Friday, August 16, 2013

Standard-Examiner: Ogden Council to Address Bonding for Water Treatment Facility

Big Debt faces off versus Common Sense

Mark your calenders, folks. As a followup to our most recent article on the subject, the Standard carries a story this morning, announcing to its print readership, in advance, Ogden City Council's previously set public August 20 public hearing, concerning the Caldwell administration's proposed $18 million water/sewer capital improvement bonding:
Borrowing "to the Max"
S-E reporter Mitch Shaw has even done some additional "sleuthing" on the subject, and reveals that despite calls for financing some portion of these repairs from some $28 million (not the mere $10 million which Mr. Shaw reports) which is sitting mostly idle in the Water and Sewer Uitility Funds' bank accounts,  the Caldwell administration remains steadfast in seeking to run up the city's prospect bond debt "to the max," at the highest possible principal loan amount, over the longest possible repayment term:
“A lower bond amount or shorter term would save the city interest over time,” reads a letter issued Thursday by the city’s Public Services Department.
“However, the benefits of such savings are currently outweighed by the capital needs of the water utility.”
Because the full amount of the bond was planned for in the city’s financial sustainability plan, the mayor and the Public Services Department believe that increasing the number of projects to replace leaking pipes and addressing other projects identified in the master plan will actually provide a better return for the water utility than reducing any debt costs associated with the term or amount of the proposed water bond.
The city council is also considering a $4.7 million storm sewer bond that would come with an interest rate of approximately 4 percent and would be paid out over 20 years.
We'll sdd that we're delighted to observe the Standard finally getting ahead of this important story, for once, at least.

Down in the lower SE comments section, we're also delighted to find that Ogden City Political Watchdog Dan Schroeder has already chimed in with his own views on this "thorny" subject:
When the financial sustainability plan was put together last year, the city's consultants predicted lower revenues, higher expenses, and lower interest rates. Now we know better: higher revenues and lower operating expenses have allowed the water fund to accumulate more cash than expected. On the other hand, interest rates have increased so borrowing money is less affordable. The city would be foolish not to adjust its plan in light of these changed circumstances. That means spending the accumulated cash and borrowing less.
Thus the stage is set; and the battle lines are drawn:

Big Debt v. Common Sense
Keep your eyes on Weber County Forum this coming Tuesday, where we'll devote a dedicated new article to the City Council arena bonding battle which is brewing between the lumpencitizen-driven forces of  Fiscal Common Sense vs. the bureaucratic advocates of Big Government Debt.

And yes.  We do believe that the current council's treatment of this issue could become an important 2013 Ogden Municipal Election issue, depending on how the council incumbents handle it.

Update 8/16/13 9:00 p.m.: Thanks to a tip from yet another sharp-eyed and alert WCF reader, we provide this online Question and Answer sheet, elaborately setting forth the Caldwell administration's surprisingly flimsy "rationale" concerning this matter:


smaatguy said...

My lord, are these idiots even paying attention to what is going on with the bond market just in the past few weeks....if they think its going to do some sort of magical Crazy Ivan they need to be committed...this is a long term "the taxpayer is going to get screwed" fist up the old wazoo....

RM said...

When will it ever end?

blackrulon said...

I would be interested to know how much money will be needed in reserve in the emergency fund? What constitues a emergency for withdrawing funds? Is the money in the fund safe from future mayors or councils using the funds for non-emergency uses? How much, if any, of the cost will be paid by the lease revenues from BDO orginally slated for infrastructure upgrades and upkeep?

smaatguy said...

Good luck getting any answers to any of those questions! I'd like to know what has any of the so called emergency fund ever been used? Was it used for the flooding below Washington I think around 29th?....We as taxpayers need to know how much is enough! We demand to know! We have a right to know! Isn't there some sort of state law that puts a cap on how much cash a public entity can have lying around?....especially all the while going out and bonding for money....we as the taxpayers of Ogden are going to get caught in a wringer when the bond market implodes...its not a matter of if, it is a matter of when, and when is not that long. When are one of the council members besides Amy going to demand answers from these departments....they won't because they are spineless...full of crap politicians making promises to get elected and then do absolutely nothing to even seek answers to questions their constituents want to know let alone do anything about the highway robbery of their and their children's future. It's enough to make you blow a gasket!

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