News - Local News

POSTED: Monday, Aug. 03, 2009

Whatcom County governments forced to return some stimulus money

When the winning bid for a major streets-improvement project in Lynden came in 27 percent below the estimate, city officials were pleased. They thought they could spend less of the city's money for the work while still relying on the $1.3 million in federal economic stimulus money they got.

"Our euphoria lasted a very short time," Lynden Public Works Director Duane Huskey said.

Within 24 hours, they were told to give back some of the stimulus money because the bid came in lower than the estimate. They lost about $328,000, money the small city had to borrow off a line of credit. Paying it back will further strap future revenue from property taxes, sales taxes and real estate sales taxes.

"It's not money that we had just laying around," Huskey said.

Lynden tripped over bad news in what's normally good news: low bid prices. The town, which is rebuilding Grover Street and other nearby streets, gave back the most stimulus money of any Whatcom County government. It's now getting $981,000 in stimulus funds, and paying another $1.3 million from various other sources.

Other local governments have lost stimulus money, but it hasn't been as painful.

Bellingham, which is building enhanced pedestrian crossings at various locations, had to give back $41,000 of the original $350,000 it got because of a low winning bid, city Engineering Manager Ravyn Whitewolf said. Sumas has to give back only $46 for its project to repave Bob Mitchell Avenue, which is used by heavy truck traffic, Mayor Bob Bromley said.

Blaine officials saw what happened to Lynden and adjusted their project estimate to make sure that wouldn't happen to them. The city is using $348,000 in stimulus funds to help pay to extend Boblett Street over the now-closed airport runway. The winning bid in Blaine came in 23 percent over the estimate.

The money that's taken back by state government is pooled and pays for what are called "tier 2" projects, which have been prioritized. One of those is Bellingham's project to repave Bakerview Road, Hannegan Road and Woburn Street. State officials don't yet know if there's enough money left over to pay for that project, said Kathleen Davis, director of highways and local programs at the state Department of Transportation.

The state chose to take back stimulus money portions because officials didn't want to see numerous small sums of money spread around the state, Davis said. That's because it would be tough to assure the governor and federal officials the money was all being spent and on worthy projects.

"The pressure is really on us to make sure we have a really, really solid, good program," she said.

Some cities, like Sumas, paid for their entire projects with stimulus money. Others, like Lynden, used local money and borrowed to match the stimulus money so they could do more substantial projects. It's the latter governments that are hurting the most when stimulus money is returned, Davis said.