Voters in Cannon Beach will weigh ballot measures in May related to debt-financed city projects.

CANNON BEACH — The City Council has unanimously agreed to move forward with a resolution authorizing $33.6 million in bond financing for a new City Hall and police station and the redevelopment of a former elementary school.

The projects, which have been on the drawing board in different forms for years, represent a significant city investment in infrastructure. The new City Hall is planned at the existing location on E. Gower Avenue and the new police station will be located at the city’s Tolovana cache site east of U.S. Highway 101. The redevelopment of the former elementary school and NeCus’ Park site is on the north side.

Mayor Barb Knop, in an email, said “these projects are way overdue. The current city hall and police station building is 70 years old. Our city staff and community deserve adequate buildings to house city hall and our police department. Cannon Beach Elementary closed in 2013. The city purchased the site in 2020 and the planning began to develop a tourism-related facility.”

The full faith and credit obligation bond will be paid through existing revenues. City staff will prepare for the auction and bidding process.

“The bid with the lowest interest costs is the underwriting firm that gets to purchase the obligations that lock in the rate and the payments on the allocations,” Matthew Donahue, of D.A. Davidson & Co., a financial adviser, told the City Council.

At the meeting on Tuesday night, some residents voiced their concerns over the bond’s price tag and called for a public vote on the issue.

“The people in this community deserve to be able to vote and if you are not afraid of how that’s going to turn out, then you will take the extra risk that it will take for it to go to the ballot and we will put it to a vote of the people. I think that it’s really important. We did that with the food tax,” said Deanna Hammond, the co-owner of Cannon Beach Bakery.

City councilors explained that a full faith and credit obligation bond does not require voter approval.

“To put it even more simply, general obligation bonds, which may impose additional tax on the taxpayer, they do have to go to a vote, because of that, the taxation issue — but this kind of bond isn’t imposing an additional tax on the taxpayer and generally do not go to a vote,” City Councilor Lisa Kerr said.

In a letter on Friday that was shared with The Astorian, an attorney representing Cannon Beach Together, a political action committee, warned that residents did not have proper notice of their right to petition proposed revenue bonds for a public vote. The attorney also claimed that the bond is a revenue bond and should be treated as one.

According to a filing with the Oregon Secretary of State’s Office, the director of Cannon Beach Together is Kyle Genin, the social media manager for Escape Lodging, a Cannon Beach-based hospitality company. Genin could not immediately be reached for comment.

“As full faith and credit obligations, these revenue bonds would commit the city to pledge all of its available revenues, including those unrelated to the projects to covering any shortfalls in funding from estimated tourism tax revenues. Given the size of the proposed borrowing and the attendant risk, it is prudent to seek the approval of city voters before making such a commitment,” Eric Winters, a Wilsonville attorney, wrote.

City Manager Bruce St. Denis, in response to the letter, wrote back to the attorney: “We have been working closely with legal counsel specializing in these funding issues, as well as our city attorney and a financial adviser. We are confident we are using the best process available to the city and our constituents.”