Tuesday, October 11, 2011

Why the street bond is a bad deal for the city

Harvey Rose

George Wooding sent me a city document that verifies his analysis in the Westside Observer of what the street bond will actually cost city taxpayers: $437,249,617. The attachment is a document from July 13, 2011 by Budget and Legislative Analyst Harvey Rose:

[O]nce all $248,000,000 of the GO[General Obligation] Bond have been sold, the estimated total debt service requirement between July 1, 2011 and June 30 of 2035, a period of 24 years, will be $437,249,617, or an annual debt service of $18,218,734 per year ($248,000,000 in principal plus $189,249,617 in interest at an assumed interest rate of 6 percent)...The proposed $248,000,000 GO Bond principal and the estimated $189,249,617 of related interest expense would be repaid from increased Property Taxes on all property owners in the City (page 20, emphasis added).

Compare this forthright statement, buried in an obscure city document, to the deceptive statement by the City Controller in the Voter Information Pamphlet (page 41 of the PDF file).

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