03/18/1997 01:32 PM Senate TRA

                                                                               
          SB  34 DOT MAINTENANCE FACILITY AT SOLDOTNA                         
                                                                              
 Number 346                                                                    
                                                                               
  CHAIRMAN WARD  introduced  SB 34  as the next order of business.  A          
 brief at ease was taken.                                                      
                                                                               
  SENATOR TORGERSON , Prime Sponsor, explained that SB 34 authorizes           
 the Department of Administration to enter into a lease-purchase               
 agreement with the City of Soldotna in order to finance the                   
 relocation of the Department of Transportation maintenance facility           
 that has been located on the Kenai River.  The land for the move is           
 land that is owed to the state by the borough.  The current site              
 has environmental problems.  There have been hydrocarbons on the              
 site and currently two small clean-up programs are occurring.  Some           
 materials are being leaked into the Kenai River which has lead to             
 the need to relocate the facility.                                            
                                                                               
 Senator Torgerson informed the committee that he did not wish to              
 offer the CS at this time, but rather suggested an amendment that             
 would lower the price from $6 million to $4.5 million.  There has             
 been debate regarding whether the clean-up price, the bonding                 
 price, should include environmental clean-up and demolition of the            
 existing building.  The question is whether it is appropriate for             
 the City of Soldotna to bond under a lease-purchase agreement for             
 those activities.  There has not be a decision on this issue.                 
 Senator Torgerson did not believe that bond council would even loan           
 money on such a function.  The Department of Revenue has indicated            
 that there is language that would authorize such.  The CS does not            
 clearly state that the City of Soldotna would be the entity selling           
 the bonds.  The City of Soldotna wants to be actively involved in             
 this process.  Senator Torgerson explained that the amendment would           
 delete the environmental clean-up monies in the original bond                 
 proposition.                                                                  
                                                                               
  SENATOR GREEN  asked if this was discussed last year, but not as a           
 lease-purchase agreement.   SENATOR TORGERSON  said that the Governor         
 put $1 million in the budget for one-fifth of the project.  The               
 Governor intended to hold onto the $1 million during the                      
 corporation process and continue to appropriate $1 million per year           
 until there was enough money to move the facility.  Senator                   
 Torgerson did not believe that was appropriate which lead to this             
 revenue bond proposal.  After meeting with the Governor and the               
 City of Soldotna, it was determined that the $1 million would not             
 be appropriated, but rather money for ongoing environmental clean-            
 up.  Senator Torgerson pointed out that SB 34 was patterned after             
 the Palmer fire fighting facility legislation.                                
                                                                               
 In further response to Senator Green,  SENATOR TORGERSON  said that           
 no one particular person is at fault for the environmental                    
 problems.  The facility is a DOT facility.  Also the environmental            
 laws have changed over the years; what was once the standard is now           
 a hazardous waste.  This is the case with many facilities.                    
                                                                               
  CHAIRMAN WARD  asked if Senator Torgerson wanted the original bill           
 to be moved.   SENATOR TORGERSON  clarified that he intended for the          
 amendment to be adopted, but if the committee is not comfortable              
 with that the adjustment could be made in Finance.                            
                                                                               
  CHAIRMAN WARD  inquired as to the long term plans after the                  
 completion of the clean-up of the property on the Kenai River.                
  SENATOR TORGERSON  said that if the property could be cleaned up to          
 a standard in which a letter or certification could be issued                 
 saying that the property was environmentally safe, there would be             
 limitless options.  Unfortunately, the State of Alaska nor any                
 environmental agency over clean-up has never issued such a                    
 certification.  Basically, a letter of no further action required             
 is issued which limits the options.  Senator Torgerson indicated              
 that the City of Soldotna would utilize the property as a green               
 belt.                                                                         
                                                                               
  SENATOR WILKEN  moved that on line 9, "$6,000,000" be deleted and            
 insert "$4,500,000".  Without objection, the Amendment 1 was                  
 adopted.                                                                      
                                                                               
 Number 450                                                                    
                                                                               
  LISA PARKER , Planning Director for the Kenai Peninsula Borough,             
 stated that the Kenai Peninsula Borough supported SB 34.  Ms.                 
 Parker offered to answer any questions of the committee.                      
                                                                               
  CHAIRMAN WARD  asked if the existing DOT site could become some sort         
 of public use area.   LISA PARKER  explained that after clean-up is           
 completed, the site would be available for selection by the borough           
 and the intent would be to expand the existing park held by the               
 City of Soldotna.  Ms. Parker noted that there has been some                  
 discussion regarding placing the Kenai River Center on the site.              
 The Kenai River Center is a joint center funded by the borough                
 which houses the borough's State Park and Fish and Game.                      
                                                                               
  SENATOR HALFORD  asked if consideration was given to a straight              
 capital appropriation.   LISA PARKER  said that last year that was            
 considered, but as Senator Torgerson mentioned that did not go                
 through the process.                                                          
                                                                               
  SENATOR TORGERSON  pointed out that there are necessary conforming           
 amendments.  On line 10, "$1,300,000" would need to be deleted and            
 replaced with "$620,000" and on line 11, "$10,000,000" would need             
 to be deleted and replaced with "$6,200,000".                                 
                                                                               
  SENATOR WILKEN  moved Amendment 2 as described above.  Without               
 objection, Amendment 2 was adopted.                                           
                                                                               
  SENATOR WILKEN  moved to report CSSB 34(TRA) out of committee with           
 individual recommendations and accompanying fiscal notes.  Without            
 objection, it was so ordered.                                                 
                                                                               
 There being no further business before the committee, the meeting             
 was adjourned at 2:12 p.m.