PORT ANGELES — Clallam County commissioners will consider using the Opportunity Fund to make investments that would take advantage of a low-interest rate on a $10 million loan.
The county secured a 0.25-percent interest rate on a 30-year state loan that was used to build the Carlsborg sewer system.
Commissioners on Monday decided to spend $346,024 per year to repay the Public Works Trust Fund loan rather than the $679,314 needed to repay the loan before the Opportunity Fund is scheduled to sunset in 2032.
The $333,290 per-year difference would be used to invest in treasury bills that would bring money back to the county.
“We could arbitrage, earn ourselves, maybe a million dollars at the end of the 15 years and still pay it off, but pay off a million less than we would have to pay off if we didn’t do it,” County Administrator Jim Jones.
State law and county policy requires that the county treasurer handle investments, Jones said.
“This is not just the commissioners’ choice,” he said.
Seeking flexibility in investments, commissioners directed Jones and Chief Accountant Stan Creasey to develop a set of options. The investment options will be discussed in a future work session.
“Whatever way we decide to move forward, I think it’s important that we are as strategic as possible with the remaining investment opportunities that we have through the Opportunity Fund,” Board Chairman Mark Ozias said.
The Opportunity Fund is a portion of state sales tax — 0.9 percent of the state’s 6.5 percent cut — that supports infrastructure projects in economically-distressed rural counties, Jones said.
“It’s not anything extra,” Jones said.
“That’s one of the misconceptions people have. We get letters all the time from people saying: ‘I’m tired of paying extra amounts of money just to go to the Opportunity Fund.’ Well, they don’t pay anything extra.”
Clallam County’s Opportunity Fund had a reserve balance of $2.05 million at the beginning of the year. The projected ending fund balance for 2017 is $1.62 million.
The option to spend $679,314 per year on principal and interest for the Carlsborg sewer loan would leave a low balance of $188,247 in 2021.
The commissioner-supported option to spend $346,024 on annual loan payments would leave a low ending-fund balance of $1.49 million for economic development projects in 2021, according to Jones’ analysis.
Examples of board-approved Opportunity Fund projects include the reconstruction of a 25,000-square-foot building to house the Composite Recycling Technology Center and infrastructure to expand Peninsula Housing Authority’s Mount Angeles View family housing complex.
In 2005, a former board of county commissioners agreed to commit $3.5 million from the Opportunity Fund for sewer projects in each commissioner districts, Jones said.
Sewers have been constructed in the eastern Port Angeles Urban Growth Areas and in Carlsborg. The Opportunity Fund will be used to help pay for a new sewer system for Clallam Bay and Sekiu.
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at rollikainen@penin suladailynews.com.
