On Nov. 6, the citizens of Roswell will be asked to approve a 10 year, $14.7 million dollar debt, in the form of a bond. But according to Roswell for Fiscal Responsibility (RFFR), Roswell City Government has been selective with the facts and has not been transparent with the voters of Roswell.
After comparing the information provided by Roswell City Government to the research conducted by RFFR, I have compiled of list of findings that I believe should be considered by the voters of Roswell on Election Day.
- The Project List is Not Binding
It may surprise voters to learn that the proposed project list, as advertised by Roswell City Government is not binding. This is a general obligation bond and as such, if the bond is approved then Roswell city government will have the authority to spend the money on any project of their choosing. Furthermore, there is no legal requirement for Roswell city government to spend the money on the advertised project list.
On Sunday, during a town hall meeting, a representative of the Roswell city government admitted that the project list was not binding and went on to explain that the Roswell City Government does not want to be "ham strung" by the advertised project list. I was very surprised and concerned to hear this statement.
2. The Project list is Filled with Wants and Not Needs
According to a statement made by one city council member, the project "list appears to be filled with wants and not needs." If this project list is filled with wants, then why does Roswell city government need us to borrow money to pay for it?
3. Why Spend City money on State Projects?
The anchor project of this bond is a $6 million dollar upgrade to the Holcomb Bridge/GA 400 interchange. However, Holcomb Bridge Rd and GA 400 are both state roads and as such, it is the responsibility of the state of GA and the Georgia Department of Transportation to pay for the maintenance and upgrade of these roads. So why, are we, the tax payers of Roswell being asked to use city tax dollars to pay for state projects?
Furthermore, in a recent statement made by Councilman Dippolito, the GA 400/Holcomb Bridge interchange has not even been approved by GDOT. So if GDOT has not approved the project, then why are the tax payers of Roswell being asked to borrow $6 million dollars so the city can pay for a state project that hasn't even been approved?
4. Without this Bond, Property Taxes Can be Lowered by 25.5 Percent
This may be the biggest skeleton in the closet for the bond issue and one that Roswell City Government has carefully avoided. You see, Roswell city government has repeatedly stated that "property tax rates will not be increased because of the proposed bonds." But according to Roswell for Fiscal Responsibility, that is simply not the whole story. According to the research conducted by RFFR, if this bond is defeated, then property taxes can actually be reduced by 25.5 percent.
Now a 25.5 percent reduction in property taxes is a pretty big number, so let's talk about how they came up with that number. Under the existing property tax rate, for every $1 dollar that we pay in property taxes, Roswell city government uses $0.25 cents (25.5 percent) of that dollar to make payments on existing debt. For simplicity sake, I will refer to this 25.5 percent as the "debt tax." And legally, that's exactly what it is. The debt tax is that portion of our property tax that is used to make payments on existing debt and legally cannot be used for any other purpose. That's right; the city of Roswell has existing debt. Now here's the good news; in 2014, the existing debt is scheduled to be repaid, at which point, the citizens of Roswell and our city will be debt free! So what happens to the 25.5 percent debt tax in 2014? Well, that all depends on the outcome of the Bond Vote on Nov. 6.
How will Property Taxes be Affected if the Proposed Bond is Approved?: You see; if the proposed bond is approved, then the debt tax will be continued and Roswell city government will simply use the 25.5 percent debt tax to make payments on the new bond (the new debt).
How will Property Taxes be Affected if the Proposed Bond is Defeated?: This is such an important point, so please don't miss it! According to Roswell for Fiscal Responsibility, if the proposed bond is defeated on Nov. 6 and the existing debt is repaid in 2014, then by law, the debt tax must be eliminated and the money can be returned to the tax payers in the form of a 25.5 percent property tax reduction. It appears that Roswell city government knows this and I am disappointed and frankly disturbed that they have not been more forthcoming to the public with this information.
5. The Bond Does Not Pay for Long-Term Operating Expenses
Long-Term Operating Expenses must be paid for by taxes and fees. Now, I am especially concerned by this fact because of the high operational and maintenance costs that the city is projecting for the new Therapeutic Pool that Roswell City Government wants to build for the Adult Recreation Center. In fact, the city estimates that the operational and maintenance costs could be as high as $230,000 per year. Wow! Now Roswell city government claims that the pool will break even; although I'm not sure how. At $230,000 per year for expenses, and an entry fee of $5 per person per trip, the city will need 46,000 people per year / 52 Weeks = 884 people per week / 7 days = 126 people per day everyday of the year to make this work. This Therapeutic Pool is starting to look more like a MARTA train with a never ending trail of costs behind it. And like MARTA, if Roswell city government can't break even on this "investment," then I guess they will either have to raise fees or subsidize the pool from our property taxes.
6. Projects can be Paid for Without the Need to Borrow Money or Go Into Debt
Roswell city government wants to borrow $14.7 million dollars to pay for the proposed project list. But there are other sources of funding available to the city that do not require the need to borrow money or go into debt. For example, the city of Roswell currently has $25.3 million dollars in cash above the required reserves. So, if the city currently has $25.3 million
dollars in cash above the required reserves, why then do we need to borrow
$14.7 million dollars to pay for the proposed projects?
Alternatively, the city could use the "pay-as-you-go" plan. Under this plan, if property tax rates are kept at the same levels, as Roswell city government claims they should be, then the city will collect $6.3 million dollars annually above the required reserves once the existing debt is repaid. $6.3 million dollars is plenty of cash to quickly pay for all of the proposed projects on the list and more! And if you use some of the $25.3 million of cash on hand and combine that with the $6.3 million collected after the debt is paid off, then the city can start the projects on time, as scheduled and complete them without incurring any additional debt!
7. Roswell City Government has a history of Over Taxing, Over Spending - and now they want to continue spending by borrowing more money
According to research conducted by RFFR, during the early part of the 2000's the city of Roswell had a rather high property tax rate. In fact, so high, that by 2007, the city had amassed an astounding $55 million in cash above the required reserves. In 2008, when times got tough and most families in Roswell reduced spending, Roswell city government kept spending. In fact, during each of the last 5 years, Roswell city government has spent more money than it has collected in tax revenue and in the process, consumed $31.5 million dollars of our reserves.
Now Roswell city government will be quick to tell you that they are a fiscally conservative government and the city operates under a "balanced budget." Well I'm sorry, but draining your savings account to balance the budget is not a fiscally conservative policy.
And now, rather than reduce spending and lower taxes by 25.5 percent during a hurting economy, Roswell city government wants to continue spending and they want to take out a mortgage on the citizens of Roswell to pay for it.
On Nov. 6, the tax payers of Roswell will have the opportunity to Vote No on the Roswell City Bond. Tell Roswell city government that it is time to start living within their means, just like families in Roswell do, every day.
I hope you will join me and vote No on the Roswell Bond on Nov. 6.
Husband, Citizen, Volunteer