July 01, 2011
The Wenatchee City Council is holding a special meeting at 6pm tonight to finalize the wording of the contingent loan agreement with the Greater Wenatchee Public Facilities Board. At issue is whether or not the city of Wenatchee will be allowed to take on the $3 million dollar plus yearly bond payment owed for construction of the Town Toyota Center.
It is likely that the city will have to pick up the bill, because the Town Toyota Center has come nowhere near turning a profit and being able to pay off its own bonds. But a court must first approve the contingent loan agreement, because the total owed for the arena far exceeds the city’s debt capacity.
So a lot is riding on the approval of the contingent loan agreement, and council will give it a final review tonight.
Tonight’s special meeting was called because 2 council members were out of town last week at the Association of Washington Cities conference in Spokane. Councilwoman Karen Rutherford explained that they wanted the whole council present before giving the final go ahead to submit the agreement to Chelan County Superior Court for approval.
So tonight council will to carefully review the wording of the contingent loan agreement. If the court grants approval the city would be on the hook to make bond payments on the TTC if the Public Facilities District is unable to make those payments itself.
But that agreement is still very much in limbo. It has become clear that the Public Facilities District will be unable to make the yearly bond payments, as revenue from the TTC continues to falter.
Rutherford said the big question all comes down to the city’s debt capacity:
So Rutherford said council will go over the loan agreement with a fine toothed comb, in the hopes they will receive court approval for the agreement originally approved by council on April 28th:
If the court approves the agreement, Rutherford said the city would likely be on the hook for a sizeable bond payment each year:
But how would the city or the PFD come up with that $3 million annual bond payment? Councilwoman Rutherford said there are really only two options available:
If the court does not allow the contingent loan agreement, saying the city would be exceeding its debt capacity limit, then Rutherford says the city would be in uncertain, uncharted territory. She said the reality could then be defaulting on the Town Toyota Center construction debt.
Rutherford acknowledged that the issue of paying off the TTC is a complicated one, and emotions can run high. She urged anyone with questions about the contingent loan agreement to ask their council members directly:
And that special meeting will be held at Wenatchee City Hall Council Chambers at 6pm. The PFD board will be in attendance, and the public is welcome as well.