Q: Mr. Federal Way, when the Federal Way City Council previously discussed applying for the $3.03 million federal Section 108 loan, it didn’t seem as though the city would use the funds for the Performing Arts and Events Center. However, the council approved using all of the funds for the arts center on Tuesday. Did I miss something?
A: This is a perfect example of politics at its finest. You are correct in your recollection of the council’s initial discussion in 2013, when council members were divided over the U.S. Department of Housing and Urban Development Section 108 loan program.
Here’s how it went down.
With a 4-3 vote, the council approved moving forward with the application process for the program, which allows cities to borrow against their Community Development Block Grant funding to fund capital projects or for economic revitalization efforts.
The U.S. Department of Housing would make a balloon payment to Federal Way for approximately $3.03 million, which as a borrower the city would repay by diverting $192,000 annually from the city’s Community Development Block Grants over the term of the loan — in this case 20 years.
The dissenting votes were made by Councilwomen Susan Honda, Kelly Maloney and then-Deputy Mayor Jim Ferrell, who all feared the $3.03 million would go toward the Performing Arts and Events Center and the city would pick up a huge tab to finance the project.
“This sort of feels like, we know we’re not putting it on the credit card, but we’re just applying for the credit card right now,” Ferrell said at that meeting in August 2013. “And we’re getting the credit card ready. It seems like we’re setting up, for ourselves, the ability for debt capacity and then debt maintenance … I do think this is in preparation for taking that credit card out at some point and putting it on the counter, and putting $3 million on it. If you take the credit card out and use the entire $3 million, and use it toward that project, we would be on the hook, and so I am concerned about that, and I’m not convinced we need to open this credit account.”
Maloney said she felt like the Section 108 program is aimed at providing funding for the Performing Arts and Events Center.
“I do have a big concern, as I’ve mentioned in the past … about going into debt, any amount of debt, for the Performing Arts and (Events) Center,” she said. “And this does seem as if it could be positioned to be used for that. If we could disassociate that project from this, I would be happy to vote for it in terms of other projects, but in terms of debt for the (center), I would be against it.”
Others, including then-Councilwoman Jeanne Burbidge and Councilwoman Dini Duclos, reassured the dissenters that the council was voting to set up a program.
“It is not necessarily designated for the (Performing Arts and Events Center), it can be made for other operations,” Duclos said.
Fast forward to June 2014, when the U.S. Department of Housing approved the $3.03 million loan fund and gave the city 12 months to identify what projects the loan would fund.
Unsurprisingly, sometime within the past year the city decided to use the entire $3.03 million fund on the performing arts center project.
Mr. Federal Way is now donning his sunglasses, sliding across the floor in his socks and calling this risky business. Why?
Because any loan comes with a risk and the city’s ability to repay this loan depends on whether the federal government will continue to dole out the Community Development Block Grant year after year. And if Federal Way gets less grant money in three years, the city’s $192,000 payment remains.
But what frustrates Mr. Federal Way the most is the mentality of some city staff and council members who knew full well what the funds would be used for, but re-emphasized that the money may not fund the performing arts center.
Then, at Tuesday’s meeting, one staff member went so far as to call out Maloney when she emphasized that it was a split vote in 2013 when the council voted to go forward with the application process.
“I know there’s some history with that,” said Director of Community Development Michael Morales. “In the bigger picture, you’ve committed to a project. You have committed to a project. This is way deep into design, ready to go to bid fairly soon in a couple of months and at some point in time, we do also need to be mindful of the message we send to people who we are still trying to recruit to invest in this project. You’re committed to the project.”
Did Morales mention that the city was committed to the project? Sounds to Mr. Federal Way like he’s trying to push his message through.
Nevertheless, both Maloney and Honda countered his argument.
“There has been some history with language similar to that as well that I think we need to steer clear of,” Maloney said of Morales’s statement. “We need to be very careful because the council needs to be able to ask these questions. Yeah, we have made certain commitments but we are still deciding on how to spend the people’s money and I take that very seriously, so I want to continue to ask questions. And I think that anyone who might be making those decisions, they’re going to understand that.”
Mr. Federal Way hopes that council members continue to do what we elected them to do — ask questions about how the city proposes to spend taxpayers’ money. And as for you other council and staff members who re-emphasize one thing but do another thing, stop playing politics.
Q: Mr. Federal Way, the City Council recently called out to the community asking for people to serve on the pro and con committees to prepare written arguments in support and opposition to the ballot measure on whether to allow marijuana-related businesses in the city. Can I still apply for that?
A: Yes you may. The deadline to apply is Monday, June 22, so Mr. Federal Way recommends getting on this quickly.
In fact, the city needs more applicants, especially for the con committee.
So far, four people have applied for the pro committee (those arguing to authorize marijuana-related businesses in the city) and only one person has applied for the con committee. The city needs three people for both committees.
Mr. Federal Way wonders where are all the people who have opined about banning the businesses in Federal Way? So much for their argument about marijuana making people forgetful.
Q: Mr. Federal Way, what’s with all the Mirror publisher’s changing head gear the past few weeks?
A: None of your business.
Got a question for Mr. Federal Way? Email mrfederalway@federalwaymirror.com