Davenport and Company provided a financial analysis of the city’s new debt. The study is to put in perspective the effect of this new debt on the City’s current financial policies, as well as provide additional information in support of the recommended revisions to such policies.
If our bond rating is downgraded, where will we possibly get an additional $9.3 Million? “The AA Rating could cause an increase of approximately $9.3 million in total debt service.”
Why on earth did they approve all that debt?
Voters approved it overwhelmingly. They were more focused on the World class architecture, “the vision”, etc. and just accepted the financial numbers put out by the City Council/School Board without question. When the City Council voted to approve the referendum vote, the members themselves did not have a clear understanding of the financial implications of what they were doing despite the attempts of some of us to highlight the many risks and questionable assumptions involved. As stated by our Vice Mayor Connolly, they just made “a leap of faith”.
It appears that the leap of faith is more like a leap of even more debt. Where is the leadership from the City Manager and the CFO? Why wasn’t this listed as one of the many risks?
Tax rates will go up yet again. The city will also be aggressive in assessing your home – above the fair market value as they did with mine. Don’t forget that the schools and school board promised to “tighten their belts’ yet asked for almost 3% increase. Spend and tax mentality.
It’s a good thing the economy is doing well right now.
That statement “a leap of faith” is enough to tell me that an elected official is gambling with the future who lacks confidence in the amount of risk being assumed. That statement wins the award for statement of the year from a city official. It is not a gamble I am going to take with my finances and future. I am on a fixed income and no longer have children in the school system or need Metro to travel back and forth to work. With a 4 cent increase in the tax rate just for the massive amount of new debt, coupled with what will be likely another 2 to 3 cent increase for schools and other expenses, in addition to an increase in my assessment, I am not about to take my own personal “leap of faith” and remain a homeowner.
I’m with you, Dale, but moving expenses are high….commissions, movers, fixing up the house, etc. I think that is what the city is banking on. Plus, the housing prices are high in other jurisdictions (but taxes are lower).
We should all be worried about how this affects the sales of homes. Now that the tax deduction is decreased and the tax rate has increased, we have to wait a bit to see how it affects house prices. Some people may opt to stay, even if they don’t really want to , because their mortgage deduction is grandfathered in. Not the case for new buyers.
There will be some indicators of the impact on FCC after the spring selling season.