[MissoulaGov] On SIDs

[Jed Taylor]

Reading the discussion on SIDs has been interesting.  Here are some thoughts
I have on them.
 
SIDs seem to really go to the question of what is the City of Missoula.  If
the city is a single entity in which its residents share the expense of its
maintenance and improvement regardless of any individual neighborhood's
relative ability to contribute to the pot, and maintenance and improvement
is provided on the basis of need regardless of that same relative ability,
then SIDs in general seem to be about the last way projects should be paid
for.  People get the city they're willing to pay for, and it's up to those
who feel more money is needed to convince a majority that taxes need to be
raised, not necessarily so their own street is nicer, but so the city in
general is.
 
OTOH, if Missoula is really a confederation of neighborhoods where basic
services such as the police are paid for based on a city-wide basis, but
more localized projects such as rebuilding a park or putting in street
lights are undertaken only when enough residents of a neighborhood can force
everyone in that neighborhood to participate in a SID, then SIDs seem a
perfectly rational way of financing things.  It's not the model I prefer,
because it seems that this would tend to Balkanize the city, but it would
have the benefit of keeping the fundamental tax rate lower than the
alternative and letting specific areas decide what they want and what they
can live without (although living without is often not much of a choice, but
rather a necessity).
 
In either case, I do think it would be a good thing strategically for the
council to state which model they think is appropriate so Missoula residents
know where its government is coming from and so individual project decisions
don't seem ad hoc.
 
There's never going to be a perfect time or method to transition from SIDs
to city-wide funding.  Anyone who's already participated in a SID has
already decided how they're going to pay for it, even if they haven't cut
the check yet.  Should the council decide to stop using 'mandatory' SIDs (as
opposed to using the mechanism to help a group voluntarily donate something
like a park rebuild to the city), I would suggest that the council should
adopt a 'that-was-then, this-is-now' approach, declare a new strategic
vision, and say something along the lines of, "Starting in 2010, we 're one
city and everyone in the city is going to help each other pay for what's
needed.  Therefore, we're no longer going to use mandatory SIDs as a way of
paying for projects."
 
Concerning sidewalks, it seems that the city could make them the
responsibility of each property owner to maintain his to a minimum standard,
much as it does requiring a property owner to keep his sidewalk clear of
snow and ice.  If a property owner wants to tear his up once a year and lay
a new one down, let him.  If his sidewalk falls below minimum standards,
order it repaired or have the city do it and bill him.  And if he doesn't
have a sidewalk, then the city pays for putting one in and he enjoys the
increase in property value while also acquiring the responsibility to
maintain it.
 
Regarding letting a property owner defer his SID payment until the sale of
his property, is the city charging interest on what amounts to a loan?  What
happens if there isn't enough money from the proceeds of the sale to pay
what he owes?
 
The cost of financing of the recent park rebuild SID seems to point to
marked benefits that could be made available to city residents if the city
created something along the lines of a municipal credit union to help them
finance local governmentally imposed financial obligations.  From what I
heard from the committee meeting during which the financing of this park
rebuild was discussed, only ~$250k of the cost is going to outside
contractors, who obviously won't want to wait to get paid.  Another ~$250k
is actually budgeted items being provided by the city, such as the use of a
dump truck, that are being billed to the SID as if the SID is renting them
from the city (and that's as it should be given the financial design of this
project).  Surely, the city doesn't need to paid right away for these items
- it's paying for the dump truck regardless.  Therefore, this project is
incurring ~$65k of legal and underwriting fees to produce ~$250k of revenue
that's needed decently soon.  Maybe this is indeed the absolutely only way
to finance this project, and maybe the SID members find this ratio of fees
to revenue acceptable in order to get the park rebuilt, but these kind of
numbers suggest that there's a very strong need to put in place a program
for the future that makes it possible to cover the cash flow before SID
income is available without spending money on lawyers and underwriters.
 
BTW - am I correct in assuming that the members of this SID are, in effect,
donating this park rebuild to the city?
 
Finally, because parks are really something for everyone, both within and
without the city, to enjoy, and because there's quite a business function
aspect to running the park system, it seems to me that a separate Missoula
Park District would be something well worth consideration.  This District
could be, by design, larger than the city itself, and since it would be a
separate taxing district, people could more readily determine how much
they're will to pay for their Park District and whether they're getting what
they're paying for.
 
 
 


  _____  

"Be the change you want to see in the world." - Mahatma Gandhi 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://www.cmslists.com/pipermail/missoulagov/attachments/20090215/853520e8/attachment.htm>