Port Orchard: Thrifty or Cheap Part II

Yesterday, I wrote about Port Orchard’s penchant for thrift, which has been extant at least as long as I’ve lived in South Kitsap (since 1979).

The city, for example, didn’t go for a voted bond issue to pay for its City Hall (completed in 1999) or expansion of its wastewater treatment plant (completed in 2007). Payments on the City Hall debt come from the city’s current expense fund, its cumulative reserve for municipal facilities fund (where real estate excise tax goes) and its water-sewer operating fund. The city’s portion of the wastewater treatment facility debt is paid for through sewer rates.

“At the time City Hall was built the City fathers did not want to increase the tax burden to the citizens by having an additional property tax levy,” wrote City Treasurer Kris Tompkins in an e-mail to me.

As I look to the year ahead, however, I wonder if (and to what degree) that thrifty mindset may be about to change.

Port Orchard is on the cusp of change and growth that will require some major expenditures. There are currently three major projects on the city’s plate, the Tremont Corridor, the Bethel Corridor and the Town Center Revitalization Project/ parking garage, which I wrote about Tuesday.

In a comment on the story, Sally Santana writes:

“How are we going to afford this and the Tremont roundabout too? And the Bethel Corridor?”

The short story on this is that the city has funding for work set to take place in 2009 on these three projects. Beyond that, there are funding gaps, and city officials are looking at a number of different potential funding sources, including state and federal grants, and economic stimulus money.

Here’s where the three project stand in terms of progress and funding.

The Tremont Street project is budgeted at an estimated $15 to $16 million with construction set to start in 2011. The work set to be done in 2009, completing the design and right-of-way acquisition, is covered in this year’s budget. The project is partially funded with state and federal grants that require a local match, with money coming from the city’s arterial street fund. There is, however, a “funding gap” for completion of the project, according to City Engineer Mark Dorsey. The state’s $6 billion budget deficit could impact the Tremont Corridor, in which case, the city would have to come up with alternate funding besides money the state had committed to the project. The city is working with the Kitsap Regional Coordinating Council and the Puget Sound Regional Coordinating Council to acquire more state and federal funding to close the gap, including federal economic stimulus monies for projects to completed within a two-year time frame.

Although the city has expressed an interest in annexing all of the Bethel Corridor sooner rather than later, that project is not even on Dorsey’s radar for 2009. The city will shortly complete annexation of 39 mostly commercial parcels on Bethel, including Fred Meyer, which will generate subtantial sales tax revenue. The theory is that, as the rest of Bethel comes into the city limits, the cost to complete the widening with infrastructure will come in part from sales taxes. But the city will also be looking toward a variety of funding sources to see this project to completion, Dorsey said. The city is also asking the county to suspend a revenue sharing agreement that would increase the city’s share of revenue gradually over three years to provide the county a “soft landing” financially speaking.

The city has spent all but $6,500 out of $30,000 on a preliminary design for the town center/parking garage. They have also spent $16,000 on a geotechnical report to make sure the proposed building wouldn’t need extra support to prevent it sinking, as buildings close to a shoreline are prone to. The project is in the “very” preliminary stages, according to development director James Weaver. The prospectus on the town center (on the city’s Web site) includes a rather lengthy list of potential funding sources including:

“1. The Port of Bremerton, a major stakeholder that needs approximately 100 spaces, has indicated
a desire to provide commensurate funding of portions of one or more parking structures.
2. Federal funding through Congressional earmarks or programs.
3. Kitsap Transit, another major stakeholder that could seek funding through many sources to
support transit improvements and parking requirements for bus and ferry users.
4. Kitsap County Consolidated Housing Authority, as the Port Orchard designated development
authority for New Market Tax Credits and which can pursue both low interest loans and grants
in conjunction with arrangements with private developers.
5. The City of Port Orchard, which can obtain funds via a bond issue, sale of the existing library
parcel, and pursue grants and loans on its own.

Additional possible funding opportunities may include

6. Washington State Local Infrastructure Financing Tool (LIFT) funding opportunities
7. New Market Tax Credit financing
8. Federal Economic Stimulus financing
9. Federal Appropriations
10. Public / Private Partnerships
11. Community Development Block Grant and other potential funding sources.”

The item city residents will want to pay close attention to, and one that I’ll be watching, is: “The City of Port Orchard, which can obtain funds via a bond issue.”

So, getting back to the thrifty or cheap question, to what extent is major spending on infrastructure and development of public properties justified if the goal of the city is growth and economic development? Considering the state of the economy, to what degree should the city hold to its traditionally thrifty principals? Did adherence to those principals in any way cause the stagnation that Port Orchard is often cited as suffering from?

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