SEQUIM –– After a delegation of city officials visited Standard & Poors’ office in San Francisco, the credit-rating agency has issued the city of Sequim an AA- bond rating.
City officials said the rating is a vital piece in the plan to build a new City Hall and police station.
“Over the life of the bond, it could save us tens of thousands of dollars,” City Manager Steve Burkett said of the city’s first-ever bond rating.
Sequim has never issued general obligation bonds. The City Council will decide tonight if it will issue $10 million in municipal bonds to finance construction of a 34,000-square-foot City Hall.
Burkett, Mayor Ken Hays, Administrative Services Director Elray Konkel, Police Chief Bill Dickinson, Accounting Manager Sue Hagener and Financial Advisor Annette Sommer presented the city’s management financial status and history to Standard & Poors in San Francisco on July 12.
“Going through this extensive analysis by an outside agency and receiving such a favorable result reinforces that our conservative financial policies and practices have resulted in a financially stable and healthy position,” Burkett said.
Burkett claimed that Sequim “has the highest bond rating of any city on the Olympic Peninsula.”
Said Hays: “I am very proud of everyone involved and to have been a part of the team.”
If the council authorizes the issuance of the bonds, they could hit the market as soon as next month.
The council, after hearing nothing from the public in a hearing July 8, unanimously agreed to decide on the bonds at tonight’s meeting, which will be at 6 p.m. at the Sequim Transit Center, 190 W. Cedar St.
D.A. Davidson & Co., in Port Angeles will market the bonds.
“I suspect a lot of local banks will buy them, and people may then be able to buy them on the open market,” Burkett said.
He said he has fielded calls from a lot of citizens interested in purchasing bonds for the City Hall.
The new City Hall is expected to cost $15 million.
The city has spent $1.6 million in buying property and for consultants. Another $3.4 million will be taken from the city’s cash reserves.
Administrative Services Director Elray Konkel said the city has been saving for the past 10 years for those expenses.
Utility funds will be tapped to pay for portions of the building that will be used to house their departments.
The bonds are expected to cost the city $660,000 a year.
Konkel said that funds will come from several sources: $225,000 from a public safety tax approved by voters in 2012 which raised the city sale tax by 0.1 percent; $200,000 from elimination of current rent for city office space, including the Police Station inside the Sequim Village Shopping Center at 609 W. Washington St.; $75,000 from Real Estate Excise Tax and $160,000 from current excess budget capacity.
Three firms are now working on designs for the building. Those designs, Burkett said, should be done late this fall.
In a special meeting July 16, the council selected Lydig, Hoffman Construction Co. and BNBuilders & The Miller Hull Partnership to prepare designs.
Pease Construction was the fourth firm to respond to a request for qualifications, but was eliminated by the council.
Sequim-Dungeness Valley Editor Joe Smillie can be reached at 360-681-2390, ext. 5052, or at jsmillie@peninsuladailynews.com.
