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Schoolhouse bonds back in session at council special meeting

  • Written by Don Mann
At a special meeting Tuesday, the Woodinville City Council discussed the elements associated with a potential bond issue and resultant tax increase to fund the rehabilitation of the Old Woodinville Schoolhouse (OWS).

Some background: The council has been reviewing various options for the OWS since 2011, when a preliminary architectural and feasibility study was presented by an outside consultant group. At that time, the council directed staff to prepare a Request for Proposals (RFP) to seek private rehabilitation and operation of the building.

In May of 2012 the council reviewed three concepts for an RFP. The Woodinville Heritage Society then requested the council postpone a decision until it could present an alternative approach for the future of the building. In September, in conjunction with the Woodinville Chamber of Commerce, the Heritage Society presented its vision to rehabilitate and operate the building, which involves funding through a voter-approved bond and subsequent city ownership and on-going management of the structure.

On Tuesday, City Manager Richard Leahy asked council to make some decisions on at least some of the issues with ballot measure deadlines looming.

Those issues included what type of bonds to be sold, the selection of an election date, the purpose and timing of a citizen survey and the level of the building’s rehabilitation.

Regarding the bonds, Leahy said the specific amount needed for the project was not known at this time as much will depend on construction elements still being determined, but preliminary estimates are in the $4 million to $8 million range. As council determined voter-approved bonds were the way to proceed, a choice needed to be made between “levy lid lift” and “general obligation” bonds, both of which use voter-approved property tax increases for repayment.

Lid lift bonds require a simple majority to pass, but are limited to a maximum of nine years to repay. This allows the bonds to be paid off in a shorter period of time, but at a higher annual amount.

General obligation bonds can be paid off over a longer period of time (typically 20 years), have a minimum voter turnout requirement (40 percent of the previous general election), require 60 percent voter approval, and allow a lower annual repayment amount.

They do, however, cost more over the life of the bonds because of additional interest costs. In addition, a decision needed to be made as to whether taxable or tax exempt bonds should be sold.

Taxable bonds allow governmental and all types of non-profits or for-profit tenants and users, while tax exempt bonds limit the potential tenants and users to governmental and non-profit groups only.

City staff recommended long term taxable bonds and the council quickly and unanimously agreed.

After some discussion, the council opted for general obligation bonds, with Deputy Mayor Liz Aspen stating a preference for lower payment for the citizens. When Councilmember Art Pregler expressed a concern with getting the mandatory 40 percent voter turnout, Leahy said he suspected it could be easily done during a general election which typically produces larger numbers than a primary election.

That said, the selection of the November 5 General Election over the August 6 Primary was unanimous.

“Plus it gives us a little more time to get our ducks in a row,” Aspen said.

Then a citizen survey was discussed — its purpose and its timing.

“My feeling is the purpose of the survey should be to get feedback from the public on what they’d like the use of the building to be,” Mayor Bernie Talmas said.

Aspen said its main purpose was “to see what kind of support we have for a bond issue.”

Leahy agreed, adding it needed to lay out a clear vision for what the voters would be asked to vote for.

“My concern is if we don’t have identified uses we might have a hard time selling it to the public,” Talmas said.

Said Councilmember Susan Boundy-Sanders: “I came in here excited to do a responsible process tonight but I’m starting to hear that this survey is going to be very colored, is going to go out and present a rosy vision to our citizens, and they are not going to be given information with which to make an educated decision about the pluses and minuses of this project. Above all I want the survey to be responsible, impartial, factual and informative.”

It was agreed the survey should go out sooner rather than later.

Regarding the level of the building’s rehabilitation, the council had previously narrowed it down to two of five options: either options C or D presented by the consultant in May of 2012

Option C, estimated at about $4.8 million, covers the base rehabilitation of the building and adds new windows to make the structure compliant with energy codes.

Option D, estimated at about $5.5 million, replaces the current internal structure with a steel frame structure and provides basic interior and exterior restoration.

The annual operating costs for both remain the same at about $18,500.

Councilmembers Paulette Bauman, Les Rubstello and Aspen said they supported Option C.

Boundy-Sanders supported Option D.

Pregler and Talmas supported asking the citizens, and it was unclear what Scott Hageman supported.

Note to citizens: City staff provided a chart indicating the annual debt service cost for a typical $358,000 home would be about $60 a year for a $6 million OWS renovation — about $10 annually per taxpayer home per million for the project.

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