Advantage – City Council
May 10th, 2009
(May 10, 2009) – - Why should you care that the City Council of Virginia Beach will use the Public Private Education Facilities Infrastructure Act (PPEA) funding scheme, borrow through the Economic Development Authority (EDA) without a referendum and build a headquarters hotel and an entertainment venue for the Dome Site?
Because council will stick the uninformed citizens of Virginia Beach and your children with more debt. That’s why.
The advantage goes all to city council: They borrow all the money they want and do not have to bother with a citizens referendum that could be defeated. So, rather than risk a NO vote on their pet projects, council simply goes through the Economic Development Authority borrows several hundred million dollars and promises that the citizens will pay back every cent.
The obvious disadvantage to citizens is: No opportunity to vote on major issues and the related major expenditures. And of course, you and your kids are stuck with all of the additional debt.
Remember that in the first part of this series, you referenced the earlier study showing the amount of money that council has already spent on oceanfront projects. In the second part, you read a short presentation of the PPEA and how council borrowed several hundred million dollars through the EDA thus bypassing a referendum.
Now click on an old study of the economic impact of Virginia Beachhttp://www.virginianewssource.com/VBIncome01/vbinvest.html and review the data. The data shows a significant difference between the dollars claimed for the report and the actual dollars recorded by the Commissioner of the Revenue. Using the actual tax revenue reported by the COR, the net shows a negative. Tourism lost money for the citizens of Virginia Beach.
Is spending your tax dollars to build a hotel and more attractions for the oceanfront a wise expenditure? Without a detailed business plan there is no way to estimate a reliable return on your expenditures.
Virginia Beach City Council should develop an exhaustive business plan for the oceanfront resort area. The plan should include all the expenditures in the resort area so far (including all interest costs) and add into the plan the proposed headquarters hotel and the entertainment for the Dome Site. To calculate the return on our expenditures, council should use accurate and actual data from the resort area and identify the “dedicated funds” used in the calculations as well as the source of those funds.
Council should present a business plan to taxpayers before starting on a headquarters hotel, Dome Site or any other major projects.
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# Reid Greenmun on 05/11/09 at 09:15 Edit… Delete!
I agree. Good points. The VBDA is a “tool” for going around the need to ask the taxpayers if we agree with running up massive debt to pay for more speculative development.
# Mike Barrett on 05/11/09 at 13:18 Edit… Delete!
Bob, enough already. The doom and gloom is killing us, and frankly your comments ignore the reality of the city weathering the turbulence of the current economic downturn in great shape. No tax increase, no significant decrease in the services we want and need, and continued plans to grow our tax base so our residential tax payer is insulated from increases.
Your comments ignore the reality of performance and in fact, if your recommendations were instituted, would result in a much higher tax rate for us residential taxpayers. Stop working against our interests. And please give the gloom and doom a rest for at least a week or so. MJB sends!
# Reid Greenmun on 05/11/09 at 14:32 Edit… Delete!
Bob, clearly you have a much greater grasp of the adverse impact of out of control DEBT than those that have mismanged SPSA so badly. Please keep up the good work and sharing the TRUTH that refutes the deceptive claims of the status quo in Virginia Beach.
# Fred Martin on 05/12/09 at 06:51 Edit… Delete!
What MJB misses is that all of the economic bloom is due to the council borrowing from the future – rainy day fund, taking school funds, etc.
The economic pix is more doom than he wants to admit. The council is mortgaging the future of our great grandchildren to finance today’s bills due from past excessive spending and mismanagement.
Sure there’s no tax increase because they’re ‘stealing’ yesterday’s surplus from today’s treasury.
# Mike Barrett on 05/12/09 at 07:18 Edit… Delete!
Fred, the Council set up rainy day funds from past tax collections to deal with an adverse economy like we have today. That is not irresponsible, that is acting in a fiscally prudent manner.
And borrowing per se is not an issue; in fact, borrowing for capital investments for needed infrastructure spreads the cost of the infraststucture over the likely years that the infrastructure will be used, thereby ensuring that those who use it pay for it.
I certainly agree that too much borrowing can be an issue, but of course, that Beach’s ratios are on the low range of those suggested by the Municipal Finance Officers Association.
# Mike Barrett on 05/25/09 at 08:31 Edit… Delete!
This council, and past councils that have made tough decisions to invest instead of to cut, have created a political jurisdiction that is not immune to economic downturns, but which is at least positioned to weather these storms and to move forward even in the turbulence of tough economic times.
The fact that this council has long appreciated the failure of the Commonwealth to fulfill its obligations in education, courts and justice, transporation, public safety, and human services has stimulated them to adopt strategies to create jobs and wealth locally. That has insulated the city to a degree not generally seen in local government.
While Council does not have the revenue sources available to it that the state has, they have striven to adopt tactics to stimulate the tax base at the resort, in the strategic growth areas, in the private sector, and in city business parks. These strategies have worked so well that this year’s budget, which has been so divisive elsewhere, was almost conflict free here.
So while the VBTA remains as the sole complainer and chief critic, it is time to set aside their incessant criticism and say, well done. MJB sends!