Island Transit will not borrow $22.4 million from an out-of-state lending firm to build a new facility at its site just south of Coupeville.

Acting on the advice of Island Transit Director Martha Rose, and amid a crowd of naysayers, the transportation agency’s board of directors Friday unanimously agreed to abandon all plans to pay for an administration and maintenance building by taking out a 20-year loan with Colorado-based Municipal Services Group.

Although Rose had been one of the proposal’s chief supporters, events over the past two weeks led her to change her mind.

“I think it would be a bad move for us,” Rose told the board during Friday’s meeting.

After a Jan. 12 story highlighting the plan ran in the Whidbey News-Times, Rose said she received word from the offices of Sen. Maria Cantwell and Sen. Patty Murray that Island Transit should not expect any funds from Washington, D.C., as lawmakers are moving to ban earmarks from the budget.

Paying off the loan with federal grant money was a keystone of the proposal. News that appropriations may no longer be available essentially killed the lending option as a realistic funding mechanism for the new facility, Rose said.

The idea may also have been unpopular with the public. The meeting, which took place in a tiny conference room at the Law and Justice building in Coupeville, overflowed with people critical of both the proposal and Island Transit.

Oak Harbor resident Sherman Carter, who identified himself as a former financial vice president for two state universities with a Ph.D in finance, said there is a tendency with expensive building projects to underestimate costs and overestimate revenues.

“If that occurs in this instance, it will fall on the taxpayers to pay for uncovered costs,” Sherman said.

On a similar note, Oak Harbor resident Floyd Hanni said he doesn’t ride the bus because he believes he should pay his own way. He also said he takes exception with those who believe that federal grant money is somehow free.

“Where’s that money come from?” Hanni said. “It comes from taxpayers. It’s taxpayer dollars, it’s not free.”

Many questioned the need for a larger facility and seemingly ever-expanding bus services while others, including Oak Harbor City Councilman Rick Almberg, voiced concerns about inefficiencies in the system that may be resulting in wasted taxpayer dollars.

Almberg also asked board members whether they would be willing to consider other options. After a recent meeting with Oak Harbor School District and city officials, Almberg said there is a possibility for a partnership in which Island Transit buses could be serviced at the school’s maintenance facility.

Island Transit board members seemed as unenthusiastic about the lending plan as everyone else. Board Chairman Bob Clay, also a member of the Coupeville Town Council, assured the crowd that “we are just as concerned as you are” and that no rash decisions will be made. This is just the most recent of a long list of options that have been explored, he said.

“We’re not under a lot of pressure,” Clay said. “The building isn’t falling down.”

Island Transit has been looking at ways to replace its facility for years. It was built in 1987 for an organization with just 20 employees and five buses. Island Transit today has 145 workers and more than 200 vehicles.

“There is a ticking clock at the current facility that needs to be addressed,” said board member Robert Gilman, who is also a Langley city Councilman.

But it looks like Rose has no plans to abandon her efforts to secure funding for a new facility.

In an interview after the meeting, Rose said the earmark ban closed one door but inadvertently opened others. Within just a few months, she may be back before the board with yet another proposal.

“It’s not over yet until the fat lady sings,” she said.