As we get closer to the election, and making a decision on Measure G, we’re going to start hearing more and more comments implying the “The City is Broke” by a number of local noisemakers.
This is not only not true, it is a deliberate scare tactic being put forth by some, and repeated by others, with the intention of making the voters believe that selling the Adams Street property to a resort developer is imperative to St. Helena’s financial health.
Mark Smithers, CPA and Chairman of the SHAPE Committee (St. Helena Assets Planning Engagement Committee) offers the following to clear up recent misstatements and information omissions that have been published in the local newspaper:
- Adams St is not going to be the funding source many are describing to fix our municipal funding needs. I’ve been involved in property transactions for 40 years and no sane purchaser / developer is going to pay $25 million for this property until their project is approved. The City may get $1 million earnest money, but the remainder comes upon project approval and that will be at least 7 years from when the property is sold.
- Adams St doesn’t need to be sold. A more favored form of municipal financing for infrastructure (City Hall, Police Station, Library improvements) is General Obligation Bonds. The City Manager and the City Finance Director both confirmed that your property taxes would go up less than 3% under a $25 million GO Bond. I’ve asked them to publish this information to the public to eliminate the confusion.
- The City Council, in a September 2018 meeting, approved building City Hall at its current site. Some folks are suggesting this never happened. As a consequence we went down some tangled path and as a result we still haven’t started building a much need City Hall. SHAPE was asked to provide recommendations and the overwhelming favorite of the committee was to rebuild City Hall at its current site. It’s all in the report.
- Regarding Water and Wastewater CIP (construction and major repair), the staff report and The Star editorial suggest the CIP is “mostly unfunded.” That’s not really right. The 2016 rate study only went out 10 years, not the 20 years the recent CIP Engineering Report provided. The 2017 staff report on the new rates did go out 20 years and it provided for $22 million of water CIP and $15 million of wastewater CIP. If you look at this issue more clearly and transparently, our current rates by and large are based on the project totals that are in the engineer’s report. It is not right to say they are unfunded and suggest there is a financial disaster in the Water and Wastewater entities. Financially they are in very good shape with incredibly high reserves and positive cash flow adding to those reserves.
- As to Storm Drain replacement, which is funded through the General Fund, not the water or wastewater entities, nearly $12 million is for drainage improvements. This means $7 million is for repair and replacement over 20 Years; that’s $350,000 a year. Yes, we have storm drains that need to be replaced, but it isn’t the financial catastrophe being suggested. And yes, let’s make improvements, but these can be mapped out and staged as our General Fund allows. We lived without storm drains on many of our more rural city roads (Dean York, South Crane, Sulphur Springs, Mills Lane, etc.); we don’t need to rush to add storm drains to all them now.
My points above are to provide correct information and information that wasn’t shared. Some folks are using aspects of the information to scare us into thinking we need to sell the farm and that just isn’t so.
— Mark Smithers
For a complete copy of the SHAPE Report, click on the link.