Council Extends Two Pda Loans Public Development Agency Runs River Park Square Garage

Tue., Oct. 10, 2000

By Oliver Staley olivers@spokesman.com

The Spokane City Council voted Monday to extend by five months a pair of loans to the agency that runs the River Park Square garage, despite the objections of Councilman Steve Eugster.

The city loaned the Spokane Parking Public Development Agency $200,000 for start-up costs last year and $80,000 to hire a parking consultant earlier this year.

Both loans were due this Dec. 31, but because the PDA is deeply in debt it asked that the terms of the loans be extended a year. The council eventually approved an amended motion that extended the loans to April 30 by a 5-1 vote, with Eugster opposing and Councilwoman Roberta Greene absent.

Eugster, who earlier in the evening gave a presentation on the garage’s costs to the city, argued that the PDA is bankrupt.

“In my mind, the PDA is insolvent, it is never going to be solvent and there is no reason to loan money to an insolvent agency,” he said.

It was because of the PDA’s possible insolvency that the City Council voted in April not to extend a loan of parking meter money to support the garage.

The developer of River Park Square - an affiliate of Cowles Publishing, which owns The Spokesman-Review - contended that the city is legally bound by a 1997 ordinance to loan the funds and successfully sued in Superior Court.

The case has been appealed to the state Supreme Court and it is with that court’s ruling in mind that Councilman Steve Corker suggested the loan repayment date be moved.

“I believe that hopefully by that time the Supreme Court will have ruled and we will know if the city has an obligation to loan funds,” said Corker, who added that negotiations with the developer may produce results by that time.

It doesn’t really matter when the loan is due, said PDA chairman Terry Novak, because the agency won’t be able to pay it back in either case.

“The 2001 budget we did shows $1.5 million negative,” Novak said.

Currently, the city’s parking meter money is being held in an escrow account awaiting the Supreme Court’s ruling. The money, which by the end of the year is expected to total around $1.7 million, would otherwise go to the city’s transportation department.

At Monday’s council meeting, Eugster gave a presentation that separated the parking meter money and the cost of collecting it from the city’s anticipated 2001 budget.

By Eugster’s calculations, the approximately $2.85 million in parking meter money and collection costs would be the 10th largest city expenditure, larger than the legal, building, planning or public works departments.

“If that were just going to be next year, perhaps it wouldn’t be that much of a problem,” he said. “But that could be going on for the next 20 years.”

The developer has argued that increases in city tax revenue offset any losses in parking meter money.

Also on Monday, Eugster was unsuccessful in persuading the council to reconsider awarding a contract that would update the fire department’s computer-aided dispatch system.

Eugster argued that the system is not aligned with the city’s other systems and would soon be obsolete. But the council voted 5-1 to award the contract, with members saying that they believed the current system provided the fire department with the reliability it needed.

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