Pages

Saturday, May 20, 2017

GO Bonds: Where is the line?

After the last post about Davidson Commissioners likely not putting funding of a new Town Hall and expanded public safety facilities on a GO bond, a long time reader asked a couple of questions.

1.  If the town could fund these things without a tax increase, why should it go to a GO bond vote?

2.  What's the threshold for spending before it should go to the citizens for a vote regardless of how it is funded?

To the first question, when Davidson already has the highest tax rate and solid waste fee compared to its neighbors by significant margins, just saying a major spending item won't require a further tax increase frankly is not good enough.

To the second question, as far as a set dollar amount before going to voters, one could say anything more than 75% of a year's general fund budget might be the line under normal circumstances for a relatively wealthy town like Davidson.  Some  people might go as high as 100%.  We here at aShortChronicle are big fans of small-d democracy whenever feasible, so setting the threshold lower feels better for a small town.  The target percentage might also change over time as the general fund budget grows and the percentage should definitely be lower for non-core services.  One would also have to consider the overall debt burden of the town.

Using that math, the new Town Hall with the necessary contingency would qualify for a vote by the numbers presented by the Creech/Stantec consulting team.

$9.189m + 30% contingency = $11.95m.  Next year's proposed general fund budget is $11m, so you are way over the proposed threshold regardless of whether or not you use the 75% or 100% of general fund percentage.

In the particular scenario before Davidson now, one has to factor in the $1.8m remodel of Town Hall for public safety needs as well.  This could and should be covered out of the town's excess reserves.  Public safety is a core service and should be covered automatically.  However, in this case it is linked to the new Town Hall piece of the project.  (Remodeling the existing Town Hall for public safety means the other staff does need a place to sit.)  To do both, the Board should either get the cost of the New Town Hall piece down to a lower level to not necessarily need a vote or reduce it enough to be confident it would pass with a majority of voters on a GO bond.

Incidentally, another reader who is very familiar with estimating construction projects told aShortChronicle today "letting the architect create the budget for a project is like Col. Sanders guarding the chickens. Two story Town Hall, 16,000 sf, $275/sf including furniture and contingencies. No piazza, no loggia, no Farmer's Market, no relocated playground, etc. $5 million."

If the town was in that ballpark we likely wouldn't even be having this conversation about a bond vote for it.

All that said, that would all be under normal circumstances, and Davidson (like it or not) is not really there due to Mi-Connection and other more recent decisions/plans.

The Board can ignore that reality if it wants, but the public won't.

The town's out of pocket real annual expense for Mi-Connection has dropped $300k over the past couple of years since they are no longer putting extra money aside for the added obligation to Mooresville under the two towns' current deal, but there has never been a serious word spoken about giving anything back to taxpayers.  There may have been legitimate public safety needs for that money and that's not really being questioned here.  However, it factors into the overall situation.

There is a growing trust problem with Town Hall among a significant portion of the citizens.  That's evidenced by the significantly dropping scores in the governing section of the recent National Citizen Survey.

Overall direction down 26 pts.
Confidence in town govt down 15 pts
Acting in best interest of town down 18pts
Being honest down 13 pts
Treating all residents equally down 11 pts

1 in 4 rate Davidson's direction "poor".

Even if those categories overall are still positive, the direction is not.  Furthermore, that change in direction has happened on this Board's watch pretty much entirely due to their own actions.

If official Towndom is concerned citizens might not pass a bond for something truly important, that official Towndom has nobody but itself to blame.

No comments:

Post a Comment