Legislature(1995 - 1996)
03/29/1995 01:40 PM Senate CRA
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SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
March 29, 1995
1:40 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chairman
Senator Randy Phillips, Vice Chairman
Senator Tim Kelly
Senator Fred Zharoff
MEMBERS ABSENT
Senator Lyman Hoffman
COMMITTEE CALENDAR
SENATE BILL NO. 96
"An Act relating to municipal activities or services mandated by
state statute."
SENATE BILL NO. 136
"An Act making appropriations for capital project matching grant
funds and to capitalize funds; making, amending, and repealing
capital appropriations; and providing for an effective date."
PREVIOUS SENATE COMMITTEE ACTION
SB 96 - See Community & Regional Affairs minutes dated
3/8/95, 3/17/95, 3/22/95.
SB 136 - No previous action to record.
WITNESS REGISTER
Josh Fink, Staff to Senator Kelly
State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Offered information on amendments to
CSSB 96(CRA)
Charles McKee
P.O. Box 143452
Anchorage, AK 99514
POSITION STATEMENT: Offered comments on CSSB 96(CRA)
Scott Brandt-Erichsen
Municipality of Anchorage
P.O. Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Supports amendments to CSSB 96(CRA)
Mayor Jerome Selby
Kodiak Island Borough
710 Mill Bay Road
Kodiak, AK 99615
POSITION STATEMENT: Supports CSSB 96(CRA)
Scott Sterling
Matanuska-Susitna Borough Assembly
Box 5
Wasilla, AK
POSITION STATEMENT: Supports CSSB 96(CRA) & SB 136
Tom Armour, Administrator
Box 737
Pelican, AK 99832
POSITION STATEMENT: Supports CSSB 96(CRRA) & SB 136
Kevin Ritchie, Executive Director
Alaska Municipal League
217 Second St., Suite 200
Juneau, AK 99801
POSITION STATEMENT: Voiced support for CSSB 96(CRA)
Jack Fargnoli, Senior Policy Analyst
Office of Management & Budget
P.O. Box 110020
Juneau, AK 99811-0020
POSITION STATEMENT: Offered information on Capital Matching Grants
Program in SB 136
Walt Wrede, Manager
Lake & Peninsula Borough
Box 495
King Salmon, AK 99613
POSITION STATEMENT: Supports SB 136
Al Riog
HC60, Box 277
Copper Center, AK 99573
POSITION STATEMENT: Supports SB 136
ACTION NARRATIVE
TAPE 95-10, SIDE A
Number 001
SB 96 UNFUNDED MANDATES ON MUNICIPALITIES
CHAIRMAN TORGERSON called the Senate Community & Regional Affairs
Committee meeting to order at 1:40 p.m. He brought SB 96 before
the committee and directed attention to proposed amendments to CSSB
96(CRA) , which was adopted as a working document at the March 22,
1995 meeting.
Number 025
SENATOR KELLY moved the adoption of the following amendment:
Amendment No. 3
Page 3, line 9: Delete "new"
Page 3, lines 14 & 15: Delete ", and each regulation or other
administrative order adopted after January 1, 1996,"
Page 3, line 17, after "division.": Insert "Each regulation or
administrative order adopted under the authority of a bill enacted
after January 1, 1996, that applies to municipalities must include
findings regarding its effect on municipalities prepared by the
Department of Community and Regional Affairs."
Page 4, line 21, through page 5, line : Delete all material
JOSH FINK, aide to Senator Kelly, addressing Amendment No. 3,
explained that the current subsection (b) in Section 2 requires
that Legislative Finance prepare findings on any bill, regulation
or executive order that effects municipalities. The amendment
provides that Legislative Finance prepare a finding on a bill, but
on a regulation or executive order, the Department of Community &
Regional Affairs would prepare the finding. As a result of this
change, Section 3, the fiscal note section, was deleted from the
committee substitute.
Hearing no objection to the adoption of Amendment No. 3, SENATOR
TORGERSON stated the motion carried.
Number 058
JOSH FINK explained that Amendment No. 4 would delete the second
half of the definition of "new funding" because it is not a
workable definition and it is already covered by the mechanism set
up in Section 2.
SENATOR KELLY moved the adopted of Amendment No. 4:
Amendment No. 4
Page 4, lines 26 - 27: Delete "it does not include transfers or
reductions in another appropriation;"
Hearing no objection, SENATOR TORGERSON stated the motion carried.
Number 077
SENATOR TORGERSON, speaking to Amendment No. 5 explained he
believes the first part of the amendment is necessary to further
give explanation to the meaning of subsection (a) in Section 2.
The second part of the amendment is clarifying language.
SENATOR KELLY moved the adoption of the following Amendment No. 5:
Amendment No. 5
Page 3, line 13: Delete "revoked" and insert "inoperative in its
effect upon a municipality until significant state funds are
available to pay the operational costs directly required for the
actual performance of the activity, service or program."
Page 4, line 30: After "$20,000 in" insert new language to read:
"each of"
Hearing no objection to the adoption of Amendment No. 5, SENATOR
TORGERSON stated the motion carried.
Number 185
SENATOR TORGERSON opened the hearing to public comment.
CHARLES MCKEE, testifying from Anchorage, spoke to his financial
duress because of the state having subservient action over the
municipalities, as well as the bond debt that the residents of all
municipalities are suffering under.
Number 196
SCOTT BRANDT-ERICHSEN, representing the Municipality of Anchorage,
stated he was present to respond to questions and further stated
that the municipality agrees with the amendments to the bill.
Number 215
JEROME SELBY, Mayor the Kodiak Island Borough, voiced their support
for CSSB 96(CRA). They think it is positive legislation that
creates a process whereby the people who live in the state at least
can be assured that there will be thoughtful consideration given to
them and the costs of government as bills are considered by the
legislature in the future.
Number 240
SCOTT STERLING, a member of the Mat-Su Borough Assembly, said
although the assembly has not officially adopted a position on CSSB
96(CRA), he believes that it has their support. One way it effects
his borough is that DEC regulations regarding operation of water
and sewer systems require them to obey those regulations as does
Anchorage or Fairbanks or the larger municipalities, and this tends
to drive their costs up quite high. This legislation would help in
a situation like that.
Number 268
TOM ARMOUR, Administrator, City of Pelican, stated the city council
has not adopted a position on CSSB 96(CRA), but he believes it will
go a long way in helping administrators run their communities, as
well as improving the legislature's credibility.
Number 280
KEVIN RITCHIE, Executive Director, Alaska Municipal League, stated
the League strongly supports the legislation as amended and urges
it passage out of committee.
Number 290
There being no further testimony on SB 96, SENATOR TORGERSON asked
for the will of the committee.
SENATOR R. PHILLIPS moved that CSSB 96(CRA) and its accompanying
fiscal note be passed out of committee with individual
recommendations. Hearing no objection, it was so ordered
SB 136 APPROP: FY 96 CAPITAL PROJECTS BUDGET
Number 310
SENATOR TORGERSON brought SB 136 before the committee as the next
order of business and stated it was his intention to only take
testimony on sections relating to the Capital Matching Grants
Program. He then invited Jack Fargnoli to the table to respond to
questions regarding the program that were directed to the Office of
Management & Budget in a memo dated March 23, 1995.
JACK FARGNOLI, Senior Policy Analyst, Office of Management &
Budget, said the program has been existence since 1993.
Essentially, there are two programs: one addresses municipalities
in the Department of Administration and the other addresses
unincorporated communities in the Department of Community &
Regional Affairs. They are referred to collectively as the
Matching Grant Program, but there are two separate funds, one in
each department to which money is appropriated. From OMB's
perspective, the program is running well. The few main concerns
they've had from municipalities and unincorporated communities
they've been able to address, and the feedback has been mainly
positive with little on the negative side.
Speaking to the equity issue, OMB believes that the program is
functioning as it was intended to function. The two groups of
grantees in the two programs are treated differently from other.
The municipalities have a much more elaborate set of criteria and
a set of factors that influence the distribution of money. The
unincorporated communities basically divide up whatever amount of
money is funded to the program. For the municipalities, all
grantees in both programs are subject to a maximum percentage match
of 30 percent. For the unincorporated communities, it is a flat 5
percent. So for the municipalities there is some shifting, by
policy in the legislation, that shifts more money to smaller
municipalities and provides less of a burden in terms of the match
required for them. The larger and more wealthy the municipality is
the higher their match tends to be. Mr. Fargnoli said OMB is not
aware of any equity concerns or problems.
Number 400
Mr. Fargnoli said there has been a question of a policy call nature
before them and before the legislature the last couple of years
which involves unincorporated communities lying within boroughs.
Under the current legislation those entities are not grantees. The
unincorporated community program that's in place only addresses
those located in the unorganized borough. The rationale for
treating them this way is not to establish any inequity between
unincorporated communities lying within and without of boroughs so
much as to not supplant the capital project planning authority that
is set out through a constitutional basis for boroughs.
OMB feels that the boroughs are the proper planning authority for
capital project planning, so they are "happy" with the program the
way it stands now. Further, Mr. Fargnoli said part of the
operational problem or difficulty they would have in making
amendments to change the program in this regard is the definitional
problem of trying to identify unincorporated communities located
within a borough.
Number 431
Addressing the future of the program, Mr. Fargnoli stated the new
administration is finding its own level of comfort with the
program. It has been communicated to him that the program will go
forward and the Governor's capital budget is proposing to fund the
program at the same $20 million level as it has been funded in the
past.
Number 437
SENATOR R. PHILLIPS recalled that a 10 percent administrative cost
for doing a project had been added to the statute, and he asked
Mr. Fargnoli how that was working out. JACK FARGNOLI said he is
not aware of there being any problem with the provision.
Number 445
SENATOR KELLY questioned 1993 population figures being used for a
program that is going into effect in 1996. He said he thought the
Anchorage figure was considerably higher than what was shown on the
chart. JACK FARGNOLI responded that it was a footnote mistake on
the chart and should read July 1, 1994. The numbers in the model
are taken each year and certified by the commissioner of the
Department of Community & Regional Affairs. That has been done
again for this year so those are the correct figures. SENATOR
KELLY commented that he would have staff check with the
municipality on those figures for the Anchorage area.
Number 511
SENATOR TORGERSON stated public testimony would be taken on SB 136.
TOM ARMOUR, Administrator, City of Pelican, voiced his strong
support for the Capital Matching Grants Program, encouraged its
continuation, and stated its works particularly well for the
smaller communities like Pelican.
Number 549
SENATOR KELLY informed the committee he had received the updated
population figures from the Municipality of Anchorage, and the
unofficial figure for 1994 is 250,006. The state will come out
with the official 1994 figures in September.
Number 561
SCOTT STERLING, a member of the Mat-Su Borough Assembly, stated the
Capital Matching Grants Program works well for the Mat-Su Borough.
He noted they are the fastest growing municipality in the State of
Alaska and have more road miles to take care of and the program
helps them in that way.
Number 583
WALT WREDE, Manager of the Lake & Peninsula Borough, stated the
borough likes the program and agrees with it in principle, but they
have an equity issue. The borough has 17 villages, five of them
are incorporated and twelve of them are not. They feel there is an
equity issue in that regard because part of those villages are not
guaranteed the $25,000 that unincorporated villages receive.
TAPE 95-10, SIDE B
Number 001
As an example, Mr. Wrede pointed out that in this year's Governor's
budget the Lake & Peninsula Borough would receive $44,000 for 12
communities. He noted that they tried to rectify this inequity
last year with legislation, but it failed to pass the legislature.
However, it is their intent to have legislation reintroduced again
this session.
Number 020
AL RIOG, a resident of Kenny Lake testifying via the teleconference
network, stated his support for the Capital Matching Grants Program
and encouraged its continued funding.
Number 566
There being no further witnesses to testify on SB 136, SENATOR
TORGERSON asked for the will of the committee.
SENATOR ZHAROFF moved that SB 136 be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
SENATOR TORGERSON informed the committee it was his intent to
introduce a bill on behalf of the committee similar to HB 185,
which relates to the senior citizen property tax exemption. He
said it basically lowers the limit to $75,000. He then adjourned
the meeting at 3:30 p.m.
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