The stars lined up for West Richland taxpayers in December,

when the city sold nearly $12.5 million in bonds to pay for its new police

station at the former Tri-City Raceway.

Their 2020 property tax bills won’t go up as much as

initially projected.

The city is paying less to finance its debt than it

expected, thanks to a better-than-expected bond rating, lower-than-expected

interest rates and growth in its property tax base.

For property owners, the savings are the equivalent of a

large pizza plus pop— about $24 a year on a property with a taxable value of

$200,000.

The city anticipated taxpayers would pony up 42 cents per

$1,000 of assessed value in 2020 when it pitched the police station bond to

voters in 2019. The 22,500-square-foot station will replace a cramped

3,500-square-foot facility on West Van Giesen Street.

The actual rate will be 30 cents per $1,000, said Jessica

Platt, West Richland’s finance manager, or $60 for a $200,000 home instead of

the projected $84.

The bond proceeds are in the city’s account, ready to be

spent developing a new police station at the former Tri-City Raceway later this

year.

Taking on debt

The city’s taxpayers will repay the debt for 29 years – the

equivalent of the anticipated life of the new building.

D.A. Davidson & Co., a Montana-based financial and

investment services firm with an office in Kennewick, underwrote the bond

offering. Foster Garvey PC, a Seattle firm, served as legal counsel.

Standard & Poor’s Global Ratings issued the city’s bond

rating. It raised West Richland’s rating to AA+ from the AA it received in 2014

when it issued bonds to build the Municipal Services building on Belmont

Boulevard.

A rating of AA or above is considered investment grade with

low risk of default. The scale tops out at AAA.

S&P cited the city’s financial strength and management

for the improved rating. Higher ratings translate into lower interest rates.

The AA+ bond rating coupled with a generally low interest

rate climate for municipal bonds in late 2019 translated to net borrowing costs

of 3.08 percent, Platt said.

Low interest rates

The city planned to put itself in a position to take

advantage of a favorable lending climate.

“One of our priorities was to take advantage of a low

interest rate environment,” Platt said. “A year ago, everyone expected them to

increase. They actually declined. I don’t think anybody was actually

anticipating that.”

Before it could sell bonds, it had to secure the site for

the project.

That proved more difficult than anticipated. The city was

eyeing a site near Bombing Range Road owned by the Bureau of Land Management

but backed off when local residents objected.

Mayor Brent Gerry said there are few properties large enough

and none had willing sellers.

It eventually paid the Port of Kennewick nearly $1.9 million

for the 92-acre former Tri-City Raceway on Highway 224 west of the intersection

with Keene Road on the city’s west side.

The deal was funded with West Richland’s allocation of rural

capital development funds generated by a small sales tax and held by Benton

County.

Gerry said the city wants to see smart development at the

raceway, but its first priority is to build the police station.

Future development will be guided by the port-master plan

for the property, tempered by the city’s interest in adding more sports

facilities and encouraging commercial development take hold.

Project status

The city intends to hire a project team of architects,

engineers and contractors under a design-build contract.

That requires a waiver from the state’s “lowest bidder”

rules. City staff presented the project to the state in January, Gerry said. It

will seek a design-build team once the project is approved.

The city doesn’t expect to break ground until late 2020.

In the interim, it is working to extend infrastructure to

the site and has negotiated an easement that will give it entrances on Keene

Road.

It is also working with raceway users to clean up the

landscape that died after the raceway closed and the water was shut off.