Council OKs bond sale by narrowest of margins

In a controversial 4-3 vote Tuesday night, the Kent City Council approved the sale of $24 million in limited tax general obligation bonds to help fund five capital improvement projects.

Brandon McLaughlin (left) and Jeremy Galstad of Barkley Dean Construction set a door jam for an electrical room outside of the main arena at the Kent Events Center July 16.

Goes 4-3, but harbors concerns

In a controversial 4-3 vote Tuesday night, the Kent City Council approved the sale of $24 million in limited tax general obligation bonds to help fund five capital improvement projects.

Residents won’t pay any extra taxes because of the vote. City officials set aside a certain amount of revenue each year to fund capital improvement projects.

But city staff asked for an additional $4 million compared to what the Council had approved as part of the 2008 budget.

The following projects will be funded through the bonds:

• Kent Municipal Court renovation, $7.75 million.

• Kent Events Center budget increase, $5.95 million.

• Street improvements for planned East Hill maintenance facility, $5.15 million.

• Technology improvement plan, new equipment, staffing, $3.1 million.

• Downtown sidewalks, $2.05 million.

The budget increase for the events center and the municipal-court renovation were not part of the original 2008 capital projects budget. Funds for the other three projects were reduced to help fund the events center and municipal court projects.

“All of these (projects) have been approved (previously) and we need to keep moving forward,” said Councilwoman Jamie Danielson before the vote. “But further bond issues we need to look at more carefully.”

Danielson, Council President Debbie Raplee, Ron Harmon and Les Thomas voted in favor of the bond sale.

Council members Tim Clark, Elizabeth Albertson and Deborah Ranniger voted against the bond sale because of concerns about the city taking on too much debt in an unstable economy.

“We’re not leaving any room or cushion,” Albertson said prior to the vote. “I don’t want to lay off employees when we open the events center. I can’t support this debt in this climate.”

Council members debated whether the sale of bonds would cause future budget problems.

Bob Nachlinger, city finance director, explained before the vote that the Council for years has followed a policy that debt service from the bonds should not be higher than 15 percent of the general fund. Nachlinger said that percentage for 2008 will now rise to 11.3 percent from 10.7 percent.

City officials use portions of revenue from the sales tax, real estate excise tax, fuel tax and utility tax to fund capital projects each year.

“The Council put the limit at 15 percent at what they feel comfortable with and we’re well below that number,” Harmon said before the vote.

But the increase seemed too high to Ranniger.

“Families all over are reining in expenses,” Ranniger said during the debate. “It’s not that I don’t support the projects, but it’s not a good time to move forward with a larger indebtedness and 20 percent ($4 million) more than planned.”

The Council approved $20 million in capital improvement projects last December as part of the 2008 budget. That included $10 million for the East Hills maintenance facility, $6 million for technology improvements and $4 million for downtown sidewalks. City departments reduced each of those projects to help fund the unexpected events center budget increase and the municipal court renovation.

The city will make an interest payment of about $300,000 this year for the bonds. The total cost of the bonds through the 18-year payment plan is expected to be $36.9 million, with $24 million in principal and $12.97 million in interest.

Contact Steve Hunter at 253-872-6600, ext. 5052 or

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