04/28/2008: "Stormwater Loan From Land Bank…Maybe"

The County Council plans on borrowing $2.000,000.00 from either the Land Bank (or possibly the road fund) to pay for storm water improvements for Eastsound. They will hold a public hearing on the idea, and the Land Bank will also have to approve the loan

County Administrator Pete Rose once characterized the Land Bank to the County Council as “what we want to be when we grow up.” The context was a discussion on the county budget, and his statement simply acknowledged the Land Bank receives one per cent of the selling price when property is sold in the county, and since it has no expenses save for those that are self imposed, it has a whole lot of money to spend.

It does however have limits on what it spends the money on. It can only “be used exclusively for the acquisition and maintenance of real property interests in conservation.” Last week, County Administrator Pete Rose submitted a draft ordinance to the Council that would authorize a short-term $2,000,000.00 internal loan – either from the County Road Fund or from the Land Bank’s “San Juan County conservation area fund”.

The money in the land bank conservation fund comes from all of the revenues that the land bank commission is authorized to receive, and can only be used to “further the goals and objectives of the land bank.”

The proposal for a interfund loan is a follow up to the recent council vote to take the First Step Toward $2M Commitment For Eastsound Stormwater. The vote was to do it, now how to do it. The idea of the interfund loan is the “how to” part of coming up with the money.; Councilman Rich Peterson said “If we work this right, we may not have to borrow anything.”

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The “not to exceed $2,000,000.00” loan would be paid back over a twenty-four month period. The County is still at work on a new storm water funding ordinance to pay for stormwater related projects. The idea is to use a county wide stormwater funding ordinance to collect money to pay the loan back.

Possible sources of funding discussed could be new fees & charges; special assessments; impact fees; property tax; voluntary assessments; a new REET (real estate excise tax); a 0.09 Rural Sales & Use Tax; Utility local improvement district (ULID), and “other grant sources.” While this would pay for Eastsound, the rest of the county would still have projects.

If one County department borrows money (as opposed to simply moving it) from one County department fund to another, the County still has to pay the money back. Rose explained the proposed loan could “be treated as an investment” on the part of the Land Bank, because “it would pay three-quarters of a percent more interest than they are currently receiving from the Local Government Investment Pool.” Money that is collected by the Land Bank is invested in an interest bearing account until needed.

Council Member Kevin Ranker expressed concern about borrowing from the Land Bank’s Stewardship Fund and – despite assurances that the transaction would require approval from the Land Bank’s finance committee, he withheld his support from a motion to move forward with a public hearing on the proposal.
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The County Council voted 5-1 to take the next step toward a public hearing to authorize the borrowing of “up to $2 million” to satisfy the Regional Growth Management Hearings Board demand that the County has assured some form of funding for stormwater projects in Eastsound. County Administrator Rose will bring a loan proposal back for public hearing and -according to the County- a Council vote at its May 20 meeting.

Last November voters rejected a funding ordinance which established a fee to pay for stormwater projects countywide, and the county then introduced a new draft ordinance that has in turn received mixed reviews.

In the meantime the County is still facing potentially sanctions unless it can show a funding source to solve the Eastsound six-year capital stormwater plan for Eastsound. The County has so far rejected the idea that only Eastsound property owners should pay for the improvements, and the proposed loan will, if nothing else, show a source of money to complete the work.

Councilman Rich Peterson was supported of the referendum the votes passed to overturn the original funding ordinance, called the authorization of a loan “necessary.” Peterson is the Council’s Stormwater Subcommittee chair. He is working with Council Chair Howie Rosenfeld and Council Member Gene Knapp to come up with a way to finance the Eastsound, and other countywide stormwater projects

Council Member Peterson stated a Stormwater Utility Funding Ordinance may be ready sometime in July. There is currently no public estimate of what the bottom line tab will be for stormwater projects countywide, plans were drawn up for Eastsound as the part of a legal settlement, however the true costs are not known.