SENATE BILL 34 "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 G. Davis explained that SB 34 would provide authorization to the State of Alaska to enter into and finance a lease-purchase agreement for the construction of a new maintenance facility in Soldotna. The current facility, resting on a seven acre site, is over 30 years old, located along the Kenai River. That facility is of concern to the entire community. The new facility will be constructed on a site which is currently held by the Kenai Peninsula Borough (KPB). He pointed out that the KPB "owes" the State the acreage; thus, there will be no land acquisition costs to the project. KPB will deed the land to whatever entity to comply with the bonding requirements. Representative G. Davis reiterated that there is public concern regarding the maintenance citing of the facility along the Kenai River. Heightened public awareness of habitat protection and water quality for the river has focused on that station. The proposed project has the support of the Department of Transportation and Public Facilities (DOTP&F) and seems to be the most viable option. In the early 1960's, the State conveyed to the Kenai Borough a parcel of land for Borough ownership. As a part of that agreement, the Borough then owed land of similar value to the State. The City of Soldotna has proposed to the State their interest in the said land and currently is waiting for the transaction to convey that land. Representative G. Davis pointed out that the new site would be conveyed at no cost to the State. Representative J. Davies questioned the costs of the clean-up involved with the site being vacated. Representative G. Davis acknowledged that a $150 thousand dollar contract had been granted last summer to address those concerns. He added, there was additional money appropriated in past budget 5 cycles and also in the current fiscal Capital Budget for the clean-up. SAM KITO, III, SPECIAL ASSISTANT TO THE COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, spoke in support of the proposed legislation. He noted that the Department has been working on the proposal with the Soldotna delegation for several years. Co-Chair Therriault asked if the proposal had been submitted for a Capital appropriation. Mr. Kito replied that there had been interest to include it for a capital appropriation about three years ago, although, did not make it through the process. The City of Soldotna and the State then began looking at bonding options. Co-Chair Therriault questioned if money existed for the removal of the existing structure. Mr. Kito commented that there are funds for demolition of the existing structure as well as funding for the new proposed structure. He pointed out that there will be a separate appropriation to address the clean-up. He hoped it would be sufficient. Ultimately, the property will be transferred to the City of Soldotna from the State. Representative G. Davis understood that Soldotna had no additional municipal selections. The cost of the new facility is projected to be $4.5 million dollars. Representative Mulder MOVED to report CS SB 34 (FIN) out of Committee with individual recommendations and with the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CS SB 34 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Revenue dated 4/25/97 and a zero fiscal note by the Department of Administration dated 3/11/97.