Legislature(1999 - 2000)
04/10/2000 01:55 PM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 133(STA). 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 133(STA). 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 133(STA). 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 limited. 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 Alaskans. 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 them. 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.