County may borrow for projects

Published 9:00 pm Friday, April 21, 2006

Snohomish County officials want to build nearly $20 million in roads, parks and storm drains by taking on more than 20 years worth of added debt.

The justification: It would be cheaper than waiting, and the projects are needed now.

Key among them is a bypass route for gravel trucks in Granite Falls, more lanes on a busy commuter route in Lake Stevens and new playgrounds, sidewalks and a yurt village for camping.

County Executive Aaron Reardon said the projects can’t wait until their turn in the county queue, in some cases 10 years from now.

“Projects will cost more over time, and the growth of government is not at the rate of inflation, so the county will forever be playing catch-up,” he said.

A proposed law to implement the program will be sent to the County Council on Tuesday.

“I think it’s a very interesting approach,” Councilman Dave Gossett said. “The details are going to need some more talk.”

Reardon said his proposal, dubbed the Community Infrastructure Development Initiative, pencils out in favor of taxpayers. The interest paid on the loans is projected to cost the same or be cheaper than if the county waited and faced inflation and rising labor and construction costs, county finance director Roger Neumaier said.

Interest on the debt would be 4.75 percent at today’s rates, while inflation and rising construction costs could average 7.3 percent, he said.

County revenue is not growing fast enough to keep up, Reardon said. He announced the idea in his annual state-of-the-county address, but he said its roots are in a bill he introduced in the Legislature as a state senator in 2003.

For the county, it’s a shift from pay-as-you-go to using debt to pay for some projects, he said.

The county has borrowed money before by selling bonds for its own projects, on behalf of the Paine Field airport and Future of Flight museum, and on 911 communication systems.

Including the new county campus and jail, the county has $361 million of outstanding debt issued since 1993.

Dozens of tax sources are already tapped to pay off that debt. Reardon’s program asks to pledge a portion of the county’s real estate excise taxes, road taxes, developer fees for parks and roads and storm-water fees.

The county’s credit rating was downgraded in 2003, but meetings scheduled in May with Moody’s and Standard &Poor will show that the county continues to improve its finances, Reardon said.

He has targeted June 7 for a bond sale, but the County Council must endorse the program.

The largest proposed project – the $25 million Granite Falls truck route – would receive $8 million in bond proceeds and seek an additional $7 million loan under the program.

That is one of two projects with significant funding gaps, Gossett said, “and I’m not sure if you really want to go out and borrow money when you’re $7 million short.”

Gossett said the timeline could slip as council members seek more information.

“There are some good projects on the list, but there’s a couple I’m not sure of,” Gossett said.

Nearly 50 percent of the anticipated housing and population growth is expected to be focused in the southwest corner of the county over the next 20 years, and Gossett said the list of projects should reflect that.

The entire list needs to be looked at in light of the county’s growth management work, he said.

Reporter Jeff Switzer: 425-339-3452 or jswitzer@heraldnet.com.

Proposed county projects

$15 million for roads: Granite Falls truck route; widening 20th Street SE in Lake Stevens; sidewalks in Bothell, Lake Stevens, Marysville, Mill Creek and the Silver Lake area in Everett.

$2.75 million for parks: Playgrounds at Meadowdale, Kayak, North Creek, Logan, Lord Hill, Machias and Paine Field parks; a dog area at Fobes Hill park; a pool and spray park at McCollum Park; improved ball fields at Esperance and Forsgren parks; a yurt village at River Meadows park; ball field lights at Lake Stevens Community Park; an amphitheater at Willis Tucker Park; and a trailhead at Reiter Pit for dirt-bike riders.

$1.8 million for storm drains: Improve drains to prevent flooding in parts of Bothell, Edmonds, Everett and Granite Falls, and relocation of Lundeen Creek to help salmon and prevent flooding.