Three major local projects won’t receive expected money from the state because forecast lottery revenue is too low to back the sale of bonds funding those projects.
As Oregon Capital Insider first reported last week, state officials have confirmed that a bond sale funding $273 million in projects around the state — with more than $10 million for projects in Lincoln County — won’t be moving forward because of an unprecedented drop in lottery revenue as a result of the COVID-19 pandemic. To sell the bonds, the state must show a 4-to-1 ratio between the Lottery Fund and the amount of debt incurred by the bonds. It’s done so easily for the past 26 years, since the establishment of the lottery, but the coronavirus pandemic — which shut down video gambling machines for almost two months — has led to a ratio of just over 3 to 1. Because of that shortfall, Gov. Kate Brown said she would not sign the authorization for the bond sale.
State Rep. David Gomberg, a driving force behind the local allocations, said, “Some of the best news that we brought home from the last legislative budget session was projects that were going to be funded here on the central coast.” He said he was angry and disappointed at the $10-million-plus hit to the local economy but also determined to fight for the re-appropriation of those funds when the legislature returns for its next budgetary session in January.
Among the 37 projects around the state that will lose funding are the Oregon Coast Aquarium, the Big Creek dams and the Lincoln City Cultural Center. The aquarium was expecting $5 million for capital projects in its master plan. President and CEO Carrie Lewis told the News-Times, “The aquarium has been in dire need of a remodel for quite some time; we opened in 1992, and we were, and still are, excited about our renovation plans for the aquarium.”
Lewis said those plans included remodeling the entry way and nature play area, and construction of an amphitheater. They also plan to renovate all three indoor galleries with updated exhibits, signage and traffic flow; build a dedicated facility for marine wildlife rehabilitation; and enhance the aquarium’s educational programming.
“Knowing that the funding for these projects won’t happen in 2021, we are considering our options for funding the projects. Our committee and board is meeting this month to discuss next steps. While this is disappointing, we are in the same boat as so many other organizations that received the appropriation,” Lewis said.
Funds expected by the city of Newport would have paid for permitting and planning for construction of a new dam at Big Creek. The Big Creek reservoirs are Newport’s sole source of water. The existing earthen dams, built in 1958, are among the top three most critical, high hazard dam projects in the state, according to Oregon’s dam safety engineer, due to their potential for failure from a relatively minor seismic event of 3.0 or greater on the Richter Scale. An upgrade is also needed to increase capacity, which is enough to meet current needs but not future demand.
The legislature approved $4 million in bond funds in June of last year, but Gov. Kate Brown initially said she intended to veto that item. She later changed her mind after aggressive lobbying by Gomberg, Newport Mayor Dean Sawyer, other officials and members of the public. Sawyer has also been working with Rep. Kurt Schrader to lobby the federal government to fund the actual construction, estimated to cost between $70 and $80 million.
Also losing out is the Lincoln City Cultural Center, which expected to receive $1.5 million in funds from the bond sale for the construction of the Lincoln City Cultural Plaza, turning 2.5 acres of former playground and open field into walkways with public art and other features. The center has already raised $250,000 in community contributions and received grants from local governments and charitable organizations.
Dorcas Holzapfel, president of the cultural center’s board of directors, said, “The state’s lottery bond allocation of $1.5 million was the last piece in our funding puzzle for the Lincoln City Cultural Plaza, our long-awaited redevelopment of the exterior grounds around the historic Delake School. We were planning to combine the $250,000 we raised from local donors and grants from the city of Lincoln City, the Confederated Tribes of Siletz Indians, Oregon Community Foundation and others. The plaza project design and engineering is complete, and we were prepared to go to bid later this year and finish the project by summer 2021. Naturally, we are disappointed to lose the lottery bond funding. But we believe that the plaza is a necessary and vital community project, and we will continue to plan and advocate until it is complete.”