Snoqualmie bond hike set for vote
October 2, 2008 · Updated 4:32 PM
The Snoqualmie City Council is contemplating approving a bond that asks residents to consider paying $750,000 more for a community center with a pool than was originally proposed.
Feedback from the city of Snoqualmie's recently circulated community center survey indicated that Snoqualmie residents would be willing to consider paying an $8 million bond for a community center with a pool.
However, the city announced at the Aug. 28 City Council meeting that it is proposing to raise that amount to $8.75 million in time for the Nov. 7 election.
The City Council will vote on the resolution at its next meeting Sept. 11.
The reason for the increase is inflation, said the city's finance officer, Harry Oestreich.
In 2005, about when the community center survey was first developed, the city inflated the original estimated cost of a facility with a pool.
The council decided its cost was then an estimated $11.8 million less $3 million in mitigated funds from Snoqualmie Ridge developers Quadrant per the 2001 agreement for a community center. The city also had about $800,000 in additional resources.
"That's how the $8 million was derived," Oestreich said.
At the time of the survey development, those numbers were accurate, he added.
Since the survey was distributed earlier in the year, the city has received updated information on inflation rates. The community center with a pool is now estimated to cost about $12.7 million.
"That will provide us with enough contingency to cover the increase in construction costs that are going to be incurring between now and next year [when development may start]," Oestreich said.
Sixty percent of survey respondents said thay would support a 41 cents-per-1,000 bond rate for a community center with a pool (for an $8 million bond).
Oestreich noted that in November, voters will be voting on allowing the city to sell $8.75 million in bonds with the promise to pay back those bonds plus interest through property levies.
"The levy rate is an approximation," Oestreich said.
The actual rate may vary depending on the rate in which residents pay back the bond, Oestreich said.
The city is considering pursuing a level-debt rate that will ask residents to pay at a higher rate, but with cost declining proportionally to city growth. The result is less interest.
The other option is pursuing a "back-loading" payment strategy, where principal payments are lower in the first years and increase over the years in order to have newer residents pay their fair share, Oestreich explained.
With this plan, residents could end up paying about 32 cents per 1,000, but with increased interest rates.
"Depending on how we structure it, the rates are significant," Oestreich said.
The Metropolitan Parks District made a recent preliminary proposal to the Snoqualmie City Council suggesting some sort of partnership to develop a regional aquatics center. Snoqualmie decided to continue with its community center and pool plans, though the City Council has stated it will continue to leave the door open for further consideration.
The City Council will also vote Sept. 11 on the maintenance and operations levy that would be required in conjunction with the bond.