Newman article on Trinity Site September 13

Council OKs county bond sale

DARRYL NEWMAN lareporter@lamonitor.com Monitor Staff Writer

An ordinance that allows for up to $75 million in revenue bonds for various capital improvement projects in Los Alamos County was approved Tuesday night, prompting residents to request that the item go before the public through a referendum.

The ordinance authorizes $75 million through the issuance of debt, stemming from gross receipt tax improvement revenue bonds.

Council approved the agenda item unanimously through a public hearing after county staff recommended that the county take advantage of current low interest rates for municipal bonds.

Assistant County Administrator Diana Stepan said a bulk on the bond revenues, namely $50 million in debt proceeds, would to go toward infrastructure expenses related to the Trinity Site revitalization project. The security perimeter project may require $12 million in debt proceeds, Stepan said, and the remaining $13 million would serve as a contingency to cover all other significant projects still in the early planning stages, as financing plans are adjusted.

Setting aside the possible $12 million in debt proceeds for the security perimeter project, would demonstrate to the state that Los Alamos is committed to proceed with its portion of associated project costs, Stepan said.

Councilor Jim West asked for a clarification of how each project would be approved and whether it would come before the council before final decisions are reached.

"One of the things we need to do is explain all of this to the public so that they clearly understand where we are," West said. "Does this mean that we are going to spend all this money right away?"

West also asked the nature of the county's current indebtedness.

The $75 million would not be spent all at once, Stepan said, and county staff will ask council to issue individual bonds only after it has "firm numbers."

Kevin Powers, director of fixed income banking at RBC Capital Markets, an Albuquerque firm that partly manages the bonds for the county, explained that the county currently has two outstanding debts. The first is a $1.1 million loan from the New Mexico Environment Department scheduled to be paid off in 2013. The second debt also is in the form of a loan for $1.8 million to be paid off in 2010.

"These are relatively small and short loans that will soon be completed," Powers said, addressing council. "The rates have remained fairly constant and now is a good time to do this because we don't know where they're headed. The numbers look good."

Councilor Jim Hall asked for an explanation of the process associated with utilizing the bond money.

Approval of the ordinance allows the county staff to proceed with initial work and, after an assessment period identifying project costs and the amount of funding necessary for projects, each project to be funded will be presented to the council.

"The items would go to council where details of bonds would be discussed, including interest rates," said County Attorney Peter Dwyer. "Each individual contract is subject to approval."

Hall noted that the public should be clear of the county's control over the bonds.

"We want to make sure that people understand that we're maintaining control, which allows us to enter into projects," Hall said.

Councilor Nona Bowman expressed some unease in a portion of the wording in the ordinance.

"It seems to me to be a lot of money," Bowman said. "I want to feel confident that we know the specifics will be brought back to council. The public wants to know what the money will be spent on."

During public comment, resident and council candidate Robert Wells questioned the release of $75 million in bonds, which he described as "a loosely defined collection of projects."

Wells has begun circulating a citizen-initiated petition with the intention of bringing the council approved ordinance subject to a vote.

"Fortunately, citizens will have the opportunity to determine for themselves whether or how they want tens of millions of their tax revenues to be spent," Wells said today.

Robert Gibson, who also is vying for a seat on the council this fall, said he is not against large-scale county projects, such as the Trinity Site revitalization, but would like to see the county proceed with the venture within "reasonable public cost."

"The Trinity Site project is on a well-worn path to failure because of increasing costs to the public," Gibson cautioned. "You need to critically review the project for scope and costs."