June 25, 1997 in Nation/World

Potholes To Drive City Into Debt Council Says It Has To Do Something About Streets

By The Spokesman-Review
 

Like a homeowner with a leaky roof and no cash to fix it, Spokane officials may borrow money to repave the city’s crumbling streets.

“This is certainly not a preferred way of doing business, but it’s a pretty desperate situation,” said City Manager Bill Pupo. “Backed by the full faith and credit of the city’s treasury, we’ll get these streets done so we don’t lose them completely.”

Pupo plans to ask the council next month to consider borrowing up to $6.2 million to fix 13 of the city’s worst streets - five this summer, eight next.

“If we let things go any longer, it’s going to cost us a lot more,” said Councilwoman Phyllis Holmes. “As long as the staff can come up with a good plan for how to repay the money, we have to go ahead.”

Securing a bank loan is a last-ditch solution born of repeated disappointments, Pupo said.

Spokane voters turned down a $37.5 million street bond last fall. The state Legislature this spring walked away from plans to send more money for streets to cities and counties.

And Spokane County commissioners haven’t yet committed to putting a 2.3-cent-per-gallon local gas tax increase before voters this fall.

“We’re still kind of mulling it over,” Commissioner Kate McCaslin said Tuesday.

Councilwoman Roberta Greene told her colleagues during Monday’s council meeting it’s time for the city to move forward - regardless.

“We can’t wait forever for folks to do stuff for us,” Greene said. “Let’s just get started.”

Deputy City Manager Pete Fortin said the proposal calls for the city to take out a bank loan for 12 to 18 months. A short-term loan is preferable to a bond because of its lower interest rate - about 4 percent for the loan, 6 percent for the bond, Fortin said.

The loan could be repaid one of several ways:

Voters could approve a gasoline-tax increase this fall if the county puts a proposal on the ballot. The city could issue a bond to repay the loan, and use gas-tax dollars to repay the bond over time.

Legislators next session could free up a lump sum for local governments to use for street repairs, and the city could repay the loan with its share.

The city could issue a bond to repay the loan, and use any new revenues generated in 1998 to repay it. Officials also could cut other services to repay the bond.

The city could put another large street bond proposal before voters and use part of the money to repay the loan.

The options don’t thrill Pupo, but he said he’s run out of ideas. “We’ve been forced into some real undesirable ways to doing things.”

Councilman Jeff Colliton said he’s hesitant to commit to the loan until he has “some degree of certainty” the city is in line for additional road-repair money. He’s not sure taxpayers are ready to cut other services to pay for streets.

“If I’m convinced the public is aware of those cuts, that’s OK,” he said.

“There’s no doubt that we’ve got to find something to fix our … streets.”

, DataTimes ILLUSTRATION: Graphic: Paved without gold


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