To clarify the transient guest tax or Bed Tax: The City Commission (previous) approved a levy of up to 7% for the bed tax. It has the authority to levy up to 7%. It has not chosen to levy 7%. At present the tax is 6%. 1% of that tax is being used to cover Discovery Center cost. This was done to limit the tax impact. Two weeks ago the commission approved the cost of exhibits at the DC. That resulted in a 1.8 million dollar bond. The cost for those exhibits are currently a property tax item, and will result in a mil levy of .373 for ten years. I would personally like to see this amount covered by the CVB budget or the Eco Devo budget. If that is not possible, then raising the bed tax should be considered.
Parks and Recreation was/is concerned about the tree placement, anchors etc. They were involved in that process to insure that no damage was incurred and that safety was maintained. I see no negatives in the business sponsored lights festival.
The City Hall/Gym/PR office project will not cost a mint –if the original plan is implemented. The finance plan for that project as originally planned would not involve any tax increase. The 2.8 million is already in the budget or is part of personnel cost savings. As that plan is on hold, pending a further architecture study – it is possible that any new plan will cost a mint. Especially if the project involves a new basketball court, plus a stage.
The Field House plan is of course far outside any budget plans or CIP projections. If the plan as proposed actually passes we will see a City debt in excess of 300 million. Two weeks ago the city passed more temp and GO bonds some 14 million in aggregate. Everyone seemed to be pleased with the interest rate and all were impressed with the city bond rating. Few folks read the details contained in the ratings, especially concerning debt:
Standard & Poor’s– Manhattan’s debt and contingent liability profile is very weak with a total-governmental-fund-debt-service ratio of 30% of total governmental fund expenditures and a net-direct-debt ratio of 243% of total government fund revenue. We consider debt amortization above average with official’s planning to retire 63% of principal over 10 years, in our opinion; this is not high enough to have a positive effect on the debt score.
Fitch –The City debt burden is high. Fundamental to the rating is the expected reduction of debt levels over the intermediate term. Tax-supported debt service represents a considerable claim on resources at 25% of governmental fund spending in 2012. This number includes debt repaid from dedicated sources ….. The City’s overall debt load totals $5,355 per capita and 9.1% of market value.
Moody’s - What would change the rating? Continued increase to an already high debt burden. At 6.5% of full value (9.15% overall), the city’s direct debt burden is elevated. The Aa2 rating reflects …adequate reserve levels and unlimited levy raising flexibility.
As I read the bond rating agencies comments it appears that they do not agree with the Mercury, City Finance Staff and selected City Commissioners view that the debt is nothing to worry about, unless you take the Moody’s comment to heart - The Aa2 rating is awarded due to the unlimited levy raising flexibility of the Commission. The debt as published at the end of OCT was 268 million. It will be around 277 million at the end of December.