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.