Legislature(1997 - 1998)
03/10/1997 01:30 PM House TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 85 - DOT MAINTENANCE FACILITY AT SOLDOTNA Number 1898 CHAIRMAN WILLIAMS stated that the next order of business is HOUSE BILL NO. 85 "An Act giving notice of and approving a lease-purchase agreement with the City of Soldotna for a maintenance facility of the Department of Transportation and Public Facilities." REPRESENTATIVE GARY DAVIS stated that HB 85 addresses a problem in Soldotna and is trying to relocate the Department of Transportation and Public Facilities (DOT/PF) maintenance facility which has been located on a seven and one-half acre site in downtown Soldotna since the early 1950s. There has been a lot of contamination on the site and money expended in cleaning up the site. He stated that the seven and one-half acre site is Kenai riverfront property, which is the rational for the high priority, because of the emphasis on trying to clean up the Kenai River and use it as a pilot project for addressing these situations in other areas of the state. He stated that all avenues of financing the relocation of this facility need to be considered. It does need to be relocated off the riverfront property, the current building is an eyesore and there is a lot of traffic of large trucks into the site and onto the highway. He stated that they have worked with the city and the borough to locate a site that will be conveyed to the state for the new facility. This legislation is approving lease purchase authority for the state to enter into a lease purchase authority depending on the availability of funds to relocate the site. Number 2046 REPRESENTATIVE DAVIS stated that he does have an amendment. The bill specifically speaks to the lease purchase agreement with the city of Soldotna, there are other opportunities and other options available and he would like to not discount the opportunity to address other lease purchase options. He stated that the amendment would not be specific to having the city sell the bonds, so that then the state would enter into a lease purchase agreement with the city of Soldotna to pay off the bonds and then ultimately own the facility but there may be an option for the state to bond for the facility and the project, eliminating the need for a middle man. Number 2106 CHAIRMAN WILLIAMS asked if the move is because it is an eyesore or if there are other reasons such as being environmentally unsafe. Number 2119 REPRESENTATIVE DAVIS stated that yes, those reasons are the rationality for the bill. He stated that it is an environmental issue and they want to make sure that nothing affects the spawning opportunities of the fish and that the river is kept as a vibrant and viable sport fish river. He stated that along the river is this barren and vacant DOT/PF site. It is largely an environmental issue, the piles of calcium chloride salt runs down to the river and could be a reason for the lack of vegetation down to the riverbank. Number 2210 REPRESENTATIVE COWDERY asked if there are any other contaminants, such as hydrocarbon contaminants. Number 2217 REPRESENTATIVE DAVIS replied that there has been studies that have shown there still needs be additional clean-up on the site. Number 2239 REPRESENTATIVE ELTON asked if we were bifurcating the options of the original bill and the sponsor substitute. Number 2254 REPRESENTATIVE DAVIS stated that this discussion is being separated and that any testimony should be given on the original bill before the amendment is offered. Number 2275 REPRESENTATIVE HUDSON stated that he was looking at the 4/12/95 draft letter concerning the relocation, it is the Soldotna Comprehensive Plan, pages 7-13 through 7-14. He stated that unless he is misreading this, it sounds like the suggestion from the city is that the state legislature should secure capital appropriation for about six million from the general fund. REPRESENTATIVE DAVIS stated that the letter was the initial attempt to try and establish a straight capital grant, but due to the finances at this time it was not really practical and we were hoping that the bonding opportunity is more acceptable and yet there is still questions on the financial viability of that. Number 2332 REPRESENTATIVE HUDSON asked what the differences are between the sponsor substitute and the original bill that is before this committee. He stated that the original bill talked about the city of Soldotna financing the building and then the state, in a period of ten years, would pay for that bonded indebtiness and asked if that was correct. Number 2346 REPRESENTATIVE DAVIS replied that was correct. Number 2350 REPRESENTATIVE HUDSON asked in the sponsor substitute who would submit the bond. Number 2356 REPRESENTATIVE DAVIS replied that he wanted to make this perfectly clear, that it is the intent that the city of Soldotna will have the option to sell the bonds and for the state to lease from the city. The proposed amendment would offer an additional option and leave it open as to who the state could bond with. The state could bond it themselves as a G.O. bond. He stated that the only alternative that the amendment is offering, is that the state can bond it or the city can bond it also. Number 2388 REPRESENTATIVE HUDSON asked that you are looking for the option of flexibility of either going with the city or perhaps the state G.O. bonding. Number 2393 REPRESENTATIVE DAVIS replied that was correct. Number 2397 REPRESENTATIVE HUDSON asked if the remediation or the mitigation of the existing site is state property and stated that it would require some mitigation before anything is done with it. Number 2425 REPRESENTATIVE DAVIS replied that was correct and that there has been two appropriations to address that in 1995 and 1996 for a total of $737,000 of which not all has been spent. He stated that there was an additional allocation of $100,000 in 1995 for design and preliminary work on the new facility but could be converted to cleanup dollars if needed. He stated that there will be additional remediation needed and the city of Soldotna will testify that it would need to be in acceptable condition before they would accept it. Number 2440 REPRESENTATIVE HUDSON asked if the state would have the option to take the remediated site and sell it the public and could they apply that to the bond. Number 2461 REPRESENTATIVE DAVIS replied that all those options are available and that it is a consensus that the land would be conveyed to the city, should it be acceptable to the city and then there are specific plans for that site. 97-14, SIDE B Number 008 REPRESENTATIVE HUDSON stated that it should be recognized that fully remediated prime property in return for a bond, that we are still going to pay for, ought to have some value to offset the cost of the bond to the general public and through the state. Perhaps we would ask the city to let us know what it is worth to them. Number 023 CHAIRMAN WILLIAMS asked how much the DOT/PF is paying for the facility now. Number 030 REPRESENTATIVE DAVIS replied that they are paying for their annual maintenance and fees and for the normal operation of a state facility. Number 039 CHAIRMAN WILLIAMS stated that he liked where Representative Hudson was coming from with the land and the new facility. REPRESENTATIVE DAVIS stated that it is an additional expense over the period of the bond. Number 049 REPRESENTATIVE HUDSON stated that he has lived there and he fully supports the need to get it off the riverbank and to get it where it should be. Number 058 REPRESENTATIVE ELTON stated that it was his understanding that a portion of the $6 million is designed for remediation and about $1 million is for site remediation and if that is the case, since $700,000 has already used, site remediation would be for the amount of $1.7 million dollars. Number 089 REPRESENTATIVE DAVIS replied that is an option for bond dollars to be spent on remediation and it is his understanding that it is a legal option to utilize bond dollars. He stated, "It is my intent to keep the actual bond as minimal as possible. If we could get it down to $4 million and reduce annual payments that would be great." He stated that would be utilizing an opportunity for dollars for remediation. Number 116 REPRESENTATIVE ELTON stated that where he is getting confused is in the 1/19/96 letter from Commissioner Perkins where it says, "current construction cost estimate for the facility is $4.5 million and then site cleanup and rehabilitation would cost an additional $1 million. I guess I was thinking okay, that is $5.5 million and then another $500,000 of unanticipated costs. But then when you said there was already $700,000 available for site remediation." He asked if $6 million is the needed figure or is it $4.5 million. Number 144 REPRESENTATIVE DAVIS replied that $6 million would be the needed figure, if bond dollars were used for some of the remediation project. Number 150 REPRESENTATIVE ELTON stated that maybe the sponsor would want to think about some additional language. He stated that he does not have a problem with a process which moves the building from one site to another and keeps the existing site a public access site. He stated that maybe the sponsor would consider amending this to provide, that if the city of Soldotna once it is transferred, ever decides to sell that land, the proceeds of the sale may go back to the state. Number 191 REPRESENTATIVE DAVIS stated that he would not have a problem with that but he has found that most of the parties involved would like to see it remain a public property. Number 203 REPRESENTATIVE HUDSON stated that he believed that the land belongs to the state so it should not get to the city without the state taking some action. REPRESENTATIVE ELTON stated that it was his understanding that the site would be transferred to the city. REPRESENTATIVE HUDSON stated that is what they would desire but it is not contained within the provisions of the bill. Number 226 REPRESENTATIVE AL KOOKESH stated that the way he understands it, is that last year and the year before you tried to get money into the capital budget and weren't able to do it, the state can't afford to build it, Soldotna wants to issue some revenue bonds so they can afford to build it themselves, the state will lease it back to DOT/PF and at the end of the lease period the state will own the facility and the only question is who will own the old site. Number 254 REPRESENTATIVE DAVIS stated that it is correct and like any prudent business, no one would accept a contaminated site. He stated that it would probably take a couple of years for the state to get it cleaned up, depending on the cost. The city of Soldotna would like to have the land cleaned up and conveyed to the city so that they could extend an adjoining park and other additional facilities on the site. Number 293 REPRESENTATIVE KOOKESH stated that he does not have a problem with the bill, except he has a question of who will own the site after it is cleaned up because someone will have to clean it up. He stated, "I guess if we wanted to divorce something right now we divorce that question and go on with the bill." REPRESENTATIVE DAVIS stated that is correct. The bill is strictly a finance bill to provide a financing mechanism for a new facility, the rest of the questions are somewhat off the table. Number 328 LISA PARKER, Planning Director, Kenai Peninsular Borough, testified via teleconference from Kenai, in support to relocate the maintenance facility on the Kenai river. She stated that the borough has been working in cooperation with the DOT/PF to relocate the facility. She stated that in the near future the borough will issue the DOT/PF a limited entry permit and begin to develop the 48 acre parcel. Once we have finished the planning process, the borough will quit claim this parcel to the state of Alaska. She stated that the borough strongly supports the bill. Number 381 REPRESENTATIVE HUDSON asked if his understanding was correct that the city would own the property that the new facility would be built upon and it would be quit claimed to the state, so that it is an asset from the city to the state. Number 397 MS. PARKER stated that the 7.5 acre parcel is owned by the DOT/PF and once the site is declared to be surplus by the DOT/PF it reverts to the Department of Natural Resources to determine the further disposition of that land. Number 453 TOM BOEDEKER, City Manager, City of Soldotna, stated that he is in support of the legislation to authorize the lease purchase financing mechanism as an option to cause the relocation of the existing maintenance facility for DOT/PF in Soldotna. He stated that there have been a number of activities involving hydrocarbons on this site and there have been efforts to remediate those in the last few years but it is difficult to clean-up an ongoing activity site. He stated that moving the facility will allow clean-up to occur in a more orderly and efficient manner. He stated that a spill will cause contamination of the river. He stated that there is a large amount of chloride contamination on the site. The new site will move all of the activities out of the present site where it created a risk of impact. He stated that it is an eyesore. The city has been willing to bond this to get the move made. He stated that the existing site be conveyed to the city of Soldotna and there are clean-up issues in which the city can't afford to take the land without it being cleaned up. He stated that the city's desire to have land is to ensure that it is used to for a park or similar activities that are consistent with the Kenai River. He stated that the city council feels they can do a better job of managing the property than trusting the state to do it. He stated that the city wants the use of the land restricted and feels that they could not control that if it was not theirs. He stated that as far as the amendment is concerned the city does not have a problem with allowing another financing option but wants to be sure that the option for the city to issue revenue bonds is open and does not want any kind of amendment that would delay financing and moving this facility. He stated the Kenai River is extremely important to the economy of Soldotna and anything that damages that river is a serious threat to the lifestyle and well-being of Soldotna. Number 740 REPRESENTATIVE HUDSON asked if the city of Soldotna currently maintains its highway and road maintenance facility. Number 752 MR. BOEDEKER replied that it is out on Funny River Road. Number 759 REPRESENTATIVE HUDSON asked if that facility could be expanded to have a multiple facility, if the state could join with the city to have a combined facility in exchange for a remediated piece of property. Number 780 MR. BOEDEKER replied that it could be managed. He stated that there are two issues dealing with the cities maintenance facilities. It is located on airport property and a large part of the maintenance equipment is used for the airport maintenance that the city has. He stated that because of the restrictions on that property there has to be a rent paid that goes into the airport fund and that site is as large as it can get. It is back one hundred yards from the bank of the river, it is something that can be looked at. Number 843 REPRESENTATIVE ELTON asked when the city of Soldotna constructs public facilities of other buildings or roads are they done under the terms of a project labor agreement. Number 856 MR. BOEDEKER replied that the city is subject in any project that they do to the prevailing wage requirement. REPRESENTATIVE ELTON stated that a project labor agreement would assure that the project is built with union labor. Number 869 MR. BOEDEKER stated that we have not done projects guaranteeing union labor, it is an option but we have always had them open to bid and paid the prevailing wage schedule. Number 893 CHAIRMAN WILLIAMS called a brief at ease at 2:33 p.m. Number 893 CHAIRMAN WILLIAMS called the House Transportation Standing Committee back to order at 2:45 p.m. Number 933 REPRESENTATIVE DAVIS stated that he did not get the sponsor substitute finished in time, as it needs to go through a five day process and he would appreciate if the sponsor substitute be considered as Amendment 1. Number 960 REPRESENTATIVE HUDSON moved to adopt Amendment 1, currently identified as sponsor substitute, 3/7/97, E Version. CHAIRMAN WILLIAMS asked if there was any objections. REPRESENTATIVE KOOKESH objected to ask a question. He asked, "What is the difference between this bill and the other bill, I understand in the first bill we have Soldotna doing the revenue bonds, and the next bill we have the state doing the revenue bonds." Number 1053 REPRESENTATIVE DAVIS stated that the original bill did have the city of Soldotna issuing the bonds and then the state leasing from the city of Soldotna, with Amendment 1, it will allow the option for the state to bond. He said, "The reason for that is there are other bills working their way through the hopper that could possibly get up to finance, as hopefully this one will too, and if there is $30 million, $40 million, $50 million approved for the state to bond, the state could make one heck of a savings on a $30 million bond compared to Soldotna's $5 million or $6 million bond. So that's the rational, in hope of saving money and reducing substantially, the monthly payment on this project." Number 1035 REPRESENTATIVE KOOKESH withdrew his objection. Number 1049 REPRESENTATIVE ELTON stated that this would give the state the ability to refinance if the rates go down even if you don't add incrementally and the state could then refinance and get the savings rather than the city of Soldotna. Number 1053 REPRESENTATIVE DAVIS stated that Representative Elton was correct and that it was a big advantage of this amendment. Number 1060 CHAIRMAN WILLIAMS asked if there was any objections to Amendment 1. Hearing none, Amendment 1 was adopted. Number 1070 REPRESENTATIVE ELTON made a motion to move CSHB 85(TRA), as amended, with the attached fiscal note and individual recommendations. Number 1077 CHAIRMAN WILLIAMS asked if there were any objections. Hearing none CSHB 85(TRA) was moved out of the House Transportation Standing Committee.
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