Anything as complex as the sale of Indianapolis' water and sewer utilities will garner mixed reactions. Not exactly a shocking statement. So, here is my take on several aspects of the deal as it is pending before the Indianapolis-Marion County City-County Council in the form of Prop 197 (see here for supporting documents and here for background documents). By the way, the Utility Transfer Oversight Committee of the Council is scheduled to meet again on July 19 - presumably in the Public Assembly Room, where they will again take public comments. That meeting will begin at 5:30 pm.
The basic outline of the deal is that the City of Indianapolis is transferring the water utility it owns to Citizens Energy for no cash, just the assumption of existing debt, and, it is selling the sewer utility it owns to Citizens Energy for $262.6 million in cash and the assumption of existing debt. Clearly, the sewer utility is the cash cow in this situation.
There have been some key players in crafting the sale, notably Chris Cotterill, the Mayor's Chief of Staff, and Dave Sherman, head of DPW, who I find to be genuinely interested in listening to ideas that can make this deal better in pretty much any aspect, except the core idea of the sale itself and the use of the proceeds for primarily infrastructure improvements. I am pleased to find this sort of openness in government, and I wish there were more folks like them. Now, that doesn't mean I think others who are involved give a hoot what the public thinks or how to improve the deal. Certainly there are some who are only looking to prod the deal in any direction that will send money to companies and outfits with which they are associated. And also certainly, there are those who are only motivated by the resulting humongous slush fund for Republican candidates for Mayor and Council in 2011.
Among the tinkered edges improved by public input, is the inclusion in the sales documents, of a prohibition on Citizens Energy ever selling these two utilities to a for-profit company. Additionally, a strong part of the deal is the first right of refusal if Citizens ever sells the water and sewer utility to a not-for-profit company or entity. Access to properties that is now enjoyed by the public, such as to Geist Reservoir, is to be preserved as well - although perhaps not to the full extent some members of the public would prefer.
Strong arguments that I have heard put forth, that have failed to materialize in the final documents, are water quality standards beyond baseline standards set by the EPA, any oversight on water quality or quantity by local authorities, or any instances of gross negligence under which the City would be able to take back these utilities without the consent of Citizens Energy. One I feel especially fervently about, and which will not see the dark of ink, is a dedication of the money to infrastructure improvements - making legal and binding, all the promises that are being made to the public in order to 'sell the sale'.
Now lets talk about the forbotten topic - should the City sell these utilities? Much is made of the nearly $1 billion in debt owed by the City for the water utility. Many believe that this utility is not managed and operated nearly as well as it should be. This is used to promote a sale. Also used to promote a sale, is some desire to remove 'partisan political governance'. Personally, I don't find any of these issues compelling. The debt is huge - but the ratepayers will still be on the hook for repaying it, regardless of who owns title to the utility. The sales agreement calls for Citizens Energy to honor the existing operating contract with Veolia that are now obligations of the City - so again no change. And lastly, one person's 'partisan political governance' is another person's 'accountability'. You say potato, I say potato. We move the water and sewer utility from services contracted by the City of Indianapolis and its elected officials, to services contracted by Citizens Energy with its self-perpetuating Board accountable to nobody else - not even shareholders.
Nobody talks about mismanagement or onerous debt encumbered by the sewer utility. By all accounts, the City has done a pretty fair, and lately a darned good, job of owning and running the wastewater system. It is under a consent decree with the EPA to make about $2.5 billion worth of improvements to keep sewage from overflowing into our rivers and streams every time it rains (Combined Sewer Overflow remediation). This represents a reduction of $1 billion from an earlier arrangement with the EPA. Everyone I know attributes this reduction in projected cost to the stewardship of Dave Sherman as head of DPW.
It is this reduction in projected cost for CSO remediation that gets garbled up in all the numbers - and I think this garbling is deliberate and unfortunate. The City's PR team wants to sell the public on the idea that Citizens Energy can pay the City $262.6 million in cash for the sewer utility and still keep rates lower than they would have been prior to the $1 billion reduction in projected cost of remediating the CSO problem. I think it is more fulsome to say that the $1 billion in reduction in the projected cost of remediating the CSO problem is fantastic - thank you Dave Sherman. But, the fact that Citizens Energy will have to float a 30 year bond to raise the cash to pay the City, will cause sewer rates to go up in order to repay the principle and interest on the bonds.
This is where the folks who support a simple transfer have a very good point. But, the water company 'sale' pretty much IS a simple transfer of that utility from the City to Citizens Energy. And all the poor management and onerous debt sound like supportive arguments making a case for the transfer. It is the sewer utility sale that is not a transfer, and without any real compelling arguments for the sale - except there is cash to be pulled out of the sewers that will result in higher than absolutely necessary rates for sewer customers. Make no mistake about it, the value of the sewer utility is not in any hard equity built into that system, but is totally contingent upon the fact that Dave Sherman brought projected rates lower than they would have otherwise gone, and the illusion that we somehow can spend that difference like it was equity.
So, now we're on to the topic of cash being obtained from the sewer utility. Just last month the City-County Council approved an increased PILOT from the sewer utility, most of which would be used to secure a 30 year bond to bring roughly $140 million immediately to the City for infrastructure improvements. I attended the Council committee hearing on this matter and something that Councillor Brian Mahern said still rings in my ears. He called it 'monetizing the PILOT payments'. Only, its 'monetizing money'. What they did was to basically take out a loan for $140 million, to spend over the next 2-4 years, and repay more than twice that amount when interest and fees are calculated -- when they could get the same $140 million from the PILOT payments in less than 10 years and have over 20 years of gravy after that. This leads me directly to the conclusion that a major purpose of generating this money is to fund the re-election campaign of Greg Ballard and Republican members of the Council. Otherwise, why be so impatient? Remember, the sewer ratepayers will be paying for 30 years to make infrastructure improvements that will last 10-15 years (and some say even fewer years than that). Why be impatient for the money?
This is the same situation that sewer ratepayers will face when Citizens Energy floats a 30 year bond for the $262.6 million sales price. That $262.6 million may be spent by the City on infrastructure improvements that last 10 -15 years -- but the rates will be elevated for 30 years to repay that money plus interest and fees.
Ratepayers will pay back at least twice the principle of both bonds, and easily more, when interest and fees are considered. So, $800 million to be paid by ratepayers over 30 years for street repairs costing $400 million that will last half that time. This money also eats up any rate savings that Dave Sherman's CSO remediation plan affords the community. Its not savings if you spend it. It is just an expense column adjustment.
On top of all this, there is no guarantee the money will be spent on infrastructure improvements. It is my understanding that the Mayor's office was willing to look at how to dedicate the proceeds of the PILOT and the sewer utility sale, but the Council blocked it. That's not good, in my book. If a Councillor is knee deep in 'selling the sale', then they have an obligation to ink down the promises being made - to protect the community from a bait and switch deal.
This deal is awash in politics - even as anti-politics is said to be a motive for selling the water and sewer utilities. This deal is clearly bad financing (monetizing money) - even as it is being touted as 'clever' financing. And, this deal will leave the sewer ratepayer with around $800,000,000 to pay off, long after the streets that do get repaved are crumbling once again.
I like very much the fact that at least some in City government have been honestly listening to the public. I'm not sure if I could be in favor if the deal was a straight transfer of the water utility only - but quite possibly. But, floating 30 year bonds for $400 million, to be spent on promised infrastructure improvements that will last half that time and leave the ratepayer on the hook for $800 million, strikes me as a generational ponzi scheme that is fiscally irresponsible.
Showing posts with label citizens energy. Show all posts
Showing posts with label citizens energy. Show all posts
Thursday, July 15, 2010
Tuesday, July 6, 2010
Two Council Committees Meet Tonight
The Indianapolis-Marion County City-County Council has two committees with meetings tonight, both scheduled for room 260 of the City-County Building.
First, at 5:30 pm, the Rules Committee has two items on its agenda - Prop 183 which would put the authority of the Board of Waterworks into the Board of Public Works (and which is likely a moot point since the BofW already supported the sale of the water company to Citizens Energy) -- and -- Prop 196, which is a Council resolution sponsored by Councillor Evans to limit contracts and attendance at conferences in Arizona until that state suspends or repeals its new immigration law.
Then at 6:00 pm, the newly formed Utility Transfer Oversight Committee will be meeting to discuss Prop 197, which authorizes the sale of the sewer and water utilities to Citizens Energy. The City and Council have posted a bunch of information regarding Prop 197:
Exhibit A (19 pages) -- roughly, creates a new Authority to oversee the sewer utility, which would be controlled by Citizens Energy upon the sale of that utility. Interestingly enough, and importantly enough, this document seeks to bar the future sale of the sewer utility to a for-profit entity. This is what the paragraph under "Purpose" says:
Exhibit B (84 pages) entitled "Asset Purchase Agreement" -- roughly, is the sales agreement for the sewer utility. A quick perusal finds that the agreement would
-- prohibit the future sale of the sewer utility to a for-profit entity and as an additional safeguard, a grant of the right of first refusal for repurchase of this utility by the City-County (two thumbs up !!)
-- allow NO MORE THAN a 10.75% annual rate hike through 2013 - which through reference much later in the document appears to be the rate hike request now under review by the Indiana Utility Regulatory Commission
-- an agreement that Citizens Energy will not seek to have the sewer utility placed under the property tax system and thereby jeopardize the PILOT just passed by the Council that I discussed in "City-County Council Should Vote Down Prop 132" and which I will bring up again in another post
-- all for the assumption of debt and a cash payment of $262,600,000
Exhibit C (78 pages) also titled "Asset Purchase Agreement" -- roughly, is the sales agreement for the water utility
-- prohibit the future sale of "Geist Reservoir, Morse Reservoir, the Canal,the South Well Fields, and any other wells or current water sources to the extent such wells or water sources are critical to providing water to the trust beneficiaries" (excellent provision)
--prohibit the future sale of the sewer utility to a for-profit entity and as an additional safeguard, a grant of the right of first refusal for repurchase of this utility by the City-County (two more thumbs up !!)
-- a rate freeze for at least 2 years (until right AFTER the next Mayoral race - coincidence??)
-- the sale is contingent upon the results of the rate hike now before the IURC being "acceptable" (as I understand it from another meeting, it must be acceptable to Citizens Energy or they will not go through with the purchase) and the sale shall not be consummated prior to 6 months after the new rates take affect
-- all for the assumption of debt alone
Supporting document A (7 pages) -- titled "Articles of Incorporation of CWA Authority, Inc.", which is the authority created to assume the assets of the sewer utility and to be run by Citizens Energy
Supporting document B (119 pages) -- the Consent Decree for the remediation of the CSO problem, dated 9-20-06
Supporting document C (75 pages) -- sales disclosure for the sewer utility
Supporting document D (27 pages) -- amendment to the Consent Decree dated June 3, 2010
Supporting document E (1 page) -- a map of the excluded assets of the Belmont treatment plant
Supporting document F (68 pages) -- sales disclosure for the water utility
Supporting document G (31 pages) -- appears to be the 2010 Capital Improvement Plan for the water utility
Supporting document H (1 page) -- map titled "Current System Configuration" showing the location of various features of the water utility with Council Districts overlaid. The south wellfield seems to have been omitted on the map to these eyes.
Supporting document I (1 page) -- flow chart of Veolia's proposed water utility capital improvements, dated 10-17-2008
WHEW !!!!
The Utility Transfer committee members are: Republicans Ryan Vaughn, Marilyn Pfisterer, Bob Lutz, Barbara Malone, Angel Rivera, and Mikes Speedy, and Democrats Joanne Sanders, Paul Bateman, Maggie Lewis, Brian Mahern, and Angela Mansfield.
This committee is set to meet again on July 19 at 5:30 pm in room 260 of the City-County Building.
First, at 5:30 pm, the Rules Committee has two items on its agenda - Prop 183 which would put the authority of the Board of Waterworks into the Board of Public Works (and which is likely a moot point since the BofW already supported the sale of the water company to Citizens Energy) -- and -- Prop 196, which is a Council resolution sponsored by Councillor Evans to limit contracts and attendance at conferences in Arizona until that state suspends or repeals its new immigration law.
Then at 6:00 pm, the newly formed Utility Transfer Oversight Committee will be meeting to discuss Prop 197, which authorizes the sale of the sewer and water utilities to Citizens Energy. The City and Council have posted a bunch of information regarding Prop 197:
Exhibit A (19 pages) -- roughly, creates a new Authority to oversee the sewer utility, which would be controlled by Citizens Energy upon the sale of that utility. Interestingly enough, and importantly enough, this document seeks to bar the future sale of the sewer utility to a for-profit entity. This is what the paragraph under "Purpose" says:
In addition to the purposes set forth above, this Agreement provides for (a) the provision of wastewater collection and treatment services through the formation of the Authority as a separate legal entity organized as a nonprofit corporation, (b) the transfer to the Authority of the System as specified in the Purchase Agreement, (c) the delegation and/or transfer to, and vesting in, the Authority of all powers that are necessary, useful or appropriate, except the taxing power and taxing authority of the City and the District, (i) for the acquisition, ownership and operation of the System and/or (ii) for the Authority to have jurisdiction over disposal of sewage, industrial wastes or other wastes and qualifying as a publicly owned pretreatment works within the meaning of the Clean Water Act, in each case, except the taxing power and taxing authority of the City and the District, and (d) the exercise by the Authority of the powers delegated and/or transferred to it herein on behalf of the City, the District and Citizens for the benefit of the inhabitants of the City and the customers of the System in a manner that (x) protects the City and its inhabitants against further sale or disposition of the System, and forever from private ownership, control or partisan political governance; and (y) is coordinated with other utility properties that may be held, owned and/or operated by the Citizens or its affiliates (including the Authority) and (z) is irrevocable.
Exhibit B (84 pages) entitled "Asset Purchase Agreement" -- roughly, is the sales agreement for the sewer utility. A quick perusal finds that the agreement would
-- prohibit the future sale of the sewer utility to a for-profit entity and as an additional safeguard, a grant of the right of first refusal for repurchase of this utility by the City-County (two thumbs up !!)
-- allow NO MORE THAN a 10.75% annual rate hike through 2013 - which through reference much later in the document appears to be the rate hike request now under review by the Indiana Utility Regulatory Commission
-- an agreement that Citizens Energy will not seek to have the sewer utility placed under the property tax system and thereby jeopardize the PILOT just passed by the Council that I discussed in "City-County Council Should Vote Down Prop 132" and which I will bring up again in another post
-- all for the assumption of debt and a cash payment of $262,600,000
Exhibit C (78 pages) also titled "Asset Purchase Agreement" -- roughly, is the sales agreement for the water utility
-- prohibit the future sale of "Geist Reservoir, Morse Reservoir, the Canal,the South Well Fields, and any other wells or current water sources to the extent such wells or water sources are critical to providing water to the trust beneficiaries" (excellent provision)
--prohibit the future sale of the sewer utility to a for-profit entity and as an additional safeguard, a grant of the right of first refusal for repurchase of this utility by the City-County (two more thumbs up !!)
-- a rate freeze for at least 2 years (until right AFTER the next Mayoral race - coincidence??)
-- the sale is contingent upon the results of the rate hike now before the IURC being "acceptable" (as I understand it from another meeting, it must be acceptable to Citizens Energy or they will not go through with the purchase) and the sale shall not be consummated prior to 6 months after the new rates take affect
-- all for the assumption of debt alone
Supporting document A (7 pages) -- titled "Articles of Incorporation of CWA Authority, Inc.", which is the authority created to assume the assets of the sewer utility and to be run by Citizens Energy
Supporting document B (119 pages) -- the Consent Decree for the remediation of the CSO problem, dated 9-20-06
Supporting document C (75 pages) -- sales disclosure for the sewer utility
Supporting document D (27 pages) -- amendment to the Consent Decree dated June 3, 2010
Supporting document E (1 page) -- a map of the excluded assets of the Belmont treatment plant
Supporting document F (68 pages) -- sales disclosure for the water utility
Supporting document G (31 pages) -- appears to be the 2010 Capital Improvement Plan for the water utility
Supporting document H (1 page) -- map titled "Current System Configuration" showing the location of various features of the water utility with Council Districts overlaid. The south wellfield seems to have been omitted on the map to these eyes.
Supporting document I (1 page) -- flow chart of Veolia's proposed water utility capital improvements, dated 10-17-2008
WHEW !!!!
The Utility Transfer committee members are: Republicans Ryan Vaughn, Marilyn Pfisterer, Bob Lutz, Barbara Malone, Angel Rivera, and Mikes Speedy, and Democrats Joanne Sanders, Paul Bateman, Maggie Lewis, Brian Mahern, and Angela Mansfield.
This committee is set to meet again on July 19 at 5:30 pm in room 260 of the City-County Building.
Sunday, May 16, 2010
City-County Council Should Vote Down Prop 132
Monday night the Indianapolis-Marion County City-County Council will decide the fate of Proposal 132, which authorizes an increase in the sewer utility PILOT (Payment in Lieu of Taxes), authorizes issuance of a $170 million bond to be repaid with these PILOT payments over 30 years, and appropriates the bond proceeds to be spent on projects approved by the Public Works Board.
Whether one is in favor of generating money for infrastructure needs through increase utility rates - whether one is in favor of selling the City's water and sewer utility - extreme caution should accompany any consideration of passage of this Proposal as it does a disservice to the long term interests of the City's taxpayers, ratepayers, and myriad property taxing units.
Let's start with the PILOT itself. I learned just two days ago, at a meeting set up by Councillor Christine Scales between local bloggers and representatives of Citizens Energy, that Citizens Energy pays property taxes. It does so for the property assets of its current utilities, and would do so for the water utility, should they take ownership of that utility. But, the PILOT envisioned in Prop 132 will be substituted for any property tax liability Citizens Energy would have regarding the sewer utility, should they take ownership of it.
A number of questions immediately come to mind. I have scanned through the 'library' of information the Ballard Administration posted online on Friday, but didn't see the answers to these particular questions. (the library can be accessed at ftp://ftp.indygov.org/utilities/ -- the user name and password are both "public")
The questions are: by what statute does the City have the authority to replace the property tax liability of any organization and substitute a PILOT? How much would Citizens Energy have paid in property taxes over the next 30 years, should they take ownership of the sewer utility? How much revenue do the other property taxing units in Marion County stand to lose if the PILOT goes through and they do not get property tax revenue for the sewer utility?
The PILOTs I have heard of before now were assessed to organizations that normally do not pay property taxes; the airport and the CIB come to mind. The important difference between a PILOT and property taxes is that the City gets the entire PILOT amount, but property taxes are shared among all taxing units relevant to the property location. Usually, schools get about half, the City/County government nabs about one fifth to one fourth, the municipal corporations (Health & Hospitals, Library, and IndyGo) get about one tenth, and the Township Government gets the rest. So, should the City swap out property tax liability for a PILOT, which it is still unclear to me they have the authority to do, it takes money from Marion County schools, Townships, the library, IndyGo, and Health & Hospitals.
Chris Cotterill, Mayor Ballard's Chief of Staff, tells me that IC 36-3-2 and 8-1-11.1 exclude the sewer utility even if Citizens owns it. Hopefully the lawyers will hash this out more fully. But, what I see is that IC 36-3-2 begins with the premise that "That the tax base of the consolidated city and the county have been significantly eroded through the ownership of tangible property by separate municipal corporations and other public entities that operate as private enterprises yet are exempt or whose property is exempt from property taxation." Since Citizens Energy pays property taxes on its currently owned utilities and would do so if it were to own the water utility, it certainly seems like, at best, a huge loophole to forgive them property taxes on the sewer utility -- thereby getting ALL the tax money for the City and denying other taxing units their due.
Another problem with Prop 132 is that it envisions floating a bond that will take 30 years and cost $292.5 million to repay (see this report in the 'library'). From that money, only $135 million will be generated to spend on infrastructure projects (if indeed the money actually gets spent on such things and only such things). These projects do not have a useful life of 30 years - much less in fact. It is a pretty simply tenet, you don't get a loan for a longer term than the life of the article which you would purchase with the loan. So, the bottom line is that the sewer utility ratepayers would pay $135 million in principle and $157.5 million in interest and fees over 30 years for repairs and construction which will not last for 30 years.
If we went by the more prudent, pay as you go system, the PILOT would generate the $135 million by year 14 (2023) and the remaining years through 2039 would see it generate over $280 million.
The final critical problem with Prop 132 is that the funds generated are not dedicated to the projects which have been promised. Section 29 of the Proposal states clearly: "All PILOT received by the City shall be deposited in the consolidated county fund and used for any purpose that the consolidated county fund may be used." So, the money can be re-appropriated and used for pretty much anything. In addition the PILOT is anticipated to generate about $123 million MORE over 30 years than is needed to repay the bonds. Yes, I'm sure the City could find many things to spend this money on. But Mayor Ballard continues to promise infrastructure improvements and the administration and the Council should be making sure that all of the proceeds of this deal are dedicated to fulfill their promises. And if they do not dedidate the funds, then there is no taxpayer or ratepayer in Marion County who should believe the promises. As the saying goes, they won't be worth the paper they aren't written on.
There are several BIG problems with Prop 132 - swapping a PILOT for property taxes denies other taxing units their due revenue, paying on what is basically a loan over 30 years for things whose tangible life is far less than 30 years, having ratepayers pay more for interest and fees than for promised projects, and not backing up the promises by dedicating the money for the promised projects in writing. All of these should lead to a Council vote against Prop 132.
Whether one is in favor of generating money for infrastructure needs through increase utility rates - whether one is in favor of selling the City's water and sewer utility - extreme caution should accompany any consideration of passage of this Proposal as it does a disservice to the long term interests of the City's taxpayers, ratepayers, and myriad property taxing units.
Let's start with the PILOT itself. I learned just two days ago, at a meeting set up by Councillor Christine Scales between local bloggers and representatives of Citizens Energy, that Citizens Energy pays property taxes. It does so for the property assets of its current utilities, and would do so for the water utility, should they take ownership of that utility. But, the PILOT envisioned in Prop 132 will be substituted for any property tax liability Citizens Energy would have regarding the sewer utility, should they take ownership of it.
A number of questions immediately come to mind. I have scanned through the 'library' of information the Ballard Administration posted online on Friday, but didn't see the answers to these particular questions. (the library can be accessed at ftp://ftp.indygov.org/utilities/ -- the user name and password are both "public")
The questions are: by what statute does the City have the authority to replace the property tax liability of any organization and substitute a PILOT? How much would Citizens Energy have paid in property taxes over the next 30 years, should they take ownership of the sewer utility? How much revenue do the other property taxing units in Marion County stand to lose if the PILOT goes through and they do not get property tax revenue for the sewer utility?
The PILOTs I have heard of before now were assessed to organizations that normally do not pay property taxes; the airport and the CIB come to mind. The important difference between a PILOT and property taxes is that the City gets the entire PILOT amount, but property taxes are shared among all taxing units relevant to the property location. Usually, schools get about half, the City/County government nabs about one fifth to one fourth, the municipal corporations (Health & Hospitals, Library, and IndyGo) get about one tenth, and the Township Government gets the rest. So, should the City swap out property tax liability for a PILOT, which it is still unclear to me they have the authority to do, it takes money from Marion County schools, Townships, the library, IndyGo, and Health & Hospitals.
Chris Cotterill, Mayor Ballard's Chief of Staff, tells me that IC 36-3-2 and 8-1-11.1 exclude the sewer utility even if Citizens owns it. Hopefully the lawyers will hash this out more fully. But, what I see is that IC 36-3-2 begins with the premise that "That the tax base of the consolidated city and the county have been significantly eroded through the ownership of tangible property by separate municipal corporations and other public entities that operate as private enterprises yet are exempt or whose property is exempt from property taxation." Since Citizens Energy pays property taxes on its currently owned utilities and would do so if it were to own the water utility, it certainly seems like, at best, a huge loophole to forgive them property taxes on the sewer utility -- thereby getting ALL the tax money for the City and denying other taxing units their due.
Another problem with Prop 132 is that it envisions floating a bond that will take 30 years and cost $292.5 million to repay (see this report in the 'library'). From that money, only $135 million will be generated to spend on infrastructure projects (if indeed the money actually gets spent on such things and only such things). These projects do not have a useful life of 30 years - much less in fact. It is a pretty simply tenet, you don't get a loan for a longer term than the life of the article which you would purchase with the loan. So, the bottom line is that the sewer utility ratepayers would pay $135 million in principle and $157.5 million in interest and fees over 30 years for repairs and construction which will not last for 30 years.
If we went by the more prudent, pay as you go system, the PILOT would generate the $135 million by year 14 (2023) and the remaining years through 2039 would see it generate over $280 million.
The final critical problem with Prop 132 is that the funds generated are not dedicated to the projects which have been promised. Section 29 of the Proposal states clearly: "All PILOT received by the City shall be deposited in the consolidated county fund and used for any purpose that the consolidated county fund may be used." So, the money can be re-appropriated and used for pretty much anything. In addition the PILOT is anticipated to generate about $123 million MORE over 30 years than is needed to repay the bonds. Yes, I'm sure the City could find many things to spend this money on. But Mayor Ballard continues to promise infrastructure improvements and the administration and the Council should be making sure that all of the proceeds of this deal are dedicated to fulfill their promises. And if they do not dedidate the funds, then there is no taxpayer or ratepayer in Marion County who should believe the promises. As the saying goes, they won't be worth the paper they aren't written on.
There are several BIG problems with Prop 132 - swapping a PILOT for property taxes denies other taxing units their due revenue, paying on what is basically a loan over 30 years for things whose tangible life is far less than 30 years, having ratepayers pay more for interest and fees than for promised projects, and not backing up the promises by dedicating the money for the promised projects in writing. All of these should lead to a Council vote against Prop 132.
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