Olympia eyes new plan as Wenatchee agency defaults

Dec 1, 2011

OLYMPIA, Wash. — A Wenatchee-area agency is defaulting on its debt but still may get support from the state Legislature.

Democratic Rep. Ross Hunter said Thursday that his committee will consider a measure that would make a belated payment on the $42 million bond debt.

A spokesman for the state treasurer says the bond market would be more receptive to a late payment than an outright default.

State officials have been concerned that the default may impact other local agencies looking to borrow. Lawmakers have been reluctant to endorse the rescue plan, worried that it may make the state a backstop for bad debt.

The proposal would use a state fund for local sales taxes to cover the debt and allow local jurisdictions to pay back over time.