Bellevue City Hall: debit, not credit

Bellevue City Council reached a disappointing decision to settle its share of $20.2 million in cost overruns on a new City Hall by paying a little now and far more later.

Cost overruns on public construction projects are a classic problem without obvious solutions, but that doesn't mean costs should be deferred. Whether because of gross malfeasance, a la Boston's "Big Dig" roads project, or a compounding of small mistakes, as is the case with Bellevue's new City Hall, few things ever cost what they are supposed to cost.

Government contracts and insurance riders build in the costs of overruns. Since they appear ubiquitous, attention shifts to how to pay for them. It would be tempting to cheer this deal, coming as it does after 18 months of fighting between Bellevue and builders over the $122 million renovation of the former Qwest office building.

Mediation apportioned blame fairly. The architect, contractor and insurance broker will pay $10.1 million of the cost overruns; the city will pay $9.9 million. The council voted 5-2 to pay slightly less than half the city's share up front and finance the rest through long-term bonds.

Wrong move. Bellevue can afford to write a check and be done with it.

The city has $120 million in total reserves. Some of this money is restricted for utilities, insurance and capital costs but enough is unrestricted to pay the cost overruns. The city's coffers will continue to swell from tax revenue from development projects. The city's expansion won't taper off anytime soon. Of the estimated 35 construction cranes angling toward the sky in cities west of the Mississippi, 15 are parked in downtown Bellevue.

Council members who voted to increase the city's debt burden gave as a reason the need to hold onto cash for an expected flurry of wish lists from citizen groups. Senior citizens want a center. Firefighters want a building downtown. Others want a community swimming pool.

Nonetheless, Bellevue missed a chance to lead by example. It should pay now and avoid paying more later. In 20 years, the cost overruns for this city's largest building project will be long forgotten, yet taxpayers will still be paying for them.