OPINION: Piedmont to Raise Tens of Millions of Dollars for City Projects?
What are Piedmont’s priorities? Schools, Community Pool, or other items?
Surveys on the way?
Resolution No. 21-2020 from the April 20, 2020 Piedmont City Council meeting directed the Budget Advisory and Financial Planning Committee (BAFPC) to “complete a comprehensive examination of potential funding mechanisms for city renovation projects,” which on its May 7, 2020 agenda, the BAFPC defined as a “Discussion of Potential Financing Options for Improvement of City Facilities.”
Which is it – funding mechanisms or finance options?
While this may seem like semantics to some, the method matters. A funding mechanism can be any number of things – reallocation of city funds, grants applications, public-private partnerships – while financing means one thing – bonds and new taxes to pay for them. The BAFPC is looking only at bonds and a new 0.15% tax to raise anywhere from $30 to $70M for new projects over the next 30 years.
That’s too bad because the city has several other tools at its disposal to come up with creative, long term funding mechanisms to pay for these improvements – a pension fund surplus of over $12M, an expiring sewer replacement program and well over $10M in other funds to re-allocate to other improvements. That would take some creative thinking on the part of BAFPC, but as the committee is progressing to have its recommendation to the City Council in time for the November 2020 ballot, that thinking is likely not going to happen. But before it makes bond recommendations, BAFPC has recommended the City talk with the School District to coordinate taxation on City residents.
BAFPC rightly asked what additional debt does the School District need to take on in the near term to address other school needs. As of May 7, those discussions between the City and the District appeared not to have happened and really should in light of the Governor’s recent proposed cuts to education. The School District’s long-term financial projections are much more dire than those of the City.
And what will be built? Council says “renovation”, BAFPC says “improvement.” Same thing? Maybe, but take a look at the pool for example. The City had a pretty good Community Pool lo these many years, the only problem being scheduling between lap swimmers and the high school and competitive swim teams. Now the city is proposing an Aquatics Center with accommodations for these two groups, at a much greater cost to build and operate.
The squeaky wheel gets the oil, but is it too much to ask that the pool improvement be a 50/50 public/private partnership? That’s not a question that BAFPC can answer, but for Council and the community to answer.
Council directed staff to hire a consultant to conduct outreach and education in Piedmont on the renovation projects and options for paying for them, so be on the lookout for computer and phone surveys. Get your 2 cents in now, because the “back of the envelope” cost for this bond initiative is $1000/household.
Zoom into the BAFPC meeting 7 p.m. Thursday, 5/21 to learn more.
Garrett Keating, Former Council Member
The Sewer Tax brings in $2.5M annually to the Sewer Fund. Piedmont has 80% of its mainline completed and is minimally eight years ahead of any legal mandate to complete. Because of the extensive rehabilitation of the sewer system, expensive emergency costs have been sharply reduced. The previous five phases of the sewer rehabilitation were done under low interest State loans (less than 2%) and in our near zero interest rate environment the low cost of completion will likely be reduced further.
The City can fund other projects by ceasing the Sewer Tax and floating a bond measure with the same approximate cost to households. Piedmont residents are already burdened with one of the highest local tax costs in the State and the Piedmont School Tax dwarfs all others.