02/12/2008 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB204 | |
| SB235 | |
| SJR15 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 204 | TELECONFERENCED | |
| += | SB 235 | TELECONFERENCED | |
| *+ | SJR 15 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
February 12, 2008
3:32 p.m.
MEMBERS PRESENT
Senator Donald Olson, Chair
Senator Albert Kookesh, Vice Chair
Senator Gary Stevens
Senator Joe Thomas
Senator Thomas Wagoner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 204
"An Act relating to an optional exemption from municipal
property taxes for residences of widows and widowers of certain
members of the armed forces of the United States; and providing
for an effective date."
MOVED SB 204 OUT OF COMMITTEE
SENATE BILL NO. 235
"An Act relating to shipping, sending, transporting, or bringing
alcohol to a local option area and providing alcohol to others
in the local option area, including penalties for violations;
relating to furnishing alcohol to a minor and to civil penalties
for licensees whose agents or employees furnish alcohol to a
minor; relating to manslaughter as a direct result of ingestion
of alcoholic beverages brought in violation of a local option
prohibition; relating to reports of the court concerning certain
alcohol violations by minors; making conforming amendments; and
providing for an effective date."
MOVED CSSB 235(CRA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 15
Disapproving the Local Boundary Commission recommendation
regarding the annexation of territory to the Ketchikan Gateway
Borough.
MOVED CSSJR 15(CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 204
SHORT TITLE: MUNI TAX EXEMPTION: COMBAT DEATHS
SPONSOR(S): SENATOR(S) THERRIAULT
01/16/08 (S) PREFILE RELEASED 1/4/08
01/16/08 (S) READ THE FIRST TIME - REFERRALS
01/16/08 (S) CRA, FIN
01/31/08 (S) CRA AT 3:30 PM BELTZ 211
01/31/08 (S) -- MEETING CANCELED --
02/05/08 (S) CRA AT 3:30 PM BELTZ 211
02/05/08 (S) Scheduled But Not Heard
02/12/08 (S) CRA AT 3:30 PM BELTZ 211
BILL: SB 235
SHORT TITLE: ALCOHOL: LOCAL OPTION/LICENSING/MINORS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/18/08 (S) READ THE FIRST TIME - REFERRALS
01/18/08 (S) CRA, JUD, FIN
01/31/08 (S) CRA AT 3:30 PM BELTZ 211
01/31/08 (S) -- MEETING CANCELED --
02/05/08 (S) CRA AT 3:30 PM BELTZ 211
02/05/08 (S) Scheduled But Not Heard
02/07/08 (S) CRA AT 3:30 PM BELTZ 211
02/07/08 (S) Heard & Held
02/07/08 (S) MINUTE(CRA)
02/12/08 (S) CRA AT 3:30 PM BELTZ 211
BILL: SJR 15
SHORT TITLE: DISAPPROVING KETCHIKAN ANNEXATION
SPONSOR(S): SENATOR(S) KOOKESH
01/30/08 (S) READ THE FIRST TIME - REFERRALS
01/30/08 (S) CRA, FIN
02/12/08 (S) CRA AT 3:30 PM BELTZ 211
WITNESS REGISTER
SENATOR GENE THERRIAULT
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented SB 204.
ERNEST PRAX, Staff
to Senator Therriault
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented SB 204.
STEVE VAN SANT, State Assessor
Division of Community and Regional Affairs
Anchorage AK
POSITION STATEMENT: Answered questions about SB 204.
SUSAN STACY HERNANDEZ, Widower
Fairbanks AK
POSITION STATEMENT: Spoke in support of SB 204.
ANNE CARPENETI, Criminal Division
Department of Law
Juneau AK
POSITION STATEMENT: Spoke in favor of SB 235.
KACI SCHROEDER, Staff
to Representative Bill Thomas
Alaska State Legislature
Juneau AK
POSITION STATEMENT: Presented SJR 15.
LYNN CHRYSTAL, Member
Local Boundary Commission
Department of Community & Economic Development
POSITION STATEMENT: Spoke in opposition to SJR 15.
SCOTT BRANDT-ERICHSEN, Attorney
Ketchikan Gateway Borough
Ketchikan AK
POSITION STATEMENT: Spoke in opposition to SJR 15.
SHERRI HAYWARD
Annette Island School District
Metlakatla AK
POSITION STATEMENT: Spoke in favor of SJR 15.
DICK COOSE
Ketchikan AK
POSITION STATEMENT: Spoke in opposition to SJR 15.
RONALD ERIKSON, Superintendent of Schools
Craig City School District
Craig AK
POSITION STATEMENT: Spoke in favor of SJR 15.
DON JOHNSON, Superintendent of Schools
Hydaburg AK
POSITION STATEMENT: Spoke in favor of SJR 15.
KAREN CLEARY, President
Klawock City School Board
Klawock AK
POSITION STATEMENT: Spoke in favor of SJR 15.
JAMES GOULD, Mayor
Thorne Bay AK
POSITION STATEMENT: Spoke in favor of SJR 15.
DENNIS WATSON, Mayor
Craig AK
POSITION STATEMENT: Spoke in favor of SJR 15.
BRETT AGENBROAD, Superintendent
Annette Island School District
Annette Island AK
POSITION STATEMENT: Spoke in favor of SJR 15.
ERIC GEBHARDT, Superintendent and Principal
Kake City Schools
Kake AK
POSITION STATEMENT: Spoke in favor of SJR 15.
BUD BURNETT, President
Hollis Community Council
Hollis AK
POSITION STATEMENT: Spoke in favor of SJR 15.
JOE WILLIAMS, Mayor
Ketchikan Gateway Borough
Ketchikan AK
POSITION STATEMENT: Spoke in opposition to SJR 15.
RACHEL WITTY, Attorney
Civil Division
Department of Law
Anchorage AK
POSITION STATEMENT: Answered questions regarding SJR 15.
LAUREN BURCH, Superintendent
Southeast Island School District
Thorne Bay AK
POSITION STATEMENT: Spoke in favor of SJR 15.
ACTION NARRATIVE
CHAIR DONALD OLSON called the Senate Community and Regional
Affairs Standing Committee meeting to order at 3:32:15 PM.
Senators Olson, Kookesh, Wagoner, and Thomas were present at the
call to order.
SB 204-MUNI TAX EXEMPTION: COMBAT DEATHS
CHAIR OLSON announced the consideration of SB 204.
3:32:41 PM
SENATOR GENE THERRIAULT, Alaska State Legislature, said SB 204
provides a partial or whole property tax exemption for the widow
or widower of a member of the armed forces who dies in the line
of duty. The deceased has to have been in active duty when
killed or fatally injured. The language said the death has to
occur within 90 days of the injury, and it was dropped in the
House. It applies only to permanent residents and allows the
municipalities to use the exemption or not. He doesn't
anticipate every municipality using it, but it would empower
them to make the decision. The structure of the exemption could
have time limits. There are a number of Alaskans in the armed
services deployed overseas. The suggestion for SB 204 came from
an Alaskan whose spouse was killed.
3:35:36 PM
SENATOR WAGONER said 80 soldiers have died, and some have
families in Alaska. He asked how many people this will affect.
ERNEST PRAX, Staff to Senator Therriault, said he can get that
information.
SENATOR WAGONER said it wasn't worth holding up the bill for,
but it would be interesting to know.
SENATOR THERRIAULT said he can find the number of people who
would be eligible, but local governments can shape the program
as they wish.
CHAIR OLSON asked about someone living outside Alaska who moves
to the state after their spouse's death.
SENATOR THERRIAULT said the bill allows the municipality to
shape the exemption, or the committee could do that. The current
language could be interpreted to allow that or not.
3:38:57 PM
STEVE VAN SANT, State Assessor, Division of Community and
Regional Affairs, said the language allows a person who becomes
a permanent resident of Alaska to qualify. A widow or widower of
a senior citizen or disabled veteran loses a similar exemption
by remarrying. HB 204 could be worded so that the exemptions
continue "even if they remarried and came up from the state of
Texas, if the local ordinance read that they could get remarried
… as long as they become a permanent resident."
CHAIR OLSON asked if suicides are covered.
SENATOR THERRIAULT said he is not sure if that would be an
injury from battle.
CHAIR OLSON asked if the Alaska Municipal League (AML) or any
municipalities have a position.
MR. PRAX said he doesn't know.
SENATOR THERRIAULT said he asked municipalities with army
installations. He received resolutions from North Pole, the
North Star Borough, and Fairbanks, and he thinks that AML would
support giving a municipality the latitude to shape the
exemption. It is drafted to give them the maximum amount of
flexibility. Local governments can give no exemption, a whole or
partial exemption, or a limit on years, for example.
3:42:26 PM
SUSAN STACY HERNANDEZ, Widower, Fairbanks, said she is a widower
of Sergeant Hernandez who was killed in action in 2006. A
widower of a disabled veteran can get a tax exemption. She
supported her husband in his military career, and she would like
help as the wife who stayed behind. She is not from Alaska but
decided to stay. It is a great place to raise her kids. Wives of
lost soldiers should receive a tax exemption.
CHAIR OLSON expressed his sorrow and gratefulness.
3:44:21 PM
SENATOR KOOKESH moved to report SB 204 from committee with
individual recommendations and attached fiscal note(s). There
being no objection, SB 204 passed out of committee.
The committee took an at-ease from 3:44:58 PM until 3:46:21 PM.
SB 235-ALCOHOL: LOCAL OPTION/LICENSING/MINORS
CHAIR OLSON announced the consideration of SB 235.
ANNE CARPENETI, Criminal Division, Department of Law, said SB
235 includes suggestions from three sources to try and curb
alcohol abuse, particularly in rural areas with a local option.
The bill prohibits sending alcohol to local option communities
in plastic bottles. It provides for mandatory civil penalties on
licensees whose agents or employees have been convicted of
furnishing alcohol to a minor. It will adopt a Class C felony
for a third offense of bringing alcohol into a local option area
with a look-back period of ten years. It adopts mandatory terms
for bootleggers, similar to drunk driving. The bill amends the
manslaughter law so that a person who knowingly sells alcohol in
a local option area may be charged with manslaughter if the
alcohol is a direct cause of someone's death. It provides for a
database of children cited for minor consuming, so that police
officers and courts will know a person's alcohol history.
Bootleggers who are charged with the crime will be eligible for
therapeutic courts if warranted.
3:48:50 PM
SENATOR THOMAS moved Amendment 1, labeled 25-GS2035\A.1, as
follows:
Page 1, lines 3 - 4:
Delete "furnishing alcohol to a minor and to civil
penalties for licensees whose agents or employees furnish
alcohol to a minor"
Insert "when a conviction occurs for certain purposes
relating to alcoholic beverage licenses"
Page 2, line 12, through page 3, line 23:
Delete all material.
Renumber the following bill sections accordingly.
Page 3, line 25:
Delete "(b) of"
Page 4, line 4, through page 5, line 2:
Delete all material.
Renumber the following bill sections accordingly.
Page 8, line 10:
Delete "Sections 1, 8, and 9"
Insert "Sections 1, 5, and 6"
Page 8, lines 12 - 14:
Delete all material.
Reletter the following subsections accordingly.
Page 8, line 15:
Delete "Section 3"
Insert "Section 2"
Page 8, line 17:
Delete "Sections 6 and 7"
Insert "Sections 3 and 4"
Page 8, line 20:
Delete "Sections 10 and 11"
Insert "Sections 7 and 8"
CHAIR OLSON objected.
SENATOR THOMAS said Amendment 1 deletes furnishing alcohol to a
minor and civil penalties for licensees whose agents or
employees furnish alcohol to a minor. It does not remove from
statute "the concept that furnishing alcohol to a minor that
there are civil penalties to the licensee. There already exist
such penalties in the existing statute." He said Page 2, line 13
(a), of the bill speaks of permits being suspended or revoked if
the board finds: "and then it lists paragraphs (1) through (12),
(12) being the additional language that was part of this bill."
That is what Amendment 1 would remove -- language that holds the
licensee responsible for the acts of their employees. "In this
land we are held responsible for what we do, not for what other
people do." He read parts of (11) of the bill regarding
suspending or revoking a license if a licensee knowingly or
recklessly violates the law.
3:51:52 PM
SENATOR THOMAS said, "We hold people responsible, licensees, and
we also require them to post signs in their establishment that
are available telling the employees what they should do. Not
only do they have classes on what they should do, but they also
are required to place a sign that reads: Warning. A person who
provides alcoholic beverages to a person under 21 years of age,
if convicted under AS04.16.051, could be imprisoned for up to
five years and be fined up to $50,000. That seems like a pretty
fair warning, and it is required by law that the person does
it." The licensee shouldn't be held responsible for the actions
of another person. "Last year we had discussions about a
particular bill that would have allowed three men in a
particular situation to leave the premises where a woman was
being beaten to death, and there was found, at that point in
time, no reason to change that law, and that bill was set aside,
or that aspect of the bill was taken out that would have held
those people responsible for not reporting that crime." It is
incongruent to let someone walk away from a homicide, versus
this situation when someone does not even know that a violation
is taking place.
3:54:00 PM
SENATOR WAGONER said the Senate made a terrible mistake last
year on that legislation based on one person's legal opinion
without getting a legal opinion from the Attorney General's
office. Two wrongs don't make a right.
MS. CARPENETI said Amendment 1 would remove the civil penalties
for licensees. There are other provisions in SB 235 that are not
dependent on that being there, "so the bill could stand alone
without it." But the DOL opposes Amendment 1, because … of the
experience seen with tobacco enforcement. If store owners have
responsibility for their employees, they will be much more
responsible. It is a good tool to discourage sales to minors.
3:55:57 PM
SENATOR WAGONER asked if that law on tobacco sales caused the
graph "to do that."
MS. CARPENETI said, "We believe so."
A roll call vote was taken. Senators Thomas, Kookesh, and
Stevens voted in favor of Amendment 1, and Senators Wagoner and
Olson voted against. Amendment 1 passed on a vote of 3-2.
3:57:02 PM
SENATOR THOMAS moved to report SB 235, as amended, from
committee with individual recommendations and attached fiscal
note(s). There being no objection, CSSB 235(CRA) moved out of
committee.
The committee took an at-ease from 3:57:44 PM to 4:00:35 PM.
SJR 15-DISAPPROVING KETCHIKAN ANNEXATION
4:00:45 PM
CHAIR OLSON announced the consideration of SJR 15 and said he
wanted to move it.
The committee took an at-ease from 4:02:11 PM to 4:03:11 PM.
SENATOR STEVENS moved to adopt the committee substitute (CS) for
SJR 15, labeled 25-LS1393\C, Cook, as a working document.
Hearing no objections, Version C was before the committee.
4:03:39 PM
KACI SCHROEDER, Staff to Representative Bill Thomas, said there
is a similar resolution in the House. The changes in the CS only
correct some dates.
SENATOR KOOKESH said the Ketchikan Gateway Borough (KGB)
submitted an application for the annexation of 4,731 square
miles in 2006, increasing the size of its landholding by three
times. The application was approved by the Local Boundary
Commission (LBC) despite the outcry of the surrounding
unorganized boroughs and the impacts it will have. The report by
the LBC glosses over the fact that the current application is
similar to the one submitted by the KGB in 1997, which was
denied. Those findings only had a de minimis affect on the 2006
decision. Any annexation by any borough is controversial, and
every effort must be made to be clear, fair, and methodical. The
unorganized boroughs believe that proper steps were not taken
regarding a possible conflict of interest by an LBC commissioner
who wrote the 1997 decision, reversed it in 2007, and then
accepted a job as the KGB manager before the final decision was
written. An independent review was requested and denied. Due to
the lack of public support, the inconsistency in decisions, and
other abnormal circumstances surrounding the KGB annexation
process, annexation should not be allowed to go forward.
MS. SCHROEDER said the annexation will have a $1.2 million
impact on the unorganized borough from the loss of forest
receipts. If the receipt program is not reauthorized by
Congress, it will continue at a lower rate. Additionally, there
is a payment in lieu of taxes (PILT) that unorganized boroughs
get, and $200,000 of that will be transferred. It will be felt
by 16 cities, 12 school districts, and 2,700 students. In
exchange, there will not be any additional services because it
is mostly uninhabited land that the KGB is annexing. There are a
few lodges but no towns. The 1999 petition and the recent
petition were substantially similar, except for annexing Myers
Chuck and Union Bay, "but in the end the LBC did not require
them to annex them, instead they required them to annex Hyder
within five years, and Hyder has nothing in common with the
Ketchikan Borough." The president of Hyder's community
association said that the relationship is nonexistent, and it
doesn't want to be part of the borough. During public testimony
36 people spoke against the annexation and no one spoke for it,
except for those on the assembly or borough staff.
4:08:13 PM
SENATOR STEVENS asked if there are schools that will be annexed.
SENATOR KOOKESH said the annexed part has no people or schools,
"and the way the formula is set up in the district - it's by
mile, you receive your income, and because they are selecting
only those areas without any students or any schools, they're
going to get the money but no responsibility."
SENATOR WAGONER asked about children living in Myers Chuck.
MS. SCHROEDER said there are people there, but it is not part of
the annexed area.
SENATOR KOOKESH said he thinks that area will go into Wrangell.
4:09:39 PM
LYNN CHRYSTAL, Member, Local Boundary Commission, Department of
Community & Economic Development, said there are three elements
to an annexation decision: the procedures and standards defined
by law and the facts. The LBC decision reflects those. He said
the LBC submitted a letter opposing SJR 15, and it notes several
misstatements in the resolution. The letter addresses the
dissimilarities of the borough's 1999 and 2007 annexations,
especially regarding the reliance of model-borough boundaries.
It addresses national forest receipts as well. Those receipts
are temporary and may change over time, whereas the formation of
a borough is permanent. The LBC is guided by Alaska's
constitution and statutes, which make little or no provision for
the fiscal affects from such transitory programs. He noted that
the loss of the forest receipts was the focus of written and
oral public comments. "The commission is very sympathetic to
that loss. It is a factor that was analyzed when considering the
best interests of the state. The [assertions] that the
commission did not consider the impact of the annexation on the
surrounding unorganized borough is simply not true." The Secure
Rural Schools Act is sunset, which is what drives the funding
that is being shifted to Ketchikan. The reauthorization of that
act is before Congress. The legislature is aware of this matter
through its joint Legislative Education Funding Task Force,
which recommended that the standing committees on education
monitor federal actions regarding the national forest receipts
program. To date, the funding has not been reauthorized by
Congress. If it is, the earliest that Ketchikan will receive the
money is 2010.
4:12:55 PM
SENATOR STEVENS asked what Ketchikan gets out of the annexation.
MR. CHRYSTAL said obviously it will have more control regarding
timber harvesting or recreation in the surrounding lands. What
they want to do with their own land is up to them.
CHAIR OLSON asked about the conflict of interest.
MR. CHRYSTAL said he hasn't been on the commission long but
doesn't feel that there were improper actions. When Mr. [Dan]
Bockhorst transferred to Ketchikan, he recused himself from any
activities with the LBC. Mr. Chrystal sees no possibility of a
conflict. There are so many laws and regulations the LBC has to
follow that he doesn't feel it is an issue, "although obviously
some people are trying to make it one."
4:14:56 PM
SCOTT BRANDT-ERICHSEN, Attorney, Ketchikan Gateway Borough, said
the KGB opposes SJR 15. The legality of LBC's actions is subject
to an appeal before the courts. LBC has to look at the facts and
the standards, and the court reviews that. The legislative
review process gives the legislature the opportunity to veto the
action. Rejecting this annexation petition sends a bad message
to others seeking to form or expand a borough. KGB followed the
process, and the area sought to be annexed is substantially
similar, with the exception of Hyder, to the model borough
boundaries that were proposed for the region. KGB began the
process about 10 years ago and sought to exclude Hyder and Myers
Chuck, but the LBC said it would approve the application if it
included those two communities. The KGB chose not to include
them then, but was leaving it up to the LBC to add them if it
wanted to. The LBC rejected the petition. This time Myers Chuck
was included, a geographic error was corrected for Hyder, and
KGB made a much stronger case for excluding Hyder based upon
Hyder's connection to Canada. The LBC did not approve the
blanket exclusion of Hyder, but it said it expected a petition
to include Hyder within five years.
MR. BRANDT-ERICHSEN said the Department of Education objected to
the first effort, but it is not doing so now. The objections are
based on timber receipts, but they are not a reliable stream of
funds. The objections are coming from people who are not being
annexed. They aren't going to be charged taxes by the KGB. The
KGB is not seeking to add or take away services, but it is
seeking to better protect the interests and concerns of the
people of Ketchikan. The 2,700 students in the unorganized
borough are currently receiving the equivalent of over $1,000
per student from the national forest receipts, and the 2,000
students in the KGB are getting $157 per student. Annexation
will make it more equitable. The unorganized borough per-student
receipts - if the funding stays at the same level -- will still
be more than twice the amount that each Ketchikan student gets.
4:18:44 PM
SENATOR KOOKESH said he sees clearcuts on Prince of Wales Island
- they have clearly been impacted by forest cutting. There are
no clearcuts near Ketchikan. "Why would you have this analogy
that says we want more impact aid, and it's not correct that we
get less than Prince of Wales students, when you had no impact
in Ketchikan?" That is where that money comes from.
MR. BRANDT-ERICHSEN said the receipt program has been around for
100 years, "and it's based upon the revenues from timber cutting
being distributed." The current high level of funds is a
separate Congressional appropriation. There are clearcuts in the
Ketchikan area. The ones on Prince of Wales Island provided
revenues that were distributed in the past. There will have to
be additional logging to directly tie the money to forest
service receipts. The KGB hopes to see more of those clearcuts.
4:20:13 PM
SENATOR KOOKESH asked why Ketchikan's attorney is making this
presentation instead of the mayor.
MR. BRANDT-ERICHSEN said the process has been going on for some
time, and there has been turnover in staff. Mr. Brandt-Erichsen
said he has been with the borough for 13 year, and so he is the
institutional knowledge. The current manager of KGB used to work
for the LBC so he is insulated from the process.
SENATOR KOOKESH said it would be nice to see someone on the
council or the mayor.
SHERRI HAYWARD, Annette Island School District, Metlakatla, said
she has two children who are members of the Annette Island
Reserve, and she is not here to talk about the effects of the
annexation on that district, but she wants to advocate for all
the children in the Southeast islands. She has researched and
testified on this topic. She has heard accusations of money and
land grabs, and "this is wrong." Every child matters. Denying
this annexation will not affect Ketchikan or anyone else, but if
it is approved it will affect the education and future of all
children in the Southeast.
4:23:38 PM
SENATOR STEVENS asked how it affects children.
MS. HAYWARD said, "I think with the forest receipts and the loss
of money and the dependency they need in these small
communities."
SENATOR STEVENS asked if the receipts that have been going to
those children will now be going to Ketchikan children.
MS. HAYWARD said she is under the impression that one of the
districts will lose $83,000.
SENATOR KOOKESH said the amount of money from forest receipts is
$1.2 million, and there is also PILT money that will to
Ketchikan instead of Prince of Wales Island and Metlakatla. "So
it is almost $1.5 million."
4:24:42 PM
SENATOR WAGONER said it is mixing apples and oranges to mix PILT
and timber receipts. "It's not about affecting one group of
children over another group of children, but how much each group
of children are affected, because I don't know what the per
child is in the unorganized borough versus the per-child cost in
Ketchikan - I haven't had time to weed through this -- but it
seems to me like this money is what we're going to do if
annexation takes place - we're going to have a reapportionment
of the funds that are currently available through the timber
receipts. Is that correct?"
MS. HAYWARD said she is not aware of that.
SENATOR KOOKESH said that is what is going to happen; "we're
going to lose $1.2 million in forest receipt money that's going
to go to the Ketchikan borough. That's not all the money that's
available, but it's a good portion of it."
SENATOR WAGONER said he understands that, but the money is not
being taken away from children; it's shifting to the Ketchikan
children. "So we're talking about the fairness of that." He
asked how much each student gets in the unorganized borough and
in the KGB.
4:26:46 PM
SENATOR KOOKESH said the school districts can provide that.
DICK COOSE, Ketchikan, said he opposes SFR 15. He is a retired
forest service employee. He served two terms on the borough
assembly from 1997 to 2003, and that is when he started pushing
for annexation. Local governments can impact national forest
uses, and the bigger the borough the better. The borough is just
trying to expand to the model-borough boundary. "We didn't try
to go land grabbing or anything like that; it was strictly
following the state constitution." He doesn't think the secure
rural schools will get "re-upped." It will go down to basically
nothing because the national forest is cutting less than 10
percent of what was cut in the "good days." "All of us are going
to be bitten by a lack of receipts." He thinks every piece of
land in the state should be in a borough to be able to influence
what happens on federal land.
4:28:50 PM
MR. COOSE asked about the signal it sends to other boroughs if
this annexation is denied. He is now on the city council.
RONALD ERIKSON, Superintendent of Schools, Craig City School
District, said he supports SJR 15. Craig is a small community
with a very low tax base. It doesn't have much land or revenue-
generation; much of its money comes from the forest service and
the logging, which no longer exists. The forest receipts were
put in place to help correct that. That bill has sunsetted, but
if it does come back, the impact will be a loss of $165,000 to
the community. That is 35 percent of the local match. He doesn't
know if the community will get that money in the future. If
there is an expansion of logging in the Tongass, the annexation
will allow the KGB to take advantage of it and less will go to
the unorganized borough.
4:31:08 PM
DON JOHNSON, Superintendent of Schools, Hydaburg, said last year
cuts were made and the superintendent and principal became one
position and one elementary teacher will be cut - decisions made
before any of this came about. There is one vocational tech
program, which has been instrumental to many students. It
includes a diving program that has turned out certified divers
and instructors. That program might be lost. Hydaburg has high
unemployment. It would be very devastating to take something
away from the kids who actually have a chance to succeed in
something that they have been taught in school.
SENATOR WAGONER asked how many students are in Hydaburg.
MR. JOHNSON said there are 72, and there are 450 in Craig.
4:33:17 PM
KAREN CLEARY, President, Klawock City School Board, said she is
the vice president of the Prince of Wales Island Chamber of
Commerce, which represents 10 communities that are impacted by
the annexation. Losing the forest receipts will cost her school
district $60,000, which may not sound like a lot but it is one
teaching position. For a school with 135 students, losing one
teacher is losing one program. It could be the vocational,
music, or other program. The small amounts of money "mean a lot
to us." As a chamber of commerce person, she knows that the
schools are the major employers. A loss of employees is a loss
to the business, "and it damages the whole fabric of our
society." She doesn't begrudge Ketchikan the land, but she
wishes they wouldn't take the money. The money is what the
little schools need to give a good opportunity to the children
and it is what the communities need to stay vibrant.
4:35:20 PM
SENATOR STEVENS asked how the money fits into the match.
MS. CLEARY said nearly the entire local match does come from
this because Klawock is not wealthy. Klawock has a sales tax,
but it doesn't come close to covering community services, let
alone the match. The municipality uses a chunk of the money for
the match. "Where they're going to find that if this goes away,
I can't even imagine."
JAMES GOULD, Mayor, Thorne Bay, said he has been there for 21
years, and he is retired from the forest service. He said he is
quite familiar with forest receipts and PILT payments. He will
speak to the impact to small communities. Thorne Bay has 467
people. The school has gone from 92 to 60 students in the last
few years. The numbers look very small, "but they are so
important to us." The $28,000 that Thorne Bay receives is
extremely critical. It is a maintenance position, he said. There
are 21 miles of road that the $23,000 helps maintain.
4:37:55 PM
MR. GOULD said Thorne Bay's economy has been devastated since
the loss of "the contract." Thorne Bay got the short end of the
stick when it came to helping communities at the end of that
contract. The national forest receipts are important to the
Southeast Island School District, "and we have a number of
families associated with that. I can't speak to exactly how that
affects them." But speaking as the Mayor, one thing the
community can't afford to lose is more families. It would be
simple for Ketchikan to take the lands and not the money, "so I
urge you to pass this joint resolution." Whether or not the LBC
met all of the legal requirements, it certainly goes against the
grain of the people that it affects. It is a money grab.
4:39:41 PM
DENNIS WATSON, Mayor, Craig, said he supports SJR 15. The
primary issue is the redistribution of forest receipts. What
kind of policy would allow financial gain to a singular
municipality to the detriment of schools and roads for 16 small
Southeast communities? This is a money grab, and it is
particularly egregious because the KGB is not increasing
services or school enrollment. Ketchikan is the number two
economy in Southeast, and they have touted the large amount of
sales tax they have collected. "People are lining up to help
them spend it." They have two competing forms of municipal
government. "What is it that compels a municipal unit of this
size and affluence to take money from smaller communities?" The
economies of nearly all 16 communities are hanging by a thread
or already in financial trouble. If this money is taken away
from these school districts and road programs, those needs won't
change but there will be no way to fund them. Craig and other
Prince of Wales communities have no means to recoup this
funding. Becoming a borough is not an option for Craig because
it cannot generate enough revenue to fund very basic borough
services. Prince of Wales Island was dropped from the recently
passed mandatory "boroughization" legislation. The legislature
is the assembly of the unorganized borough communities, "and if
you do the right thing and protect from what is nothing more
than a bald-faced expansionism by voting to move this resolution
out of this committee, and if you should feel that there is
merit in letting the annexation proceed, that you hold the
impacted rural communities financially harmless."
4:43:03 PM
BRETT AGENBROAD, Superintendent, Annette Island School District,
said the concern is the money grab and the best interest of the
state. He doesn't understand why Ketchikan enclaved and
eliminated Hyder and Myers Chuck in its 1998 application. They
are the only two communities within the 5,000 square miles that
would benefit from borough services. The KGB was offered a
chance to amend the application, and it chose not to. It came
back in 2006 and chose to annex Myers Chuck with no school
children, and the LBC took it and gave it to Wrangell. The
application remains about the same as in 1998. "They excluded
Hyder; they don't have to worry about Myers Chuck anymore, and
as the mayor previously said they incur about $1.5 million in
new revenues, and they are not required by law - to my
understanding -- to apply those new revenues to school-aged
children." It is not fair if the money is not earmarked for
education. There is an appearance of a conflict of interest in
the 2006 preliminary report. One of the senior staff is making a
six-figure salary as a manager of Ketchikan. He has heard people
say it wasn't a conflict, but it hasn't been proven by an
independent investigation. It looks like a conflict of interest.
Without the annexation of Hyder, the responsibility to educate
those students will still be left to the Southeast Island School
District, which will lose $83,000. "We'll lose $161,000."
Ketchikan gets a windfall with no new students to care for.
4:46:34 PM
ERIC GEBHARDT, Superintendent and Principal, Kake, Kupreanof
Island, said his district will lose about $40,000 in education
funding. The school has trimmed administrative personnel to keep
services for kids. Every little bit helps provide for the
students. With Ketchikan not taking on any new children, and no
new money, it becomes reapportionment of existing money. "Our
kids are losing and giving money to the Ketchikan Gateway
Borough for their kids." It doesn't make sense and isn't in the
best interest of the state.
4:48:41 PM
SENATOR WAGONER asked how many students are in Kake.
MR. GEBHARDT said there are 101.
SENATOR WAGONER said he is from an area similar to Kake, except
he is from a second-class borough. He has 9,000 students borough
wide, with 22 schools and one superintendent. He asked about
forming a second-class borough.
4:50:06 PM
MR. GEBHARDT said Kake has talked with other communities, has
written a borough charter, and has sent it to the LBC for an
opinion. "So we realize that it is certainly worth looking
into." He said he heard that Southeast Island was taken out
because it would not be profitable to form a borough. Kake is in
the process, but he doesn't know if it will be approved.
4:51:16 PM
BUD BURNETT, President, Hollis Community Council, said he
supports SJR 15. The LBC decision favoring the KGB annexation is
not equitable and it is poor public policy. It benefits only one
community and collectively robs $1.2 million in educational
funding yearly from 16 cities, 12 school districts, and 2,700
students in Southeast Alaska. It doesn't sound like much, but it
means a great deal to these communities and schools. It will
adversely affect the quality of education, which is the
governor's top priority, as it should be. He asked the committee
to put education at the top of the list and pass the resolution.
4:53:10 PM
JOE WILLIAMS, Mayor, Ketchikan Gateway Borough, gave his Tlingit
name and said the process is to expand the borough "so that we
can do more things for our community as a borough." This
language of expansion was put in long ago; "it was done within
the realms of what's allotted us - and we're taking that." He
said several communities will be hurt because of what Ketchikan
is asking for, and they are all legitimate. It is unfortunate
that the topic is money. Talking about money always creates a
problem, but people should think outside the box. He has heard
that it is about educational dollars. The fix might be in the
Department of Education -- not here. He said he supports giving
the best education to our children, because as a child his
aunties and uncles said when they were donating money that is
was for their grandchildren and great grandchildren. The
grandchildren are 20 years old, and education is important. The
fix is not in this room, but in the Department of Education.
"We're talking about funding that has a lifeline of maybe six
years at best - if it's even approved." The communities talking
about Ketchikan taking their funding will be back looking for
more educational funding anyway.
4:57:01 PM
MR. WILLIAMS said he was asked to come to the meeting because
there was an outcry asking for Ketchikan's mayor. "I'm here."
But there are folks who spoke on behalf of the KGB who are more
educated regarding the process. When applying to expand the
borough, it never occurred to him that it would create a
financial challenge for other communities. "You're sitting in
the seat that could correct that challenge, and that's fixing
the educational funding."
4:57:56 PM
SENATOR WAGONER asked if these funds are exclusively for
education.
MR. WILLIAMS said no.
SENATOR WAGONER said each district that has come before the
committee today is funded through the same formula as every
other school in Alaska. Is the formula reduced when a school
receives the [forest receipt] funds?
MR. WILLIAMS said it would seem to him that it would have to be
added, because other districts would protest.
SENATOR WAGONER said all schools are funded at 100 percent
through the formula by the state or locally. Does this give
these schools 105 percent of funding or will it be adjusted?
4:59:57 PM
RACHEL WITTY, Attorney, Civil Division, Department of Law,
Anchorage, said she doesn't know.
SENATOR KOOKESH said he didn't think there was an outcry to hear
from Mr. Williams, but he wanted to see the face of Ketchikan
not an attorney. The mayor should have been present from the
beginning, but he is glad to see him there now. He asked if the
mayor would have gone forward with the application if he had
known the impacts on other children.
MR. WILLIAMS said he doesn't believe that a financial impact was
discussed at the time.
SENATOR KOOKESH said some witnesses said it would be okay for
KGB to annex the land without getting the money. Have you
considered waiving the money?
MR. WILLIAMS said no.
SENATOR KOOKESH said the question of being a good neighbor comes
up. Surrounding communities are offended and hurt by Ketchikan's
actions. Is that the direction the KGB wants to go?
MR. WILLIAMS said he never intended to offend his neighbors. By
thinking outside the box, some of the funding that is being
discussed can be recaptured.
5:02:48 PM
SENATOR THOMAS asked if there is another resolution now that the
impacts are known.
MR. WILLIAMS said the fix is in the Department of Education, and
he doesn't support SJR 15. Six years from now the timber
receipts will be gone. The leaders who spoke today should think
in those terms. He will support those schools trying to get
funding from the Department of Education.
5:04:15 PM
SENATOR KOOKESH said most school districts are worried about
surviving now, and the six-year window is far in the future.
LAUREN BURCH, Superintendent, Southeast Island School District,
said there are eight schools in his district, and the annexation
will directly impact them. "Hyder is one of our schools … It
sits over to the side there, not including that, it takes about
$82-83,000 in timber receipts from us, but leaves us with the
obligation of the school." He would like to maintain that
school. "The community is happy with us. Parents are happy with
us … they don't want to go to school in Canada." Hyder is not
interested in joining Ketchikan. His eight schools meet AYP
[adequate yearly progress] and there are two in the top ten in
the incentive program. "We do small schools very well. We're
very proud of that, and were Ketchikan to take it, that's a
different beast than having a school of 1,500 kids." The timber
receipt money is additional resources and doesn't impact the
foundation formula. The ISER [Institute of Social and Economic
Research] money is helpful, "but we're pretty much on the
ropes." There was a time when the district had 20-some schools
with their own plane - those days are long gone. Students are
down 20 percent. There is no administrative fat. Combining
school districts would not bring much of a cost savings. There
are plenty of principals within 50 miles that make more money
than he makes, so somebody has to be sitting in his chair,
whether it is a superintendent or someone else. "I drive the bus
and I cleaned more than one toilet and do principal duties as
well." There's no fat. There are 160 students in his schools.
5:08:37 PM
MR. BRANDT-ERICHSEN said in the hearing on HJR 30 there was a
spreadsheet of enrollments and funding. The KGB wants to be a
good neighbor and has had a good relationship with the
communities on Prince of Wales Island in the past. Ketchikan
posted security for a ferry, jointly pursued timber issues with
the forest service with the city of Craig, and it has a long
history of cooperation. It doesn't want to damage that
relationship, "but at the same time we're concerned about things
that are going on just outside of our boundaries." Activity in
Misty Fjords is impacting Ketchikan. There are legitimate
reasons, completely independent of timber receipts, to be
pursuing this annexation, and the community wants to move
forward with it.
SENATOR WAGONER said the two communities that stand to lose the
most are Petersburg and Wrangell. Why aren't they here?
MR. BRANDT-ERICHSEN said he doesn't know. In terms of the $1.2
million that has been mentioned, about one third represents
funds that currently go to Wrangell and Petersburg. Wrangell
will take about $250,000 of timber receipts above its current
level if its petition to form its own borough is accepted.
Petersburg is trying to form a borough, as well. That might be
why they didn't object to Ketchikan's petition.
CHAIR OLSON removed his objection.
5:11:40 PM
SENATOR KOOKESH moved to report the CS for SJR 15, labeled 25-
LS1393\C, from committee with individual recommendations and
attached fiscal note(s).
SENATOR WAGONER objected. He said he has been here for six years
and he continues to hear about the LBC forming boroughs, "and
here's a borough willing to go out - they've already formed a
borough -- and take in more land to be responsible for, and I
don't know what's going to be on that land in the future." It
may be developed and cost that borough money or increase its tax
base. The borough might help develop the land for mining or
other things. He said that is what "we" have been trying to do
for years. A lot of the rural areas resist forming boroughs.
Kenai would have been a mess without a borough. The communities
were very small at that time, and it grew and prospered. "We pay
our borough taxes and we have borough services, so I think
that's the way to go."
5:13:43 PM
A roll call vote was taken. Senators Kookesh, Thomas, Stevens,
and Olson voted in favor and Senator Wagoner voted against.
Therefore, CSSJR 15(CRA) moved out of committee on a vote of 4
to 1.
The committee adjourned at 5:14:22 PM.
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