Budget concerns lead Thurston Commission to delay vote on Atrium expansion
The Thurston County Board of Commissioners on Tuesday delayed a vote on whether to lease nearly 90,000 square feet of office space, citing unresolved questions about the budget impact.
In a 2-1 decision last week, the board supported putting the lease option for the two-story Atrium building on their regular meeting agenda for Tuesday. Under the proposed lease, the county would pay MJR Development a total of $11.75 million over seven years for use of the space.
Beyond the rent costs, the county would have to pay for tenant improvements that could run about $7 million. Additionally, the county has the option to extend the lease by three years.
However, the board decided to postpone the item to Sept. 28 or later during an agenda setting meeting on Tuesday.
The decision followed a discussion on county revenue that morning that raised new questions about the county’s ability to cover the cost of the Atrium lease and other budget requests from offices and departments.
Assistant County Manager Robin Campbell told the board that the county would be not receiving about $1.5 million in revenue to its general fund next year after becoming ineligible for a state funding source.
Through city-county assistance, also known as ESSB 6050 distributions, the state shares 1.4% of revenue from its real estate excise tax on each sale of real estate property with certain cities and counties, according to a revenue guide published by the non-profit Municipal Research and Services Center.
Cities and counties are only eligible if a complicated formula indicates they have relatively low taxing capacity, per the guide.
Campbell cited the guide as she explained why Thurston County is now ineligible for the funding. She said the formula is rooted in sales tax and unincorporated county populations.
“So really what has happened here is our sales tax growth… has been so extreme that we have essentially priced ourselves out,” Campbell said. “Our sales tax has grown at such a rate (and) our unincorporated population has hardly grown at all.”
Therefore, Campbell said the county will have $1.5 million less to spend for policy level changes in its general fund, which is down from about $3 million. This news gave the commissioners pause.
Commissioner Tye Menser said he believes offices and departments have been conservative with their budget requests over the last two years.
“What I’ve been told by a lot of different directors and elected officials is that they’ve been very patient and restrained the last two-plus years in asking the board to fund their core needs,” Menser said. “So there is going to be a lot of pent up demand for the policy level dollars.”
Commissioner Gary Edwards expressed concern about the revenue forecast and touched on his previous argument that the Atrium lease may be unnecessary given the trend toward working from home.
In response, Menser reiterated his belief the Atrium will meet a core need for the county. However, he added he would like a better picture of the county’s other needs before moving forward.
Commissioner Carolina Mejia agreed with Menser and said she felt the revenue forecast threw a wrench in the plans to lease the Atrium.
“I’m just not there, just with the number we’re being presented,” Mejia said. “I also would like to see what the requests are. If I’m saying yes to this, then what other $1.5 million worth of requests that I could have said yes to am I going to say no to?”
For now, the vote on the Atrium lease has been moved to the Tuesday, Sept. 28 regular board meeting. However, Menser indicated the board may still not be ready to vote that day if their concerns are not addressed.
This story was originally published September 22, 2021 at 11:38 AM.
