they are big  hoops. A majority of                                                               
them are  appropriate, but  the major problem  "is that  there is                                                               
kind  of an  idea of  what  a borough  should be,  and that  idea                                                               
is…being laid on  top of the state." There are  numerous areas in                                                               
the state that  want to form boroughs, but they  can't because of                                                               
some of  the regulations, including the  model-borough boundaries                                                               
that are  put there  as guidelines,  "but it is  a lot  more than                                                               
that when  it's actually applied  on the  ground. I think  if the                                                               
legislature  relaxed the  way they  look  at it  and allowed  the                                                               
state to  form naturally, these  areas would  organize. Southeast                                                               
would  organize fairly  rapidly,"  he  said, including  Wrangell,                                                               
Petersburg, Kake,  and Angoon. The  process lasted more  than six                                                               
years for the City of Skagway, he noted.                                                                                        
                                                                                                                                
4:10:07 PM                                                                                                                    
MR. BOURCY  said he has heard  from many people who  watched what                                                               
Skagway had to  go though, and a lot are  asking themselves, "why                                                               
would we bother  with what you guys have gone  through; why would                                                               
we bother to spend the time and  the energy just to get kicked in                                                               
the  face?"  He  said  he   doesn't  have  an  answer  for  them.                                                               
Incentives are  needed. It  cost Skagway  over $200,000.  He said                                                               
last  year he  was  in Juneau  talking  about the  administrative                                                               
borough,  "and some  of these  incentives where  you didn't  even                                                               
have to  pay for government.  Well, that's  not what we  want. We                                                               
want governments to step forward;  we want them to be functional;                                                               
we want them to provide services."  That is the ultimate goal, he                                                               
stated. The idea of the  borough boundaries is old. "The U.S.S.R.                                                               
no  longer  exists,  the  Berlin wall  is  gone.  Countries  have                                                               
changed."  He noted  that the  LBC has  rewritten regulations  of                                                               
over  180  pages,  and  he   doesn't  think  that  is  the  right                                                               
direction. "It's  just adding more layers,  more regulations, and                                                               
making it more difficult," he opined.                                                                                           
                                                                                                                                
4:12:13 PM                                                                                                                    
MR. BOURCY said an alternative  would be to write legislation and                                                               
organize the  state, "and get  it done."  There are areas  in the                                                               
state that  will never have  the tax  base or resources  to form,                                                               
but there  is the  other 90  percent of the  state that  is quite                                                               
capable of it.  Given the opportunity and  incentives, they would                                                               
form. He said he doesn't  envy the commission--they deserve to be                                                               
compensated in some manner for the large amount of work they do.                                                                
                                                                                                                                
4:13:37 PM                                                                                                                    
MR. BOURCY said he has been mayor for six years.                                                                                
                                                                                                                                
SENATOR  STEVENS  asked  what  the  hurdles  were  and  what  the                                                               
incentives were.                                                                                                                
                                                                                                                                
MR. BOURCY  said there are  incentives in statute,  which include                                                               
money  for  schools and  for  writing  the charter.  But  Skagway                                                               
declined   those   because   those  incentives   were   used   as                                                               
disincentives-as a  reason not to  allow the Skagway  petition to                                                               
move  forward because  it  was  going to  cost  the state  money.                                                               
Skagway has  the ability  to pay  for its  school, and  it didn't                                                               
want  to walk  away from  that responsibility.  Other than  that,                                                               
there  is no  incentive--it is  a cost.  The boundary  of Skagway                                                               
will be what  abuts the Haines Borough, and it  happens to be the                                                               
boundaries of the city, including Dyea, he said.                                                                                
                                                                                                                                
4:15:36 PM                                                                                                                    
SENATOR WILKEN asked for a list of what should be changed.                                                                      
                                                                                                                                
MR. BOURCY said he has been working on it and making comments.                                                                  
                                                                                                                                
4:16:27 PM                                                                                                                    
CHAIR OLSON asked about compensation.                                                                                           
                                                                                                                                
MR. HARGRAVES said  he doesn't want salaries, just  a stipend per                                                               
meeting,  similar  to  other boards  that  receive  compensation.                                                               
Currently, travel  expenses are covered,  so a stipend on  top of                                                               
that to recognize their work would be appreciated.                                                                              
                                                                                                                                
CHAIR OLSON asked about other state boundary commissions.                                                                       
                                                                                                                                
MR.  HARGRAVES  said  most  states have  some  kind  of  planning                                                               
commissions, but most lands are all organized into counties.                                                                    
                                                                                                                                
CHAIR OLSON asked if others are compensated.                                                                                    
                                                                                                                                
MR. HARGRAVES said some are full-time professionals.                                                                            
                                                                                                                                
CHAIR OLSON asked if the LBC has had a recent audit.                                                                            
                                                                                                                                
MR.  HARGRAVES   said  any  audit   would  be  done   within  the                                                               
department. There are no contained funds for travel, he added.                                                                  
                                                                                                                                
4:20:57 PM                                                                                                                    
CHAIR OLSON  asked about  the time and  financial expense  of the                                                               
organizing process.                                                                                                             
                                                                                                                                
MR.  HARGRAVES  said  some  areas  could get  a  grant  from  the                                                               
legislature,  and he  noted that  there have  been some  specific                                                               
appropriations  for  some  areas   to  do  their  planning.  Some                                                               
communities have  gotten grants from other  sources, even private                                                               
grants.  The communities  need to  know that  "after they  do get                                                               
incorporated, they've got some money coming by statute."                                                                        
                                                                                                                                
CHAIR OLSON said the incentives are all after the fact.                                                                         
                                                                                                                                
MR. HARGRAVES said  he has been on the  record encouraging direct                                                               
grants for communities that have a high level of interest.                                                                      
                                                                                                                                
CHAIR OLSON  asked if he  would be  in favor of  incentives being                                                               
given before the actual incorporation.                                                                                          
                                                                                                                                
4:22:37 PM                                                                                                                    
MR. HARGRAVES said,  "I am not sure it's the  same incentive, but                                                               
an  incentive of  a grant  to help  them with  their organization                                                               
would be  appropriate." A lot of  the work at the  local level is                                                               
to try to get  the residents geared up. By the  time they come to                                                               
the LBC, they have made a considerable effort, he stated.                                                                       
                                                                                                                                
4:23:20 PM                                                                                                                    
CHAIR OLSON asked  "what was bought" with the  $250,000 spent for                                                               
borough studies last year.                                                                                                      
                                                                                                                                
MR. BOCKHORST said the LBC  took a hands-off position with regard                                                               
to  the administration  of  those programs;  it  was assigned  to                                                               
others in the  DCCED. The approach was to  solicit proposals from                                                               
private  contractors to  conduct the  studies, which  are ongoing                                                               
and nearing  completion. He has a  copy of the contracts  and the                                                               
requests for  proposals. There  is a  divide that  exists between                                                               
conducting the  study and  taking the next  step to  petition for                                                               
incorporation, he explained.  The study for the  Kuspuk region is                                                               
nearing  completion, and  there is  interest in  taking the  next                                                               
step.  He  doesn't know  if  the  Chatham/Glacier Bay  area  will                                                               
pursue incorporation of  the large region, but  there is interest                                                               
in forming smaller  boroughs. The third area under  study was the                                                               
viability of detaching Eagle River, and that is not completed.                                                                  
                                                                                                                                
4:26:07 PM                                                                                                                    
MR. BOCKHORST said  the department granted $30,000 to  a group in                                                               
the Yukon Flats region to do a borough feasibility study.                                                                       
                                                                                                                                
CHAIR OLSON said  boroughs have value by  providing services, and                                                               
he asked  the LBC  view of  tribal governments,  especially since                                                               
they provide public safety, roads, and erosion control.                                                                         
                                                                                                                                
MR.  HARGRAVES said  when a  petition comes  to the  LBC all  the                                                               
players have been involved. There  is no LBC position. There have                                                               
been  discussions  about  natural resources  as  incentives,  and                                                               
another might be  the outsourcing of state services  to the local                                                               
boroughs, like jails, clinics, or Head Start, for example.                                                                      
                                                                                                                                
4:28:27 PM                                                                                                                    
SENATOR  STEVENS  said  88  percent   of  the  population  is  in                                                               
boroughs, but  there are many  areas that are decades  from being                                                               
ready  for  a  borough government.  If  the  previously-mentioned                                                               
pending areas were  included, that would be a  high percentage of                                                               
the  population. Not  everyone should  be in  a borough,  because                                                               
some are just too rural to form a government.                                                                                   
                                                                                                                                
SENATOR WILKEN suggested compensation of  $150 per day. In Senate                                                               
Finance there  was a bill  that looked  at the board  stipend for                                                               
Alaska Housing.  He thought  that bill  could be  resurrected. If                                                               
there is  a commission  that deserves some  sort of  stipend, the                                                               
LBC does, because  it is the most  difficult and underappreciated                                                               
board in state  government. It is important enough  to be written                                                               
into the  constitution with the  vision that local  government is                                                               
the  best  government. Most  people  are  worried about  what  is                                                               
around the corner, and the LBC  is looking at the next generation                                                               
and beyond. The issues carry a  lot of angst about change. Alaska                                                               
is  the  only  state  with unorganized  areas.  Local  government                                                               
works, and it is the bedrock of America's system.                                                                               
                                                                                                                                
4:32:17 PM                                                                                                                    
SENATOR WILKEN said  the commission works hard, and  he noted the                                                               
service of  Tony Nakazawa  and Robert  Hicks. The  state is  at a                                                               
spot where  it can  become a bunch  of boroughs  without bringing                                                               
the surrounding  areas into the  discussion. The state  is headed                                                               
toward  Donlin  Creek and  perhaps  Delta,  "where we  carve  out                                                               
little enclaves  of wealth,  and those  little wealthy  areas are                                                               
very happy because  they'll have a big tax  base; they'll provide                                                               
very  little, if  anything, of  local support."  The people  that                                                               
aren't considered  will look back  and ask what  happened. Donlin                                                               
Creek is  coming at  us, he  said. "There's going  to be  a group                                                               
that  wants Donlin  Creek to  be  this sweet  little borough  and                                                               
without  regard" for  others. He  warned  against allowing  those                                                               
"little pockets of wealth." He said  the state has to be careful,                                                               
"and we've  taken the  first step with  the current  situation of                                                               
starting  that, and  that is  very distressing  to me."  Delta is                                                               
close to  that with regards to  the gas line, and  the areas left                                                               
out may never have the resources for self governance.                                                                           
                                                                                                                                
4:35:28 PM                                                                                                                    
SENATOR WILKEN called  it the Balkanization of  Alaska. The LBC's                                                               
job is terribly difficult, he concluded.                                                                                        
                                                                                                                                
CHAIR  OLSON  said  there  are  parts  of  Alaska  that  want  to                                                               
organize.  The  Balkanization  is  interesting;  you  don't  want                                                               
someone from the Soviet Union  dictating to them what they should                                                               
do. He  said the bulk  of what he hears  from areas that  are not                                                               
organized  is that  they  are taken  into  consideration and  not                                                               
overrun by the U.S.S.R-type people  that were so dominant in that                                                               
Balkan area prior to them coming  together. He doesn't want it to                                                               
turn into an us-versus-them thing.                                                                                              
                                                                                                                                
The meeting was adjourned at 4:37:53 PM.                                                                                      
                                                                                                                                
                                                                                                                                

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