Legislature(2023 - 2024)BELTZ 105 (TSBldg)
01/31/2023 01:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
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| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Alaska Municipal League Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
January 31, 2023
1:30 p.m.
MEMBERS PRESENT
Senator Forrest Dunbar, Chair
Senator Donald Olson, Vice Chair
Senator Elvi Gray-Jackson
Senator Jesse Bjorkman
Senator Cathy Giessel
COMMITTEE CALENDAR
PRESENTATION(S): ALASKA MUNICIPAL LEAGUE OVERVIEW
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Presented an Alaskan Municipal League
Overview.
ACTION NARRATIVE
1:30:39 PM
CHAIR FORREST DUNBAR called the Senate Community and Regional
Affairs Standing Committee meeting to order at 1:30 p.m. Present
at the call to order were Senators Bjorkman, Giessel, Gray-
Jackson, Olson and Chair Dunbar.
^PRESENTATION(S): ALASKA MUNICIPAL LEAGUE OVERVIEW
PRESENTATION(S): ALASKA MUNICIPAL LEAGUE OVERVIEW
1:31:24 PM
CHAIR DUNBAR announced an overview of the Alaska Municipal
League by Nils Andreassen and invited him to put himself on the
record and begin his presentation.
1:31:58 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League,
Juneau, Alaska, presented an Alaskan Municipal League (AML)
Overview. He said the overview focuses on the ever-evolving role
of AML, its work to support communities in Alaska, member
priorities, and AML-adopted resolutions. He intends to touch on
the work AML is doing for infrastructure development if there is
time.
MR. ANDREASSEN advanced to slide 2, commenting that AML is a
very different organization today than it was five years ago. In
the past, AML held conferences to exchange best practices, learn
from state and federal officials and each other, advocate on
behalf of members, and produce a number of publications and
items that complimented the work of local government. Now, AML
is a member-service organization that delivers direct value and
indirect benefit to members in ways not contemplated five years
ago.
1:33:17 PM
MR. ANDREASSEN spoke to the mission, purpose, and objectives of
AML which stem from its articles of incorporation. He said these
are the best in the state and maybe the nation, allowing AML to
actively support local governments and take on issues directly
related to cities, boroughs, and residents. The articles of
incorporation encourage AML to develop best practices and models
of governance that can be implemented at the local level. Slide
3 relayed its mission, purpose, and objectives:
Mission * Purpose * Objectives
The purpose of the Alaska Municipal League is:
• To safeguard the interests, rights, and privileges
of Alaskan municipalities as they may be affected by
Federal and State governmental actions.
• To secure cooperation among municipalities of the
State in a thorough study of local problems and in
the application of efficient methods of local
government.
• To provide means whereby municipal officials may
interchange ideas, experiences, and obtain expert
advice.
1:34:21 PM
The objectives of the Alaska Municipal League are:
• To perpetuate and develop the League as an agency
for the cooperation of municipalities in the state
of Alaska for the practical study of municipal
affairs.
• To promote application of the best methods in all
branches of municipal service by holding at least
one conference annually for the discussion of
problems of administration.
• To gather and circulate information and experience
concerning the most approved methods of municipal
administration.
• To secure general and municipal legislation at the
state and federal levels which will be beneficial to
the municipalities and inhabitants thereof, and to
oppose legislation injurious thereto.
• To engage in the study and preparation of uniform
ordinances, resolutions, and practices; and to do
any and all other things necessary and proper for
the benefit of the municipalities of Alaska.
• To develop appropriate membership services and
programs that strengthen Alaskan local governments'
ability to govern their own affairs and improve.
1:34:30 PM
MR. ANDREASSEN reviewed slide 4, stating this job allows him to
do just about anything in support of local governance,
including:
- cosponsoring the Alaska Broadband Summit with U.S. Senator
Sullivan last year,
- infrastructure symposiums with U.S. Senator Murkowski,
- calculate changes in sales tax revenue across municipalities,
and
- dive deep into data sets to understand governments' decisions
about revenues. He said this analysis led AML to understand
better the effects of removing community assistance and how
communities responded when that occurred.
1:35:38 PM
MR. ANDREASSEN said the subject of the retirement system has
come up a few times this legislative session, and this is a
priority for AML members. The role of AML is to look at national
best practices to determine which states are doing retention and
recruitment efforts right. He pointed out the success of
Tennessee's public pension plan. Pew Charitable Trust and others
have conducted evaluations of Tennessee's pension plan.
MR. ANDREASSEN said the AML is looking at services, short-term
rentals, housing issues, and childcare solutions. AML is working
with a short-term rental company that allowed the collection of
remote sales tax for 45 jurisdictions, increasing revenues for
local governments by about $20 million this last year. This is a
small amount compared to the total revenue collected by
jurisdictions, but it is meaningful, especially in a downturn.
He said that AML can do just about anything in support of its
members and support of Alaska communities.
1:36:56 PM
MR. ANDREASSEN said the last five years were defined by
alternating years of opportunity and crisis, as seen on slide 5:
2018 ARSSTC
[Alaska Remote Sellers Sales Tax Commission]
Supreme Court Wayfair case opens up opportunity for
remote sales tax collection
2019 VBB
Fiscal crisis hits home with a drastic FY19 budget
proposal
2020 COVID CARES
[Coronavirus Aid, Relief, and Economic Security]
Public health emergency and economic crisis
2021 ARPA [American Rescue Plan Act]
Federal relief packages - $1 billion to local
governments
2022 BIL [Bipartisan Infrastructure Law]
Infrastructure package results in five years of
formula and competitive grant cycle
MR. ANDREASSEN said every year brought a new layer of challenge
to Alaska's local governments and an opportunity for AML to
support communities and participate in finding solutions. He
noted that AML grew from a three-person crew five years ago to
fourteen persons. AML's budget invests back into local
governments. He said this is an impressive arc in many ways.
1:38:05 PM
CHAIR DUNBAR asked whether AML receives revenue to act as the
remote sales tax contractor for local governments.
MR. ANDREASSEN answered yes. AML is a nonprofit, but more than
that, AML is an interlocal organization that responds directly
to the interest of members. AML has an administrative function
to collect and administer those funds. He explained that AML
collects the physical sales tax for four communities. AML has a
health insurance program, a retirement program, and a deferred
compensation program. It is beyond a nonprofit and really a
member-support, shared-services organization.
MR. ANDREASSEN reviewed slide 6, Federal Funding Coordination.
He said that AML helped organize a website under the American
Rescue Plan Act (ARPA) two years ago. The website is a
clearinghouse for information and resources to help Alaska
organizations make the most of federal funding available under
ARPA and BIL. It is a one-stop shop for local governments
eligible for federal grant opportunities, and the website
contains resources related to ARPA and BIL. With the passage of
the Inflation Reduction Act and increased attention to pollution
prevention, energy efficiency, and air quality, the website will
continue developing. AML's team offers support for grant writing
and technical assistance to local governments, tribes,
nonprofits, and school districts. This effort has been supported
with legislative funding and complemented by funds from the
Rasmuson Foundation, the Denali Commission, contracts through
state agencies, and others.
1:40:35 PM
MR. ANDREASSEN reviewed slide 7, the success of AML is only
possible with partnerships. AML has two sister organizations,
the AML Joint Insurance Association, and the AML Investment
Pool, that provide property and workers' compensation insurance
to most local governments in Alaska. The investment pool manages
about $700 million on behalf of local governments. AML is unique
in the nation; it is the only organization that responds to
county-equivalent interests and cities. It includes both
boroughs and cities as part of its membership. Every state in
the nation has a county association and a municipal league; AML
brought both under one body. AML works closely with the National
Association of Counties and the National League of Cities. He
sits on both boards in some capacity. AML directly interfaces
with colleagues on the federal and national levels, benefiting
Alaska and local governments with their advocacy. AML makes a
valuable contribution. He spoke briefly about other partnerships
and relationships listed on slide 7.
1:43:00 PM
MR. ANDREASSEN advanced to slide 8, Alaska's Local Governments.
He emphasized that Alaska's local governments are different from
one another. It is easy to believe that one decision impacts all
equally. Often state and federal decisions affect local
governments differently or not at all, depending on the issue.
Not all local governments are created equal, not all have equal
responsibilities, and not all have the same capacity. A larger
local government might have many departments with hundreds of
employees, but many of AML's members operate with half-time
staff, trying to complete the same tasks as larger communities.
MR. ANDREASSEN reviewed slide 9, emphasizing how different local
governments are from one another. Seventy local governments have
police powers; arguably, they all have some degree of public
safety responsibility. Forty of these have a combined budget
that exceeds that of the Department of Public Safety (DPS) by
$75 million, noting DPS is not the only entity delivering public
safety in the state. He said the partnership between state and
local government is critical. Local governments:
- manage just as many road miles as the Department of
Transportation and Public Facilities (DOTPF),
- are almost entirely responsible for Alaska's ports and harbors
and for a fishing industry that is one of the most advanced
economic sectors in the state,
- are almost completely responsible for water and wastewater
systems in Alaska,
- run the majority of school districts in Alaska and have the
responsibility for school construction and major maintenance,
- own 75 percent of all schools or school facilities,
- play the role of education funder, tax base, and
- are responsible for the quality of life in communities,
including public libraries, swimming pools, parks, and
recreation.
MR. ANDREASSEN said local governments in Alaska support keeping
families, businesses, and the community whole and healthy. He
emphasized that it is not just infrastructure that people and
businesses need but a community.
1:45:43 PM
SENATOR OLSON asked what role AML plays in communities that want
improvements or to build a new harbor.
MR. ANDREASSEN answered AML supports the Alaska Association of
Harbormasters and Port Administrators, which give direct
technical assistance to municipalities and enterprises. AML
conducted a survey last year to identify the ports and harbors
infrastructure deficit. He identified about a $300 to $600
million annual infrastructure need, stating that probably does
not include the Municipality of Anchorage. It is important to
understand infrastructure needs, what they look like, and why
improvements might be necessary. AML advocates for the municipal
harbor match grant funds, noting they were not funded this year.
He pointed out that a partnership with the state transferred
many assets to local governments. Local governments are now in
charge of maintaining and improving those assets based on their
inherited condition. Local governments provide 50 percent of the
funds for harbor improvements, and the state provides 50 percent
when the program is running.
1:47:20 PM
SENATOR OLSON sought confirmation that AML's sister
organization, AML Investment Pool (AMLIP), manages $700 million.
He asked how the interest is distributed.
MR. ANDREASSEN answered that AMLIP is managed separately from
AML. He estimated the investment pool has 80 members with 160
accounts and a pretty sophisticated process for managing funds.
It has a separate investment advisor, so it is a 3-party
endeavor to ensure those funds are invested accurately and
safely. Each fund is distinct and managed separately but as a
pool. The market rates that accrue to the pool are pro rata,
kept track of for each account.
SENATOR OLSON asked how the interest is distributed among the
investors.
MR. ANDREASSEN replied the returns go back into the accounts.
SENATOR OLSON sought clarification that the returns are
distributed to those communities.
MR. ANDREASSEN replied no. The funds are available to the
communities. They have 24-hour, around-the-clock access to
drawing down funds, but it is really a cash management tool just
like the state might otherwise leverage. The rate of return is
very similar to market rates.
1:49:34 PM
MR. ANDREASSEN advanced to slide 10 and explained the
differences between the following borough classifications:
Non-unified Home Rule
Unified Home Rule
First Class Borough
Second Class Borough
Unorganized Borough
MR. ANDREASSEN said all boroughs have three primary
responsibilities:
- They all have to tax.
- They all have planning and platting responsibilities.
- They all have school district responsibilities, contributing
2.65 mils or the equivalent.
[MR. ANDREASSEN moved through slides 11 through 24 quickly. Each
slide illustrates whether the subject applies to a given city,
depicted as a dot on the map.]
1:51:07 PM
MR. ANDREASSEN summarized slide 11, All Local Governments. One
hundred sixty-five cities and boroughs across the state are in a
home-rule, first-class, or second-class structure. At the city
level, the same functionality occurs between home-rule and
second-class cities. He explained that the legislature
determines what must or is allowed to be done in second-class
cities, whereas the voters decide it for home-rule cities.
Unincorporated cities have a different governance model; the
state or tribal government picks up responsibilities.
MR. ANDREASSEN summarized slide 12, Cities in Unorganized
Borough. Home-rule and first-class cities in an unorganized
borough bear some responsibility for their school district and
contribute 2.65 mils or the equivalent. They have
responsibilities for public education, whereas second-class
cities do not.
MR. ANDREASSEN summarized slide 13, Cities in Borough. Cities
within an organized borough come together in very different
combinations and a lot of collaboration goes on within those
regions.
1:52:54 PM
MR. ANDREASSEN advanced to slide 14, Sales Tax. Not all
communities have a sales tax. Roughly 100 communities out of 165
boroughs and cities have a sales tax. Revenue collected from
sales tax is much less than that collected from property tax;
however, sales tax is significant to those communities that
collect it.
MR. ANDREASSEN advanced to slide 15, Property Taxes. He
expressed his belief that approximately 40 communities collect a
property tax. Almost all boroughs have a property tax. If not,
there is either a payment in lieu of taxes (PILT) or a fish tax
which is basically the equivalent.
1:54:14 PM
SENATOR OLSON sought clarification of a first-class city on the
Aleutian Chain.
MR. ANDREASSEN answered the city should be Unalaska. He said the
dots shifted slightly. The dots approximate the location on the
map.
MR. ANDREASSEN advanced to slide 16, Alaska Marine Highway
System (AMHS) Ports. This map shows which local governments AMHS
affects. These communities see a huge return on this investment.
The investment is essential for coastal communities, travel
tourism, and the economy of these local governments; it is
important that AMHS stay in place.
1:55:30 PM
MR. ANDREASSEN advanced to slide 17 to discuss communities
affected by Public Employee Retirement System (PERS) decisions.
Not all local governments are part of PERS. Only 64 out of 165
local governments participate in PERS, making up 18 percent of
the contributions, payroll, or pension liability, depending on
how it is measured. He expressed his belief that it would take
77, not just local governments, but employers within PERS to
make up one percent of the PERS contribution. He said it is
important to know that even though 64 local governments
participate, many of them are at the minuscule level in terms of
the system as a whole.
1:56:28 PM
CHAIR DUNBAR asked about the typical benefit structure for
communities not part of PERS.
MR. ANDREASSEN answered they do not have them.
CHAIR DUNBAR sought clarification on whether those communities
have nothing or an alternative benefit structure.
MR. ANDREASSEN replied AML produces a salary survey that might
capture the answer. He will send it to the committee. The
communities that do not participate in PERS are very small with
little capacity, where eighty percent of the budget might fund
community assistance. These communities do not have a lot of
resources to put into employee benefits; even health insurance
is a stretch for some. Some have deferred compensation plans. It
is not clear-cut that these communities would have benefits.
1:57:39 PM
SENATOR GIESSEL asked whether teachers in those communities
would be eligible for Social Security.
MR. ANDREASSEN answered that all school districts have PERS and
TRS. PERS employers would not be from those home-rule or first-
class cities.
1:58:08 PM
MR. ANDREASSEN advanced to slide 18 to discuss Municipal
Hospitals. Local governments have some rule, and healthcare
decisions are important to them. Each of these communities had
different roles during the public health emergency. It is worth
knowing how these communities might have been affected.
MR. ANDREASSEN summarized slide 19, Petroleum Property Tax. He
said petroleum property tax applies to local governments
organized relative to oil and gas infrastructure assets.
MR. ANDREASSEN explained slide 20, Fisheries Tax. He said the
fisheries tax is spread out statewide depending on the type of
shared tax. The map shows the prevalence of fisheries in
communities throughout Alaska. In some communities, the tax is
95 percent of their revenue base. For others, it is only one
percent. There is considerable variation in the collection of
fisheries taxes and what that revenue means to individual
communities.
MR. ANDREASSEN advanced to slide 21, School Contribution. He
said municipal school districts cover about half the state in
some capacity. Together they make up about 26 percent of total
public education contributions.
1:59:33 PM
CHAIR DUNBAR asked why Anchorage has no dot on slide 21.
MR. ANDREASSEN answered that on this map, Anchorage is depicted
as a borough in a blue block, as is Juneau. He clarified that
school contributions apply to those communities on the map in
blue blocks and dots.
MR. ANDREASSEN described slide 22, School Bond Debt. Not all
communities that make school contributions have school bond
debt. He said that communities with school bond debt experience
the debt very differently. The debt is a very significant
portion of some local government budgets; it would be a pretty
big lift if Kodiak Island School Borough had to pick up the
entirety of its school bond debt.
MR. ANDREASSEN advanced to slide 23. He said this map shows the
distribution of power cost equalization (PCE) across the state
and which communities benefit from lower costs. There is a small
amount of direct benefit to local governments. PCE plays a
significant role in keeping communities healthy.
MR. ANDREASSEN advanced to slide 24, Police Power. Seventy local
governments have some form of police, with 40 police departments
and 30 village police officers. The AML salary survey shows that
some communities can only offer the minimum wage to village
police officers charged with public safety in their community.
2:01:58 PM
MR. ANDREASSEN advanced to slide 25. He said the next group of
slides pertain to local government priorities and adopted
resolutions. He intends to make high-level comments on adopted
community resolutions but not delve deep into any one slide. He
offered to prepare a packet to supplement today's presentation
if members want to dive deeper into the resolutions.
2:02:27 PM
MR. ANDREASSEN reviewed slide 26, Cross-Cutting Impacts. Reports
indicate grants for infrastructure projects awarded last year
will increase in cost 140 percent this year. The rate of
inflation is adversely affecting local governments.
Infrastructure investments and decreasing purchasing power are
problems across the board. The August legislative conference
identified housing and childcare as top priorities. They are
increasingly challenging for residents. Supply chain issues will
not affect all communities. Still, as federal investments start
flowing, the implementation of projects will affect communities
slated for public transportation, water, and wastewater
projects. He said inflation, housing, and childcare affect
population demographics and outmigration. Alaska does not
attract people at the same rate they leave.
2:04:30 PM
MR. ANDREASSEN advanced to slide 27 and spoke to PERS. He
reviewed slide 27, which contained these main points as well as
a PERS financial table:
• Remove high interest rate on non-payment
He said employer contributions are capped at 22 percent and that
the state contributes an additional 3.1 percent. He emphasized
that 17 percent of that goes to the net pension liability. The
pension system is a huge driver for municipal considerations,
stressing the unfunded liability hinders the ability of local
governments to contribute to and provide other types of
benefits. He explained local governments could offer employees a
much larger defined contribution plan if the pension liability
did not exist.
• Evaluate and payoff arrearages
MR. ANDREASSEN said municipalities are interested in discussing
areas that would improve the employer experience, potentially
increase recruitment, and address retention challenges. Some
require less of the state budget, and others require more. He
expressed his belief that statutory provisions require employers
to pay a 15 percent interest rate on nonpayment or late payment.
That rate seems like a penalty, like a payday loan-type
situation. He believes the rate could and should come down. A
number of communities have arrearages that still haunt them and
make it challenging to catch up. He said it would be useful to
identify and pay them off, costing maybe $10 million, possibly
coming from DCRA or others.
2:06:49 PM
• Evaluate and remove salary floor
MR. ANDREASSEN said the salary floor from 15 years ago still
requires local governments and others to contribute $3 million
or so beyond the current employee base. He said addressing this
issue and looking at the actuarial impact would be in the
state's best interest. He said it would be interesting to
discuss this, especially when considering government downsizing
or a footprint reduction. The ability to operate more
efficiently would be good and still hold local governments and
the university to the 2008 salary floor.
• Increase State contributions to reduce non-State employer
rate
MR. ANDREASSEN said this is where it gets more expensive. The
state could buy down that 22 percent. Nothing requires 22
percent to be the floor of an additional state contribution. The
state could determine the rate at which it gets down to 15
percent. This would free up 7 percent of a local government
budget to offer employees an additional incentive program or
benefit or to contribute differently to a deferred compensation
plan. So, there are ways to increase employee benefits by
working with employers.
• Evaluate opportunity for State to take over liability for
employers who try to leave system
MR. ANDREASSEN said those local governments that tried to leave
PERS still have a net pension liability. This is especially true
for smaller local governments. It was supposed to last till 2039
but carries forward many years beyond that. It could last till
2099. It would benefit small, struggling local governments to
opt out of the program without the lingering liability. This
would require the state or system to absorb those costs. It
would benefit employers and free up funds for recruitment and
retention.
2:08:55 PM
MR. ANDREASSEN reviewed slide 28, stating AML made a number of
resolutions related to public education. The following education
recommendations are on slide 28, along with a chart depicting
the growth of local government education contributions over the
past ten years:
• Increase the BSA and adjust for inflation
• Evaluate statewide local contribution
• Replace school bond debt reimbursement program
• Implement base allocation for school construction
and major maintenance
• Support ability for districts to consolidate
schools without penalty
2:12:34 PM
CHAIR DUNBAR commented that the remaining slides in the slide
deck contain meaty, big policy topics. He said any of these
topics would be a fairly major policy accomplishment. He asked
whether AML prioritizes these topics, choosing one and seeing it
through to the conclusion.
MR. ANDREASSEN answered AML has priorities. The priorities are
pension system fixes, school construction, and major
maintenance. AML wants some of the fixes presented today
incorporated into the legislative effort.
MR. ANDREASSEN indicated his intention to speed up through the
remainder of this last group of slides.
2:14:01 PM
MR. ANDREASSEN spoke to slide 29, Economic Development:
Housing
• AML conducting statewide review of municipal code,
fees, and processes to identify efficiencies
• Ensure State investment into access and utilities on
developable State lands
• Review of intergovernmental regulatory alignment
MR. ANDREASSEN noted that AML has a housing task force that is
coming out with recommendations this week. He can talk more
about this if the committee is interested.
Child Care
• Evaluate public sector role in managing assets or
employing workforce, thereby extending benefits and
cost consolidation
• Ensure effective State-level distribution of
resources
• Review of intergovernmental regulatory alignment
Slide 29 which had a chart showing how parent spent money on
their children:
SPENDING BREAKDOWN FOR U.S. PARENTS
- 30 percent Housing
- 16 percent Food
- 14 percent Transportation
- 6 percent Clothing
- 8 percent Healthcare
- 18 percent Childcare and Education
- 8 percent Miscellaneous
2:14:39 PM
MR. ANDREASSEN reviewed slide 30, Transportation. He said AML
has a good working relationship with DOTPF and continues to work
through local government issues on these fronts:
1. Budget estimates higher than local planning
2. Transfer of ownership and maintenance
3. Contingency amounts required at the beginning of
design and the construction
4. Municipal Harbor Facility Matching Grants
5. Amend statute to encourage RTPOs [Regional
Transportation Planning Organizations]
Slide 30 has a chart that shows how local government spending
falls into these categories:
- 30 percent public safety
police, fire, and emergency response
- 35 percent schools
required contribution, respond to district needs,
75 percent of schools
- 25 percent utilities
roads, landfills, water and sewer
- 10 percent quality of life
libraries, museums, rec centers, parks, playgrounds
2:15:43 PM
CHAIR DUNBAR asked whether the Anchorage Metropolitan Area
Transportation Solutions (AMATS) is an RTPO.
MR. ANDREASSEN replied AMATS is a Metropolitan Planning
Organization (MPO). AMATS and the Fairbanks Metropolitan Area
Transportation System (FMATS) are MPOs. Mat-Su has an MPO
underway. The value of MPOs is that they provide access to
federal funding and planning dollars. He expressed his belief
that MPO projects have other benefits as well. An RTPO has value
at the regional level and some support for bringing regional
priorities to the state list.
CHAIR DUNBAR asked whether the term regional could define an
area larger than Anchorage, for example, the Mat-Su, Kenai, and
Anchorage combined. He sought clarification about MPOs and their
size in relation to AMATS.
MR. ANDREASSEN answered multi-jurisdictional, potentially. He
clarified that it probably would not combine Mat-Su and
Anchorage. He said Kenai, Southeast, and Northwest Artic could
add one consistent with the Alaska Regional Development
Organization (ARDOR) boundaries. Copper River Valley just formed
one, and Fairbanks just added one for the region beyond FMATS.
He expressed his belief that the Bristol Bay Borough has one.
So, there is room for greater regional collaboration. It could
be multi-jurisdictional with multiple cities at the table, but
that is a whole new level of state planning.
2:17:38 PM
MR. ANDREASSEN reviewed slide 31, Energy, which covered these
topics:
1. Renewable Energy Fund
• Ensure adequately funded for community level
projects
2. PCE uses
• Reimburse municipal investments that bring down
cost below PCE subsidy threshold
2:18:30 PM
CHAIR DUNBAR commented that this seems like a reasonable
bipartisan fix. He asked whether legislation on this is in the
hopper.
MR. ANDREASSEN answered, not that he knows of.
3. Bulk Fuel Loan
• Increasing cap and lowering rates
MR. ANDREASSEN said AML has a resolution that supports
increasing the cap and decreasing rates. DCRA is doing a great
job of administering this program. Slide 31 has a map of Alaska
showing communities with 2021 bulk fuel loans.
4. Grid Resilience
• State funding from IIJA [Infrastructure Investment
and Jobs Act] to support local utilities
MR. ANDREASSEN said grid resilience is a new topic. The
Department of Energy has funding for improving local grids
statewide. AML supports efforts to improve utility operations.
Slide 31 displayed these Alaska Energy Authority Quick Facts:
Over 100 operational REF projects [Renewable Energy
Fund]
REF Legislative Appropriations to Date: $299 million
Projects Currently in Development: 44
Matching Funds: $229 million
2:19:51 PM
MR. ANDREASSEN reviewed these topics related to fiscal policy on
slide 32:
1. Mandatory Exemptions
• Reimbursement according to statute
2. Presumption Trust
• Unfunded mandate of State-level presumptions that
apply mainly to local government workers
compensation; provide State reimbursement fund
3. Ensure Sustainability of Community Assistance
• $30 million shortfall for recapitalization
minimum
• Allow Fund to accrue return on investments
• Provide for non-federal match access beyond
formula
2:23:00 PM
MR. ANDREASSEN spoke to public health points, and the public
health tracker pictured on slide 33:
Opioid Settlement
• Ensure ability to make both short-term investments,
while maintaining sustainability of settlement
funding
• Encourage multi-jurisdictional investments
• Envision infrastructure development as needed for
support system
Public Health Dashboard
• Ensure continued use and maintenance of public
health data for effective local decision-making
Increase capacity of local government role in public
health, through health assessments and grant funding
2:24:02 PM
MR. ANDREASSEN advanced to slide 34, stating he could spend the
remainder of his time on Title 29 [Municipal Government]. He
drew attention to the Rural Utility Business Advisor (RUBA) best
practices dashboard. RUBA applies to a majority of communities
but not all. It is the state's way of gauging whether a
community has the financial and governance capacity to
administer utilities. He said the state seeks assurance that a
community can effectively manage itself before investing; this
is accomplished through a set of best practices scores.
MR. ANDREASSEN drew attention to the scorecard at the bottom
right, stating little improvement in best practices scores has
occurred since 2015. For ten years, the scores averaged roughly
60 out of 100 points. He wondered whether a different approach
is needed to ramp up scores. AML wants to work with the state on
better direct support for communities. He noted that best
practices scores factor into whether unserved or underserved
communities are eligible to receive some of the $3 billion in
infrastructure funding for water and sewer. Communities that do
not rank high enough potentially reduce the state funding they
could have received. The AML priorities on slide 34 for Title 29
read:
1. Confidential disclosure of real estate transactions
statewide
2. Removing audit requirement from Community Assistance
3. Amend AS 29.45.500 to reduce interest rates on
overpayment of taxes
4. Reducing burden of commercial public records
requests
5. Making flexible the number of required city council
officials
6. Supporting authority to regulate activities that
affect public safety
7. Accelerating transfer of State lands to municipal
governments
8. Improve Best Practices direct support to communities
9. Local Boundary Commission oversight
2:26:24 PM
CHAIR DUNBAR commented that the [Division of Community and
Regional Affairs (DCRA)] director spoke to the committee about
the RUBA program. He asked whether AML and its members worked
directly with the division director on these priorities.
MR. ANDREASSEN answered, to some extent, yes. AML had a long,
negotiated discussion with DEC and DCRA about making
improvements. The fact that not much has changed in the last ten
years means a different approach is needed. Other Title 29 items
could be addressed. If bills come up relative to other items,
AML will flag them and notify members.
2:27:32 PM
MR. ANDREASSEN advanced to slide 35. He said AML is partnering
with police chiefs to create a policy manual for all law
agencies in Alaska. It could serve as a template. He expressed
enthusiasm for this opportunity.
MR. ANDREASSEN spoke to the following points on slide 35:
Public Safety
1. Community Jails
• Local governments providing detainee facilities
for State
2. Village Police Officers
• Basic levels of training, heavy responsibilities,
little funding
3. Police Standards
• Working with AACOP on a grant request to help
fund statewide standards model
4. Local Emergency Planning Committees
• Discontinued State support but still a helpful
way to ensure communities are prepared
5. Capital Needs
• Facilities and equipment needs for effective
response
2:28:54 PM
MR. ANDREASSEN advanced to the final category in the slide deck,
Strategic Infrastructure Development, slide 36. The AML board
director said this is a once-in-a-lifetime opportunity. AML's
job is to make the most of it and maximize the benefit. He said
this applies to local governments, school districts, tribal
governments, nonprofits, and businesses. AML must ask itself
what difference it can make to bring funding to the state. He
expressed his belief that AML has been effective this past year.
He reminded members about AML's resource located at:
akfederalfunding.org.
2:29:38 PM
MR. ANDREASSEN summarized slides 37 and 38, AML and Alaska
DOTPF. He said AML has a memorandum of agreement (MOA) with
DOTPF to support and act as a liaison with local governments
around the state. It has been effective and a model for other
agencies. He emphasized this is a different AML than five years
ago; an MOA for these agencies to work this closely together did
not exist. This kind of partnership benefits the state and local
governments. It resulted in the Alaska Transportation Funding
Opportunity Hub, where any local partner can submit a project
through an intake form. AML knows there is aid and has a role in
working with local governments and others to strengthen their
projects, and make them competitive at the federal level, while
DOTPF works on state-eligible projects.
2:31:13 PM
MR. ANDREASSEN reviewed slide 39, stating AML contemplated how
to make the most of the federal government's infrastructure
investment in the state and came up with this Infrastructure
Logic Model:
Goals Inputs Outputs
Maximize Benefit Collaboration Shared resources
Strengthen Capacity Competency Grant Assistance
Strategic Planning Competitiveness Events
Outreach
Outcomes Impacts
Informed membership Partnerships
Competitive applications Grant funding and management
Project development Address infrastructure deficit
MR. ANDREASSEN said the Infrastructure Logic Model centers on
collaboration and ensuring applications are competitive,
emphasizing competitiveness relies on collaboration. He stated
it would be easy to think local governments are competing with
each other, but the competition is 20,000 other cities
nationwide. The idea is to raise the tide for all of Alaska's
communities. AML hosts weekly office hours, sends information
about new grant opportunities and webinars twice weekly, and
provides direct technical and grant-writing assistance to local
governments and others.
MR. ANDREASSEN said that at the end of the day, AML hopes
communities have local partners to support them. If a community
is awarded a grant, hopefully, it is managed effectively, the
project is implemented, and Alaska's infrastructure deficit is
addressed. Last year Alaska had about $30 billion in need
between schools, water/wastewater, transportation, ports and
harbors, and so on. He said AML estimated housing at about $5
billion. This is an opportunity to address the infrastructure
deficit; it is up to local, state, and tribal governments to
make a difference.
2:33:05 PM
MR. ANDREASSEN reviewed slide 40, stating the
akfederalfunding.org website is done in conjunction with the
Alaska Infrastructure Coordinating Committee. This group meets
every other week, checks out different opportunities, catches up
with each other on projects, avoids duplication conflicts, and
looks for partnerships. This has been a good way to facilitate
infrastructure collaboration informally. AML seeks opportunities
for different entities to work together on digital equity,
energy, and other investments. Slide 40 lists these
organizations:
Infrastructure Collaboration
Alaska Municipal League University of Alaska
AFN Alaska Small Business
theforakergroup Development Center
Alaska Chamber Alaska Denali Commission
The State of Alaska Rasmuson Foundation
Alaska Native Tribal Alaska Telecom Association
Health Consortium Alaska Power Association
2:33:57 PM
MR. ANDREASSEN advanced to slide 41, stating AML made huge
progress this past year, year one of a five-year IIJA investment
cycle. A lot of work remains. He said the scale of the project
and implementation needs are pretty incredible. He expressed his
belief that neither AML nor state agencies are ready to do all
this work yet. He anticipates turning the corner into
implementation, project management, and grant management this
year. He summarized slide 41, Community Planning and
Infrastructure Management.
Community Planning and Infrastructure Management
Community Planning and Prioritization
Grant Development and Response
Grant Award, Partnerships, and Match
Procurement and Workforce
Project Management
Grant Reporting and Outcomes
Maintenance and Operations
Asset Management and Sustainability
2:35:25 PM
CHAIR DUNBAR expressed concern about Mr. Andreassen's last
point, asset management and sustainability. He said the DOTPF
builds about three percent more lane miles in Anchorage every
year but keeps its snow removal budget the same. The result is
snow removal in Anchorage has degraded over time. He expressed
concern over infrastructure money entering the state without
explicit conversations with DOTPF and local communities about
new infrastructure maintenance. He suggested focusing on
repairing and maintaining projects that are more integrated into
the community and easier to maintain. He asked Mr. Andreassen to
expound on this subject.
MR. ANDREASSEN answered AML hopes to have that conversation this
year. The state has few asset management capabilities right now,
so AML wants to do more asset management training. AML has
discussions about inflation-proofing maintenance budgets, which
are surprisingly flat when looking at three- and six-year
planning efforts. The mantra last year was that communities are
doing less with less. Even with the influx of new funding,
communities will fall behind if maintenance is not keeping up. A
silent approach to maintenance and operations needs to change.
The conversation needs to be local-state, local-local, and
local-tribal to leverage available partnerships and funding more
effectively and allow for more intentional planning and
discussions. RTPOs would be huge for the transportation effort.
MR. ANDREASSEN said AML held an infrastructure symposium last
year. It focused on new money. This year the infrastructure
symposium needs to focus on "the next steps" and how to maintain
and sustain all the work getting done.
2:38:21 PM
CHAIR DUNBAR noted that political leaders are partially at
fault. It is less fun to do a ribbon cutting in front of a
repair than in front of new construction. He said what a lot of
facilities really need are repairs and maintenance.
2:38:42 PM
SENATOR GIESSEL commented that building better is also needed.
2:38:58 PM
MR. ANDREASSEN said AML did a lot of work on this in ways that
have not been done before. AML's ability to deliver shared
services to members is part of the answer, but ultimately,
augmenting the capacity of local control, local decision-making,
and partnerships is vital.
2:39:18 PM
SENATOR GRAY-JACKSON asked about AML's relationship with the
National League of Cities (NLC).
MR. ANDREASSEN replied that the National League of Cities is the
national-level municipal association. All state leagues
participate in their activities and encourage cities to attend
events. He expressed enthusiasm for NLC advocacy efforts. The
work NLC did around ARPA and the CARES Act meant the world. AML
was able to supply information to members, local governments,
and the tribes, including information about implementation and
federal regulation compliance. The help of NLC has been crucial
these past few years. He said that he took Senator Gray-
Jackson's words to heart and is on the Board of the National
League of Cities and attends meeting conferences. He expressed
how impressive and skillful the organization is. It has led to
greater cooperation between the directors and Alaska,
Washington, Oregon, Idaho, and Montana. He said learning how to
support small communities better has added value to the
relationship.
SENATOR GRAY-JACKSON thanked Mr. Andreassen for his involvement;
NLC is an important organization.
2:42:27 PM
SENATOR BJORKMAN asked whether AML had a speaker from NLC at its
annual conference.
MR. ANDREASSEN answered yes. Its previous president
participated. NLC participated in early education and childcare.
AML modeled a Cities of Opportunity (CoO) off of NLC, and a
dozen emerging municipal officials participated.
2:43:36 PM
CHAIR DUNBAR commented that the presentation contains an
extremely large portfolio of issues. He said that this committee
has a similarly broad portfolio. He said that he expressed to
the Senate President that as these legislative issues start to
move, he would like some of them sent to this committee.
2:44:34 PM
There being no further business to come before the committee,
Chair Dunbar adjourned the Senate Community and Regional Affairs
Standing Committee meeting at 2:44 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SCRA AML Overview, 1.31.2023 -2 .pptx |
SCRA 1/31/2023 1:30:00 PM |
AML SCRA Presentation, 1.31.2023 |
| SCRA AML Overview, 1.31.2023.pdf |
SCRA 1/31/2023 1:30:00 PM |