[MissoulaGov] Park rebuild project

[Jim McGrath]

I'm sure others will weigh in on this, because it is a thorny question. In fact, curiously philosophical for city council work.

I think all council members grapple with the question (I know I did). What is the "fair" way to fund projects like this? I tended to lean toward community-wide, in part so that all parts of the community could afford infrastructure.

The fact is that would result in many fewer projects -- some years none because all the resources would go to maintaining existing crumbling infrastructure. The sources of community-wide funding are real estate taxes and gas tax. Both may be declining. Property taxes are constrained. These capital projects are very expensive, too. In the case of parks, you can't use gas tax. I pretty much oppose the idea of park districts, but the amount of money devoted to park maintenance and development is dismal. 

Plus there is history. The city has used the SID tool for many years. I know an elderly disabled fellow on the Northside who happened to have a corner house and was assessed a gigantic SID for curb and sidewalk. It presented a huge hardship and it is still in place. Are you interested in giving relief to past property owners who agreed by the petition process to have that assessment?

Given that we are doing SID's, the financing tool is only an option for the property owner. They can pay it or they can finance it themselves I suppose or they can take advantage of the city's financing. The amounts and timelines are such that the city can't "just pay for" and bank the neighbors. (There may be legal problems with that idea, too, I don't know). 

I don't have any answers for these questions. I do know all the approaches to it have minuses as well as pluses. 

-----Original Message-----
From: missoulagov-bounces at cmslists.com on behalf of Jed Taylor
Sent: Thu 2/5/2009 11:47 PM
To: missoulagov at cmslists.com
Subject: Re: [MissoulaGov] Park rebuild project
 
So the lawyers and underwriters are taking out ~$65,000, or ~10% of the
value of the actual project itself.
 
If I understand the financing of the project, a special taxing district (the
SID) has been created to access those properties who benefit from the
rebuilt park.  The owners of these properties (around 1,000) will be billed
to raise the money to pay back the bonds, which will also include interest
on top of the $750k of face value.  What's the final dollar amount that will
be collected?
 
Is it really necessary to borrow the money to handle the cash flow on this
project?  If the city simply covered the cash flow, it could wind up banking
some of the money flowing to the financing (and maybe specifically place it
in a parks improvement account) while reducing the per-property cost of the
project.
 
How long do property owners have to pay off their obligation?  If there's
really 1,000 properties, that's less than $1,000 / property.  An up-front
payment of $250 / property should be enough to get things moving, with the
balance due in reasonable amount of time.  I'll bet there's better things to
do with that $65k, even though it's the property owners that are paying it,
not the city itself.
 
Of course, this begs the question as to why the city is using a SID for
something that belongs to the entire city.  Shouldn't the entire city pitch
in when something needs built, even though any given project
disproportionately benefits a certain area?  Isn't that the whole concept of
having a city, as opposed to a collection of neighborhoods where some can
afford projects others can't?  Will those paying for this park be able to
keep those who didn't pay for it out?
 


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From: missoulagov-bounces at cmslists.com
[mailto:missoulagov-bounces at cmslists.com] On Behalf Of Bob Jaffe
Sent: Thursday, February 05, 2009 16:09
To: raoke at aol.com; missoulagov at cmslists.com
Subject: Re: [MissoulaGov] [BULK] (no subject)


It works out to about 15%. 6% is to the city. That is split 2% for the
finance department, 2% for engineering to do the cad work on property
identification. I don't remember who gets the other 2%.
The bond council, or lawyers who put together the bond sale docs get about
4.5% and the underwriters of the loan tack on another 4.5%.
 
Those numbers are not exact but it is something like that.

  _____  

From: missoulagov-bounces at cmslists.com on behalf of raoke at aol.com
Sent: Thu 2/5/2009 12:16 PM
To: missoulagov at cmslists.com
Subject: [BULK] [MissoulaGov] (no subject)


So,  who is it that gets the $108,000.00?


 Carole

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