Bainbridge city council OK budget change for purchase of medical center building

The Bainbridge Island City Council approved a budget amendment at its meeting this week that will earmark $6.9 million toward the purchase of the Harrison Medical Building and property.

The city is purchasing the medical building on Madison Avenue and plans to convert the structure into a new police station and municipal court.

The council approved the purchase of the property for $8.975 million from CHI Franciscan in late March, but the 2019-2020 biennial budget was adopted last November, before the council had reached a decision on where it would locate the new public safety building.

At the council’s meeting this week, the council voted unanimously, 5-0, on an amendment to the 2019-20 biennial budget that will transfer $6 million from the city’s general fund and $900,000 from its Real Estate Excise Tax Fund to the budget for the project. A total of $3.1 million was appropriated for the project in previous years.

The city’s current Capital Improvement Plan sets out a budget of $20 million for the police station/court project.

With the total appropriation for the project being changed to $20 million, city officials noted the funding will cover $400,000 that has already been spent on project studies, site assessment and preliminary designs, as well as $8.975 million for the Harrison Medical Building property purchase, and $625,000 for future design and planning work.

The project budget of $20 million includes $10 million of long-term debt, but the council has yet to decide where that $10 million will come from.

Earlier, in November 2015, the city asked voters to approve a $15 million bond measure to pay for the new police station/municipal court, but that ballot proposition failed in a landslide defeat.

City officials said this week that the final decision about the funding mix needed to complete the project has not yet been made, and noted the city council could choose a different mix of current city funds and long-term debt.

The council’s decision on how much debt to issue and when to authorize it will be made later this year, according to the city.

If the council eventually approves non-voted, or councilmanic bonds, to raise $10 million, city officials have estimated that it will cost the city approximately $720,000 per year for 20 years to retire the debt.

According to an estimate prepared by the city, that means the debt service on a $10 million bond sale will eventually have to be repaid by the city at a total cost of approximately $14.4 million between 2019 and 2035.

The budget amendment was approved as part of the consent agenda at the council meeting Tuesday. Councilwoman Rasham Nassar and Councilman Kol Medina were absent.

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