The Only Prudent Choice
Even casual observers of New Albany's city government must be scratching their heads in wonderment this Independence Day weekend.
The city's leaders just tiptoed through a minefield of state-mandated budget cuts and came out the other side with city operations intact. After sometimes rancorous debate and no small degree of negotiations, the mayor and council found a way to adjust the budget without cutting city services.
That should have been a lesson for all concerned. But now, as the city council weighs its options for financing the first phase of Scribner Place, some are advocating a course that will unnecessarily cost the city at least $105,000 a year in additional interest costs.
Mayor Garner has declined to declare a preference among the three options he presented to the council. We have no idea why that is so, but we urge the mayor to bring his considerable skills to the task of persuading council to approve Option 1.
Some say it would take political courage to pledge the city's entire taxing authority as an additional credit enhancement. Perhaps so, but it will take much more than courage to defend the alternatives. City officials appear resigned to the fact that they don't have the votes to approve Option 1, but can garner at least five votes for a cobbled-together Option 3.
Option 3 is a Scribner Place financing package that encumbers future economic development income taxes. Without those future revenues, the city is much more likely to be forced to resort to property tax increases in the coming decade. At least $1.3 million will also have to be found to create a reserve fund under this plan. No one has adequately explained why the city should lose the use of this money for 15 years, much less where that money will come from. Even at 3% interest, that adds an additional $39,000 a year to the cost of Option 3.
More critically, settling for the third option puts at risk the county's willingness to participate in the financing package. Recognizing that the project brings benefits all of Floyd County, county commissioners and county council stand ready to contribute to the construction costs.
However, some members of the county council are deeply concerned about Option 3. They reason that if the city can afford to "waste" $144,000 just to pander to a minority of citizens who have failed to understand the nature of bond financing, why should the county bother making its contribution?
As it stands now, less than one week before the city council takes its first-reading vote on Scribner Place financing, it appears that the county will enthusiastically join a financing plan like Option 1. But if the city council approves Option 3, county council will rightly reason that the city does not need a hand from the taxpayers in greater Floyd County.
--------------------------------------------
Randy Smith, destinations@sbcglobal.net
The city's leaders just tiptoed through a minefield of state-mandated budget cuts and came out the other side with city operations intact. After sometimes rancorous debate and no small degree of negotiations, the mayor and council found a way to adjust the budget without cutting city services.
That should have been a lesson for all concerned. But now, as the city council weighs its options for financing the first phase of Scribner Place, some are advocating a course that will unnecessarily cost the city at least $105,000 a year in additional interest costs.
Mayor Garner has declined to declare a preference among the three options he presented to the council. We have no idea why that is so, but we urge the mayor to bring his considerable skills to the task of persuading council to approve Option 1.
Some say it would take political courage to pledge the city's entire taxing authority as an additional credit enhancement. Perhaps so, but it will take much more than courage to defend the alternatives. City officials appear resigned to the fact that they don't have the votes to approve Option 1, but can garner at least five votes for a cobbled-together Option 3.
Option 3 is a Scribner Place financing package that encumbers future economic development income taxes. Without those future revenues, the city is much more likely to be forced to resort to property tax increases in the coming decade. At least $1.3 million will also have to be found to create a reserve fund under this plan. No one has adequately explained why the city should lose the use of this money for 15 years, much less where that money will come from. Even at 3% interest, that adds an additional $39,000 a year to the cost of Option 3.
More critically, settling for the third option puts at risk the county's willingness to participate in the financing package. Recognizing that the project brings benefits all of Floyd County, county commissioners and county council stand ready to contribute to the construction costs.
However, some members of the county council are deeply concerned about Option 3. They reason that if the city can afford to "waste" $144,000 just to pander to a minority of citizens who have failed to understand the nature of bond financing, why should the county bother making its contribution?
As it stands now, less than one week before the city council takes its first-reading vote on Scribner Place financing, it appears that the county will enthusiastically join a financing plan like Option 1. But if the city council approves Option 3, county council will rightly reason that the city does not need a hand from the taxpayers in greater Floyd County.
--------------------------------------------
Randy Smith, destinations@sbcglobal.net
posted by All4Word at 9:51 AM
0 Comments:
Post a Comment
<< Home