Budgeting Financing Strategy for the Term Paper

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We do not anticipate success is securing a non-voted debt issue. Given the time frame for the completion of the Commons project, the city will weigh our request vs. The upcoming needs for school repairs and roadwork. Education is a touchstone issue for voters, and roadwork affects all voters in the city. Should council decide to issue any of their remaining non-voted debt capacity, it is unlikely they would choose to use it for the Commons project ahead of those two other priorities.

Voted debt, however, they can issue. If the public votes 60% in favor, council will not face the same concerns about opportunity cost. We will not be competing for money with schools. A voter-approved special levy would function in much the same way (financed through property tax increases) but requires only a 50% vote in favor. Although the capacity for such special levies is only $90 million, that is more than we will need to ask for. Furthermore, there is precedent for success in the 1986 King County vote to approve bonds for improvements to the Woodland Park Zoo.

We will ask for federal transportation funds. We believe sharing the costs of the Seattle Commons amongst several layers of government is both logical and prudent. First, the Commons will be a significant attraction to the city, one used by citizens not just Seattle and King County, but the entire Everett to Tacoma area. Visitors to Seattle will be drawn to the Commons as well, just as they are to Central Park or Boston Common.

The federal transportation funds will be specifically directed to the street improvements required for the project, and the establishment of arteries to Mercer Street. We will be seeking the maximum $25 million for this. We will request grants from the county and the state. We have sufficient connections to ensure that we are able to receive grants for the development of greenspace. The maximum available from each is estimated to be around $10 million, but we anticipate being able to secure half of that, or $5 million from each of the county and the state.

We recommend to pursue the LID option as well. Of the different options that places the cost of developing the Commons on those landowners who will benefit the most from it, this strikes the best balance of revenue generation and legality. We expect to be able to generate $20 million from this option. We also anticipate resistance. However, those opposed will have just 30 days to gather 60% disapproval from all affected landowners. The would require a very high degree of organization and we do not believe the opponents have this at present.

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We will also use a REET to finance some of the housing goals of the project. We estimate we will be able to generate $5 million from the REET.

So the funding sources we shall recommend to the city are as follows:

Private donations: $100 million

Voter-approved special levy: $60 million

LID: $20 million

REET: $5 million

Federal Transportation Funds: $25 million

County grant: $5 million

State grant: $5 million

Total: $220 million

This strategy should appeal to the city in that they are asking the voters to approve the bulk of the city's contribution to the project, less than one-third of the project in total. The city will also appreciate that other levels of government are contributing $35million and that almost half of the budget is going to come from private sources. There are many sources of financing, but we do not foresee this as an obstacle, as many capital projects have funding formulas even more complex.

The last element of the strategy is the timeframe. We should proceed with the referendum as quickly as possible. We believe that there is no benefit to conducting an environmental survey. Voters are unlikely to weigh the survey's results while at the ballot box. They are, however, likely to respond to the romantic vision that Seattle Commons represents. Emotion could carry the tide, but emotion subsides over time. We do not have any reason to believe a rational, sober vote will be more favorable than one conducted during a wave of positive emotion.

Furthermore, we recognize that there is an element of opposition to this project, as there will be with any capital project of this magnitude. At this point, however, opposition is not organized, whereas we are. We are able to conduct a well-financed, professional public relations campaign in support of the Commons, while our opponents scramble to organize. Plus, we should hold the vote before we announce the LID, as the latter will be a flashpoint around which our opponents will galvanize.

Additionally, once we secure the required popular vote, we will have the core of our financing - almost ae of it - in place (assuming private donations estimates hold). This increases the chances that the other layers of government will make their contributions, if the project has demonstrated voter support and ae of its financing in place.

The final consideration for a quick vote is that there are other capital projects being discussed that may come up for referendum in the coming years, such as the Sound Transit System and a new stadium to replace the Kingdome. If we wait, we may compete with those options for voter-approved funding, but if.....

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