Editor's Note: The following blog post was submitted as an "open letter to Roswell City Councilman Rich Dippolito."
The most surprising revelation to come out of Roswell’s budget process this year is not what you read about in the local print media, instead it is the fact that $6.6 million dollars has been “socked away” into a previously unknown escrow account to pay off a general obligation bond ahead of schedule.
I would simply like Councilman [Rich] Dippolito, who is the Roswell City Council liaison with the Administration & Finance Department, to inform property owners where this astronomical amount of money came from and over what period of time it has grown to this number?
The following is an excerpt from the FY 2013 Budget (which can be found on page 253 under “Debt Service Fund”):
Following are the estimated principal and interest requirements on the City's outstanding general obligation bonds and the previously issued outstanding general obligation bonds of the City for the fiscal years ending June 30, 2012 and thereafter.
Principal Interest Total
2013 $6,143,213 $436,425 $6,579,638
2014 $0 $140,175 $140,175
As the reader can see there is absolutely NO principle payment due on any debt next fiscal year. None, Zero, Nada!
And when questioned about the “Zero” in the debt service principle payment in 2014, Mrs. Kay Love, the Roswell City Administrator explained that excess revenues had been placed in an escrow account. She has stated that the amount of the defeasance on the Series 2002 Bonds is $6,665,730. That means unbeknownst to property owners, the City actually has this money in the bank to pay off the 2002 bond next fiscal year.
Now bond payments are routinely scheduled based on a very rigid timetable and are financed by a general obligation property tax millage rate that will generate the required revenues for the specific life of the loan. For example, it is already well known that the proposed $24 million bond referendum, which will appear on November’s ballot, will require an annual payment of $2.4 million for 30 years.
Councilman Dippolito, the next logical question has to be: was the additional $6.6 million generated with the existing debt service millage rate, as Mrs. Love has stated, actually been the result of an inflated tax rate?
Have property owners been over-taxed and for how long?
And if these excess monies were the result of a long-term gain, why wasn’t the rate adjusted to be revenue neutral, especially, during a period of declining real estate values?
Councilman Dippolito, you were present when I directly asked Mayor [Jere] Wood during the final reading of his budget if he was going to reduce or eliminate the debt service millage rate next year in light of the fact that there is no revenue requirements to pay down any principle due on any general obligation bond next fiscal year.
Mayor Wood refused to respond to my question. Do you agree that the Mayor’s lack of response is indicative that he has no intention of reducing property taxes?
Isn’t it true that Mayor Wood’s long-term intentions are to eventually rollover this apparently inflated general obligation debt service millage rate into the General Operations & Maintenance Fund to subsidize the City's day to day operations?
Wasn’t this precisely what your Budget & Finance Director, Keith Lee proposed last January with his initial FY 2013 Proforma presentation?
Or could it be that the Mayor & Council’s intention are to maintain the existing general obligation debt service rate for the next two years to generate excess revenues over and above the small amount due on the series 2008 bond in the fall of 2015?
Sir, don’t you believe that your constituents who are property owners have a right to know that either way the City will generate over $6.3 million annually in excess revenues?
So please explain why there is any need for the proposed $24 million bond referendum this November.
I am sorry, but with this FY2013 budget the Wood administration has conveniently decided to postpone the inevitable property tax millage rate increase until after the November bond referendum and will likely have to advertise a significant rate increase this time next year as is required by state law.