Although two public hearings have already been held about the budget, new info was made available just today with the materials for next week’s City Council meeting. You can see the Preliminary 2027-2032 Grand Connection Portfolio CIP Cashflow document (link) attached to the September 22nd meeting agenda.
I had been eagerly waiting to find out how the Grand Connection Crossing budget gap was going to be filled, and it turns out that “Transfers In” is here to save the day, to the tune of $122 million.
As mentioned in a previous post, at the time of the Tax Increment Financing (TIF) vote, there was a Final Project Analysis (FPA) document that explained the funding sources for the Grand Connection. From page 81, the Transportation Benefit District (TBD) tax was supposed to generate 40% of the funds (~$141.4 million) needed to pay back the bonds, and the TIF was projected to provide 24% of the funds (another $84.4 million) over 25 years, with $127.8 million coming from philanthropic sources and “other city funds.”
As shown on page three of the Attachment C – Transportation Scenarios Memo for TBD (part of the agenda materials for the September 15th meeting), the contribution from the TBD is being reduced to $1.26 million per year, a significant reduction that makes the gap even bigger.
The Cashflow document puts the budget of the crossing at $265 million, and that does not appear to include financing costs for the bonds. Page 8 of the FPA had formerly said that the Crossing was expected to cost $230 million. This increase in project cost makes the gap bigger.
The Final Project Analysis had said that the debt service payments would be $353.6M (page 54), based on anticipated bond amounts of $75 million in 2026; $80 million in 2027, and $75 million in 2028. The new cash flow document specifies that only $75 million is coming from bond proceeds, $25 million each year for 2028, 2029, and 2030. Reducing the bond amount might mean we can expect just $115 million in repayments (though the dates of the TIF are fixed and that might affect the term length if we have a different starting year). This significantly reduces the borrowing costs, assuming there are no interest costs associated with the mysterious “Transfers In” funding source.
The Cashflow document also has a 10% under-expenditure assumption, which reduces the total being budgeted to just under $239 million (feels like the opposite of a conservative estimate), and assumes $5 million from the Parks Levy, $15 million from grants, and $24 million from private donations. There is also $34.4 million in “beginning fund balance” at the start of 2027. I’m guessing we might already have that $34.4 million now, but I’m not sure where it came from.
I’m sure we can get answers about it, but right now the $34.4 of beginning fund balance and $122.2 million of “Transfers In” feel like mystery money. I also don’t see where we’ve accounted for $40 million in bond servicing costs or think we can conservatively justify the $26.5 million decrease in what we’re budgeting based on the 10% under-expenditure assumption, even if we do have $13.5M in portfolio contingency for unforeseen costs and scope changes. I’m not sure it’s fair to the community to take $5 million from the Parks Levy (though the development of trails *was* supposed to be one potential use of the Levy funds), private donations are not guaranteed, and the bond repayments still rely on assumptions about future redevelopment that will generate TIF tax revenue increases we can capture.
The third and final public hearing will be on October 27th. Please reach out to Council before that if you have concerns about what is being proposed!
Note 1: Page 2 of the September 15th meeting’s Attachment E on Sustainability says we have “Invested $44.2 million to advance design work for the Grand Connection Crossing,” which is more than I had realized. I still don’t have a breakdown for this, and I don’t think it’s included in the $265 million, since that’s the spending forecast for 2027-2032.
Note 2: Bellevue’s current debt, according to page 95 of the preliminary budget book, is $324 million. Page 243 makes it clear that the Grand Connection Portfolio is not just the Crossing, but this is the only capital project in the Grand Connection Path. The subcategories from the Cashflow document are G-126: I-405 Non Motorized Crossing ($228.6 million), G-130: East Landing ($23.4 million)[connection to Eastrail], and G-131: Portfolio Contingency ($13.4 million). These are described in CIP project detail sheets (pages 13-15).
Leave a Reply