Legislature(1999 - 2000)

04/10/2000 01:55 PM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
           SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE                                                                      
                          April 10, 2000                                                                                        
                             1:55 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                                                                                                            
SENATE BILL NO. 304                                                                                                             
"An Act relating  to state aid to  municipalities and certain  other                                                            
recipients,  and  for the  village public  safety  officer  program;                                                            
relating to municipal  dividends; and relating to  the public safety                                                            
foundation program."                                                                                                            
     -HEARD AND HELD                                                                                                            
CS FOR HOUSE BILL NO. 255(CRA)                                                                                                  
"An Act relating to cities incorporated under state law that are                                                                
home rule communities."                                                                                                         
     -MOVED OUT OF COMMITTEE                                                                                                    
SENATE CS FOR CS FOR HOUSE BILL NO. 133(STA)                                                                                    
"An Act relating to municipal service areas and providing for voter                                                             
approval of the formation, alteration, or abolishment of certain                                                                
service areas."                                                                                                                 
     -HEARD AND HELD                                                                                                            
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
SB 304 - No previous Senate action                                                                                              
HB 255 - No previous Senate action                                                                                              
HB 133 - See State Affairs Committee minutes dated 2/24/00.                                                                     
WITNESS REGISTER                                                                                                              
Mr. Peter Torkelson                                                                                                             
Legislative Staff for Representative Fred Dyson                                                                                 
Alaska State Capitol                                                                                                            
Juneau, AK 99811-1182                                                                                                           
POSITION STATEMENT: Commented on CSHB 255.                                                                                      
Mr. Pat Poland                                                                                                                  
Director of Municipal & Regional Assistance Division                                                                            
Department of Community & Economic Development                                                                                  
333 W 4th Ave. Suite 220                                                                                                        
Anchorage, AK 99501-2341                                                                                                        
POSITION STATEMENT: Supports CSHB 255.                                                                                          
Ms. Patty Swenson                                                                                                               
Legislative Staff for Representative Con Bunde                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK 99811-1182                                                                                                           
POSITION STATEMENT: Commented on SCS for CS for HB 133.                                                                         
Representative Con Bunde                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK 99811-1182                                                                                                           
POSITION STATEMENT: Commented on SCS for CS for HB 133.                                                                         
Mr. Mike Prax                                                                                                                   
Fairbanks North Star Borough Assembly                                                                                           
1015 Meadow Rue                                                                                                                 
North Pole, AK 99705                                                                                                            
POSITION STATEMENT: Supports SCS for CS for HB 133.                                                                             
Mr. Gershon Cohen                                                                                                               
Address Not Provided                                                                                                            
Haines, AK 99827                                                                                                                
POSITION STATEMENT: Supports SCS for CS for HB 133.                                                                             
Mr. Rob Goldberg                                                                                                                
Address Not Provided                                                                                                            
Haines, AK 99827                                                                                                                
POSITION STATEMENT: Supports SCS for CS for HB 133.                                                                             
Mr. Kevin Ritchie                                                                                                               
Alaska Municipal League                                                                                                         
217 Second Street, Suite 200                                                                                                    
Juneau, AK 99801                                                                                                                
POSITION STATEMENT: Opposes SCS for CS for HB 133.                                                                              
Mr. Mike Scott                                                                                                                  
Mat-Su Borough Manager                                                                                                          
350 East Dahlia Avenue                                                                                                          
Palmer, AK 99645                                                                                                                
POSITION STATEMENT: Opposed to SCS for CS for HB 133.                                                                           
Mr. Jim Swing                                                                                                                   
Public Works Manager for Mat-Su Borough                                                                                         
350 East Dahlia Avenue                                                                                                          
Palmer, AK 99645                                                                                                                
POSITION STATEMENT: Opposed to SCS for CS for HB 133.                                                                           
Mr. Ocie Adams                                                                                                                  
HB Box 200                                                                                                                      
Wasilla, AK 99654                                                                                                               
POSITION STATEMENT: Commented on SCS for CS for HB 133 and supports                                                             
SB 304.                                                                                                                         
Mr. Jim Norcross                                                                                                                
P.O. Box 242                                                                                                                    
Willow, AK 99688                                                                                                                
POSITION STATEMENT: Commented on SCS for CS for HB 133.                                                                         
Mr. Duane Udland                                                                                                                
Chief of the Anchorage Police Department                                                                                        
4501 South Bragaw                                                                                                               
Anchorage, AK 99507                                                                                                             
POSITION STATEMENT: Supports SB 304.                                                                                            
Ms. Nadine Hargesheimer                                                                                                         
Fairbanks North Star Borough                                                                                                    
P.O. Box 71267                                                                                                                  
Fairbanks, AK 99707                                                                                                             
POSITION STATEMENT: Supports SB 304.                                                                                            
Mr. Scott Malmquist                                                                                                             
Fire Chief of the Soldotna Fire Department                                                                                      
231 South Binkley Street                                                                                                        
Soldotna, AK 99669                                                                                                              
POSITION STATEMENT: Supports SB 304.                                                                                            
Mr. Scott Walden                                                                                                                
Assistant Fire Chief                                                                                                            
City of Kenai                                                                                                                   
105 South Willow Street                                                                                                         
Kenai, AK 99611                                                                                                                 
POSITION STATEMENT: Supports SB 304.                                                                                            
ACTION NARRATIVE                                                                                                              
TAPE 00-04, SIDE A                                                                                                            
Number 001                                                                                                                      
CHAIRMAN TIM  KELLY called the Senate  Community & Regional  Affairs                                                            
Committee meeting  to order at 1:55 p.m.  Present  were Senators Tim                                                            
Kelly, Mackie,  Phillips, and Hoffman.  The first  order of business                                                            
to come before the committee was CSHB 255(CRA).                                                                                 
                   HB 255-HOME RULE COMMUNITIES                                                                             
MR. PETER TORKELSON, staff  to Representative Fred Dyson, stated the                                                            
goal of  CSHB 255(CRA) is  to allow small,  unincorporated  areas to                                                            
adopt a home rule charter  and to allow existing second class cities                                                            
to adopt a home  rule charter to let local governments  adopt a more                                                            
flexible  form of municipal  government to  address specific  needs.                                                            
Currently, if a community  has fewer than 400 people, the government                                                            
is prohibited from adopting a charter.                                                                                          
MR.  TORKELSON  explained  that a  home rule  community  entity  was                                                            
created to ensure that  CSHB 255(CRA) would be effective.  Home rule                                                            
communities are  not school districts nor are they  required to file                                                            
a full financial  audit.  Currently,  home rule cities are  required                                                            
to zone and  plot land.  They would  not be required to do  so under                                                            
CSHB 255(CRA).   He is unaware of  any opposition to CSHB  255(CRA).                                                            
Number 067                                                                                                                      
MR. PAT  POLAND, Director  of the  Municipal  & Regional  Assistance                                                            
Division  for the Department  of Community  & Economic Development,                                                             
stated support for CSHB 255(CRA).                                                                                               
CHAIRMAN KELLY stated a  proposed technical amendment will accompany                                                            
CSHB 255(CRA) to the Senate floor.                                                                                              
SENATOR MACKIE  moved CSHB 255(CRA)  and its accompanying  amendment                                                            
from committee with individual  recommendations.  Without objection,                                                            
the motion carried.                                                                                                             
           HB 133-VOTER APPROVAL OF SERVICE AREA CHANGES                                                                    
MS.  PATTY SWENSON,  staff  to Representative  Con  Bunde, made  the                                                            
following  comments.    SCS  CSHB  133(STA)  will  strengthen  local                                                            
control  of service  areas.   Article  10,  section  1, of  Alaska's                                                            
constitution established  a principle of maximum self-government. To                                                            
achieve  maximum self-government,  Article  10, section 5,  provides                                                            
for  the creation,  alteration,  and  abolishment of  service  areas                                                            
subject to provision of law.                                                                                                    
AS   29.35.450  codifies   these   constitutional   provisions   and                                                            
establishes  a  mechanism  by  which  service   areas  are  created,                                                            
altered,  and abolished.    A service  area  is one  in which  local                                                            
residents  assess themselves  to provide for  a particular  service.                                                            
Currently, there are over 250 service areas statewide.                                                                          
SCS CSHB 133(STA)  amends AS 29.35.450  to support local  control by                                                            
prescribing  a  majority  vote  mechanism   under  three  scenarios:                                                            
abolishment  of a  service area;  abolishment and  replacement  of a                                                            
service area; and alteration  of a service area or combining it with                                                            
another  service area.   SCS CSHB  133(STA) will  settle the  debate                                                            
about who is  entitled to vote during  the creation, alteration,  or                                                            
abolishment of a service area.                                                                                                  
REPRESENTATIVE  CON  BUNDE  stated  SCS  CSHB  133(STA)  allows  for                                                            
smaller local government  and to operate less expensive communities.                                                            
SENATOR MACKIE asked if there is any opposition to the bill.                                                                    
REPRESENTATIVE  BUNDE  stated the  Municipality  of Anchorage  (MOA)                                                            
opposes it  because it limits the  MOA's capabilities pertaining  to                                                            
home rule.                                                                                                                      
CHAIRMAN  KELLY asked  if the bill  will primarily  pertain to  road                                                            
service areas.                                                                                                                  
REPRESENTATIVE  BUNDE stated it will  apply mainly to road  and fire                                                            
service areas.                                                                                                                  
SENATOR MACKIE asked if Fairbanks is concerned about the bill.                                                                  
REPRESENTATIVE  BUNDE stated  yes,  there are  180-190 limited  road                                                            
service areas in Fairbanks.   They would like to consolidate some of                                                            
those service  areas and save administrative costs.   This bill will                                                            
allow them consolidation but a variation in taxation.                                                                           
MR. MIKE  PRAX, Fairbanks  North  Star Borough  Assembly,  expressed                                                            
concern  about  trying   to  control  the  administrative   expenses                                                            
generated by the diversity  of services that people enjoy.  Mr. Prax                                                            
stated support for SCS CSHB 133(STA).                                                                                           
MR. GERSHON COHEN,  representing himself, stated Haines  is the only                                                            
third class  borough in Alaska.   Mr. Cohen  referred to a  planning                                                            
and zoning issue that occurred  in Haines two years ago which caused                                                            
the  borough  to  change  the  planning   and  zoning  service  area                                                            
boundaries.   As a  result, 97 percent  of the  planning and  zoning                                                            
service  area was removed  from the  Mud Bay Land  Use Service  Area                                                            
(MBLUSA)  and that removed  control  for planning  and zoning.   Mr.                                                            
Cohen stated support for SCS CSHB 133(STA).                                                                                     
MR. ROB GOLDBERG,  Chairman of MBLUSA,  stated the borough  assembly                                                            
agreed  to   reduce  the   size  of  the   service  area  and   that                                                            
gerrymandered  the borough's  power.  Next  month, MBLUSA is  facing                                                            
abolishment  under  a proposed  ordinance,  and the  borough  hasn't                                                            
given a reason  for that.  Mr. Goldberg stated support  for SCS CSHB
CHAIRMAN KELLY  asked if SCS CSHB  133(STA) authorizes planning  and                                                            
zoning service areas.                                                                                                           
MS. SWENSON stated she believes they are authorized.                                                                            
CHAIRMAN KELLY asked if  it was Mr. Goldberg's intention to set up a                                                            
planning and zoning service area.                                                                                               
MR. GOLDBERG  stated yes.   In a third class  borough, the  only way                                                            
citizens can  get planning and zoning  is through service  areas and                                                            
the only  power they have  is to collect taxes  for education.   The                                                            
service area in Haines has been in place for 10 years.                                                                          
CHAIRMAN  KELLY stated this  bill incorporates  road service  areas,                                                            
fire service areas and planning & zoning service areas.                                                                         
SENATOR PHILLIPS added parks & recreation service areas.                                                                        
MR. KEVIN  RITCHIE, Alaska  Municipal League  (AML), stated  the AML                                                            
focused mainly  on section  3 which requires  a vote within  the old                                                            
and new service  area.  AML adopted  a policy statement in  November                                                            
that opposes  legislation to mandate  fragmented service  area votes                                                            
in boroughs.  Some boroughs  now exercise this as a home rule power;                                                            
it is  a decision  that can  be made  locally.  The  people in  that                                                            
community  have  the ability  to work  within  that  system to  make                                                            
changes.  The  issue that could arise if a vote is  mandated is that                                                            
if one  service area  exists with  150 people  and a subdivision  is                                                            
added,  the vote must  be affirmative  in both  old and new  service                                                            
areas.  AML believes  voting is a choice that each  municipality can                                                            
make.  AML does not oppose  the section allowing the municipality to                                                            
have differential  rates within a service area.  Mr.  Ritchie stated                                                            
opposition for the bill but support for section 3.                                                                              
MR. MIKE  SCOTT, Mat-Su  Borough Manager,  stated SCS CSHB  133(STA)                                                            
implies the  State is stepping in  and stopping local control  in an                                                            
area where  there is an  elected assembly.   Every municipality  has                                                            
the  ability to  put a  petition  together to  appear  on the  local                                                            
ballot.   SCS CSHB 133(STA)  would limit local  control in  a second                                                            
class borough.   Local assembly laws  should not be undermined  by a                                                            
mandatory  State law.   Mr.  Scott stated  opposition  for SCS  CSHB
MR. JIM SWING, Public Works  Manager for the Mat-Su Borough,  stated                                                            
the Mat-Su Borough has  erosion control service areas, flood control                                                            
service  areas, and  water &  sewer service  areas.   In  Talkeetna,                                                            
water &  sewer issues can  only be served  within the service  area.                                                            
The borough has received  requests for services from people adjacent                                                            
to the service area.  Public  works has no power outside the service                                                            
area.   If SCS  CSHB 133(STA)  passes, it  would require  a vote  of                                                            
people  inside and  outside  that service  area.   If  a borough  is                                                            
serving people outside  a service area, then the service area should                                                            
be expanded.   Mr. Swing stated concern and opposition  for SCS CSHB
Number 382                                                                                                                      
MR. OCIE  ADAMS, representing  himself, stated  general support  for                                                            
SCS CSHB 133(STA).                                                                                                              
MR.  JIM NORCROSS,  representing  himself,  referred  to the  Mat-Su                                                            
Borough  consolidation  issue.   Mr. Norcross  asked Representative                                                             
Bunde to explain section 4(b).                                                                                                  
REPRESENTATIVE BUNDE replied  section 4(b) states that service areas                                                            
that  want  to  maintain   two  different  levels   of  service  and                                                            
consolidate to save administrative  costs can do so and maintain the                                                            
original level of taxation.                                                                                                     
MR. NORCROSS  asked if service area  funds would be used  to upgrade                                                            
services for the service area that was annexed.                                                                                 
REPRESENTATIVE  BUNDE stated  no, not without  a vote of the  people                                                            
who are effected.                                                                                                               
CHAIRMAN KELLY  asked Mr. Scott if  the Mat-Su Borough had  proposed                                                            
language for the bill.                                                                                                          
MR. SCOTT stated  yes.  The borough has concerns about  the tax cap,                                                            
home rule boroughs,  and third class  boroughs.  He stated  he would                                                            
speak with Mr. Grenn in Chairman Kelly's office.                                                                                
Number 456                                                                                                                      
REPRESENTATIVE  BUNDE stated no municipality likes  to see its power                                                            
                 SB 304-MUNICIPAL DIVIDEND PROGRAM                                                                            
MR. RITCHIE,  AML, stated SB 304 provides  permanent stable  funding                                                            
for municipal  revenue  sharing, capital  matching  grants, and  the                                                            
Village Public Safety Officer  (VPSO) program.  Mr. Ritchie referred                                                            
to graphs given to the  committee.  The reason for the change in the                                                            
municipal revenue  sharing formula  is that very few municipalities                                                             
know why  they receive the  money that they  do.  The allocation  of                                                            
general   funds  to  a   municipality  causes   problems  when   the                                                            
legislature  has to  appropriate the  money.  With  the new  revenue                                                            
sharing  formula everyone  will understand  why  they are  receiving                                                            
money and where  it is being allocated.  The new formula  creates an                                                            
allocation for roads, similar  to what currently exists.  Every mile                                                            
of road maintained  by a municipality would receive  $2,000 per mile                                                            
and $10 per capita for its use volume.                                                                                          
SB  304 allocates  funds  for  three different  services  in  public                                                            
safety.  If a  municipality provides fire safety,  the program would                                                            
get $20 per capita served,  EMS would get $20 per capita served, and                                                            
police would get  $20 per capita served.  It maintains  the existing                                                            
formula for  hospitals and  health facilities.   It also provides  a                                                            
base  minimum funding  for  power services  for  municipalities  and                                                            
allocates  $45,000 for  municipalities.  SB 304  allows $10,000  for                                                            
unorganized communities; currently they receive $5,000.                                                                         
The program  reached  the amount of  $85.9 million  for fiscal  year                                                            
2001.   The  allocation  formula  transfers  money from  the  excess                                                            
earnings of  the PFD and is based  on $150 multiplied by  the number                                                            
of people who  received dividends the previous year,  allowing for a                                                            
population sensitive formula.                                                                                                   
SB 304 uses the excess  Permanent Fund earnings after full dividends                                                            
have been paid and after  the fund has been fully inflation proofed.                                                            
Mr. Ritchie referred  to graphs given to the committee.   The impact                                                            
on  the dividend  would  be negligible  for  the first  five  years,                                                            
during which  time the public would  receive, in addition  to a PFD,                                                            
$150 in a local tax offset  per person.  This could be an additional                                                            
dividend  program that  could  put more  money into  the pockets  of                                                            
CHAIRMAN  KELLY  explained  the Alaska  Permanent  Fund Corporation                                                             
(APFC) has projected amounts  for the dividend for the next 10 years                                                            
as follows:                                                                                                                     
           2000 - approximately $1,960                                                                                          
          2001  - approximately $1,980                                                                                          
          2002  - approximately $1,980                                                                                          
          2003  - approximately $1,900                                                                                          
          2004  - approximately $1,840                                                                                          
          2005  - approximately $1,880                                                                                          
          2006  - approximately $1,950                                                                                          
          2007 - approximately $2,020                                                                                           
The dividend will  level off in the year 2007.  SB  304 will make an                                                            
insignificant  change  to  the  growth  of  the  dividend  check  as                                                            
Alaskans know it.                                                                                                               
MR. RITCHIE agreed.                                                                                                             
SENATOR PHILLIPS asked if SB 304 requires a vote of the people.                                                                 
MR. RITCHIE answered no.                                                                                                        
SENATOR PHILLIPS  stated SB 304 will  affect everyone so  the public                                                            
should have the right to vote.                                                                                                  
CHAIRMAN KELLY asked what  the result will be on property tax owners                                                            
throughout the State.                                                                                                           
MR. RITCHIE stated SB 304  will provide municipalities with a higher                                                            
level of support.  Over  time, SB 304 will stabilize revenue sharing                                                            
and  property  taxes.   Mr.  Ritchie referred  to  a poll  taken  by                                                            
Representative  Jeanette James with significant support  for SB 304.                                                            
SENATOR  PHILLIPS stated  he  would not  support SB  304 without  an                                                            
advisory vote.                                                                                                                  
Tape 00-04, Side B                                                                                                            
MR. DUANE UDLAND,  Chief of the Anchorage Police Department,  stated                                                            
a  long-term  ability   for  cities  to  plan  a  budget   would  be                                                            
beneficial.  Mr. Udland stated support for SB 304.                                                                              
MS.  NADINE  HARGESHEIMER,  Fairbanks  North  Star  Borough,  stated                                                            
support  for SB  304.   SB 304  would  create a  stabilized  funding                                                            
source that Fairbanks views  as an asset.  SB 304 would help all the                                                            
service areas around Fairbanks.                                                                                                 
MR. LEN MALMQUIST,  Fire Chief of  Soldotna Fire Department,  stated                                                            
support  for  SB  304.   Three  small  volunteer   fire departments                                                             
adjacent to the  Soldotna Fire Department also cooperate,  they have                                                            
no regular source of funding  and SB 304 would provide stability for                                                            
MR.  SCOTT WALDEN,  Assistant  Fire  Chief for  the  City of  Kenai,                                                            
stated support for SB 304.                                                                                                      
MR. ADAMS stated  support for SB 304  and for a vote of the  public.                                                            
CHAIRMAN  KELLY  asked  how  the funding  would  be  split  so  both                                                            
homerule and municipalities receive funding.                                                                                    
MR. RITCHIE  stated it would be divided  by the population  of those                                                            
service areas.                                                                                                                  
SENATOR  PHILLIPS  asked  Mr.  Scott if  the  Mat-Su  Borough  would                                                            
support a vote for SB 304.                                                                                                      
MR. SCOTT  stated if  the legislature  could maintain  that the  PFD                                                            
would stay  intact, then there  would be no  problem with a  vote of                                                            
the people.                                                                                                                     
Number 501                                                                                                                      
MS. LORRAINE DERR,  Executive Director of the Alaska  State Hospital                                                            
& Nursing Home Association,  stated SB 304 would create a stabilized                                                            
funding base.  Ms. Derr stated support for SB 304.                                                                              
MR. CRAIG DUNCAN,  City and Borough of Juneau (CBJ),  stated support                                                            
for  SB 304.    CBJ  is making  budget  reductions  because  of  the                                                            
continued  State shared  municipal assistance  reductions from  last                                                            
year.  CBJ  is trying to  make decisions on  what budget to  reduce.                                                            
CBJ doesn't  want to see taxes increase,  and is concerned  that the                                                            
10 mill  tax cap may  pass.  SB  304 would help  fund education  and                                                            
emergency services.                                                                                                             
CHAIRMAN KELLY  stated that because concerns about  SB 304 have been                                                            
expressed, it will be held in committee.                                                                                        
There  being no  further  business  to come  before  the  committee,                                                            
CHAIRMAN KELLY adjourned the meeting at 2:54 p.m.                                                                               

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