By Joe Smillie
Peninsula Daily News
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The opinion issued Wednesday said the district in Forks cannot use timber taxes to repay a loan from Clallam County used to buy four rental houses, a suggestion Treasurer Selinda Barkhuis asked commissioners to consider.
County officials, and those with the parks district, said they are awaiting legal interpretations of the opinion before they discuss how it affects the loan.
The opinion requested by Clallam County Prosecutor Deb Kelly said timber tax revenues can be used only to pay debt services related to capital bonds.
In a posting on her personal website after the decision was released, and in a memo sent to commissioners after Wednesday’s opinion, Barkhuis again urged commissioners to make the district either repay the loan or deed the property to the Peninsula Housing Authority.
“For the [county commissioners] to resolve this problem for the QVP&R District would set an unsustainable precedent, as other districts would be prompted to likewise seek County taxpayer revenues to fund those problems declined to be funded by such districts’ own voters,” Barkhuis wrote.
Barkhuis referred the PDN to her website when asked for comment on the attorney general’s opinion last week.
In 2004, the park district borrowed $225,000 from the county’s Opportunity Fund to purchase four homes on 4 acres of land adjacent to the Quillayute Valley Aquatic Center at 91 Maple Ave.
Forgive loan or delay
Members of the parks district’s board asked commissioners in April to forgive the loan or delay payments until 2023, when the construction bond used to build the pool and community center is paid off.
Commissioners asked Kelly whether the district’s timber tax revenue could be used to pay back the loan after Barkhuis urged them to deny the request and foreclose on the homes and land if the district does not make payments.
“That was her advice,” Commissioner Mike Chapman said.
Barkhuis said the district could repay the loan out of its bond fund, which is primarily fed by timber tax revenues.
Mark Nichols, Kelly’s chief deputy prosecutor, then asked Attorney General Bob Ferguson’s office for an official opinion on the use of timber tax revenues.
Nichols, on vacation in Texas when contacted Saturday, said he had yet to review the opinion.
Nedra Reed, chairwoman of the parks district, said Friday the district’s attorneys were reviewing the opinion.
“We will wait and see what our counsel says is the best way to proceed and respond,” Reed said.
Chapman and County Administrator Jim Jones said the county probably won’t take up the loan repayment until after the first of the year.
Kelly has announced she will retire Dec. 31. Chapman said the parks district’s loan likely won’t come up until a new prosecutor is appointed.
“I don’t know that there’s a big hurry on this,” Chapman said.
“It’s going to be an issue that whoever’s appointed will have to deal with. And I don’t know that it will be on top of the list of priorities.”
The district has not made its $6,430 annual payment on the loan since 2010, Barkhuis said.
The district owes $212,140 in principal plus $6,559 in accrued interest.
The pool was built after voters approved a $2.9 million construction bond, but it was shuttered in 2007 after two years of operations levies were defeated.
The pool reopened after the district contracted operations to the Forks Aquatic Health Club, which currently leases the space.
The homes were purchased with the intent of providing affordable housing in Forks, with rent revenues earmarked to help fund pool operations.
Beginning in January 2005, the district transferred management of the properties to Lunsford Real Estate and Property Management, which now is managing all four as full market rentals with monthly costs between $600 and $1,100.
The county’s Opportunity Fund derives from a special program designed by the state to aid rural counties by returning nine-tenths of 1 percent of the state’s share of the county’s sales tax revenue to fund projects that spur economic development.
Sequim-Dungeness Valley Editor Joe Smillie can be reached at 360-681-2390, ext. 5052, or at email@example.com.