Enid lawmaker's bill targets Arkansas River dam bond loophole
BY WAYNE GREENE World Senior Writer
Thursday, January 24, 2013
1/24/13 at 7:58 AM
OKLAHOMA CITY - A proposal before the state Senate would kill the authority for $25 million in state bonds to fund low-water dams on the Arkansas River.
In November, the state Supreme Court ruled that a planned bond proposal for the river projects was unconstitutional because the state didn't have a legitimate stake in the deal, making it essentially a gift to the city of Tulsa.
But the court ruling left the law authorizing the bonds in place, meaning a differently structured bond proposal that met the Supreme Court's standards remained possible.
Senate Bill 799, sponsored by Sen. Patrick Anderson, R-Enid, would resolve any remaining doubt and kill the bond authority for the river project.
The bond authorizing law was passed in 2008, and Anderson said the river project has changed since then, meaning any effort to fund it with state debt should have to come back to the Legislature for consideration.
"If we're going to move forward on a new plan, we need to bring it before the legislators and have them vote on it specifically," he said.
If the authorization stays on the books, the state's credit remains at risk for another bond attempt at any time, he said, adding, "Ten years down the road, are we going to have to relitigate the issue?"
Jim McCarthy, chairman of River Parks Authority's board, said a state bond issue under the 2008 law remains an option for the project.
When the Supreme Court ruled against last year's bond attempt, McCarthy said River Parks leaders noted with interest a comment by Cliff Elliott, one of the attorneys who challenged the proposal and a former chairman of the state Council of Bond Oversight. At the time, Elliott said a state river bond proposal was still a possibility and that the court's ruling was "just a structure problem."
McCarthy said he saw Elliott's comments as a genuine effort to help the project along, and it has led to some hopes for working out a deal in the future.
State Bond Advisor Jim Joseph, however, said there are real challenges to coming up with an Arkansas River bond plan that will work. The Supreme Court's ruling essentially means the river dams would have to be owned by the state, not the River Parks Authority, and dam ownership would raise troubling liability and maintenance concerns, he said.
If the Legislature kills the bond-authorizing law, McCarthy said the River Parks Authority would continue to look for other funding means, including other state bond mechanisms.
Meanwhile, Anderson has written separate legislation asking voters to approve $100 million in new state debt to fund infrastructure improvements in cities with no more than 125,000 residents.
That would include Anderson's hometown of Enid but would exclude Tulsa and Oklahoma City.
He said the measure would level the state bond playing field.
"We keep on having bond issues of museum projects in Oklahoma City in particular," he said. "All the taxpayers across the state get to pay for that, but nothing outside the Tulsa and Oklahoma City areas get any bond funding."
Anderson's proposal would restrict the funding to infrastructure projects. No city could receive more than $10 million in financing for any one project.
Anderson has been one of the leading opponents of further state funding for the half-built American Indian Cultural Center in Oklahoma City, which has received $63 million from three previous bond issues and which would get as much as $40 million more under proposals before the Legislature this year.
Although one of the strongest arguments against the center has been that the state shouldn't increase its debt, Anderson said there is a significant difference between his $100 million infrastructure proposal and the bonds for the cultural center and the Tulsa river project.
Those proposals are so-called moral obligation bonds, which are approved by the Legislature and funded with promises of future state appropriations, but the Anderson proposal is for general obligation bonds that could be sold only if the plan is approved by a statewide vote.
Anderson's plan comes with a guaranteed source of financing bond costs. It would dedicate 0.25 percent of state sales tax receipts collected in cities eligible for the funding to pay bond costs. That would mean the Legislature would have that much less money to pay for other things, including schools, roads and public safety, he acknowledged.
Last year, state voters approved as much as $300 million in general obligation bonds to finance water and sewage projects for local governments through the Oklahoma Water Resources Board, Anderson pointed out.
There will be a good deal of skepticism in the Legislature for big-ticket building projects, especially those funded with state debt, he said. Lawmakers will likely consider funding for a new facility for the state Medical Examiner's Office in Edmond and money for needed repairs to the state Capitol.
Although the Legislature could go a different direction, Anderson said he favors paying for the Medical Examiner's project without debt and asking voters to approve bonding for the Capitol repair project.
Mullin on House panel with corps oversight
U.S. Rep. Markwayne Mullin, R-Okla., has been appointed to the House subcommittee that oversees the Army Corps of Engineers.
Mullin announced his appointment to the Water Resources and Environment Subcommittee of the House Transportation and Infrastructure Committee on Wednesday.
The subcommittee has jurisdiction over water issues ranging from development, conservation and management, pollution control and water infrastructure.
The corps oversees the McClellan-Kerr Arkansas River Navigation System, which runs through Mullin's 2nd District and is a vital transportation outlet for the state. The corps also could be a key funding mechanism for projects associated with development of the Arkansas River in Tulsa County.
U.S. Sen. Jim Inhofe, R-Okla., has previously obtained congressional authorization for $50 million in corps work linked to local river development, although the money has never been appropriated or spent.
Inhofe has said there is still a chance the corps will reprioritize projects and fund the Arkansas River projects. Inhofe is a member of the Senate Environment and Public Works Committee, which also has authority over the corps.
Original Print Headline: Dam bond loophole targeted
Wayne Greene 918-581-8308
The Zink Dam and Pedestrian Bridge are shown last month. CHRISTOPHER SMITH/Tulsa World