City Considers Bond Surplus for Project Funding Gaps

The City has $16.4 million in unspoken-for money, but not for long. City staff and Council are narrowing down the long list of potential uses for the money to a short list of top priorities. The money comes from bonds issued in 2009 and 2010 for a variety of projects that didn’t end up happening or didn’t end up using the full amount of allocated funds for one reason or another.

$16,444,647 available from the 2009 & 2010 LTGO Bonds:

$8,959,540 from the Dome parking project
$3,000,000 from the Salishan Library project
$3,000,000 from the Brownfields project
$408,627 from the Parking system project
$1,076,480 from Interest earnings

The money is surplus in the sense that as bond money, it cannot simply be given back, and it cannot be put towards Tacoma’s general fund budget gap. The bond money does come with certain strings attached, including those tying funds to economic development or infrastructure projects.

In 2011 a list of other projects in need of funding was being considered for a new round of Long Term General Obligation (LTGO) bonds, but in the third quarter, the City shifted its focus to repurposing the funds remaining from the 2009 and 2010 bonds, rather than issuing new ones.

The list of potential projects for the money is, of course, lengthy, but has been narrowed over the past months. At last Tuesday’s City Council study session, staff presented recommendations on where the money should be allocated based on priorities identified by Council in previous conversations. Staff organized suggested projects into three tiers.

Tier one projects (those identified as highest priority) are those where the City has some level of contractual commitment to complete, or where there is a serious risk of the City losing out on a larger set of funds if the project doesn’t move forward. Staff recommended that the LTGO funds be used to close the funding gap on all of these projects except for the Puyallup Bridge project, which they feel has a good chance of getting funding elsewhere.

TIER ONE:
Contractual Commitments or Risk of Grant Fund Loss
Estimated funding gaps

Point Ruston Waterwalk – $6,000,000
Pacific Avenue Streetscape – $400,000
BCPA Capital Phase 2 – $1,742,700
Tacoma Bridge match – $1,800,000
Puyallup Bridge match – $6,200,000 ($0 recommended)
People’s Pool (phase 2) – $1,700,000

TIER ONE: Subtotal $11,642,700

Projects listed in tiers two and three did not have that same contractual obligation for completion. Staff drew a distinction between tier two projects that leveraged existing partnerships, and tier three projects that would get funding solely from the City. Staff did not recommend any of these projects for funding from this particular pool of money at this time, but Council did discuss a few of the projects, most notably the Hillside Terrace Infrastructure, as well as the Brownfield project and the Salishan library and community center. The Hillside Terrace project would add another $1.5 million to the total proposed reallocations, leaving approximately $3 million out of the $16.4 available.

No decisions were set in stone at the study session, and before any of the money can be re-allocated Council will have to vote on the move. For now Council has asked staff to move forward on all tier one priorities, including a general concern that the City be sure to meet funding needs for the Puyallup Bridge portion. In addition, Council identified the Hillside Terrace project as an important priority, with Mayor Strickland referring to it as having the most potential economic impact in providing housing security to families, and the inclusion of an education center component, as well as the construction jobs that would be generated.

All of the tier one projects moving forward out of this process have a component of prior commitment from the City in some way – contractual and other agreements with Point Ruston, the Broadway Center, People’s Pool, and TAM; and matching fund requirements on the two bridge projects. Although there is no contractual obligation on the Hillside Terrace project, the fact that a chunk of the bond money comes from the cancelled Salishan project came up as a part of the conversation around allocating funding to that project.

To quote Mayor Strickland, “Anybody have any other questions?”