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Tacoma: City officials not worried about repaying $20 million bridge loan, despite former spokesman’s comments

Post by Lewis Kamb / The News Tribune on Feb. 15, 2013 at 11:54 am with No Comments »
February 15, 2013 5:37 pm

As Tacoma celebrates the re-opening and centennial of the Murray Morgan Bridge this week, city officials say they aren’t worried about repaying a $20 million federal loan that was a key part of the span’s salvation — despite a recent comment from the city’s former spokesman suggesting they may have trouble doing so.

Murray Morgan BridgeThe no-interest loan, which materialized suddenly in 2010, provided the last funding piece needed for the city to complete the bridge’s $57 million rehabilitation.  When it appeared, the city hailed the loan as a windfall of sorts.

But on Sunday, the city’s former public information officer, Rob McNair-Huff, posted the following Facebook comment about News Tribune columnist’s Peter Callaghan‘s recent piece about a local activist group that helped make the bridge’s salvation happen:

IFEnjoyed the column about the Murray Morgan Bridge restoration in the paper today, but I was disappointed to see it left out the major issue left with this project – the city, aka, taxpayers, still need to pay off a $20 million loan to cover the rest of the cost of the restoration. This will become an issue when the bill is due, and there is no money set aside to pay the bill.

Not only did Callaghan’s column mention the “zero-interest loan to complete the package,” but city officials say there are no repayment issues, as McNair-Huff suggests.

Earlier this week, after I asked city officials about the former spokesman’s comments, Interim Public Works Director Kurtis Kingsolver and City Manager T.C. Broadnax each explained that the city has ample time to pay off the loan — and a funding “backstop” to do so.

“The (loan) agreement was written with some flexibility and the idea is we will go back to the (Washington Department of Transportation) within the first five years and develop a repayment plan,” Kingsolver said.

In fact, according to the loan terms, the state DOT, which administers the loan, first only needs to see a plan for repayment by September 2015.  Full repayment isn’t due until September 2020.

And built into the agreement is much wiggle room — and the idea the City can use future grant dollars to pay back the loan, Kingsolver added.

“It’s defined in a document, but there’s a lot of flexibility with that,” Kingsolver said. “And we’ve already begun discussions with DOT. ”

Even in a worst case scenario where the city wasn’t able to land any future grant dollars that could be applied toward the loan, Kingsolver noted Tacoma has an out:  its revenue share from the state’s motor vehicle fuel tax. The city receives about $3.5 million to $4.2 million per year in gas tax revenues.

“It hasn’t necessarily been decided, but it’s always been implied the gas tax revenue would be the backstop,” Kingsolver said.

“The bottom line is, we signed it, we’re going to pay back the dollars,” Broadnax added. ” …That’s why people should not rely on Facebook to get their government information.”

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