Council should question new Urban Waters plan
THE NEWS TRIBUNE
When it comes to public- financing schemes, state Treasurer Mike Murphy is like your mother: If he tells you it’s a bad idea, you’d be smart to listen.
So when Murphy warns Tacoma city officials against using so-called “63-20” financing for its long-awaited Urban Waters project, it’s a huge red flag.
“If you want to pay too much, do a 63-20,” Murphy told The News Tribune last week when a reporter inquired about about his views on the matter.
That is reason enough for the City Council to hit the brakes on a hurry-up proposal by top city administrators to partner with a nonprofit organization in building a home for Urban Waters on the Foss Waterway. Urban Waters is supposed to be a marriage of the city’s environmental services labs and a University of Washington Tacoma marine research program on water quality.
City Manager Eric Anderson and assistant public works director Karen Larkin want the city to partner with New York-based National Development Council to build the facility. The $18 million building would be located north of the South 11th Street Bridge on the east side of the waterway, on land the city bought last month for $5.6 million.
They appear to be getting way ahead of the council on the partnering approach. Although the city has already issued a request for proposals that attracted only the NDC, the question of whether to switch to a “lease to own” approach apparently has not been fully considered by the council.
Murphy has two good reasons for disliking 63-20 financing. Under this arrangement, the city would contract with NDC to build and operate the facility. The city would lease space from the nonprofit for 20 to 30 years, then assume ownership.
Murphy notes that the nonprofit would have to borrow at higher interest rates than city utilities would get in the municipal-bond market. So the city would be paying more in the long run.
Murphy’s second and no less important objection is that the nonprofit would operate and control a public facility but not be subject to any of the public disclosure or other legal requirements that would apply to the city. In fact, being able to avoid public competitive bidding and contracting rules seems to be one of Larkin’s arguments for going the lease-to-own route; it would save time and maybe money, she contends.
That is not terribly convincing, especially since the potential savings in construction time could be merely five months. And the possibility of reducing construction costs by letting a nonprofit do the contracting seems to be pretty much of a crapshoot.
Larkin is scheduled to brief a council committee this week, and the plan will be the subject of a council study session May 29. Council members should put the lease-to-own idea through the wringer before it goes any further.
