Waiting for Transparency in City of Coral Gables Government (1)

We have been waiting for the fruition of all of the offers of Transparency that we heard form Messrs Cason and Quesada.  So far there there is not real evidence of increased transparency.

The city manager pulled out of the deck a $22 million debt increase and imaginary spending program.  The commission was content is hearing comments from two or three citizen who happened to present at the unvailing of the “Renassaince Debt.”

One commission, a local banker, who mentioned the “costless” refinancing during his campaign tried to sell us “pig in a poke” by saying that the program is free because we have money in the budget–as if there were on other use for the money, such as cutting taxes, raising needed reserves or compensating for the multi-million dollar revenue loss from the Biltmore fiasco.

Looks like the commission needs to go back to take Econ 101.

Explanation of “Renaissance Debt”–A Pig in a Poke

For the record this is the best description of what is happening.  Forget tax reductions for the near term.  Forget pension reform, if we can afford to add to our debt. This is what we call in the Midwest a “pig in a poke.”

This proposal adds $21 million to the long term debt of the city and extends the volume and payment period of that debt far into the future making it impossible to maintain, much less reduce the current excessive property tax rates. If the current course of retiring the bonds were followed, in 2017 we would have 39 percent less debt service on these bonds, in 2021 we would have 54 percent less, and they would be totally retired in 2033. Under the managers proposal the entire debt service would continue at its present rate until 2033. This proposal would not allow any room for reduction of our property taxes in the future. More ominously, it would not allow for the distinct possibility that the City will become responsible for a massive restoration project at the Biltmore hotel because of deferred maintenance by the present management company. This will have to be funded by new borrowing.

via Letter: Pat’s $21m railroaded ‘vision’ too costly.