The first effort to “redevelop” the Franklin Road area lasted 10 years and ended in failure when city officials dissolved the Franklin Gateway Tax Allocation District. This scheme intended to leverage school tax and property tax revenues to develop a Bus Rapid Transit Station surrounded by a mixed-use development.
The city promised the school board a return of $26 million, but generated zero dollars. The two remaining tax allocation districts have cost the school system about $4 million in lost revenues over seven years.
The reason the TAD scheme failed is the same reason the $68 million Franklin Road bond will fail. City officials have no risk management plan. In fact, they have no plan at all.
The big risk the TAD experts failed to account for nine years ago was the drop in home values. This time city officials are taking a more direct approach, reaching directly into taxpayer’s pockets, but once again are ignoring risks that can ruin city finances and destroy the school system.
1. The biggest risk is the use of bond money to remove 1,100 school children from the Marietta School System. Complaints to the Justice Department on behalf of Marietta students forced to leave the system will be an embarrassment to the school system, and could result in massive legal fees and possible loss of federal school funds.
2. The $68 million debt (actually a $100 million debt including interest payments) will make city and school officials reluctant to raise taxes for worthwhile needs over the next 20 years, like paying policemen and firemen a decent wage and relieving over-crowding in the classrooms; or they will ignore the damage to the middle class and small businesses, and raise taxes any way.
3. The long term debt obligation and liabilities of Marietta citizens is $1.5 billion. That is BILLION with a B. Unpaid pension and other post-employment benefits (OPEB) obligations, debt to up-grade obsolete coal-fired power plants, construction financing of two new nuclear reactors, existing school system and city bond debt, third party loan payments, and other items comprise the city’s dangerously high long term debt total. Adding another $100 million of frivolous debt burden is financial folly.
4. Use of bond money to purchase private property will drive down Marietta’s already declining tax digest, taking more money from the school system and vital public services. Four years ago, city officials rushed to keep private investors from purchasing Preston Chase Apartments. They paid $2 million for the complex using recreational bond money. This purchase has cost the school system $600,000 in lost property tax revenues. City officials just took an option on another complex valued at $7.8 million. If this property becomes public property and remains so for 10 years, it will cost the school system approximately $5.2 million. If officials succeed in buying all the apartment complexes in the Franklin Road area and hold these properties for 10 years, the loss to the school system will exceed $60 million. The city already owns other investment properties valued at $8.7 million, equaling an annual school tax revenue loss of $650,134. The city’s redevelopment schemes are severely degrading the school system’s financial situation.
5. The proposed purchase of Franklin Road properties will cost the Board of Lights and Water about $5 million per year in lost revenues. If city officials force the BLW to foot the infrastructure bill for a mass transit station and two new roads, rate payers will have to raise millions of dollars to cover the increased capital costs. Utility rates are already set to increase 4 to 10 percent each year until 2023.
6. If city officials can declare Whitlock Avenue a slum area and can use public funds to move people they designate as undesirable out of the city, what prevents them from taking your home and knocking down your neighborhood?
7. Sen. Isakson announced his support of the 50 percent increase in my property taxes for redevelopment. This is an alarming event. It signals the tax and spend wolves of Washington are prowling Main Street. They hit the wall in Washington on the amount of money they can spend and are looking at local taxpayers for a new source of funds for special interests. A vote for the bond signals your support for deficit spending and Washington style tax-dollar waste at the local level.
Don’t be fooled by the slick pro-bond campaign. The bond proponents received their political training in Washington. They say your $100 million will prevent crime, improve schools and create jobs, but cannot back it up with details. All we know is the $100 million will not go directly to support local law enforcement, improve classrooms or buy school supplies, or help small local businesses. All promises are empty without a creditable explanation of how they will be achieved.
There is currently no practical means to reform bad government. The only tool available to the taxpaying middle class is the individual ballot. Exercise your power. Vote against the redevelopment bond and stop the flow of money to special interests.