Council eyes $46.5 million in bond funding

Published 6:00 am Wednesday, November 8, 2006

The revenue would pay for transportation, affordable housing and other initiatives.

Stalled city projects could soon receive a $46.5 million jumpstart from island taxpayers.

The council on Monday set the groundwork for $15.5 million in council-approved bonds, along with a $31 million voter-approved bond, to help fund transportation improvements, affordable housing offerings, new public-use buildings and other city projects.

Combined with almost $45 million in various loans, grants and fees, the total capital projects package would amount to $90 million over six years.

“This starts the ball rolling and gives us a funding stream for some high-priority areas,” said Councilman Bob Scales, just before the council unanimously approved adding the package to the city’s 2007 preliminary budget.

Voters may see bonds on the ballot as early as 2008.

Councilman Nezam Tooloee, who proposed the measure, said the bonds will essentially mimic the regular school district bonds that finance equipment and facilities upgrades.

He said the $90 million is “not that big” when compared to funds tied up in stalled city projects.

“We have $150 million in capital project delays,” he said, listing unfinished work on Halls Hill Road, Fort Ward Hill Road, Wing Point Way, the Bainbridge Island Senior Center and a proposed downtown parking garage.

“We have these delays because there’s no credible funding plan,” Tooloee said.

Putting portions of his plan to a vote brings citizens further into the fold of city financing, Councilman Jim Llewellyn said.

“I like that this brings an important part of the budget process to the people,” he said.

The measure also narrows the focus from community-driven wish lists to projects that voters can feel in the pocketbook.

“It gives us a mechanism to assess the desire of the community – not in what they want, but what they’re willing to pay for,” said Scales.

Tooloee estimates a house valued at $500,000 will see an annual property tax increase of about $180 over the next 20 years to pay for the bonds.

The council-approved bond would be broken up between road improvements ($9 million), non-motorized transportation projects ($2.5 million), open space acquisitions ($2.5 million) and affordable housing ($1.5 million).

Scales said earmarking additional funds to help foster low-cost housing options was long overdue.

“(The bonds) provide meaningful seed money that could jumpstart a number of (affordable housing) projects,” he said.

City Administrator Mary Jo Briggs welcomed the $50,000 included in the package that would help support staff assigned to a new citizen advisory committee. The committee would collaborate with the city on various capital projects funded by the package.

But Briggs cautioned that the committee may amount to a substantial burden on Finance Director Elray Konkel unless the $50,000 is used to hire a full-time employee.

“(The package) needs permanent staff, otherwise it falls on Elray and other things fall off the table,” Briggs said.

The voter-approved portion of the package would essentially amount to a “two-to-one” ratio over the council’s bond, according to Tooloee. The city would calibrate the extent of council bonds based on voters’ response.

In addition, the city would leverage the bonds’ proceeds with federal and state grants, low-interest state loans, local improvement districts, developer contributions, inter-governmental cost sharing, transportation impact fees, capital leases and various contracts, according to Tooloee.

New baseline

The City Council on Monday also took a shot at the often overlooked budget beast growing in the corner of City Hall.

Though few like to talk about it, the city’s expenses are expected to outpace revenues in the next few years, according to city finance department estimates.

The council opted to hit this budget uncertainty head-on with a new $24.4 million baseline for next year’s operating expenses.

“Let’s be blunt: this puts the monkey on our back,” said Councilman Nezam Tooloee, who drafted the approved addition to the 2007 preliminary budget. “We need to say ‘No! No! No!’ to things and hit our (budget) target. We can’t have everything we want in the community. We have to start saying the big ‘No’ word.”

Tooloee cited the rapidly swelling budget for professional services as one line-item likely to feel the baseline pinch.

Spending listed for professional services between 2005 and the preliminary budget drafted for next year saw a 43.5 percent increase, according to Tooloee.

“That’s an insanely high rate of growth,” he said.

Inaction on the part of the administration necessitated the baseline, said Tooloee.

“The (revenue and expense) lines are beginning to cross in 2008 and I don’t know what the administration’s plan is,” he said.

Mayor Darlene Kordonowy said numerous information-gathering initiatives, such as Winslow Tomorrow, have come at substantial costs but will soon pay dividends, moving the city “toward a sustainable budget.”

But no time is better than now for a dose of fiscal responsibility, said Councilman Bob Scales.

“It’s irresponsible to treat this like Christmas and get all the stuff we want,” he said. “The community expects us to be responsible with the budget and not dig ourselves into a hole.”

The council deleted a portion of Tooloee’s proposal to institute an annual 6 percent baseline increase to keep pace with the island’s population growth.

An amended version directs city finance staff to work with the council on crafting a new growth rate.

“I’d like to have a little wiggle room rather than having a specific number right now,” said Councilman Kjell Stoknes, who supported the amendment.

Tooloee also expressed an openness to debating the $24.4 baseline number should it prove a poor match with future budgets.

City Finance Director Elray Konkel gave the spending baseline a hesitant endorsement.

Expenses outpacing revenues “has been a trend in the community for some time,” he said. Also in recent years, city officials have sometimes shown an unwillingness to tighten the budget belt if it means feeling the pinch.

“But the big question is whether $24.4 million is sufficient for the the level of services this community wants and requires,” Konkel said.