One reading related to the bond levy aimed at financing the city of Mercer Island’s new Public Safety and Maintenance (PSM) Facility is in the books with a second to go on July 15.

At its July 1 regular meeting, city council joined staff in conducting the first reading of the ordinance and provided direction on the bond’s explanatory statement that will head to the voters’ pamphlet if the ordinance is adopted at council’s next meeting. Council is considering if a bond measure and excess levy will be placed on the Nov. 4 general election ballot.

Council approved the PSM schematic design, setting the project budget at $103,900,000, at its June 17 meeting.

On July 1, council’s feedback on the ballot measure ordinance included the repayment schedule length on the staff recommended general obligation bonds and more. The majority of council went with a 25-year repayment length, which would financially impact households (with a $2 million assessed home value in 2025) by $56 per month.

“It is a pretty common practice in the public sector for cities to take on general obligation bonds to help pay for public investments of this size and scope,” said city finance director Matt Mornick.

Staff recommends the city issue Unlimited Tax General Obligation (UTGO) bonds because the PSM is slated to be a seismically-rated level IV facility, have a 50-plus-year useful life, debt service from the bonds exceeds the city’s current revenue capacity and bonds spread the financing costs over time, according to city documents. With UTGOs, the bond requires 60% voter approval, and 40% voter turnout based on the previous general election.

Mornick said — and as noted in city documents — the city’s current debt amounts to $33.2 million; with the proposed UTGOs for the facility, the city’s remaining debt capacity is around $390 million.

“The city, in general, has very little debt and we’re well-positioned to take on this financing,” he said.

Pacifica Law Group’s Deanna Gregory, who is part of the city’s bond counsel group, said that city staff presented a good draft of the explanatory statement. She offered some general guidelines for cities that are penning a draft: “What I would recommend, instead of saying, ‘We need this facility,’ is to lay out the reasons why the facility is needed.” For instance, she noted that cities could say that their police force has grown and they need more space to do business; the amount of square footage that a new facility will provide; and how the public will benefit from visiting the new space.

Also at the meeting, council appointed Mayor Salim Nice, Deputy Mayor David Rosenbaum and councilmember Craig Reynolds to the ad-hoc working group — which also features the city manager and attorney — to review the ballot proposition and the explanatory statement. The group will prepare a final recommendation for council’s consideration at its July 15 meeting. The pro and con committee members will also be appointed at that meeting to prepare ballot-measure statements for the voters’ pamphlet.

ARTS IN PUBLIC PLACES FUND

On the arts front at the July 1 meeting, council adopted an ordinance that features the option for council to exempt or partially exempt qualifying projects that involve the use of general obligation bond proceeds from contributing to the 1% for Art in Public Places Fund.

Council also directed staff to include a full exemption for the PSM project from the 1% for arts contribution requirement, according to the city.

Reynolds, whose suggested amendment was voted into the ordinance, noted at the meeting: “We can’t have money from this bond going to things outside the Public Safety and Maintenance building without calling it out in the ballot measure.” He added that arts are important for the community, and the bond levy passage is critical for the city as well.

Mercer Island resident Dr. Jonathan Harrington spoke up at the meeting regarding the arts issue. During the public appearances portion of the meeting, the Mercer Island Arts Council member urged city council to vote no on the changes to the 1% for Art in Public Places Fund.

“Mercer Island is a community that is dedicated to the arts. We see it in our schools, on our streets, in our parks and in our businesses. It is a critical part of who we are. Please do not alter the current 1% for the arts code, which has withstood the test of time,” Harrington said.