INC NEWS - Bull... Agent James Bull - 0057

[RW Pickle]

This years budget process reminded me of the James Bond movies of the past
with much less excitement, but perhaps a lot more daring. Where's Risk
Management when you need them... (not that the administration listens to
the employees or the citizens; some of them know much more I guess...).

.0057 is the figure that the budget was reduced by; $10 on a $200,000
house is what it would have cost us. Hardly a box of cereal and a gallon
of milk these days. But the outcome could perhaps cost us millions.

When the tax rate was reduced and the money borrowed from our savings
account to make the ends meet, like Finance Director Keith Hermann
suggested, it sent up a red flag that all was not well in the City full of
bull. If in fact he is right, and our valued credit rating of AAA is
reduced (we're only one of 19 cities nationally who have coveted rating),
the rate we pay on the money we borrow will cost us more; millions more.
Just to put it in perspective, raising the tax rate one penny raises $2.1
million dollars. If we lose the AAA rating and pay more in interest (not
just this year but in years to come), that $.0057 will have cost us a lot
more; $3 million more just this year alone! And we're the ones who will
end up paying for it as well. So why did Council do it? I don't have a
crystal ball that'll see through the bull to tell me. But realistically,
it makes no sense. It may end up costing us (the tax payers) a lot more
than the half a penny would have cost us now.

The reality of it all is that the rate went the wrong way. For example,
the Capital Improvement Budget this year was roughly $147 million. We only
had $30 million to spend on it, so we came up short by roughly $117
million. This is about the same figure ($110 million) we didn't include in
the last $100+ million dollar bond issue that was passed by the citizens.
Except now, it has grown by $7 million... And it'll continue to grow every
year we do not get these things done!

If we were going to go any direction with the tax rate, just looking at
the Capital projects (roofs on buildings, park repairs, fire stations, and
the list goes on...), the tax rate should have increased by more than $.58
(to a $1.12). Instead we went the other way and risked our good fortune to
have it set now at $.54. No wonder it's hard to get it all done. There
just isn't enough money to go around. Some would say we waste a lot of it
already and just adding more to waste would be a waste in itself. But
seeing the real costs of what we have and what we need year after year,
there's just not enough there to fix it all.

It was suggested earlier this week that perhaps Durham has reached a
critical threshold of having enough money to keep everything it has in
good shape; that our growth, repairs, and needs are not sustainable. I'd
suggest that those funds haven't been there for a long time to do this and
the longer we wait, the more it costs. I've heard it for years... don't
build it if you can't take care of it. Lack of maintenance got us into
this mess (because of lack of funds) and there is no light at the end of
the tunnel that many of us can see coming. Repairs just never get any
better...

I had a conversation with our Solid Waste Director this week. I ask him
what he was going to do with the 9 new yard waste truck that are coming
(it takes 15-18 months to get these trucks so they were ordered a while
ago). There are also 4 additional knuckle boom trucks coming. All of this
was in anticipation of rolling out a comprehensive solid waste plan many
of us in INC worked towards about 3 years ago. This is over $2.5 million
in trucks (already paid for)coming for a program the City Council cut out
of the budget. This is the kind of planning none of us need... Save a half
a penny here to waste a whole lot more there. It makes no sense if you're
counting your pennies.

I'm like you, I hate taxes. But the reality of it all is that it costs to
keep this stuff we've built over the years and there's just not enough
coming in to do it. There are hard choices to be made and we need leaders
who will make them. Otherwise it'll all catch up with us sooner (as it
has) or later (and cost us more). Reducing our tax rate by $.0057 was a
stupid thing to do. That was not leadership.

RWP
27 Beverly