Funding the Gap
I wasn't there, but by all accounts, CM Coffey's last-minute fireworks display got rained out during Tuesday's City Council work session. No pop, all fizzle.
He was quoted as saying it would be cheaper to "fund the gap" than for the city to undertake a commitment to Scribner Place. But that's what the issue has been all along. Municipal government bonds are the most attractive to the market. By guaranteeing the Scribner Place, Phase I bond issue, the city is able to bring it to completion at the lowest cost. As far as funding, the city will in fact be "funding the gap."
The gap is that amount that will not be provided by private sources, in this case, the Caesars Foundation of Floyd County.
City Council will take up the issue on first reading on July 7. Did Dan Coffey endorse the city "funding the gap" in his comments last evening?
Now the question turns to how big that gap will be. To my amazement, the council seems prepared to enlarge that gap by borrowing at the highest interest rate, and paying the largest annual sum over the life of the bonds. In addition, the city will be required to maintain a reserve fund that is approximately $1.3 million dollars.
Why? Why is council prepared to accept the most costly and riskiest of the three options presented to them? Why is Mayor Garner being so timid about explaining Option 1?
A last-ditch attempt by opponents to derail the Scribner Place locomotive induced the city attorney and bond advisor to include the ridiculously expensive Option 3. Click here to see the comparison between each of the three options on the table.
Who among the council wants to defend Option 3? Who wants to face the voters and explain why $105,000 in EDIT funds was unnecessarily devoted to Scribner Place bonds when it could have been avoided by simply promising to use city taxes as a last-resort guarantee? And who wants to defend requiring the city to put $1,375,000 in escrow for the next 16 years? Where are we going to come up with that?
For those of you who are contentedly sitting out the advocacy campaign on this one, the hour grows late. Tell your representatives you will remember who it was who cost the city $1,480,000 when it wasn't required.
Stop this train. Option 3 is a disaster waiting to happen. It is an option that will hamstring the city for the next 16 years. And it's totally unnecessary.
Apparently, the Option 3 supporters are unable or unwilling to explain to their constituents how Option 1 will strengthen the city's ability to provide services and will help to limit property tax increases in the future. Option 3, instead of shielding us from property tax increases, will require the city to come up with an extra $105,000 each year while parking $1,375,000 in escrow every year for the next 16 years.
Advocate for Option 1. Be smart. Insist that you want proper financial stewardship from your council member. Call or write them now, before they approve the outrageous Option 3. Your city's future depends on it.
--------------------------------------
Randy Smith, destinations@sbcglobal.net
He was quoted as saying it would be cheaper to "fund the gap" than for the city to undertake a commitment to Scribner Place. But that's what the issue has been all along. Municipal government bonds are the most attractive to the market. By guaranteeing the Scribner Place, Phase I bond issue, the city is able to bring it to completion at the lowest cost. As far as funding, the city will in fact be "funding the gap."
The gap is that amount that will not be provided by private sources, in this case, the Caesars Foundation of Floyd County.
City Council will take up the issue on first reading on July 7. Did Dan Coffey endorse the city "funding the gap" in his comments last evening?
Now the question turns to how big that gap will be. To my amazement, the council seems prepared to enlarge that gap by borrowing at the highest interest rate, and paying the largest annual sum over the life of the bonds. In addition, the city will be required to maintain a reserve fund that is approximately $1.3 million dollars.
Why? Why is council prepared to accept the most costly and riskiest of the three options presented to them? Why is Mayor Garner being so timid about explaining Option 1?
A last-ditch attempt by opponents to derail the Scribner Place locomotive induced the city attorney and bond advisor to include the ridiculously expensive Option 3. Click here to see the comparison between each of the three options on the table.
Who among the council wants to defend Option 3? Who wants to face the voters and explain why $105,000 in EDIT funds was unnecessarily devoted to Scribner Place bonds when it could have been avoided by simply promising to use city taxes as a last-resort guarantee? And who wants to defend requiring the city to put $1,375,000 in escrow for the next 16 years? Where are we going to come up with that?
For those of you who are contentedly sitting out the advocacy campaign on this one, the hour grows late. Tell your representatives you will remember who it was who cost the city $1,480,000 when it wasn't required.
Stop this train. Option 3 is a disaster waiting to happen. It is an option that will hamstring the city for the next 16 years. And it's totally unnecessary.
Apparently, the Option 3 supporters are unable or unwilling to explain to their constituents how Option 1 will strengthen the city's ability to provide services and will help to limit property tax increases in the future. Option 3, instead of shielding us from property tax increases, will require the city to come up with an extra $105,000 each year while parking $1,375,000 in escrow every year for the next 16 years.
Advocate for Option 1. Be smart. Insist that you want proper financial stewardship from your council member. Call or write them now, before they approve the outrageous Option 3. Your city's future depends on it.
--------------------------------------
Randy Smith, destinations@sbcglobal.net
posted by All4Word at 12:30 PM
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