How Did the City Manager Get Permission to Seek Another $2.68 M Loan?

To refresh some memories from last month's regularly scheduled City Council Meeting on October 25th, a vote took place on Resolution No:2010-07.  See this previous blog post to see what happened during this discussion on this resolution: Additional City Debt Camouflaged as Housekeeping  By the sounds of the discussion during the October 25th meeting, 2 of the 4 Council persons there at the meeting had no idea what the other two had in mind when they voted to pass this resolution, nor did they have a clear understanding of what they really voted for.  The 5th council person was not even there at the meeting.  The way the whole issue was handled was very sneaky and underhanded.  The verbiage was very vague and even during discussions, which included the Interim City Attorney, Tom Cloud, these vague areas were intentionally never clarified and spelled out before the vote.  They were merely brushed over and explained away as standard operating procedure just to get the resolution to pass.  With this yes vote from the council on this resolution, the Acting City Manager/Vice Mayor Trudy Block received permission to seek a loan for whatever amount she wanted for whatever purposes she wanted.

By having 5 Council positions by design, the city charter intended to have each of those individuals make EDUCATED decisions regarding the welfare of the city and the public in a fair and democratic way AS A TEAM.  The way this vote happened on this resolution, with the support of the Mr. Cloud helping to "sell" it, this did not happen.  It was quite obvious to the public, especially in retrospect, that Mayor LaCascia and Acting City Manager/Vice Mayor Block were the only two council members who fully understood that this vote would allow Ms. Block to seek a loan for whatever additional funds she saw fit to move forward on whatever agendas they had in the works now or in the future, and revitalize the city's bank accounts so they could pay their day-to-day operating expenses with no worries of bouncing checks.  How is this a fiscally responsible way to run the city?  More debt is not the answer when the city is so strapped that it can't even pay current debt obligations!

This sewer business plan is what has gotten the city in such a deep hole to begin with.  Pouring more Millions into this hole will not make the hole get any smaller.  The tax base is still only around 800 parcels and roughly 1600 residents and only a handful of small businesses who are already overly taxed and overly charged for water and sewer services with no additional benefits to show for their hard earned money.  A debt amount of $10.4 M, plus an additional $1.68 M in debt (roughly $1 M of this new loan is just refinancing current debt) does not increase the cash flow from this tiny tax base.  It only makes the problem worse!  These high taxes and fees are what is scaring businesses and residents away from the city and reducing the city's cash flow.  Adding to the mountain of debt will not change this fact. 

At least the previous administration used what they thought at the time was sound judgment when getting the loans based on projected future growth in a thriving economy from incoming developments, which ultimately did not materialize.  This current administration does not have that projected growth to justify it.  In fact, we are in the worst recession since the depression of the 1930s.  If they think that the commercial warehouse project across from Fountain Park, on SR33, is going to pay for this loan through increased revenues, remember these entities have not promised any projected start dates and they have worked out a deal with the previous administration so they will not owe any impact fees.  Even with the moratorium on impact fees from the city and county, it has not resulted in the growth they were hoping for.  The only businesses who have recently come into the city are missions and churches which are eligible for tax exempt status and rely on donations from the public to survive.  These are not long term revenue sources for the city.  Hopefully, the possible bond holders and banks realize this reality!!  The people and handful of small businesses can not afford to pay any more than they already are, it will only drive them out of town.