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Thursday, July 24, 2014

Get it done

Monday, August 20, 2007

Cherokee City Council members are understandably reluctant to add more debt service unto an already heavy tax burden for city residents.

The total city property tax in Cherokee at this time is about $16.33 per thousand dollars of taxable valuation; about $3.06 of this is for debt service. The city tax does not include property tax for other entities, primarily the school district and county government. Taxable valuation is about half of actual valuation on property.

Despite the reluctance to increase taxes, the deteriorated condition of the Cherokee Community Center had council members talking at this week's meeting about a future bond for the community center. So far, they are approaching the subject with the painful timidity of a swimmer moving into frigid water with agonizing slowness.

Here's a word of advice to those who plan a capital improvement project for the public, don't be timid or apologetic, dive right into the effort. Write off the segment of the population who will never be in favor of any increase in taxes for any purpose and concentrate on generating enthusiasm from supporters.

This is the approach that the aquatic center fundraisers used and, more relevant in terms of a totally tax supported project, it is the approach used to get a bond passed for a first rate new Cherokee Middle School.

The backers of these projects knew that support wasn't enough. There needs to be enthusiasm for a public undertaking.

That doesn't mean a project needs to be extravagant. The council members were right to balk at the original community center plans, which included excessively expensive lighting throughout the community center and also included stage lighting and a sound system that were beyond what is needed.

However, the council is considering taking care of what is falling apart at the community center now but delaying other badly needed projects at the community center for a year and then delaying still more projects indefinitely. Their timidity is not likely to be respected either by potential supporters or the opposed-in-any-case crowd.

The council will wait for bids to come in before deciding on a bond amount, which is as it should be. That is not what we are referring to by timidity. By all indications, the council will not get everything done that needs done with a bond issue, at least not the first time around,

The highest amount for a bond that any of the council members speculated about at their last meeting was $200,000 to take care of immediate needs with other needs delayed, some indefinitely.

The city clerk prepared, for the council's consideration, a list of bond amounts and the correlating taxpayer impact. The smallest amount listed was $250,000, creating additional debt service of about 30 cents per thousand dollars of taxable valuation for a 10-year bond at 5 percent interest, with about a six-cent increase for each additional $50,000 of bonding.

This would mean that a $200,000 bond would create additional debt service tax of about 24 cents. Based on the most recent estimates for construction (which might already be outdated) and eliminating some of the built-in extravagance, the city might need to bond closer to $300,000, as well as use money already set aside for capital improvements. This is admittedly a very rough estimate. The estimated debt service for a bond of this amount would be about 36 cents.

Increasing property tax by 24 cents is not that different psychologically than increasing it by 36 cents, a lot less significant psychologically than the difference between just keeping the rain from pouring in and making the community center a facility the town can once again be proud of.

And speaking of psychological effects, there could be no worse strategy than to tell people they are getting a tax increase now for the community center and then will get another one in a year or two. That is a strategy for demoralizing supporters and rallying opposition.

The city council can issue a bond on its own authority following a public hearing for which public notice is given. Citizens have a right to call for a vote on the bond by submitting a petition.

The city needs to decide whether it wants to have a fully functional community center. Otherwise, the building should be demolished and a nice flower garden should be planted in that location.