BELLINGHAM - Money to pay back a $3.3 million gap in funding for the city's purchase of Chuckanut Ridge shouldn't come from a new Greenways levy.
That was the recommendation from the City Council's finance committee, which met Thursday, Sept. 22, to discuss ways to fill the gap in financing for the 82-acre parcel on the south side that also is known as Fairhaven Highlands. The property has long been at the center of community efforts to save it from development.
The council unanimously approved the $8.2 million purchase from Washington Federal on Aug. 15, and voted 5-2 in favor of a financing plan on Sept. 12.
That plan included a loan from the city's parks endowment fund, a loan now expected to total up to $3.3 million. The city gave itself six years to repay the loan, but the council has yet to figure out how to do so.
The finance committee on Thursday didn't come up with a solution, either. What members did do was recommend limits for the council to consider as it takes up the matter again Monday, Sept. 26. That included the proposal to leave the next Greenways levy, so-far called Greenways IV, out of the equation for fear it could harm the measure's chance of being passed by city voters.
"We don't think it would be a good idea to bank on Greenways IV as a repayment plan," said Councilman Michael Lilliquist, who is chair of the finance committee.
Councilman Jack Weiss, who sat in on the committee meeting, agreed.
"It's going to be so radioactive," he said, "and I'm concerned about that."
The sale is expected to close Oct. 11. Washington Federal acquired the property in a foreclosure after the failure of Horizon Bank.
The loan of up to $3.3 million will come from a fund that gets a share of voter-approved Greenways property tax levy money that is supposed to be used for maintenance, not land purchases. The money will have to be repaid with interest.
A draft of funding ideas presented at the committee meeting included selling part of the land for development, leasing a portion of the property, using a combination of other city funds such as park impact fees and real estate excise taxes, and state and federal grants.
Additional ideas were to tap into other public funds via a metropolitan parks district or conservation futures, private contributions through a fundraising campaign, selling other land owned by the city, selling naming rights such as for Civic Stadium and Joe Martin Field, refinancing, and using "banked capacity" in the existing Greenways levy, which would amount to a small property tax increase.
But the ideas are preliminary and far from being fleshed out.
In addition to saying no to the idea of dipping into Greenways IV, the three-member finance panel - Barry Buchanan and Seth Fleetwood are the other members - said the city shouldn't dig deeper into current greenways and park acquisition money.
Other funding sources for the purchase of Chuckanut Ridge are $4.5 million from the Greenways III levy that voters approved in 2006, and $500,000 from parks impact fees collected from the south side.
Finally, the committee recommended that the council make clear the 82 acres purchased should be collateral for the loan.
While some members of the public oppose selling any part of the property, Lilliquist said he wanted the public to know there was a plan for repaying the loan - what he called a fallback that would involve selling some of the property.
"My opinion is that's the default option but not the preferred option," he said. "It will take some creative thinking and the public stepping up to the challenge to see if we can find another way of repaying the loan."
