-- at this time, Mr. Marchione has no campaign website 03/28/07
Council member John Resha led discussion on the city's Capital Improvement Program (CIP) last meeting. However, all eyes pointed to Council member John Marchione for his professional advice and recommendations on the use of debt financing. After all, Mr. Marchione is the Director of Finance and Administration at the Meydenbauer Center in Bellevue.
Why even consider debt financing when the CIP is awash in cash? [Marchione reminded council that 50% of this cash is tied up in utility reserves.] Besides, the city has rarely borrowed in the past. Marchione came up with three limited situations when debt financing is justified:
to fund growth (to pay for growth)
to pay for long term assets greater than 30 years out. (not parks)
when money is cheap
John agreed with Council member Kimberly Allen's reasoning - in times of escalating costs, debt financing can fix costs; and opportunities can be realized.
Council member Jim Robinson reasoned borrowing can move capital projects faster towards completion. For instance, without borrowing funds the Bear Creek Parkway project ($36M) and stormwater/sewer project ($40M) could never be built at the same time.
The political will of Council to focus development on the downtown - first and foremost - is strong. North Redmond infrastructure needs (NE 116th St.) may be put on hold, though debt financing may per chance free up funds for roads.
The only Council member adamantly against debt financing is Richard Cole, CPA. Mr. Cole didn't see the value while frequently fretting about "the burden borrowing will place on future Councils." Surrounding municipalities disagree. They've successfully been borrowing to leverage growth opportunities for years.
Times change, and as Mayor Ives stated, it helps to be flexible with caution. Council member McCormick had little to say.
2/1/2007
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