COEUR d'ALENE - The Coeur d'Alene City Council approved funding Tuesday night to cover the cost of a 2-mile stretch of old railbed along the Spokane River corridor.
Last month, the council gave city staff permission to pursue the purchase of the property, and to develop alternatives for funding the purchase of the $2.5 million property.
At the July meeting, City Attorney Mike Gridley announced he had reached a favorable agreement with Burlington Northern Santa Fe Railroad to purchase the property. The property was appraised at $4.3 million last fall, but Idaho's congressional delegation was able to work with the city and the railroad to get the price down.
At Tuesday's meeting, Gridley presented several options for funding the purchase, including using foregone taxes, tapping the city's rainy-day fund, using cash reserves in the city's utility fund or going for a bond election to pay for the property.
First the council settled on splitting the cost of the railbed with the Lake City Development Corporation, which has previously agreed in principal to partner with the city.
Gridley told the council that LCDC's portion of the cost would be a little more than $1.4 million and the city's portion would be $1.1 million.
After establishing that, the focus of discussion quickly turned to which funds to use for the purchase.
Acting City Administrator and Finance Director Troy Tymesen explained the pros and cons of each funding source and council honed in on two options - the rainy-day fund and cash reserves in the utility fund.
Tymesen explained that the city's goal is to have 60 days of operating revenue in the "fund balance," or rainy-day fund. That fund is projected to be roughly $4.7 million by the end of the year, which would only run the city for 52 days.
Tymesen said if the council borrowed $1.1 million from that fund, it would only leave 41 days of operating revenue in the fund.
The number of days the city can operate on that fund balance is important when going to the bond market to borrow money, he said. But Tymesen added the city isn't planning to borrow any money on the bond market until early next year, if the fire department is successful with a general obligation bond.
He said if the fund isn't replenished by then, the city could move money from the utility fund to stabilize it for a favorable bond rating.
Gridley said the annexation fees that will be collected in the river corridor could return about $970,000 to whichever fund the council chose.
Mayor Steve Widmyer said he preferred to leave the rainy-day fund intact and borrow the money from the cash reserves in the utility fund.
Councilwoman Amy Evans eventually made a motion to use the rainy-day fund primarily and other city funds if necessary to make the purchase.
After some discussion, Councilman Gookin later amended the motion to specifically use the utility fund. That motion passed unanimously.
The council also voted to allow city staff to negotiate land trades with developers to gain more public access to the Spokane River throughout the corridor.
Gridley told the council he has already begun discussions with one developer to trade a portion of the railbed that cuts through his property in exchange a for a large piece of waterfront property on the river.
In other news, the council approved a new robotics ordinance. See The Press on Thursday for more details on the story.