LETTER: Former council member talks about pool finances
Tuesday, February 07, 2012 5:09 AM
Here are some facts about the pool (SWIM Center) for consideration:
1) Construction Account I opened with $250,000 from the city council. This was all spent. Then the first $242,000 of donations were deposited and also spent.
Bills were coming in; the city administrator had the council "lend" $150,000 to the project. This was supposed to be repaid by bond proceeds; apparently it was not.
2) Then, the bond was issued for $1.78 million. Construction Account II was established and $26,000 was taken off the top for the bond seller's fee.
3) Interest over 20 years will be more than $1 million.
4) The EDA issued the bonds because by state law the city's debt limit was less than $700,000. The EDA had no limit for this type of financing.
5) When I came on the city council in 2007, I wanted to accomplish a change in this debt. I reported to the council several times from information received from Mike Bubany, but my efforts were met mostly with indifference or sarcasm and with verbal abuse from some community members.
Suggestions I made were going to be opposed even if they were in the best interests of the town.
6) a. The annual $143,000 bond payment is paid half in February and half in August.
b. The bonds were issue in $5,000 denominations.
c. The first date that bonds could be redeemed without penalty was February of 2011 (last year.)
d. Bubany estimated the total payback in 2011 at $1.25 million, but not all of the bonds could be bought back at the same time.
e. Bubany said the pool's debt had to be reduced significantly to refinance the remainder.
7) Apparently, the $1.3 million fund-raising goal was not met. Construction started at the $800,000 fund-raising mark. A big pledge defaulter is the EDA, which pledged either $50,000 or $100,000 and has not paid in full on this pledge
8) ONE PROJECT SHOULD BE PAID OFF BEFORE STARTING ANOTHER.
I was not against the movie theater or Giants of the Earth Heritage Center, but I would've liked to have seen that money pay off the pool first.
The money in the 2012 budget for enacting the capital improvements for down the pike (perhaps a new city hall?) should be shifted to buy back pool bonds instead. The interest saved could be used for the future projects.
9) Community leaders should crank up Splish Splash II. This debt needs to be eliminated as much as possible. No interest to pay is better than even low interest. Perhaps naming rights could be sold?