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Budget woes likely to delay bond projects

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Comments (12)

Saturday, January 30, 2010

(Updated 3:00 am)

By Amanda Lehmert
Staff Writer

GREENSBORO — If the last City Council stepped on the accelerator, the current crowd might be stepping on the brakes.

In the midst an $11.2 million budget deficit, City Council members may have to consider putting millions of dollars worth of bond projects on hold — including things that have been planned for more than a decade.

In some cases, that could mean losing the ability to borrow the money altogether, a position that City Manager Rashad Young is willing to take if it’s the right thing to do for the city’s finances.

There will be no sacred cows, Young said.

“We are going to have to focus. We are going to have to make some decisions about what we prioritize and why,” he said.

Voters have approved so many bond projects that the city has a backlog of incomplete projects — like a proposed skate park and various road and sidewalk projects around the city.

Last year, City Council members agreed to start dozens of projects worth $65 million to take advantage of recession construction prices.

The debt payments of those projects — plus another $34 million in projects planned to start soon — could spur a tax increase. Since City Council members don’t want to do that, they may face some tough decisions about which projects get cut.

“I expect a good argument could be made for every issue,” Mayor Bill Knight said. “We are just going to have to go through and look, and at some point, make choices.”

Young said the city will ask for public input on the process. Ultimately, it will be up to him and elected officials to figure out which projects will have the biggest impact on the community.

Earlier this week , council members gave Young the broad direction to give precedence to projects that encourage economic development.

That could mean big-ticket items, like the aquatics center or the expansion of the Natural Science Center, make the cut because of their projected impact on the tourism economy.

“The sooner we build it, the sooner the tax income is going to come in,” said Science Center Director Glenn Dobrogosz . “(If) we stall it, I can’t get the aquarium. I can’t get the restaurant up and running. I can’t do all the things that will bring people to Greensboro to spend money.”

There is some concern that other recreation and culture projects could fall by the wayside.

About a third of the projects due to begin soon fall under the Parks and Recreation Department banner. They’re items like the development of Keely Park in northeast Greensboro and Hilltop park and recreation center in the southwest.

Money for both parks dates back to the 2000 bonds — which will expire if they are not sold this year. That’s cash supporters don’t want to lose.

“People are getting a little bit weary of the special interests coming ahead of everything else. I know it’s wonderful and glamorous, but it’s very expensive, too,” said Parks and Recreation Commission Chairwoman Rose Marie Ponton , referring to the aquatics center and the science center.

“If you’ve been waiting in line this long, it’s time for us to have what the general public wants and needs,” Ponton said.

Council members also may consider whether the cheaper construction costs still provide enough incentive to start projects now.

The bond project list includes several new buildings, such as the Lake Jeanette library branch, for which the City Council will be asked to approve design services next week .

Although the aquatics center came back over budget, Fire Chief Gregory Grayson said recent bids for a new fire station came back below 2007 bids for a smaller fire station.

The library issue, like other things on the list, also might become a political battle over council members’ favorite items.

“I’ve been fighting for that library for along time,” Councilman Zack Matheny said. “I will continue to fight for it.”

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com

Accompanying Photos

Nelson Kepley

Photo Caption: The Greensboro skyline.

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Panacea

January 30, 2010 - 8:38 am EST

Clearly the Council has hard financial choices to make. Pet projects will have to go.

The swim center should be one of them. The projections are overstated, and the issue of how yearly maintenance costs will be paid has yet to be answered.

Sadly, the Science Center expansion should also go on that list. While I support the Science Center, I find it incredulous that a restaurant there will bring more than local traffic, though I could see it might encourage more of that local traffic. But I don't see any reason to let it cut in line for bond money when other worthy projects have had to wait.

Some other projects should just be allowed to die, like the skate park. It's not necessary infrastructure.

Sidewalks, OTOH, are a safety issue, and should be given priority. It would also be nice if the Council would find the money to fix all the potholes cropping up. Somebody is going to get seriously hurt hitting some of those things.

Mick

January 30, 2010 - 11:59 am EST

I dont entirely disagree Pan. But just because you dont know the expected expenses/deficit doesnt mean it is not known to those who will be making the decisions. Of course, it is also somewhat likely that you are correct. I am sure (hope) all the info will be available to CC.

Though I dont neccesarily disagree, you assume the projections were overstated. We dont really know. I hope that more and more reliable/accurate info is made available to CC for their decision making processes on all projects..

Economic impact should be a piece of the process, a big piece but just a piece none the less. I dont get the restaraunt at The NSC. Has the one at the Farmers Market been some kind of huge success? Maybe it has I really dont know. I never did get the skate park. Agreed on the potholes. I know libraries have patrons and usage, etc but hasnt the internet swallowed up a great deal of library "business". Has at my house.

Good luck CC.

d_random

January 30, 2010 - 12:58 pm EST

Complete agree.
Axe the swim center, we can't afford it!

Abner Doon

January 30, 2010 - 9:08 am EST

"Are principal and interest payments of an expected $70 million bill for complying with Jordan Lake Rules accounted for in the City of Greensboro’s $11.2 million deficit?"

George Hartzman

If the city used overly optimistic assumptions for this coming year, the chances of the numbers being pretty far off the year after are pretty high.

I would hate to be the guy who has to tell a city social services employee thier job was eliminated so some upper income families have a nice place to swim in the winter.

Mick

January 30, 2010 - 12:01 pm EST

"Needed" jobs should not be eliminated. I doubt it comes down to social workers vs GAC. But nice attempt at fear mongering Mr Doom.

Abner Doon

January 30, 2010 - 2:14 pm EST

Numbers are numbers Mick. What we have here are facts being ignored by special interests more interested in thier own interests than the best interests of the community.

Look how hard you lobbied for the pool. The facts were irrelevent to your rhetoric.

This is the same thing only different.

Jeremiah

January 30, 2010 - 11:22 am EST

I think the $8M SciQuarium, all-new museum and expanded zoo were the point of the economic development statement, not just the restaurant. According to the state, the Science Center is already #14 for tourism. They have also met every single accreditation standard that exists in their fields of expertise and are projected to become a top 10. According to UNCG, their positive, annual build-out economic impact is almost double the current deficit. Yes, there are hard choices, but new money coming into Greensboro is new money! A future top-ten attraction in Greensboro is why 61% of the voters said yes to a small tax increase.

nambus

January 30, 2010 - 12:51 pm EST

Hard choices will have to be made. City Council and the City Manager would be wise to carefully consider each bond from both a political and a business perspective. One bond clearly seems to jump out as deserving special consideration. The Natural Science Center bond was embraced by over 61% of the community and unanimously approved by the City Council. That was passed by Greensboro citizens in the depths of a recession, and with the full understanding by all that it could result in a slight tax increase. There were many reasons for the “YES!” proclamation from the community. Those don’t need to all be repeated to convince me that this bond should not be thrown in the same pot as other controversial bonds, infrastructure related bonds, and non-revenue generating bonds.

In addition, the folks at the Natural Science Center have wisely spread this worthy project and its related costs over several years. The revenue stream that will quickly begin to flow, if their projections are accurate and as their proven track record suggests, will therefore help cover costs, which means some of the bond money can likewise be spread over time. However, the project should be started immediately as profoundly requested by the community last November.

It would seem to me that the City is only confusing the issue by not treating this bond separately and letting a slight tax rate increase be considered, if necessary, to cover its debt service. The other bonds in the mix could then be addressed on a priority rating basis as deemed appropriate in light of funds available and the Council’s tax rate objectives. This would not be compromising but, rather, fulfilling the pledges and commitments to the citizens of Greensboro.

Jeremiah

January 30, 2010 - 1:07 pm EST

Well said, Nambus. I have lived in cities that would absolutely "die" to have an aquarium and all of the positives that come with it. Greensboro will get a new aquarium, science museum and zoological park all in one location. It was just two months ago that the voters and a unanimous city council (new and old) overwhelmingly said YES to this very unique project and a corresponding small tax increase. I will support city council on a 'yes' decision for the Science Center.

nambus

January 30, 2010 - 1:40 pm EST

As a business person, I know it is tough to make money without making investments and fulfilling commitments to our customers and stakeholders. Of course those investments must be wise investments founded on much research, planning, and thoughtful deliberation. I will reserve comment or judgment on other bonds in the hopper, but I have followed closely the available background information regarding the SciQuarium project. This truly seems to be a solid financial investment for the community, which our citizens as stakeholders chose to support even in the most difficult economic times. Without a doubt, that is because they recognized that this project is an important part of the solution, not part of the problem. I have every confidence that our City Council and City Manager truly recognize the merits of the SciQuarium project, and accordingly will make the right choices in supporting the wishes of the community they serve.

d_random

January 30, 2010 - 12:57 pm EST

How about pull the plug on that "Swim Center"? Obviously we can't afford it.
We can reclaim $20 million for the budget.

RonaldusMagnus

January 31, 2010 - 7:44 am EST

If projects like the swim center are a good idea private business would invest in it but it is not a good idea. It would be yet another publicly funded hole to throw my tax dollars in. Our taxes are already among the highest in the state because of wasteful spending by our local government. The problem with socialism is sooner or later you run out of other peoples money. At 11% unemployment my guess is that will be sooner.