WENATCHEE — Despite a $2 billion state budget deficit, the state treasurer will ask lawmakers in next month’s special session to loan $42 million to Wenatchee to avoid default on the city’s arena.
The Treasurer’s Office will have three days to make its case for the loan, win approval from the majority of the House and Senate, and get the governor’s signature in order to process the loan and pay off the bonds by the time they expire on Dec. 1, the Wenatchee World reported Saturday.
“I would describe it as running uphill against the wind on ice,” said assistant state treasurer Wolfgang Opitz.
The Greater Wenatchee Regional Events Center Public Facilities District, which owns the arena, has been unable to pay off the short-term, interest-only debt by Dec. 1 after a judge ruled in September that the city could not legally back the sale of new bonds without exceeding its debt capacity.
“It’s not urgent that we bail out the Public Facilities District in Wenatchee,” Opitz added. “It’s urgent that we avoid another municipal default in Washington state.”
As the calendar moves closer to Dec. 1, Opitz said the community has run out of options for refinancing the debt. Even with the needed backing, it would take six to eight weeks for the PFD to sell bonds and get the proceeds in order to retire the debt.
“The clock has ticked past the time they could enter the bond market and sell bonds in time,” he said.
Opitz said lawyers hired by the state Treasurer’s Office are trying to figure out an exact plan for the state to loan the money and how it will be repaid. Once they draft the proposed legislation, it will be sent to all lawmakers before the Nov. 28 start of the special session.
City Councilman Tony Veeder, who has been working behind the scenes to try and resolve the debt crisis, insisted that the loan is not a bail out.
“It’s not a grant. It’s not even an easy loan,” he said. “It would come with pretty strict terms and at a premium interest rate. The city will pay for it for sure.”
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