The agenda for the Bellingham City Council meetings on September 26 has been changed to add a Finance & Personnel committee meeting from 2:35 – 2:45 to discuss repayment options for interfund loan for partial payment of Greenways property acquisition.
Chair Michael Lilliquist’s memorandum to council members reads as follows:
The Finance Committee explored approaches to developing and evaluating options for repayment of the $3.4 million interfund loan that provides partial funding for the agreed purchase of the Chuckanut Ridge property for use as public open space. The committee did not try to decide among the options at this time. Several repayment options exist, including the implied default option to sell a portion of the real property at or before the end of the loan term. It was expressed that this default option may not be the preferred path, however. The committee discussed parameters for a process by which other solutions, perhaps in combination, could be explored and pursued by city officials and staff and by interested members of the public.
Wishing to provide some guidance to these explorations, the committee makes the following recommendations:
- The committee recognizes that the real property serves as the collateral for the loan, and that the default form of repayment is the sale of part of the property, subject to specific evaluation at that time. Therefore, the committee recommends that the status of the property as collateral be made clear by amending the recital language of the financing ordinance (AB 19317). CAO David Webster has agreed to work with Finance Director John Carter to develop proposed language to make it clear that indicating the real property is collateral for the interfund loan is not the same as indicating an intention to sell.
- One possible form of repayment initially discussed is the use of a future Greenways levy (“Greenways IV”) to retire a portion of the current interfund debt. After some discussion, the committee recommends that the full Council take this option off the table, as possibly harmful to the public support for the present and future Greenways program.
- The committee also recommends that the current allocation scheme for Greenways funds be respected, and that no further changes in the allocations be made to help retire the principal of the loan. The committee also recommends that no further Parks acquisitions monies should be used to help retire the loan. Further explorations of repayment options should avoid these mechanisms.
- Given the wide variety of ideas being discussed, and the possibility of new solutions coming forward, the committee suggests that the City post descriptions of the many possibilities on the COB website (probably within the Parks & Rec section). It is hoped that this will facilitate discussion, and keep everyone on the same page, so to speak. Entries could be updated with new information, if the Council asks staff to look further into any of the options.
The time frame for this exploration and evaluation process was not agreed upon. My personal view is that the committee should reconvene before the end of the year to assess what progress or consensus has been made on the various possible repayment options.