By Rolf Boone, June 12, 2013, The Olympian
The Port of Olympia Commission is set to consider financial adjustments to its capital investment plan and a $20 million bond issue to help pay for it, the port’s finance director said Tuesday.
Finance director Jeff Smith shared an overview of the financial changes and the funding needed at the port’s commission meeting Monday night in Yelm.
A public hearing on the capital plan and the bond issue is set for June 24 at Tenino City Hall, and then a commission decision is expected on July 8 at Bucoda Community Center. Both meetings will start at 5:30 p.m.
The commission is traveling to those other communities to show it is representative of the entire county.
Driving the need to issue new debt are four projects tied to the port’s capital investment plan, Smith said.
• Dredge, clean up and maintain depths in Budd Inlet near the marine terminal.
• Build a stormwater treatment facility.
• Work on various projects at Olympia Regional Airport.
• Expand the existing marine terminal warehouse by another 50,000 square feet – an expansion needed to keep cargo under cover and out of the elements.
The original capital investment plan was budgeted at $24.2 million, but now is projected to rise to $36.1 million, partly due to more extensive work involved with the stormwater treatment facility and a reinforced foundation required for the warehouse expansion.
To help pay for the projects, the port wants to issue about $20 million in general obligation bonds, Smith said.
If approved by the commission, the bonds would be paid off in 2029, although the majority would be paid off after 12 years, and the total interest cost would be less than 3.5 percent, according to Smith’s presentation materials.
The port currently has $25.6 million in outstanding bond debt. That amount, combined with the new bond issue, still would leave the port with a remaining borrowing capacity of $13.3 million, he said.
The port will pay down the bonds with its property-tax levy, which is $4.8 million this year. Even though the property-tax levy might increase in the future, it does not need to be raised to pay for the new bond issue, Smith said.
If the bonds are approved July 8, here’s what happens next: The port will wait to receive a dredge permit from the Army Corps of Engineers, then will seek a bond rating from Moody’s, a credit rating agency. That rating is expected to be A1, which is not the highest possible rating, but still is considered a low-risk, investment grade rating, Smith said.
Once that is complete, the port expects to issue the bonds in July or August.