Finance Council OKs $231.3 million in additional bonds for NBAF, with conditions

Sen. Terry Bruce, left, House Speaker Ray Merrick and Gov. Sam Brownback talk with Jamie Johnson of the U.S. Department of Homeland Security before a meeting Tuesday of the State Finance Council. The council OK'd issuing 31.3 million in additional bonds to help finance the new Bio and Agro-Defense Facility being built near the Kansas State University campus in Manhattan.

? Gov. Sam Brownback and legislative leaders agreed Tuesday to authorize another $231.3 million in bonds, with certain conditions, to help finance the National Bio and Agro-Defense Facility under construction near Manhattan.

But the approval is conditioned on the U.S. Department of Homeland Security signing a letter agreeing that the state will not be asked to pay any more and that the federal government will pay for any future project cost increases.

The additional bonds will bring the state’s total investment in the facility to $307 million, or 25 percent of the total cost, whichever is lower, officials said.

The new laboratory, which is expected to be fully operational by 2022, will be used to research dangerous animal-borne diseases. It will replace an aging research facility at Plum Island, N.Y., which Homeland Security intends to sell.

The governor and legislative leaders met Tuesday as the State Finance Council, a group that has authority to make financial decisions for the state when the Legislature is not in session.

Kansas lawmakers initially authorized $105 million in bonds when the state was awarded the project in 2009. So far, it has only issued about $75 million of those bonds, which were used to build a power plant to serve the new lab.

But since then, the total cost of the project has doubled to an estimated $1.15 billion, and Homeland Security has asked the state to pick up a part of that additional cost.

In November, the council balked at authorizing the additional bonds until Congress appropriated the money for its share of the project. The council also said it wanted assurances that the federal government would pay for any further project cost increases.

In December, Congress approved a funding bill for the Department of Homeland Security. And while the bill only funds the agency through March, it did include $400 million to pay the remaining federal share of the cost.

“We’re going to put these extra funds in,” Brownback said Tuesday. “We didn’t want to. We didn’t want the project to cost more, but we’re going to put the extra funds in. But we want to make sure this is it. Any cost overruns are done by DHS, and no more. The project’s going to happen.”

“We had to make a second approval because the cost went up on the project, and the Legislature asked that that language be put in so that we wouldn’t be hit with another bill that we clearly couldn’t afford,” said Senate President Susan Wagle, R-Wichita.