PORT ANGELES — Clallam County commissioners will grant a request from the Quillayute Valley Park and Recreation District to forgive the $205,710 it owes on a decade-old loan.
The three commissioners Tuesday directed staff to draft an interlocal agreement and loan forgiveness documents for district board members to consider prior to final approval.
The West End parks and recreation district runs the Forks Athletic and Aquatic Club, 91 Maple Ave.
It received a $160,000 grant and a $225,000 no-interest loan from the county’s Opportunity Fund in 2004 to purchase land, rental homes and equipment to support the community pool and recreation center.
Citing tough economic conditions, district Chairwoman Nedra Reed asked commissioners in a Jan. 11 letter to forgive the balance of the loan.
“I certainly support [the request], and probably one of the key reasons is I don’t think that it should have been a loan to begin with,” said Commissioner Bill Peach of Forks, who resigned from the Quillayute Valley Park and Recreation District board after he was elected as a county commissioner last November.
“I tend to agree,” Commissioner Jim McEntire said.
“I just think if the Opportunity Fund is going to provide money for something, it needs to be cash outright. [A loan] just sets up a bad dynamic between taxing districts.”
The Opportunity Fund is a portion of a state sales tax that supports public infrastructure projects for economic development in economically distressed areas.
“The cash has already flowed out of the county treasury, so this does nothing as far as the balance,” McEntire said.
Voters approved a $2.9 million bond issue to build the pool in 2005, but a levy to fund its operations failed in 2006.
The pool was closed in 2007 after citizens voted down a measure to create a metropolitan park district to fund operations.
In retrospect, Commissioner Mike Chapman said the loan should have been restructured after the levy failed.
He said forgiving the loan is “clearly in the interest of the taxpayers” because it would be a burden for the county to take over the pool.
“There will be some who will criticize this as some sort of gift, or not in the best interest of the taxpayer, but I believe that should the Quillayute Valley Parks and Rec District walk away from their obligation, all of that facility would then fall on the county, unless we can find somebody to give it to, which would be very difficult,” Chapman said.
“You can’t just hand these things off.
“So in essence, by forgiving the loan, we’re actually protecting the taxpayers of the entire county from the county taking on a burden that would be extremely onerous for the parks department and completely outside of what our normal scope would be.”
The William Shore Memorial Pool District in Port Angeles, by contrast, has managed to make its loan payments because an operations levy was passed, Chapman said.
“If you had an operations levy, it wouldn’t even be a question,” he said.
“The voters have not been able to pass that.”
The rental properties acquired with money from the loan have been vacant because of the economy and sewer failures, Reed said in the letter.
The park district was unable to make its full insurance payment last year because of the vacancies and repair costs.
Additionally, the community center in Forks does not generate enough revenue to cover its expenses, Reed said.
“They can’t do this without some help,” Chapman said.
“And hopefully the district doesn’t hand it off to the county, because that would not be good for the taxpayers of the whole county.
“So it’s an inevitability, but I think this protects the taxpayers as opposed to somebody saying it’s a gift.
“This is not a gift. I think it’s just protecting [taxpayers].”
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.
