Predicting the future is always one of the more difficult aspects of governing; we’re fortunate in Oak Ridge (and Oak Ridge Schools) to have some folks on staff who are gifted in that area.

They don’t claim any prophetic talents — no crystal balls, incense, turbans and the like — but they are handy with calculators, formulas, and such.  Since the last City Council meeting (which I missed, as it was during Spring Break), the forecast for Crestpointe (should the bond referendum pass) has been revised and refined.

—–Original Message—–
From: Jenkins, Steve
Sent: Thursday, March 29, 2007 2:05 PM
Subject: Latest Crestpointe Analysis

As a result of discussions at the last City Council meeting, attached is a spreadsheet that incorporates the very latest information on Crestpointe. The changes from the original analysis are as follows:

 1.       The analysis now incorporates the actual borrowing that will be recommended. The amount of that borrowing is $2,500,000 for 15 years @ 4.5%.

2.       The balance of the $10,500,000 or $8,000,000 will be paid from reserves that will be advanced to the economic diversification fund by the debt service fund.

3.       The model includes a contribution by the County of approximately $87,000 annually for the taxes paid to the County by Target. If the County does not contribute to the project, the repayment schedule would be extended by 2 to 3 years.

4.       Property tax collections from the site grow at 3 percent annually, which is conservative based on the City’s tax history for the prior 15 years.

 After incorporating these changes, the results are as follows:

 1.       The property tax collections alone will pay the debt service on the $2,500,000 and replace the $8,000,000 within a 15 year period. This is very important to the project because no sales tax collections will be necessary to retire the debt. In addition, there will be some funds, (approximately $800,000) available in year 14 and 15 for other uses.

2.       Any property tax collections from the site after 15 years will no longer be necessary for the project and the lease agreements can be released. At that point, property taxes will be paid as normal to the City and County and can be used for other purposes.

3.       This analysis shows that any net increase in sales tax collections will provide new revenue to the City, City Schools, and County Schools.

4.       If the City chooses, it could use a portion of the sales tax to retire the debt and/or replace the reserves earlier.

5.       Finally, in this analysis, assuming the buildings are constructed, the project downside moves from 10 cents on the tax rate to no negative impact on the property tax rate. The upside is also much better.

This analysis still includes a $60,000,000 net gain in sales tax collections for the City and County, but as stated earlier, any gain in sales tax collections will produce new revenues for the City, City Schools, and County Schools.

This is a very viable project, and one that I truly hope Oak Ridgers will support in the coming referendum.  The only remaining question I’m hearing is, “where is the ‘new’ sales tax money coming from?”  The answer, very simply, is that the “new” revenue is that which is currently going to Knox County, when our residents (and others who would otherwise shop in Oak Ridge because it’s closer to where they live or work) have to go to Knoxville to buy the items they want and need because of the limited selection here.

It’s not money that isn’t currently being spent, it’s just being spent elsewhere.

If we had someone who could coordinate Oak Ridgers the way Pat Summit coordinates her team, there’s no limit to the things that could happen here.  Unfortunately, we don’t listen quite as well as the Lady Vols, with far too many armchair coaches and not enough teamwork.

We can change that, and should.

County Commission’s vote not to kick in a little extra support to the Crestpointe project is sort of old news — almost two weeks old now — but Commissioner Whitey Hitchcock’s response in the form of a column yesterday is still fresh.

Whitey is one of my two County Commissioners, and the only one to vote against it.  Following is the note I sent to him today:

Dr. Hitchcock,

I was out of town for Spring Break when I read, with considerable dismay, that you were among the three Oak Ridge Commissioners who voted against redirecting roughly $97k/year in potential property taxes on the proposed Target site.  I agree that it is my own fault for not conveying my opinion to you in advance of the vote, as you were very responsive to me on the issue of the sessions court move.  Given your involvement in education, I mistakenly believed that my input was unnecessary – it seemed silly to think that you could be opposed, given the low risk and high potential benefit.

As a member of the Oak Ridge Board of Education who has been very involved in school finance issues for several years, I fully understand the breakdown in distribution of local tax dollars for education between the three school systems in the County; this project would be beneficial to all of us.  That the County schools receive roughly twice as much as Oak Ridge schools is simply a matter of pupil population.  But, following the County’s successful vote to supersede our sales tax rate last year, you must also know that Oak Ridge is in dire need of replacing not only the sales tax revenue lost to the County, but also the sales tax revenues that have declined in real dollars over the past several years.

I also know (as I strongly suspect that you do) that a Commission vote in favor of this tax redirection would have had absolutely no impact on whether or not the citizens would be able to vote on the matter in a referendum; that question is predicated solely upon the number of valid signatures on the petition.  In contrast, the Commission’s “no” vote does lessen the likelihood that the referendum will succeed.  Many people question why Oak Ridge should bear all of the risk, while the County recognizes the greatest benefit.

Should Commission have voted in favor of this proposal but the referendum be defeated in June, it would be a moot issue.  You would not have usurped any citizen’s choice in the matter.

We, in Oak Ridge, are more heavily reliant on property taxes to fund education (via allocations from the City General fund, as well as from Anderson County) than any other school system in the region.  For us to prosper in terms of retail development is of critical importance, but it also helps our counterparts in Clinton and Anderson County, whose schools are not suffering an embarrassment of riches, either.

I respectfully ask that you publicly commit to voting in favor of this request before the start of early voting on May 16, in order to mitigate the harm already caused.

Sincerely,

[Netmom],  District 6

Unlike Whitey, neither Shuey nor Creasey have given any public explanation that I know of.  If anyone’s heard from them, I’d love to hear their explanation.