Legislature(2001 - 2002)
2002-01-30 House Journal
Full Journal pdf2002-01-30 House Journal Page 2095 HB 364 HOUSE BILL NO. 364 by the House Rules Committee by request of the Governor, entitled: "An Act relating to capital projects for deferred maintenance, replacement, modification, and expansion of state facilities; relating to leases to secure financing for those projects; relating to the issuance of certificates of participation to finance those projects for certain capital facilities owned by the state; giving notice of and approving the entry into, and the issuance of certificates of participation in, lease-financing agreements for those projects; and providing for an effective date." was read the first time and referred to the State Affairs and Finance Committees. The following fiscal note(s) apply: 1. Fiscal, Dept. of Revenue The Governor's transmittal letter dated January 28, 2002, appears below: "Dear Speaker Porter: I am transmitting to you a bill authorizing a $136 million financing plan to address the highest priority deferred maintenance needs for state facilities, including Pioneers' Homes, prisons, and office buildings. It takes a major step toward addressing the concerns raised in 1998 by the Legislative Deferred Maintenance Task Force. Budget cuts to building operation and maintenance budgets since the mid-1980's, combined with inadequate capital funding for major maintenance and renovation projects, have led to continued deterioration of state buildings. These facilities are in serious need of repair, major maintenance, and in some cases, replacement to maintain and extend their useful lives, to comply with the Americans with Disabilities Act, and to protect the safety of employees and the public. 2002-01-30 House Journal Page 2096 Some state buildings have deteriorated to the point of endangering the safety and health of employees and the public. For example, areas of the Juneau State Office Building lobby were recently roped off because concrete roof pieces were falling to the floor. In Anchorage, both the Pioneers' Home and the Boney Court Building have electrical and fire code violations that create a safety hazard to building occupants. The Fairbanks Pioneers' Home also has similar electrical and fire code violations. In 1998, the Legislative Deferred Maintenance Task Force determined that deferred maintenance on state owned buildings, not including the University of Alaska, totaled over $169 million. Because of budget constraints, little funding has been provided in the last several years to address deferred maintenance in state owned buildings except for the University. With the lack of funding, facilities have continued to deteriorate, increasing the deferred maintenance total to over $200 million. The legislative task force recommended that necessary deferred maintenance projects be financed through debt financing. The magnitude of the expenditures required to accomplish these essential facility repairs is too great to accommodate in a single year's capital budget. This legislation uses certificates of participation, which are available now at extremely low interest rates that are among the lowest in the last twenty years. Annual debt service on these bonds will be approximately $12.8 million per year over a term of 15 years. This investment will be a major step toward eliminating the deferred maintenance backlog. This bill also finances the replacement or expansion of several key facilities. The Juneau National Guard Armory needs to be relocated; funding is provided in this bill to construct a combined armory and University of Alaska facility. The bill also provides funding for a badly needed renovation and expansion of the Nome Youth Detention Facility. The bill would authorize partial funding, to be matched with federal monies, for construction of housing for Alaska veterans requiring an assisted living situation that cannot be provided by a Pioneers' Home. A Veterans Housing and Health Needs Survey, previously requested, would determine the population to be served, the level of care, and facility requirements. 2002-01-30 House Journal Page 2097 The introduction of this deferred maintenance legislation, combined with general obligation bonds for school construction and major maintenance, revenue bonds for accelerated construction of transportation projects (GARVEE's), and amendments to the harbor bonds bill from last year, completes my agenda for debt financing of capital construction projects. I encourage your support of this important legislation, which implements a responsible plan for funding essential deferred maintenance projects for state facilities. Sincerely, /s/ Tony Knowles Governor"