10/25/12 Supreme Court Upholds Ruling on City Arena Debt (AUDIO)
The City of Wenatchee exceeded its legal debt capacity when it agreed to back construction of the Town Toyota Center. That's the ruling issued today by the State Supreme Court. Steve Hair reports. .
In a 5-4 vote justices upheld a September 2011 ruling by Chelan County Superior Court Judge John Bridges. Bridges ruled that the contingent loan agreement between the City and the arena violated constitutional debt limits. The City agreed to back the 41.8 million dollar loan but in his majority opinion Justice Charles Wiggins said, "We conclude that this case implicates the very concerns that prompted our framers to enact limits on municipal debt in the first place. ... The City could enter into the agreement if approved by a vote of the people, but not without a popular vote." Wenatchee Mayor Frank Kuntz said he supported the Court's ruling. Justice Mary E. Fairhurst, issued the minority opinion saying she found no precedent for the majority opinion. "The lead opinion invents an entirely new legal analysis to achieve a contrary result." The bond contract between the City and the Public Facilities District was never finalized and the loan went into default in December. Fairhurst says said the transaction would not have met the constitutional definition of "debt" for the city, which would act only as a lender. Following the September Supreme Court Ruling the Arena emerged out of default after the City and the PFD passed sales tax increases to finance the bonds which were have since been sold.