Kennewick Councilman Paul Parish has no illusions that the state Legislature will squeeze every dollar it can from existing state programs to try to meet its court-mandated duty of fully funding education.
But Parish and some Tri-City business leaders, including Bill Lampson of Lampson International, have a single plea -- leave the Public Works Trust Fund alone.
Tri-City officials say the fund's low-interest loans are critical for paying for road, water and sewer projects.
Loans from the trust fund allowed Kennewick to build the 10th Avenue bridge over Zintel Canyon, creating the first east-west connection in the city.
A 3-million-gallon reservoir being built on top of Thompson Hill to support the Trios Southridge Hospital and future development in that area is using a trust fund loan.
Richland used the loans to pay for a massive water pipeline replacement project when the city's World War II-era pipes were failing.
Without the loans, projects either would have been postponed or city taxpayers would have to foot a higher bill for the same result.
Some say the self-sustaining trust fund already has been crippled by legislators who previously have stripped it to pay for education. There never has been a default in the 28-year history of the program, and it's been held up as a national model, officials say.
Even so, the state faces a massive gap in paying for transportation, sewer and water projects with a $2 billion shortfall, said Stan Finkelstein, chairman of the state Public Works Board.
Cities and local governments still must tackle critical projects even if trust fund loans aren't available, Finkelstein said.
Using municipal bonds means paying higher interest rates, he said. That adds to higher user fees for residents who benefit from the water and sewer systems.
And for small towns, especially those with lower-income populations, it becomes especially onerous, Finkelstein said.
Parish, Lampson, the Home Builders Association of Tri-Cities, the Tri-City Association of Realtors and some local unions have formed a coalition to explain to legislators why the trust fund is critical to the long-term health of the state's infrastructure and economy.
They want the state Legislature to approve $170.2 million in low-interest loans the volunteer Public Works Board has recommended for approval. Parish hopes Gov. Jay Inslee will include the loans in his budget proposal, he said.
"We are trying to make all the noise we can so we can to at least save part of this trust fund and hopefully get it viable again," Parish said.
Broad-based efforts like those of the Tri-Cities Public Works Coalition is what is needed to help protect what used to be a stable source of funding for cities, counties, public utility districts and water and sewer utility districts, said Carl Schroeder, an Association of Washington Cities government relations advocate.
The trust fund has become a popular target to fill gaps in the state's operating budget during the past several years, Schroeder said. The association expects the money in the trust fund -- from principal and interest payments local governments have made on past loans -- will be a target again during the upcoming legislative session.
Because of the mandate to fund education, trust fund supporters may not be able to protect it. Legislators need to come up with a long-term way to continue to invest in local communities, Schroeder said.
Emptying the fund
Kennewick will be able to build more roads in Southridge area off Highway 395 if the legislature approves the list of recommended trust fund loans, which includes a $7 million low-interest loan for the city.
The projects will help link west Kennewick to the new Trios Southridge Hospital.
Ken Nelson, Kennewick's assistant public works director, said the $7 million loan represents a portion of the projects city officials had hoped to pay for with a $12.8 million loan that was not awarded last year because the Legislature emptied $277.2 million from the trust fund into the state's general fund to pay for education.
The Legislature also cleaned out $368 million from the trust fund in 2009 to pay for general state expenses.
Normally, the trust fund has been fed by loan repayments, solid waste and public utility taxes, and 6.1 percent of the real estate excise tax. But last year, legislators approved redirecting the taxes for at least six years, except for 2.1 percent of the real estate excise tax.
Diverting money from the trust fund was one of the less desirable decisions legislators had to make, said Sen. Mark Schoesler, the Senate Republican leader. But legislators didn't have a lot of choices because of the court mandate to fully pay for education.
Schoesler does not favor any increased diversion from the trust fund and such a diversion hasn't been proposed at this point, he said.
The trust fund is an excellent program, but the Legislature doesn't have a court injunction to fund it, he said.
Inslee wants a tax increase to pay for education, but Schoesler said he believes the state can make a good payment on the Washington Supreme Court order to fully fund education by using existing revenue, he said.
Parish said legislators have broken promises since the trust fund was created in 1985.
In the early 1980s, the state commissioned a study of its roadways and utility systems and found that there were major deficiencies in maintaining existing roads and systems, said Finkelstein, one of the lobbyists involved in the creation of the trust fund.
An agreement was reached to increase the solid waste tax, water and sewer utility taxes and the real estate excise tax, with the understanding that all the money from the increased taxes would be earmarked for a revolving loan fund for public infrastructure, Finkelstein said. Cities and towns made concessions in giving that tax money over to the state to be used for the revolving fund.
Then, the state and local governments worked to address a critical need, Finkelstein said.
"That partnership seemed to have been breached by the actions of the Legislature," he said.
Legislators who understood how and why the trust fund was created have been replaced by others who don't have the historic background, Finkelstein said.
A success story
Parish, a longtime Kennewick councilman, said cities have come to heavily rely on the trust fund. It helped Kennewick build the infrastructure needed to attract development.
Kennewick alone has borrowed more than $63 million, said Cary Roe, Kennewick's public works director.
The Thompson Hill reservoir is providing the water needed for development to happen in Southridge. The city also has used trust fund loans for water and sewer projects that have supported development throughout the city.
The streets and utilities the city extended in southeast Kennewick are part of the reason the area has drawn commercial and residential development, said Renee Brooks, the Home Builders Association of Tri-Cities director of governmental affairs. Projects paid for by trust fund loans spur housing and commercial development, growing the tax base.
"It's a boon to the local economy," Brooks said.
Benton County governments have received 45 loans amounting to $101.6 million since 1985, according to the Public Works Board. Franklin County governments have received 12 loans totaling $15.7 million, while Walla Walla local governments have received 14 loans reaching $36.8 million.
Construction projects that the loans fund end up adding to the state's coffers because of the 6.5 percent sales tax the state pockets to help with expenses, including education, Parish said.
Kennewick and other cities already are struggling because of how the state has kept dollars instead of passing them on to local governments.
Taking money from the trust fund is short-sighted, Parish said.
"If we don't grow, we wither," he said.