The Spokane City Council is hoping a quick infusion of cash from a bank loan will save a handful of Spokane’s roughest roads from further decay.
Council members on Monday unanimously approved plans to borrow $2.66 million to fix five of the city’s worst stretches of street.
“It’s probably the least desirable recommendation to make from a city management perspective,” said City Manager Bill Pupo. “But … if you don’t prepare communities for the future, you don’t leave prosperity for tomorrow.”
“We just simply feel that we can’t wait,” said Mayor Jack Geraghty. “We’ll convert (the loan) into long-term funding, depending on the outcome of the various gas tax proposals.”
The decision to borrow money to fix the streets came after several hoped-for dollar sources never materialized.
Spokane voters turned down a $37.5 million street bond last fall. The state Legislature last spring walked away from plans to send more money for streets to cities and counties.
And Spokane County commissioners haven’t committed to putting a 2.3-cent-per-gallon local gas tax before voters in November. They are expected to vote on that issue later this month.
City officials hope either voters or legislators come through with more money for street repaving this fall.
If that happens, the short-term loan could be repaid with the new dollars. If that money doesn’t come or comes in amounts too small for quick repayment, the city likely will have to issue bonds to repay the note.
General fund dollars also may be sacrificed to pay off the bonds.
Dick Adams, a frequent critic of city spending, asked the council whether the loan would necessitate a tax increase.
“No,” Geraghty said. “It would mean we’d have to cut something.”
In two weeks, the council will finalize terms of a short-term bank loan.
The proposal calls for taking out the loan for 12 to 18 months. A bank loan is preferable to a bond because of its lower interest rate - about 4 percent for the loan, 6 percent for the bond.
, DataTimes MEMO: This sidebar appeared with the story: Street repairs Five streets will be repaved this summer with $2.66 million borrowed from a bank. They are: Monroe Street from Maxwell to Garland avenues; Hamilton from Trent Avenue to North Foothills; Thor/Freya from Sprague to Eighth avenues; Division Street from Third to Seventh avenues; Grand Boulevard from Eighth to 29th avenues.