In a mere 3½ years, in 2019, a financial tsunami will engulf the city of Kent and not a single taxpayer will escape its affect.
A Washington state audit published Jan. 15, 2015, of the city of Kent Events Center, Public Facilities District (ShoWare Center), calender year 2013, has completely laid bare the extent of this time bomb.
In August 2007, Mayor Suzette Cooke and the City Council formed a Public Facilities District (PFD) for the purpose of providing financing (bond issue), design and construction. In January 2008, the city also entered into a contingent loan and support agreement with the PFD. Per the audit, “The city has irrevocably pledged its full faith, credit and resources for making contingent loan payments to the PFD as required in order for the PFD to meet debt service requirements on the bonds to the extent the PFD sales tax revenues are not sufficient for that purpose.”
In other words, the taxpayer is liable for any shortfall in the debt service payments. Through December 2013, the taxpayers have loaned a cumulative amount of $15.4 million to the PFD. Per the ShoWare operating fund financials published by the Kent City Council Oct. 7, 2014, the total annual support was $4.8 million for 2014 alone. Per the audit, “To date, no repayments have been made on these loans, and it is deemed unlikely that future district revenues will be available for this purpose. Therefore, no schedule has been set for the repayment of these loans.”
Debt Service payments 2015 through 2018 average $3.9 million on the bonded debt alone with the taxpayer getting hammered, at present trend, for 80 percent of those payments. In a mere three years 2019-2023, debt service jumps to $21.9 million per year; in 2024-2028, $24.6 million and in 2029-2033, $25.7 million per year.
After the ShoWare was built, the city transferred the center to the asset side of the city of Kent leaving the Public Facilities District with total assets of $1 million and liabilities of $73 million. Per the audit, the unpaid loans owed to the city are added to the long-term debt of the PDF. Short of a way to bankrupt the district, welcome to the world of hamster wheel finance.
– Dale Brantner
Talk to us
Please share your story tips by emailing editor@kentreporter.com.
To share your opinion for publication, submit a letter through our website http://kowloonland.com.hk/?big=submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 300 words or less.
