Legislature(2003 - 2004)

02/11/2003 08:05 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB  79-AK REGIONAL ECONOMIC ASSISTANCE PROGRAM                                                                                
CHAIR MORGAN announced that the  first order of business would be                                                               
HOUSE BILL NO. 79, "An Act  extending the termination date of the                                                               
Alaska regional  economic assistance  program; and  providing for                                                               
an effective date."                                                                                                             
Number 0123                                                                                                                     
SUE STANCLIFF, Staff to Representative Carl Morgan, House                                                                       
Community and Regional Affairs Standing Committee, Alaska State                                                                 
Legislature, paraphrased from the sponsor statement, which read:                                                                
     The Alaska  Regional Development  Organizations (ARDOR)                                                                    
     Program  is   the  State's  contribution   to  regional                                                                    
     initiatives for developing Alaska's  economy.  In 1988,                                                                    
     the  Legislature  recognized   that  a  locally  driven                                                                    
     initiative, in partnership with  the State, is the most                                                                    
     effective approach to creating  and sustaining a strong                                                                    
     and healthy  economy.  The Legislature  established the                                                                    
     ARDOR Program  to create a network  of organizations to                                                                    
     plan and  support economic development at  the regional                                                                    
     There  are  currently 14  ARDOR's.    The ARDORs,  like                                                                    
     their counterparts nationwide:                                                                                             
             · Enable local officials and businesses to                                                                         
               pool their limited resources and work                                                                            
               together on economic development issues,                                                                         
             · Develop partnerships among public, private                                                                       
               and other organizations, and                                                                                     
             · Provide needed technical assistance via                                                                          
               direct links with local citizens                                                                                 
     It's not the State trying  to determine what's best for                                                                    
     the region; rather, it's the  residents and those doing                                                                    
     business  in  the  region working  together  to  create                                                                    
     their economic future.                                                                                                     
     The  ARDOR  Program  is  providing  a  return  for  the                                                                    
     State's  investment.   The State  provides $620,000  in                                                                    
     grant   funds    for   the   ARDOR   Program.       The                                                                    
     accomplishments   of   the   ARDORs   are   impressive.                                                                    
     Additionally, the  ARDORs have  used $620,000  in State                                                                    
     grant  funds to  leverage  over $3.6  million in  other                                                                    
     Board   members   participation    reflects   a   local                                                                    
     commitment to the ARDOR Program.   The 14 ARDOR boards,                                                                    
     each with  10-20 members,  constitutes 150  plus local,                                                                    
     civic-minded  individuals who  volunteer their  time to                                                                    
     achieve a stronger economic base in their region.                                                                          
     The original intent of the  ARDOR Program was to create                                                                    
     regional entities that could  improve the local economy                                                                    
     and   eliminate    region-wide   economic   development                                                                    
     barriers.   The  ARDORs  are  meeting this  legislative                                                                    
     intent.  The  ARDORs work on a wide  range of projects.                                                                    
     Some,  like  Anchorage's   "Military  Hub  Study"  have                                                                    
     regional or  statewide impacts.   Other  projects, such                                                                    
     as  the  Arctic  Development Council's  Revolving  Loan                                                                    
     Fund, assist individuals and businesses.                                                                                   
     This legislation  would extend the sunset  date to July                                                                    
     1, 2008.                                                                                                                   
     [original punctuation provided]                                                                                            
CHAIR MORGAN  explained that  the reason for  the sunset  date of                                                               
2008 was  in order for  the ARDOR  program to continue  two years                                                               
into the next administration.   Therefore, the transition [during                                                               
an administration change]  would be easier.   Chair Morgan turned                                                               
to the  $650,000 fiscal  note and  pointed out  that in  the past                                                               
each ARDOR has received about $47,000.   The ARDORs do a lot with                                                               
that $47,000, especially in Bush Alaska, he said.                                                                               
Number 0531                                                                                                                     
MS. STANCLIFF  pointed out that  of the $650,000, $30,000  is for                                                               
the in-house  administrative costs of  running the program.   The                                                               
$620,000 is what is divided among the 14 ARDORs.                                                                                
REPRESENTATIVE CHENAULT inquired  as to the cost  of this program                                                               
in the past.                                                                                                                    
MS.  STANCLIFF  answered  that  the  amount  of  $620,000  hasn't                                                               
changed for some  years and doesn't change if an  ARDOR drops off                                                               
or comes on.  All the  ARDORs would [equally] share the $620,000.                                                               
In  further response  to Representative  Chenault, Ms.  Stancliff                                                               
explained  that   the  state  sees  returns   through  the  local                                                               
economies  that put  [funds] into  the local  community and  thus                                                               
take the burden off the state.                                                                                                  
Number 0689                                                                                                                     
REPRESENTATIVE WOLF asked  if it's common for ARDORs  to drop off                                                               
or come on board.                                                                                                               
MS.  STANCLIFF responded  that it's  not common  although it  has                                                               
happened.   A couple of  ARDORs have been  lost, one of  which is                                                               
back on-line  and the other is  being worked on [in  order to get                                                               
it back on-line].                                                                                                               
CHAIR  MORGAN  informed the  committee  that  most of  the  folks                                                               
involved in the ARDORs are volunteers.   The ARDORs that are lost                                                               
are usually in  Bush Alaska.  Chair Morgan mentioned  that he was                                                               
a  board member  for an  ARDOR and  it  was a  lot of  work.   He                                                               
emphasized that the returns are realized locally.                                                                               
Number 0810                                                                                                                     
REPRESENTATIVE  SAMUELS asked  if the  $3.6 million  in leveraged                                                               
funds is $3.6  million instead of money or is  it $3.6 million in                                                               
loans coming in from outside for the projects.                                                                                  
MS.  STANCLIFF answered  that the  [$3.6 million]  represents the                                                               
ability to  leverage other  federal funds  coming in  for various                                                               
CHAIR  MORGAN pointed  out that  in his  district, there  was the                                                               
need for  good aerial maps.   With [ARDOR money], more  money was                                                               
leveraged  from  the  Bureau  of   Indian  Affairs  (BIA),  which                                                               
produced the aerial maps.                                                                                                       
Number 0965                                                                                                                     
JIM   CARTER,  Executive   Director,  Kenai   Peninsula  Economic                                                               
Development District,  related that the Kenai  Peninsula Economic                                                               
Development District  was probably the  first ARDOR in 1988.   He                                                               
informed the  committee that  some ARDORs  work on  projects that                                                               
alleviate poverty, deal with fire  suppression or medical clinics                                                               
while other  ARDORs address larger  development projects  such as                                                               
the  Southeast Conference.   On  the Kenai  Peninsula, the  ARDOR                                                               
tries  to  work with  small  business  development and  community                                                               
initiatives.     Mr.  Carter   noted  that   the  $40,000-$47,000                                                               
represents  about 20  percent of  the  [Kenai Peninsula  Economic                                                               
Development  District's] budget.   As  has been  mentioned, those                                                               
funds are  used to leverage  other funds that are  directly spent                                                               
in  the  communities  in  the  borough.   He  also  informed  the                                                               
committee   that  last   year   the   Kenai  Peninsula   Economic                                                               
Development District  had its first  funding summit.   During the                                                               
summit  13  communities  presented  20 projects  to  the  various                                                               
funding   agencies  like   the   United   States  Department   of                                                               
Agriculture (USDA) and the Denali  Commission.  He mentioned that                                                               
the  communities  attending  the summit  were  underserved  rural                                                               
communities  such as  Tyonek, Point  Graham, and  Seldovia.   The                                                               
cost of  the summit was  about $2,000 [which resulted  in] follow                                                               
up  of  about $10,000.    Mr.  Carter  announced that  the  Kenai                                                               
Peninsula Economic Development  District supports the committee's                                                               
endeavors with HB 79.                                                                                                           
Number 1168                                                                                                                     
REPRESENTATIVE ANDERSON  inquired as to  the amount of  funds, in                                                               
addition   to  the   $47,000,   the   Kenai  Peninsula   Economic                                                               
Development District received in 2002.                                                                                          
MR.   CARTER  explained   that  the   Kenai  Peninsula   Economic                                                               
Development   District  is   [financially]  supported   by  other                                                               
planning  and  capacity-building  grants.   The  Kenai  Peninsula                                                               
Economic  Development  District provides  a  50:50  match to  the                                                               
$47,000.  Therefore, the district  has to look elsewhere for that                                                               
match.   Mr.  Carter pointed  out that  the Economic  Development                                                               
Administration (EDA) and the U.S.  Department of Commerce require                                                               
a match as well and thus the ARDOR  funds are used as a match for                                                               
those federal funds, which are then  used as a match to the ARDOR                                                               
funds.  That $47,000 in  ARDOR funds leverages $59,000 in federal                                                               
funds [in the Kenai Peninsula Economic Development District].                                                                   
Number 1258                                                                                                                     
SUE   COGSWELL,  Prince   William   Sound  Economic   Development                                                               
District, informed  the committee that this  district has existed                                                               
for about two years and before  that time the district existed as                                                               
a council since  1991.  She noted that [the  Prince William Sound                                                               
Economic  Development  District] just  had  a  funding summit  in                                                               
Cordova.  This  summit was attended by about  70 folks, including                                                               
state, federal, and private foundations.   Ms. Cogswell estimated                                                               
that   over  the   years  the   Prince  William   Sound  Economic                                                               
Development District  has saved a  little over $500,000  from the                                                               
state ARDOR program,  which has allowed the  district to leverage                                                               
about $6 million.   Ms. Cogswell informed the  committee that one                                                               
of  the district's  current projects  is  a fisheries  processing                                                               
plant in  Valdez.   This plant will  enable fishermen  to process                                                               
their  catch  of  a  variety  of  seafood  throughout  the  year.                                                               
Hopefully,  the  plant  will  open  next fall,  she  said.    She                                                               
mentioned that the training would be done in the local college.                                                                 
REPRESENTATIVE CHENAULT asked if  the seafood processor is funded                                                               
through a private  corporation or is the ARDOR  system looking at                                                               
funding this.                                                                                                                   
MS.  COGSWELL explained  that  the vice  president  of the  ARDOR                                                               
developed this  idea for  the processing  plant.   The processing                                                               
plant project  will be funded  by EDA through the  Prince William                                                               
Sound Economic District.                                                                                                        
Number 1397                                                                                                                     
REPRESENTATIVE SAMUELS inquired as to  who will own, operate, and                                                               
hire the workers for this processing plant.                                                                                     
MS. COGSWELL  answered that  the Valdez  fisheries will  hire the                                                               
workers.  Positions  will be open to all the  fishermen in Prince                                                               
William Sound,  although they  will have  to receive  training on                                                               
the equipment.   This training as well as  marketing courses will                                                               
occur  at the  college.   In further  response to  Representative                                                               
Samuels, Ms.  Cogswell confirmed that  the training will  be paid                                                               
for with  the leveraged funds.   She explained that  the district                                                               
assisted  the  City of  Valdez,  the  Valdez fisheries,  and  the                                                               
college with  obtaining a  mini grant to  provide funding  to pay                                                               
the college to train the workers.                                                                                               
MS. COGSWELL, in response to  Representative Wolf, specified that                                                               
Nautilus  Seafood  is the  processor  in  Valdez.   Ms.  Cogswell                                                               
pointed out  that a study  was performed before this  project was                                                               
proposed.  [The  study shows that] the  proposed processing plant                                                               
won't conflict  with the work  done at the processors  during the                                                               
summer because  the proposed  processor will  only process  up to                                                               
5,000 pounds of  product at a time per individual.   Ms. Cogswell                                                               
offered to  send the committee  the packet of information  on the                                                               
proposed   processing   plant.       In   further   response   to                                                               
Representative  Wolf, Ms.  Cogswell confirmed  that this  project                                                               
would [create] a value-added product.                                                                                           
Number 1557                                                                                                                     
WANETTA  AYERS, Executive  Director,  Southwest Alaska  Municipal                                                               
Conference  (SWAMC), informed  the committee  that the  Southwest                                                               
Alaska Municipal  Conference represents  54 communities  from the                                                               
Aleutian,  Pribilof,  Bristol  Bay,   and  Kodiak  Island  areas.                                                               
Historically,  ARDOR  funding  has   accounted  for  about  20-25                                                               
percent of  the Southwest  Alaska Municipal  Conference's budget.                                                               
The  balance of  the budget  is comes  from EDA  funding, private                                                               
sector  membership,  earned income,  and  other  grants that  are                                                               
leveraged from  time to time.   These funds have  funded projects                                                               
ranging  from  tourism  development  activities  to  solid  waste                                                               
projects.   Ms. Ayers  said that  the Southwest  Alaska Municipal                                                               
Conference   is    constantly   looking   for    other   granting                                                               
opportunities to help the communities.                                                                                          
MS.  AYERS  highlighted  that  the   ARDOR  program  has  been  a                                                               
significant rallying  point in the  Southwest Alaska region.   In                                                               
fiscal year 2002, the federal  government designated SWAMC as the                                                               
organization  to help  mitigate  economic losses  due to  fishing                                                               
restrictions in  the ground fish  fisheries in the region.   That                                                               
effort  resulted  in the  distribution  of  over $29  million  to                                                               
individuals throughout the Gulf coast  of Alaska and elsewhere in                                                               
the U.S.   She pointed  out that [the Southwest  Alaska Municipal                                                               
Conference] did  that for  less for  1 percent  of administrative                                                               
costs and  over 80 percent  of the funds were  distributed within                                                               
one year.                                                                                                                       
MS. COGSWELL added  that the ARDORs network and  work together to                                                               
help each other.                                                                                                                
Number 1740                                                                                                                     
REPRESENTATIVE ANDERSON  moved to report  HB 79 out  of committee                                                               
with  individual  recommendations  and  the  accompanying  fiscal                                                               
note(s).  There being no objection, it was so ordered.                                                                          

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