“The rest of that $5.5 million estimated shortfall is based on projections that tax collections will continue to slow. The prospect of additional cuts from the state means the gap could widen.”
The above from Emily Battle’s story in the Free Lance Star http://fredericksburg.com/News/FLS/2008/112008/11192008/426232 sums up the current financial situation that the City now faces. Staff provided a scenario to address this projected shortfall by further cuts to departments and services, a reduction in school funding below the current level, the suspension of Capital projects—excluding the Courthouse, and further reductions to Outside Agencies. Even with these reductions a gap of about $1.5 million would remain. We are facing some very tough decisions and all indications are that we have not seen the bottom of the current economic downturn that is expected to carry over to 2011.
Another factor that must be considered is the impact of the current economic downturn is having on our tax base. Home prices are falling and will be reflected in the latest assessment. Economic development projects like Kalahari are being pushed back due to the credit crunch and Circuit City has filed for bankruptcy—probably not the last area business to do the same or just close the doors. Sales tax revenues are heading south as are related sources such as BPOL. Finally, the word from the state is that they will be reducing the contributions to localities to balance their budget. We have been told that during this round of cuts there will be no sacred cows.
On the bright side Wegmans is a head of schedule, the downtown hotel is expected to open next summer, and the new Eagle Village project, when started, will have a positive impact on our bottom line. However the income form these projects will not help us in the coming year.
The end result of this situation is, in the coming year or two, city residents will probably have to open their wallets to just help maintain current levels of service. Speaking for myself, my decisions related to the coming budget, as outlined in previous posts, is to maintain core services—public safety, public services—water, sewer, street maintenance, etc, and education. I agree with the staff recommendation of Capital projects, not related to core services, should be put off but I would add the new Court facility to that list.
I do understand the need for new court facility. I agree that we should move forward on this project as quickly as is feasibly possible. However, now is not the time. The cost on the debt service for this project alone translates to 10 cents on the tax rate and right now that is where the money will have to come from to move this project forward—city residents.
The rationale for moving forward on the construction of the court facility is safety concerns, the advantages of consolidation, and the projected increase in case loads which is regionally driven. I agree with these points but I do not agree that the court facility is an economic development project that will some how pay for itself or even come close.
It will not be bring a lot of “new” revenue to the City. The facility is being built to meet growing demand that is coming whether we like it or not. I agree that the courts should remain downtown to help the economic vitality of downtown but it will not be a large revenue generator. While there will be both a commercial and residential component to the project the revenue generated will not cover the over $3 million dollars a year in debt service.
All I have requested of my colleagues is that we push back the project to allow for the impact of real economic development projects like Kalahari, the downtown hotel, Wegmans and Eagle Village to begin generating revenue for the City. Lets, get through the next two years and give the overall economy time to bounce back--as it will. Most importantly, lets not place the burden of this project on City taxpayers now when there is a legitimate feeling of uncertainty about our economic future.
I do understand that construction costs will continue to rise but if the money isn’t there then we have to wait. What I do not understand is the explanation that this project must move forward because if we don’t the area judges will force us to build it. I was elected to serve the best interests of the City and its residents not local judges. Moving this project forward at this time is not in the City’s interest and its time we make that position clear.
What would be your recommendation on the building of the new court facilities?
1 comment:
I'd say I'm still stuck on the middle on this one. On the one hand, conversations I've had with attorneys and people working in the courts have indicated someo of the issues with our complex. Especially compared to the new ones around us (it really is a competition isn't it).
I personally don't have enough info yet to support the plans or not. I've read the proposals from when council was looking at all three locations. Yet there were few details released to the public on why $60M.
I tried to weed some of this out of all of you when running for council, and at best I received some anecdotal reasoning, security, safety, consolidation. What I didn't see were any concrete numbers. Nor did I hear any mention of what I believe was originally in the plan - growth space.
So, here is my suggestion, lets fund the first 5M for engineering and architectural design, with a cap on total cost of $40M. Lets see where that gets us. Lets start off with NO parking additions - look, before you blast that one, hear me out. The current courts get by with on street parking for the most part just fine. The new complex is even closer to the downtown garage. At a cross walk signal or two and we can start off (get by) with this plan.
In that $20M reduction, nix any growth area construction, but have the architects complete a modular design. No parking deck, but clear the land in preperation. Retail? Condos? Let the developer fully fund those, what we pay for is courts. How to the other rental companies feel about the city constructing competing retail anyway? Would rent here be cheaper than surrounding areas? Wouldn't this whole plan in effect be subsidizing commercial rental space? I may be WAY off base here, but without a business plan for the public to review, it's assuming the worst.
Oh wait, if we fund the engineering work, shouldn't the developer kick in some %, since that engineering work also includes the 1st for retail? Sorry Matt, enough details have not made it out into the public yet to really have a complete discussion on the topic.
For starters, I guess I'd be interested in hearing the Judge's comments on three options:
$20M
$40M
$60M
What do we get for each, and what benefit do we gain. Maybe we just start with the module for the deteriorating historic courthouse, then when revenues come back we finish the project for full consolidation.
Just some thoughts - have fun with this one.
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