By: Disgusted
On the RDA agenda for next week is one of the Administrations pet projects:
• Ogden City Council/RDA Work Session Agenda July 6, 2010The administration thinks they have found free money from the Feds under the American Recovery and Reinvestment Act of 2009, $18 million to be exact and they want the State to reallocate an additional $12 million (3 & 9) of similar funds for a hotel development and additional parking at The Junction. Of course all of this would be bond money (most likely acquired from a financial institution) and the resultant debt would either have to be collateralized by either revenues or assets or both. Unless the administration has truly found free money (which I don’t believe is the case) the Fed involvement is only to make the process easier to get the funds, not to pay the debt service on the funds.
Before the RDA board drinks the cool-aid they need to ask a lot more questions and have a much better understanding of the risks before they commit the residents.
The administration as usual has made the process painless for the RDA members and has even prepared a nice little letter for his lap dog board chair to sign in an effort to secure the State portion of the bond funding.
The council staff has even suggested the following questions for the board members to ask;
1. Please give an overview of the project and the need for the bond funding as a financing tool.IMHO there are several other questions that need to be asked so that the city doesn’t end up with another zero net gain to the bottom line and some $30 million more debt that it is collateralized for on its books.
2. Please describe the City’s liability on the bonds and the source of repayment.
3. Please explain how the job creation numbers were calculated.
4. What would be the consequences if the Board decided not to support the application?
Finally in light of the earlier comment I lodged under a previous article, probably the biggest question would be, is this the right timing for a project like this?