Tuesday, April 10, 2007

City council needs to ask debt questions

At the city council meeting the members took 30 minutes to pat themselves on the back for all the ways they are spending money in the downtown area. The mayor was aghast that the SNL actually questioned the decisions of the council to spend this money on various projects which haven't been finalized or even awarded.

I wonder if an impact study has been done to determine the fiscal impact of all the $$$ spent in the downtown area.
You want to revitalize the downtown area put a Super Wal-Mart down there and people will flock to it. The type of people that will visit the various shops in the newly renovated downtown area prodominately live in the San Francisco area or in Marin County CA. How are we going to get those people here Mayor Tom. The region of downtown has been populated by bars and the like which seem to entertain the MSU students and the crime rate of the area doesn't seem to reflect the major sources of entertainment in that area.

I see NO reason why PRIVATE monies can't be invested in the area. Once something is set in stone for the advancement of private money to be invested in this area then public monies could follow upon reasonable assurance that the taxpayers aren't going to be left holding an empty bank statement.

City council needs to ask debt questions

Springfield nears worrisome level.

Before they vote to put the city in debt by another $20 million tonight, city council members have to ask themselves two questions:

How much debt is the city actually in?

How much can the city handle?

What's worrisome is that council members didn't appear to ask those questions a couple of weeks ago before they approved the first reading of bills that would authorize the city to sell up to $2.7 million in bonds for a crime lab and up to $6 million for a Heer's parking garage and another $12 million for a parking garage at College Station.

We're pretty sure the council didn't ask the question because when we asked it of City Manager Bob Cumley, he didn't know the answer. But he found out, and the answer should give city taxpayers pause.

If the proposals before the council are approved tonight, the city will have just more than $61 million in debt related to economic development projects downtown. The city has other debts, such as about $90 million for the new airport terminal, and other bonds that are backed by taxes for road projects, but the downtown economic development debt is significant because it's a bit of a gamble.

If the projects work — and don't misunderstand us, we believe they will — then the debt can be paid off without much harm to general revenue. And if the projects fail? That's a possibility Cumley and others don't want to think about.

But they are thinking about the debt. And their conclusion, after tonight at least, is clear. No more debt.

"At some point, you start to get concerned," Cumley says.

We believe that point ought to be now.

We have been, and continue to be, fans of downtown's resurgence and the city's role in helping to make it happen. The crown jewels, so to speak, are the College Station project that is under construction and the Heer's building redevelopment that is getting closer by the day. We believe the very thought of those projects on the horizon is contributing to the work of other developers in and around downtown as more old buildings get refurbished and turned into loft apartments and retail outlets. The crime lab project is important in and of itself in that it will improve the entire state's ability to move justice forward in cases right now that are delayed because of the lack of a lab; but it's also valuable as it will bring employees downtown and offer even more incentive for redevelopment of older empty downtown buildings.

But fans of these projects or not, it's important to consider the short and long term repercussions of this debt. In the short term, some of the previous bonded indebtedness is costing the city out of general revenue coffers. According to figures provided by the city, it's costing about $500,000 a year to pay off bonds that build the Jordan Valley Ice Park and another $500,000 a year to pay off bonds for the Jordan Valley Parking Garage. Meanwhile, though not downtown, the city will spend more than a million dollars out of general revenue this year to pay off bonds for the Partnership Industrial Center near the airport.

That's $2 million a year that's being spent out of general revenue on a gamble that once completed, economic development projects will produce enough revenue to help pay off their own debt. One can argue that a strong downtown core is worth more economic development potential to the city even if it costs some general revenue to make it happen. But that's a tougher and tougher argument to make as a tight city budget leads to hiring freezes and questions about raises.

At some point, there has to be a payoff to this gamble.

So where is it? That's what council members need to ask themselves before they vote.

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Not to mention that, once again, it seems that we have to spend more money to redesign the redesign of the redesign of the square.

You'd think at some point these morons would get it right.

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