Thurston Commission approves $52 million bond issue resolution

Thurston County has pushed back the first half of 2020 property tax deadline to June 1.

Thurston County has pushed back the first half of 2020 property tax deadline to June 1.

Olympian file photo

Thurston County plans to raise up to $52 million through a bond issue to fund its plan to transform a reorganized courthouse campus.

The Board of County Commissioners voted 2-1 Tuesday to approve a bond order for the acquisition of land and the remodeling of various county buildings.

This money will allow the district to fund its plan to convert its aging campus into a renovated law and justice center to meet its urgent space needs. The county turned to that plan in 2021, about a year after withdrawing plans to build a new $250 million court center in downtown Olympia.

As part of this plan, in mid-2021 the county separately signed a seven-year lease for the Atrium, a building at 3000 Pacific Avenue that will house general government offices.

Tenant improvements to the atrium are underway this year and are expected to cost approximately $10 million. Also on Tuesday, the board approved a $2 million contract with Gordon Products Inc, also known as Creative Office, to purchase furniture, fixtures and appliances for the atrium.

The Borrowing Resolution authorizes Assistance County Manager Robin Campbell to approve the final terms for the sale of the General Limited Tax Debentures. The district set it up so it could meet its interest rate and payment schedule without reconvening the board, district documents show.

“It is standard Thurston County practice to delegate the authority to the deputy district chief to issue bonds at a time that is most advantageous to the district,” Campbell said.

Campbell said the maximum interest rate on the bond cannot exceed 5.5% and it should mature by the end of 2047. A bond sale is expected to begin in mid-August and be completed by the end of this month, county documents show.

“For at least 40 years, this is the type of bond that Thurston County has issued,” Campbell said. “And it’s a common practice for counties in Washington state, if not across the country, to issue limited general commitment bonds under Council action.”

The county plans to make payments on the bond with revenue from its real estate tax (REET), which is levied on real estate sales. If the county does not have sufficient such funds, Campbell said it can repay the bond from its general fund.

In 2021, there were 12,717 real estate transactions in Thurston County, Campbell said. This grossed just over $5 million. She added that the county had raised $2 million through May this year, but most of that revenue is typically generated from July through September.

“Very few transactions generate a lot of REET money,” she said. “Our projected sales this year are just over $5 million. We forecast a little less than last year… We’re on track to deliver that revenue.”

Commissioners Carolina Mejia and Tye Menser voted in favor of the Atrium contract and bond cancellation. In line with his previous opposition to both projects, Commissioner Gary Edwards voted against both items after failing to have them removed from the agenda.

Edwards said he was skeptical of the plans and doubted the legality of the county’s actions. Rather than let the board decide, he said he wanted the public to vote on the matter.

“It’s a mediocre plan at best,” Edwards said. “We just have to let voters know what the plan is and what it looks like and make sure it’s good.”

He also predicted that a recession would hit the nation and affect the county’s finances, particularly the money it makes from sales taxes and property taxes.

“We can see a recession coming,” Edwards said. “I don’t think it’s a very good time to rely on REET. When we’ll recover from that, I’m not sure.”

Additionally, Edwards said he believes it is unfair that the county is using REET funds raised in unincorporated Thurston County to fund acquisitions and remodeling in Olympia.

Commissioner Tye Menser, a lawyer, said he was confident in the council’s internal and external legal counsel for the county, noting that there were no legal issues with the county’s actions.

Menser also disputed Edward’s contention that using a REET fund would be unfair to unincorporated individuals. He said the fund should be used for facilities and that the county has an obligation to provide county offices within the county seat, in this case Olympia.

“There’s really no way you don’t have that connection between the real estate transactions and at least some facility spending within the county seat because that’s state law,” Menser said. “So it’s really not an argument that I think has any merit.”

During an earlier meeting Tuesday morning, Menser challenged Edwards’ stance on letting voters decide the county’s plans. He pointed out that Edwards had previously turned down the ballot proposal to fund a plan to build a new courts campus in downtown Olympia.

“They want your plan,” Menser said. “When you get your plan, put it before the voters. If it’s the majority of the board plan, you don’t want that to get in front of voters.”

In response, Edwards said he did not support the previous election proposal because he did not believe the plan being presented to voters was good enough.

Menser said the county doesn’t have to ask voters to approve the new plan because it doesn’t require a tax increase.

“This plan will be completely scaled back, he lives with his financial possibilities and does not demand any tax increases from the voters,” said Menser. “And for that, we were elected to make the decisions to carry out the plans to fulfill our legal obligation to provide facilities to the county.”

This story was originally published June 22, 2022 10:23 p.m.

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