County issues $11.3 million bond
June 12, 2008 · Updated 10:24 AM
"The Kitsap County Commissioners on June 18 unanimously approved the issuance of an $11.28 million, low-interest bond designed to save the county thousands of dollars in future years.Kitsap County Director of Administrative Services William Nogle told commissioners last Monday proceeds from the bond, wholly underwritten by Banc of America Securities LLP, will accomplish three main goals for the county.First, Kitsap County can refinance at a lower interest rate the Illahee Property purchased earlier this year for $3 million from the state Department of Natural Resources (DNR). Under the refinancing plan, the interest rate is expected to drop from 7.23 percent to about 4.9 percent.When proceeds from the bond issue are transferred to Kitsap County later this month, Nogle said county officials plan to write a check to DNR for just over $2 million to pay off the remaining balance on Illahee, a 352-acre parcel just north of the City of Bremerton. The county originally issued a downpayment for the property using existing funds.The next step, said Nogle, will be to pay off the Illahee-refinance portion of the current bond, which has a term of 10 years, by using the county Conservation Futures Fund and, potentially, impact fees. The county's Conservation Futures Program is funded by property taxes at a rate of 6.25 cents per $1,000 of assessed value. A few citizens attending the commissioners meeting on Monday commented about county decisions in general to purchase open space.I applaud the idea of lower interest rates on these bonds, said John Norris, a Silverdale resident. As a property owner, however, Norris wanted to let the county commissioners know he's wary of any open-space acquisitions because they take properties off the tax rolls and that places more burden on the taxpayers.County Commissioner Tim Botkin clarified that, in this particular case, the county purchased Illahee from DNR and the forest was never part of the tax base anyway. Even so, Norris wanted and was given the chance to register his concerns about the use of public funds for the acquisition of open-space property.A second portion of this current bond, meanwhile, could pay $4.57 million for the impending construction of an operations and administration building for the Department of Public Works, Surface and Stormwater Management Program. If all goes well, construction could commence at the planned site in the Olympic View Industrial Park as early as next summer, said Public Works Director Randy Casteel.The Public Works portion of the bond, which carries a two-decade life, will be paid back through Public Works fees and other revenues.The remainder of the bond, said Nogle, can be used to refinance a different series of bonds issued in 1992, since interest rates have declined so significantly in recent months. The bonds issued eight years ago paid for parks projects, the Kitsap Mental Health building, and open space acquisition.County officials estimate refinancing these bonds will amount to a savings of about $297,000 in interest payments over the next seven years. The immediate savings is estimated at $257,000.County officials plan to pay this part of the bond back by using real estate excise taxes, Kitsap Mental Health lease payments and Conservation Futures funds and possibly impact fees. "