The purpose of this blog is to create awareness as to what has been happening in the City of Polk City over the past 5 – 6 years, not to create anger and hatred amongst us. It is to show how frustrated many of Polk City residents are with the direction our city is choosing. The people have every right to voice their opinions, and we’re providing the tools to do it and be heard.
The last administration has created a “mountain of debt” for its citizens. The citizens showed their frustration by replaced a majority of the city officials. This new administration has to be applauded for their hard work in trying to make the future look brighter for Polk City. They have been working very hard and in some cases have been uncompensated for their long hours of dedication.
With that said, we are operating a city with the bare necessities. Our infrastructure is so bad that we couldn’t even sell the water/sewer system to FGUA. After an extensive study, FGUA notified the city that it would be necessary for them to increase the utility rates by 90% to pay for necessary improvements and be able to make it a profitable venture. After the city increased our rates by 62% within the past year, the city is now considering leasing it to them to operate. FGUA is not a non-profit organization. What will stop them from increasing rates once they will operate our water/sewer system?
Our roads are falling apart, and there are no funds in the budget for the extensive repairs that need to be done. Some prominent potholes are being filled, as we speak, with crushed millings. Heavy truck traffic and a few good rainstorms will wash it right out.
The city’s approach to fixing it’s financial shortfall is very similar, just temporary fixes so they can present a balanced budget for the next fiscal year, as required by law. Amortizing the city debt over 35 years will only add to more interest being paid on these loans. Let’s compare it to purchasing a car.
Amount of the car loan is $20,000 borrowed @ 8% rate.
Monthly Payment # Of Payments Principal + % Paid Total % Paid
$626.73 36 (3 years) $22,562.18 $2,562.18
$350.66 72 (6 years) $25,247.87 $5,247.86
Now apply the same analogy to an $8 million dollar debt @ 3.25% rate.
Monthly Payment # Of Payments Principal + % Paid Total % Paid
$78,175.22 120 (10 years) $ 9,381,026.78 $1,381,026.78
$31,914.98 420 (35 years) $13,404,291.23 $5,404,291.23
Sounds a lot more manageable per month, but look at the total picture. The total of both the principal and interest of the loan increases to $13,404,291.23, of which $5,404,291.23 is interest. As you can see, spreading out the city debt over a longer period of time will lower monthly payments, and might help balance an annual budget, but it will only end up costing the city and its citizens much more in the long run. Is this the path the people of Polk City want to take?
Polk City has been outsourcing the operations of the waste water treatment plant and the water treatment plant for years. This was a good idea as we only pay for the expertise we need and are able to share the cost of using complex equipment. The Council gave approval to continue researching to outsource more of the functions of a wastewater and water treatment system. This would include:
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Customer Service
Meter Reading
Collection Systems
The equipment and expertise needed for performing these functions are not needed on a full-time basis so the basic principle is to share the outsourced company’s expertise and equipment across multiple customers. Or, in other words, pay for what you use.
The current council has changed since FGUA was approached to purchase Polk City Utility. It appears that this is not the direction the current council is headed. Considering the current financial situation, no one knows if FGUA has changed their mind. Current data should be sought out and used in any statements describing the current status of Polk City. The city finances are dynamic and have changed dramatically over the past 12 weeks.
Once again, FGUA WILL NOT HAVE THE POWER TO INCREASE OR DECREASE THE UTILITY RATES. Polk City would still own the utility. POLK CITY WOULD MANAGE THE CONTRACT WITH THE OUTSOURCER AND THE RATES TO THE CUSTOMERS.
I posted an updated letter of the current City Council accomplishments at The Ledger blog site:
http://county.blogs.theledger.com/11369/abolish-polk-city-government-heres-how/comment-page-1/
I was unable to post the letter at this site due to length restrictions.
Blog #1 to be continued
We are in negotiations to get a contract to fix the roads. Millings were put in on a temporary basis until we can get the contract signed. This should happen in the next few weeks.
ReplyDeleteAlso, there are funds for the roads. Polk City never had a one year and 5 year rolling plan to fix the roads. This is on our list of things to do.
There is a restricted fund for road repairs that has dollars. I will not say how much until Monday when I can confirm the amount in the budget and post the amount.
Loan Restructuring - The plan is not only to increase the length of the loan but to also decrease the interest rate. At the same time, the revenue to the city continues to rise and at some point we can start paying more of the principle. We have not done this analysis yet but we expect to have a table for every $50,000 of revenue or decreased cost realized by the City of Polk City, there could be a percentage decrease in the utility rate. Stay posted as our financial analysis continues.
The problem with the tables used in the example posted by the leadership of Concerned Citizens of Polk City is that they do not represent the current Polk City financial situation. All of these tables are available to the leadership of the Concerned Citizens of Polk City at City Hall. Polk City has loans that are at a favorable interest rate for 30 years. If these loans are renegotiated the payment will probably increase, and also the interest rate. Will the county add an interest charge for managing the debt????
Bottom line – Is it possible that the dissolution will cost more than working our way out of the situation with the current City Council?
Either way, all of the work to decrease costs and restructuring of the debt by the current council will benefit the city.
The citizens deserve to know the following about the dissolution process
1. The pros and cons of dissolution
2. The cost of dissolution
3. Identify assumptions and state the background information that supports the assumptions
4. Start to build a business case for dissolution.
Only when this work is done and the facts are presented will the citizens of Polk City be able to make an informed choice by comparing keeping the city versus dissolution.
The rest of this discussion, in my opinion, is a distraction.
I ATTENDED TUES MEETING 9/21 AND I MUST SAY MRS BLOCK DESERVES AN EMMY. WHEN SHE HEARD ENOUGH SHE WOULD TELL YOU WE WILL GET BACK TO THAT LATER. I DO NOT TRUST HER AND I CERTAINLY DO NOT LIKE HER. SHE DOES NOT HAVE HER HAND ON THE PULSE. SHE IS DOING THIS FOR HER OWN GOOD. I THINK SHE STACKED THE ROOM WITH FOLLOWERS. AT THE END THE TEARS DID NOT MEAN A THING TO ME. IN FACT I THINK IT WAS CHILDISH. I WOULD ALSO LIKE TO KNOW WHY THE MAYOR'S WIFE WAS IN ATTENDANCE WHEN HER HUSBAND WAS IN SUCH TROUBLE IN THE HOSPITAL. I WOULD HOPE THAT IF I HAD A "HEART ATTACK" THAT MY WIFE WOULD BE AT MY SIDE AND NOT AT A MEETING. COME ON PEOPLE LOOK AT THIS AND OPEN YOUR EYES AND QUIT BEING A FOLLOWER. THIS ADMINISTRATION IS GOING TO SEND US INTO THE DRINK. THE COUNTY WILL TAKE US OVER SOONER THEN YOU THINK.
ReplyDeleteI also attended the meeting last night. What a coincidence that the Mayor has health issues after the citizens have exposed him for investigations of wrong doings? MY MOTTO IS WHAT GOES AROUND COMES AROUND? These investigations include the Mayor and his wife. Please citizens...LOOK WHO IS RUNNING THE CITY? All this is for your sympathy!!! Please look into these investigations for yourself. I really feel sorry for the honest citizens of Polk City. I believe there is a higher authority, and good will prevail over evil.
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