State fund loan would save county $5 million in interest

Whitman County could face as much as $5 million in additional interest payments if it misses out on a state loan to help build infrastructure at the long-proposed Hawkins shopping center on this side of the state line. The extra interest expense would derive from interest costs in the event the county had to put up its part of the deal through a bond issue.

The county is waiting for the legislature to approve an $11 million loan from the state’s Public Works Trust Fund.

The county has committed to build $15 million worth of streets and water and sewer lines for the Boise-based company’s 714,000-square-foot shopping center in the Pullman-Moscow Corridor at the Idaho state line.

If the state loan is approved, the county would issue bonds for the remaining $4 million.

If the loan is denied, a bond issue for the full $15 million would cost the county $4.9 million in interest, Gary Petrovich, county administrator, told commissioners Monday.

The county would pay $1.75 million in interest over 25 years if it received the one percent state loan, with $2.15 million in interest on the 25-year bonds for the remaining $4 million. That would be a total of $3.9 million under the loan scenario.

Paying for infrastructure entirely with bonds at 4.5 percent spread over 20 years would cost the county $8.8 million in interest.

Petrovich said he consulted with lenders to get the 4.5 interest rate.

He added Hawkins’ revenue projections would provide the county $1.24 million in annual sales tax revenue and $75,000 in property taxes.

In addition, the county would be able to use $200,000 a year for 25 years dedicated through the state’s Local Revitalization Fund. The county received a special allotment from the legislature that would allow it to receive a refund of the state’s new sales taxes generated from the shopping center.

The county could also use some of the .09 economic development funding to repay the loan.

County commissioners have saved more than $1 million in .09 funds over the past several years by only making available a portion of the annual allotment to towns and smaller public entities.

The county doesn’t expect to learn the fate of their trust fund loan application until after the legislature begins its session in January.