Funding to be Determined II

At first blush, it might appear at tonight’s City Council meeting that the Administration and other Winslow Way Streetscape supporters have reconsidered their positions on the Heery International contract and are now ready to delay the project in order to seek grants and to more fully consider the City’s financial circumstances. What more could we want? But upon closer inspection, it is quite clear that this latest proposal is a feeble attempt to hold together an untenable project and to keep the project moving forward at all costs.

Phasing the Pain

An interesting memorandum (see earlier post below) has been circulating today, written yesterday by City Staff and delivered only this morning to Council, proposing to divide Phase II of the Heery contract into four phases, with a cost allocated to each phase. Construction would occur in 2010 rather than in 2009, and the City will apply for a Transportation Improvement Board (TIB) grant in August, at the end of Phase I. There has also been discussion of applying for the Public Works Trust Fund Loan in 2009, as previously suggested by Councilpersons Brackett, Vancil and Knobloch, but until now not possible with a 2009 construction schedule.

According to the memorandum, these proposed revisions to the contract are offered to address concerns expressed about “the City’s financial status”, though it’s not at all clear how the proposed changes, or the plan to apply for grants and loans at a later date, will fully address the fundamental problems that have led to concerns expressed by the public, and many on Council, in recent weeks.

This is virtually the same contract, the same plan, with different packaging. The fact is that no matter how they try to divide it up, recombine it, stretch it out, emphasize one aspect or the other or introduce yet another red herring – today it’s the possibility of a grant or loan – they cannot force this project, as it is proposed, into a palatable form. Any potential scenario they can drum up will face the same hard realities and limitations, the most significant being that the City simply does not have a viable funding source to even pay for the design, let alone the construction of the utility portion of the project, much less any extra amenities (aka bells and whistles).

While superficially it may appear that this increasingly incremental approach to the project is more responsible, the current proposal is in fact a step in the opposite direction. If we assume that it is irresponsible to fund the design of a project that the City cannot afford to build, is it not even more irresponsible to incrementally fund a design that the City cannot afford, for a project that the City cannot afford to build? Looking at the phased plan released today, we see funding identified for Phase I, but following the costs listed for each subsequent phase, we see “Funding to be determined. Funding to be determined. Funding to be determined.”

On a Wing and a Prayer

When the full Council last visited the Heery contract, on April 9^th, it was assumed that the contract would be paid for with Councilmanic (non voter approved) bonds. Since the last regular City Council meeting, Council and Staff have been informed that the City has no more Councilmanic bonding capacity, as there is no cash available to make new debt service payments. That leaves voter approved bonds, revenue bonds, loans and grants as potential sources of funding for the Streetscape and other capital facilities projects. We have yet to hear of any proposal to ask the voters to pay for the project, and up until now, the Administration and four members of Council have been unwilling to delay the project long enough to apply for loans and grants that might be available for a later construction date. That has left Revenue Bonds on the table, which are paid for by utility rate payers, but which place stringent limitations on what portion of a project can be funded, particularly when it comes to soft costs. And there are some really mushy costs throughout the Heery contract.

As we understand it, the response to the revelation of “no bonding capacity” was a decision to place virtually the entire burden of the design and much of the construction costs onto the backs of the City’s ratepayers. We can only assume that sometime over the last few days certain members of the Council majority that support going forward at all costs (Peters, Franz, Snow and Stoknes), and/or the Administration, have realized that to do so would be legally indefensible, as no theory could support the allocation to ratepayers of any portion of the Streetscape amenities work or outreach/ public relations activities. And of the remaining costs, a large percentage will be non-engineering related soft costs with, at best, a tenuous nexus to the actual utility work. Thus, the City is left once again without a source of funding for the Streetscape design and construction, and thus arises the need to further break down the funding of the project. This phasing of the Heery contract will at the same time give the appearance of easing into the project with the ability to “walk away” at any point – in other words, it will give a false sense of security to certain members of Council, and keep together the current majority pushing the project forward.

So why not put behind us the path it took to get here and embrace the opportunity to apply for the TIB grant and maybe even the Public Works Trust Fund loan? Because the possibility of future funding does not change the City’s current financial situation. If those advocating for this latest proposal were agreeing to delay proceeding until funding was found for the design work, and at least some reliable funding was secured for construction, maybe they’d be on to something. But as it stands now, they are proposing to “stay the course” and keep moving the project forward without any clear funding source.

Let Them Eat Cake

Another red herring that will be thrown out tonight is a new plan by the Winslow Way property owners to make a $1 million “contribution” to the project in the form of an LID. Listen closely when you hear this proposal tonight, and you will learn that the money is offered only for the Streetscape “amenities” – trees, benches, nice pavement etc. – not for any portion of the essential utility repairs and upgrades that are the only reason (purportedly) that this project is being pushed to the front of the line, before all other capital projects on the Island, during these difficult financial times.

Which leads us to another fundamental flaw that continues to follow this project in all its recent forms. We have yet to hear a justification for removing this project from the annual Capital Facilities Plan process which by law the City is obligated to use to evaluate and prioritize Capital Projects each year. That process is currently underway and set to end in June. It was already improper to ask Council to approve the Heery contract prior to the CFP, but now, with the proposal that the decision points for the phased contract be before and after the CFP process, the attempt to avoid the legitimate process has left the project literally straddling the CFP in a rather absurd fashion.

Amidst these unanswered questions, under the darkness of our City’s financial forecast and still without any reference to the results of the (already completed) Community Priorities survey, Council will be asked tonight to keep the ball rolling and agree to proceed with Phase I of a revised Heery contract. No doubt we’ll hear many bemoaning what a difficult decision this will be. No, with reality breathing down our necks, it’s really quite simple. It’s time for Council to pull the plug on this sacred cow and send it back into the herd of capital improvement projects waiting for their turn at the empty public trough.

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