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Road fund may be tapped for stormwater loan
Turns out the idea of using the Land Bank as leverage proved too hot to handle.
So the San Juan County Council last week set its sights on the county's multi-million-dollar road fund instead. Road revenue, the council agreed at its May 13 meeting, will provide a line of credit that hopefully will convince state officials of the county’s commitment to fulfill its obligation to manage stormwater runoff in the Eastsound Urban Growth Area.
Without such a commitment, the Western Washington Growth Management Hearings Board had been poised to declare the urban growth boundaries invalid and the county out of compliance with state planning guidelines. The result, according to county officials, would likely have been a ban on building permits.
Councilman Rich Peterson, chairman of the council’s stormwater subcommittee, said council members were inundated with objections after the Land Bank’s stewardship fund was targeted four weeks ago as the source of a $2 million interfund loan, which would cover the cost of six years' worth of stormwater improvements in Eastsound.
However, the stewardship fund, Peterson noted, would have only been tapped if the council failed to produce a financing tool that would pay for the 10 projects slated for Eastsound and then an assortment of countywide projects in the years beyond. That tool, which would replace the fees struck down by voters in last November’s stormwater referendum, is expected to be presented by the subcommittee to the full council sometime in July.
The council opted to avoid a tug-of-war over the use of Land Bank funds by withdrawing its request, Peterson said.
“All of us got considerable feedback and there was enough discord about it we decided it would be better to let it go,” he said.
The Land Bank, Peterson added, would have received interest over and above what the stewardship fund — an investment account which totaled about $3.5 million at the start of the year — currently generates if it had been tapped and repayments were necessary.
Last year, roughly $350,000 was drawn from the fund, which covers costs of managing, maintaining and improving properties purchased by publicly-owned conservation agency. But, he said, the volume of criticism raised by islanders and by Land Bank officials prompted the council to pursue Option B, the road fund.
Land Bank Director Lincoln Bormann said Land Bank staff and commissioners fear the agency, which must be renewed periodically by voters, could suffer if money meant for conservation, even if never tapped, is made available for other uses. Such a loan, he noted, would also set a precedent.
“Even if it’s painless this time, the question then becomes, ‘Where do you draw the line?’ the next (time),” Bormann said.
Public Works Director Jon Shannon is confident the council will find a palatable way to finance stormwater projects and that little if any impact awaits the road fund. The average daily balance of the fund has been about $3.5 million in recent years.
“We don’t anticipate needing the money but my position all along is that if we actually do we would be in big trouble,” Shannon said. “I think we’ll be alright.”
In the meantime, road revenue, generated through local property taxes and state and federal grants, will act as a “line of credit” and a last resort for financing the improvements slated for Eastsound.
“I think all of us accept the notion that if we have to get some money through a loan it would be a short-term thing and it would be paid back, along with interest, fairly quickly,” Peterson said.