(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.