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City takes out loan to buy roundabout land
Port Orchard’s city council has taken out a $300,000 loan from an investment fund to temporarily cover the cost buying right-of-way from property owners on Tremont Street.
The city hopes to use the land for the Tremont Street widening project.
The money will come from the Cumulative Reserve for Municipal Facilities Fund, which currently invested in the local government investment pool, earning a .24 percent interest rate.
It will go into the Arterial Street Fund, until it’s used to buy the properties.
The council hopes to pay the money back, with .24 percent interest, through grants received “on a reimbursement basis approximately six weeks following a request to the Department of Transportation,” according to a report prepared by Alan Martin, the city’s treasurer.
The city also extended its contract with Berger/Abam Engineers, moving the new completion date to Dec. 21, 2018.
“It just seems weird what we’re doing here,” said City Councilman Fred Olin.
But the city’s staff said it’s OK.
“From a legal side, it’s perfectly fine,” said Greg Jacoby, the city’s attorney. “Of course you’re correct, you can’t bind future councils.”
Martin said it seemed acceptable.
“The Washington Budget, Accounting and Reporting Manual allows municipalities to make interfund loans under certain limited circumstances,” he wrote in a report to the city council.
He outlined those guidelines at the city council meeting.
“The loan will be temporary in nature and will be paid back upon receipt of grant proceeds,” he said. “In no case shall the loan exceed 13 months from the date it is first drawn upon.”
The Public Works and Finance Departments have, in the past, avoided loans.
It has purchased land after it had enough cash to pay for it at the outset, but grant funding for the Arterial Street Fund hasn’t been consistent.
Mayor Lary Coppola and Councilman Jim Colebank recused themselves from the city council’s discussion and vote on the issue, since both own property that will be impacted by the acquisitions.
Councilman Fred Chang, who works for the Department of Transportation, said he didn’t have an interest in the issue, but offered to recuse himself if anyone saw a reason why he should.
No one took him up on the offer.