04/28/1996 12:35 PM Senate FIN

       HOUSE BILL NO. 352                                                      
       "An Act giving notice of and approving a lease-purchase                 
       agreement with the City of Palmer for a fire management                 
       facility at the Palmer Airport."                                        
                                                                               
  Representative Scott Ogan was invited  to join the committee                 
  and testified on behalf of the bill.  This would consolidate                 
  the  Division  of  Forestry  from  four locations  into  one                 
  location.   They  are now  spread  out in  Anchorage,  Eagle                 
  River, Big Lake  and Palmer.   This proposal would save  the                 
  State money as indicated by the  positive fiscal note.  This                 
  would   be   a  lease/purchase   agreement  and   wild  land                 
  firefighting  forces  would be  more  effective.   The State                 
  would own the  facility at the  end of the lease  agreement.                 
  Palmer was chose because  it has a six thousand  foot runway                 
  at  the  airport  which is  uncongested  to  allow operation                 
  unimpeded.   It is centrally located  in the fire protection                 
  area and  can  provide  community  services  and  commercial                 
  support available.   This will allow firefighters to be more                 
  effective.                                                                   
                                                                               
  Tom  Boutin, Division  of Forestry was  invited to  join the                 
  committee.  He said the department  supported the bill.  The                 
  present facility in Eagle River  is a portable warehouse and                 
  the Division of Parks and the  Division of Geological Survey                 
  would  like  to  own the  building.    It  is possible  both                 
  divisions will  be able  to make use  of the  building.   He                 
  referred to consolidation of the four locations into Palmer.                 
  Representative  Ogan  said  the most  of  the  equipment for                 
  firefighting are stored at the Eagle River warehouse and has                 
  to be trucked to  the Palmer airport to be flown  out to the                 
  site of the fire.  The cost savings will reflect the ability                 
  to respond  to fires  more efficiently.     Mr. Boutin  also                 
  commented on the  cost of fighting  fires.  Senator  Zharoff                 
  asked how  long it would be  before the State would  own the                 
  facility and Mr.  Boutin said it  would be  up to the  state                 
  bond  committee.   In response  to a  question  from Senator                 
  Phillips,  Mr.  Boutin  said  the bulk  of  labor  for  fire                 
  suppression was the 73 sixteen person emergency firefighting                 
  crews autonomous to  each village around  the State.   There                 
  are no prisoners involved.  Each person was certified yearly                 
  to be able  to run 1-1/2 miles  with a 40  pound pack.   Co-                 
  chairman Halford asked  about the annual obligation  of $1.3                 
  million if  that was less  than the current  expenditure for                 
  the same functions.  The current fiscal note shows a savings                 
                                                                               
                                                                               
  but the savings does not occur until  three years away.  Mr.                 
  Boutin said the debt service was $560,000/year.  He referred                 
  to page 7 and explained the net value savings.                               
                                                                               
  Nico  Bus  was  invited  to  join  the  committee  and  also                 
  testified on behalf of the bill.  He said there would  be no                 
  change in the department's fiscal note.                                      
                                                                               
  Mr. Boutin said when  the bill was introduced last  year the                 
  state bond committee members  were recommending a seven-year                 
  debt service.  That  would have required a much  larger debt                 
  service payment than a twenty-year debt service to maturity.                 
  Since then the  financial advisor  said the rating  agencies                 
  would expect leases of this size  to be ongoing whatever the                 
  long-range capital projects of the state  might be.  A short                 
  debt  service  would not  seem critical  at  this time.   In                 
  response to  a comment by  co-chairman Halford he  said they                 
  would  not  object to  a reduction  in  the $1.3  million to                 
  $900,000.  Senator  Sharp moved to  delete $1.3 million  and                 
  insert  $900,000 on  page  1 and  without  objection it  was                 
  adopted.                                                                     
                                                                               
  Senator Zharoff noted that the bill needed an effective date                 
  and co-chairman  Halford concurred.   Senator  Zharoff moved                 
  "immediate  effective date"  and  without objection  it  was                 
  adopted.   Senator Donley moved SCS  HB 352(FIN) and without                 
  objection    it   was    reported   out    with   individual                 
  recommendations  and  zero fiscal  notes from  Department of                 
  Natural Resources  and Department of Transportation & Public                 
  Facilities.