WL council evaluates next steps on bond
West Linn City Council was able to breathe a sigh of relief during its work session Monday, May 21, on the heels of a general obligation (GO) bond passing by a comfortable margin May 15 — but there wasn't much time for a victory lap.
City staff briefed the council on what the next steps will be now that voters have renewed a levy that is expected to raise as much as $20 million for capital projects over the next 20 years. And while bond-related spending is expected to stretch far into the future, the council faces a quick deadline on several fronts.
"On June 25, we will be presenting a supplemental budget for that (bond) issuance," Finance Director Lauren Breithaupt said. "We'll be opening a new fund to track the projects in and the debt service will be paid out of the debt service fund, and those will both be items in the supplemental budget. The supplemental budget needs to be done before the new fiscal year (in July) and prior to spending any money."
But even before adopting the supplemental budget, the council will have to finalize its list of projects to be funded by the bond and provide rough cost estimates for each project. Further, the councilors must decide whether to split the bond over two or more "issues." When cities issue general obligation bonds, they are essentially taking out a loan that will be repaid — with interest — using funds generated from property taxes.
A prior park bond was split, with $4.4 million issued in 1998 and $3.6 million in 1999.
"It could be a Series 1 (issue) in September 2018 and Series 2 in September 2020," Breithaupt said. "The estimated additional cost is between about $525,000 and $840,000 depending on interest rates, so that's how much you would miss out on if you issue in two series rather than one (with a 50/50 funding split)."
In deciding how to divide funding, project timelines and the city's capacity for undertaking the work will be key.
"Before we can decide how many series to issue and how much to issue each time, we're going to need timing from some of these projects to get an idea of what can start in the next two years, or if we need to do a second series," City Council President Brenda Perry said. "That's really going to weigh into our decision making."
The City has identified three areas of focus for the bond spending: transportation, parks and city facilities. Community Development Director John Williams said staff believes the transportation and parks projects — which include improvements on Highway 43 and 10th Street, enhanced river access and sports field renovations — could be completed in one bond issue.
Projections are less clear for the work at city facilities, in large part because the council has yet to decide exactly which projects in that category should be prioritized — and how much money they should receive. Possible city facility projects include improvements at the Robinwood Station Community Center, repairs at the library and renovation of the old Bolton Fire Station.
"The last time you left the project list, there was still a lot of uncertainty in the city facilities category, and I think that's where we're looking for the most clarity right now," City Manager Eileen Stein said. "What projects are going to be in the city facilities category, and how much is going to be spent on each of those projects? That's really how we anticipate you'll spend much of your time (in the coming weeks)."
The council will meet again May 31 to further discuss the bond.