Defeasance would benefit city, Maddox says
March 02, 2005 - To the editor:
This letter is in response to the Call's editorial titled "Defeasance of certificates would not benefit residents.''
Basically, defeasance means paying off certificates or bonds before using all the money for the purposes for which the certificates were issued. The two aldermen who support defeasance of the certificates — obtained for construction of a new po-lice facility and repairs to City Hall — are quite familiar with the city's finances and have a good grasp on what defeasance would mean to the city and our residents.
It is true that the city's fiscal woes have been related to the general fund. Those woes are being extended to the parks and stormwater fund as the board has transferred general fund support for parks and recreation entirely to the parks and stormwater fund.
The capital improvements fund is not to be used for operational expenses except as those expenses directly relate to street repairs or other capital improvements. The capital improvements fund cannot be used for staffing police or fire services. It can be used for street maintenance and capital improvement work performed by city staff.
In fiscal 2004, the general fund was paid $377,000 for public works staff work by the capital improvements fund.
Of course, defeasing the certificates would mean the proposed City Hall renovation for the Police Department would not be possible. The problem with proceeding with the present plan is first, the design appears intended to use every dollar available as it would provide 27,000 square feet of office space and 2,100 square feet for a firing range. Second, proceeding to use all of these monies establishes and continues a debt payment of $730,000 per year for the next 18 years.
This from a fund that has had decreasing income — down 18 percent in 2004 — due to falling sales-tax receipts. This directly impacts street work and other capital improvements, as less and less money may be available to future boards if this downward trend continues.
With regard to the "moral issue,'' the subject of continuation of the sales tax could be placed before voters as a referendum. I suppose this could take the form of recalling the extension, approving the extension passed in 2002 or reducing the tax with an extension.
Contrary to the Call's editorial headline, defeasance would benefit residents by preserving our capability to properly maintain our streets and provide other capital improvements for the future.
Proceeding with the present renovation plan mortgages our future and jeopardizes the city's capability to meet future capital improvement needs, including street maintenance and repair.
Ward 3 alderman