The Capital Area Regional Public Facilities District (PFD) Board of Directors on Friday voted unanimously to request a state-conducted financial feasibility review (FFR) and to enter an interagency agreement with the Washington State Department of Commerce so the City of Olympia and the Hands On Children’s Museum can proceed with planned bond issuance.

The PFD’s approval “starts the process” required by state law for PFDs that seek new debt, board members said, and allows Commerce to select an independent vendor to assess whether the PFD’s pledged revenue stream can cover the proposed bond payments. The board’s materials and staff briefings state the review will be billed to the PFD at an estimated cost of $20,000 to $40,000; the City of Olympia has committed to reimburse the PFD for that expense.

Board Chair David Bridal explained that a 2012 change in state law requires public facilities districts issuing new debt to undergo a financial feasibility review administered by the Department of Commerce. He said the review “is conducted by an independent vendor.” Ken Parsons, a board member, said the review typically takes about three months: “It takes about 3 months to do this feasibility review.”

Commerce will sign an interagency agreement with the PFD and will select the consultant from its contractor pool, board members said. The consultant’s report will be distributed to the governor, the state auditor, the state treasurer, relevant legislative committees, the PFD, and the participating jurisdictions, per the statute and staff guidance shared with the board.

Board members stressed that the feasibility review focuses on the PFD funding stream — not on the underlying projects’ overall feasibility. Ken Parsons and others said the municipalities that plan to issue bonds (the City of Olympia and the City of Lacey) remain responsible for their own bond terms and for finding backfill if pledged revenues prove insufficient. A board member summarized that recourse for bondholders would be to the municipal bond issuers, not the PFD.

City and project representatives told the board most required materials for the review had already been compiled. Board members noted the city council in Olympia recently adopted a bond ordinance to keep the city’s schedule moving; Debbie Sullivan, assistant city manager for the City of Olympia, confirmed the council passed that ordinance on Tuesday.

Board members also discussed ancillary project items that were raised during questions, including a possible land purchase from the Port of Olympia and a reversion clause the port and city have discussed so that property would revert if not used for the museum. Board members emphasized that those property arrangements and the museum’s project budget remain municipal responsibilities and will be addressed in the cities’ bond planning and project feasibility work.

Two formal actions were approved by the PFD: (1) to request the Department of Commerce conduct the financial feasibility review for the Olympia/Hands On Children’s Museum bond plan; and (2) to authorize the PFD president to sign an interagency agreement with Commerce to carry out the review. Both motions were adopted unanimously by the members present. Board members said Commerce will produce the consultant’s report and that the PFD will receive and review the final FFR once complete.

Board members and staff thanked city staff, Commerce staff and project representatives for quickly assembling documents and coordinating after the board learned the FFR requirement applied to the planned new debt issuance. The consultant-selected review and report will be an additional step the municipalities must clear before moving forward with bond sales, and board members said they are trying to align the review’s timetable with the cities’ bond schedules.

The PFD indicated the estimated timeline for the review could extend the cities’ schedule; board materials and staff said the study often requires two to three months to complete once the Commerce-vendor contract is in place. The board said it will reconvene in a future special meeting to act on the FFR report and any further required approvals.