Macon County Shared Vision

Take Our Survey / Poll on Taxes

Macon County Shared Vision is taking a survey/poll on property tax increases in the city of Decatur. It only takes five minutes. Share your views. Poll results will be shared with the media and policy makers to influence tax policy in Decatur.

Click on this link to take a survey/poll on property taxes in Decatur.

Decreasing Housing Values Should Add Pressure to Control Spending

Property values dropped through-out the Midwest this year for the first time in many years, signaling that states and local governments could be on the verge of another fiscal crisis. As a result of the depressed housing market, assessed values in some Midwest counties dropped 1% to 3%. Local governments that have been accustomed to annual increases of 5 percent to 6 percent in the revenue raised by property taxes may now see no increase. This can lead to even more pressure on state government to support local government units. Without some adjustment, some cities will face cuts in essential services. Generally, about 50-60 percent of municipalities' operating budgets are bankrolled by property taxes. Communities know the hit is coming, and should be formulating financial contingency plans.

Water Supply Issues: A Letter from former Mayor Howley

[This was written by former Mayor Howley to the City Council.]

Tonight's the Decatur City Council will begin an important study session which promises to attain a long-range solution to Decatur's water supply issue. The following facts are pertinent to the Council’s decision-making process and hopefully will be considered:

• Water supply has been at the top of this city's priority list since the lake was built in 1920 due to the concentration of large industrial users in the city,
• There have been dozens of studies completed since the 1940's about increasing the capacity of our lake,
• There have been dozens of studies completed since the 1940's about decreasing the amount of silt entering into Lake Decatur from the Sangamon River watershed,
• Most of these studies, paid for with taxpayer dollars, are sitting on shelves in the Public Works library and have never been fully implemented,
• Decatur makes enough water daily for a city of approx 300,000 population (approximately 38 million gallons per day “MGPD”),
• Our water supply currently is replenished from the Sangamon River, Big Creek, and Sand Creek and other small streams that feed into our lake. In total over 960 square miles provide water to Lake Decatur,
• Normal daily inflow from the Sangamon River averages 225 MGPD, at present that is down to about 5 MGPD (according to Jon Smith of the City),
• The Decatur Sanitary District processes approximately 30-32 MGPD of waste water through their system every day of the year,
• After processing this treated discharge daily, the sanitary district of Decatur discharges a similar amount down the Sangamon River.

Perhaps one of the most important and least discussed alternatives is:

Can this processed water from the city be recycled back to ADM, SWTP or the Lake on a daily basis rather than discharged downstream?

Is this not one of the most logical steps towards preserving this precious water resource so vital to our community? The city and county have sponsored a re-cycling program for several years dealing with newspaper, aluminum, plastic and glass containers. Yet we have not exhausted the possibility of recycling our water. We have all heard that the water supply is not the problem in Macon County. It is the management of those resources that is in question. There is plenty of water here. Our challenge is not to store more water but to ask that it be managed correctly by those entities who make and treat it on a daily basis.

Water Supply Issues; A Letter to the Mayor

Dear Mayor Osborne and Council Members,

Macon County Shared Vision tries to promote an informed and constructive dialogue about pro-growth policies in our community. Maintaining adequate water supplies for citizens is a primary responsibility of city government. We all must accept our collective responsibility for a robust water supply. The Decatur City Council’s consideration of options for meeting the water needs of our community may lead to the most important decisions over three to four decades.

Simply the intent of this correspondence is to encourage you

• be open with the citizens of Decatur,
• consider adverse consequences of funding options,
• examine all options for water supplies,
• exhaust all funding alternatives, and,
• carefully monitor all cost estimates.

Update on Hotel - Analysis

The Council found its way to a better (not best) outcome. In general, we are not critical of the current arrangement that the city is working on with Mr. Horve. In a more perfect world, we would always prefer giving more genuine consideration to both lease/management alternatives (Ritchfield & Horve), but there was no political consensus for keeping Ritchfield as an alternative.

As described in the news article linked below, the City has decided to focus on entering a lease/management contract with Mr. Steve Horve to operate the hotel for a period of time. This will provide Mr. Horve the best opportunity to determine if he will buy and operate the hotel. As the Council has come to understand, the hotel must be sold or leased in this kind of arrangement due to liquor license restrictions on the city's control of the hotel.

The pending lease/management agreement with Mr. Horve is not a purchase. It is better described as a master lease with elements of a hotel management agreement. Horve may purchase it in the future, and this arrangement may provide the best way to encourage him to do that.

A significant change was the removal of Horve’s option and right of first refusal. Mr. Horve volunteered that. The removal of this provision and issue significantly changes the character of the deal and gives taxpayers a chance to participate in the possible upside. Some will complain about Mr. Horve's 50% profit share of the gain on sale. Such an incentive creates a meaningful reward for Mr. Horve to improve financial performance and promote the sale of the hotel.  This is good for the city. We should not overlook the significant risk associated with this hotel, for the City, Mr. Horve and any possible purchaser. These incentives help the city reduce those risks. (Mr. Horve said it would take $2 to $7 million for rehab of the hotel and to get a national franchise agreement – not $500,000.)

For the Herald & Review article << click here.

Hotels - Another Point of View

The following letter to the editor was on the Herald & Review's Blog and deserves attention. It was written by Terry Howley and asks our community to confront our priorities. For the post on the Herald & Review website - click here.

We would want to remind our readers that ill-conceived city decisions contribute to the high tax burden in the Decatur community.

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A recent guest editorial described the City of Decatur's hotel purchase as "a centerpiece for future economic development and provides a large amount of revenue for local taxing bodies".  While this hotel is “nice to have” for Decatur, a fair minded person comes to a different answer. There are several key facts:

·         Tax revenues from this property are only 20 percent more than the interest only cost to the city.

·         Needed hotel renovations, will likely cost taxpayers several million over the next few years.

·         Thirty percent occupancy rates show the limited demand for this hotel (successful hotels operate at 60% or higher).

·         Total “room-nights” from both Farm Progress Show and State Republican Convention only represent 2% of annual possible room-night sales for this hotel.

·         There is, and has been, little development interest in adjacent land.

·         The City does not emphasize job preservation in city supported commercial ventures.

The City did not try to purchase K's, Intermet and other Decatur businesses. Would the Council buy other struggling businesses with employee residents? In fact, recent City financed developments did not require job increases or retention.

On the day after this purchase, newspaper headlines announced two new hotels in Forsyth. To investors, are these new hotels more viable due to traffic, shopping, restaurants and entertainment? The lack of interest from savvy investors is a red flag.

A city official stated that the storm sewers need rebuilding, while others call for a new lake, dredging and police space needs. Our community needs to set better priorities. The city manager also said: “… this isn't just about the money…”  When using taxpayers funds to compete with Decatur businesses, it is only about the money. Taxpayers buying this hotel, simply doesn’t make sense.

Should the City Be Buying Hotels? What are Vital Assets?

The Decatur City Council will be voting tonight (8/15/2007) on the possible purchase of the former Decatur Holiday Inn. While the city has not announced any details, we believe it will be bought for less than $10 million.

 

While most of us emotionally "wish" this hotel could remain in our community, we don't believe the role of city government is to run a private business with taxpayer resources. City government should not be the Buyer of Last Resort. Like before, this purchase has not been adequately discussed with the community. We encourage you to consider what action that you want to take today.

Editorial from the Decatur Herald & Review - City Should Stay Out of Hotel Business click here.

Information we know and questions on our Talking Points. Click here for it.

Whenever city resources (funds or debt) are used for a purpose that does not create more revenue than it uses, there is a risk that taxes will rise. We think some/many city projects need to be resisted until our community tax burden is competitive with other communities. Many of our readers believe that the City has not demonstrated competence to invest in the myriad of projects over the years. These doubts relate to:

1. Wabash Crossing
2. Various Water Line Extensions
3. Dredging Project (recently shut down due to poor results)
4. Mound Center
5. 300 North Water/ the hole in the 300 block

While the hopes for many of these projects are noble, the results are mixed at best. More importantly, city staff has been unwilling to share an objective appraisal of the costs incurred and benefits derived from each of these projects.

MCSV would like to see the City of Decatur to be more focused on not increasing city expenditures and thereby reduce the tax burden on the community. With a lower tax burden, we can better attract families and business to our community.

In considering a purchase like this, there are three major policies issues that deserve discussion and debate in the community. This is particularly important when the city wanders away from its primary role in local affairs. These issues are:

1. Should the City use taxpayers resources and borrowing capacity to engage in private commercial enterprise? Under what conditions and with what criteria?

2. Is this project/enterprise a sound investment and properly/adequately analyzed? What are the risks and likely rewards or failures? 

3. Is this the kind of decision that taxpayers/voters would expect and have they been given adequate chance to understand the policy and implications? Have they been given a chance to express their approval or lack thereof? 

Please express your point of view - comments welcome - click on comments below.

Good Decisions and Meeting the Space Needs of the Decatur Police Department?

Decatur is approaching the decision point regarding meeting the space needs of the Decatur Police Department. It is important to Decatur because of the need for effective police protection and the need to limit increases in City spending. It seems everyone agrees about:

• The police need more space.
• The decision process has been protracted and an end is not in sight.
• It appears everyone is frustrated.
• An expanded/new police station will not improve public safety in a meaningful way.

Frustration is not a good reason for a flawed decision. The Herald and Review today properly observed the decision process has been flawed from the start because the City decided on the answer ("Move to the Regions Building") and then decided to try to make this the best option. Good decisions are not made this way. The Council needs to correct this process to work towards an effective decision. (For more on a Better Decision Making -see below.)

Many have asked "why"? Why has the City so strongly focused on a single alternative? We don't know. We don't know anyone that does know. At the Council meeting last Monday, one presenter may have tipped us off. He said "that people downtown are scared that the Regions Building will go dark when Regions Bank moves out" [MCSV paraphrasing these comments]. He went on to say "if [the property owner] had any alternatives to the City using this for a police station, we would not be standing here now". We think he intended to make the point that other tenants would provide a more lucrative lease. Some would disagree that his building would go dark. Many believe that this building is one of the more attractive downtown locations. If anyone wanted a retail presence downtown, this would be a wonderful building and location.

Also see "The Vote is In 76,999 to 1".

Not enough attention has been given to the cost of providing the police 60,000 square feet of space in the Regions Building. This decision may well lead to increased taxes. Whether space costs $10 or $15 per square foot per year, the additional cost of doubling the size of the police department will be at least $300,000 more per year. We believe that actual increase in city spending will be more like $750,000 per year (1).

It is also clear that little attention has been given to the actual space needs of the Police. We do not believe that a space needs analysis has been done (2). The police make effective arguments that they are doing more with less and need more space. However, when one listens carefully it is not apparent why they need to double their space. We inventoried the space concerns expressed by the police and believe that a reasonable space for the police would be in the range of 35,000 to 45,000 square feet if in the current LEC.

We ask: "What can we afford?" We wish that the City Council would ask too.

There are other unanswered questions. Watch our site for more on this topic.

Attitudes about Water Rates in Decatur

Last Monday (8/6/2007) The Decatur City Council planned to act on a rate increase for City water rates. The vote was deferred so that the community could better understand and comment on the increases in water rates.

Please take the MCSV SURVEY on WATER RATES.

By taking the 5 minute survey, your opinions about increases in water rates can be shared with the Council, the media and others in the Decatur Community. You may complete the survey anonymously if your prefer.

Empty Your Pockets; Garman and City Raising Water Rates 59%

                              UPDATE 1:44 PM Monday

Mayor Osborne has announced that the decision tonight on the water rate increase has been deferred. We applaud the Mayor and Council members who decided to give the community a chance to understand and comment on this issue. To those that believe there was adequate comment on this prior to today, we say "Not Adequate for a 59% increase." The orginal post on this follows -

  Please Complete Our Survey on Water Rates - Click Here 

The Decatur City Council will be voting Monday night (August 6, 2007) on a 59% increase in city water rates that will effectively tax another $5 million per year out of the local economy. This is unnecessary, excessive and inadequately discussed in the community. Take Action and call your favorite Council Member and tell them what you think.

The City Manager has placed on the agenda Monday night an increase in water rates of over 59% in two years. The City will have more of our money instead of us! Families and businesses don’t deserve to have more taken from them by the City of Decatur.

As reported in today's newspaper, an immediate 20% rate increase will be followed by two additional 15% increases in each of the next two years. The total revenue collected from these increases will be $5 million or more per year. These additional city taxes and fees, unfairly burden families and local businesses. This "deadweight loss" hinders economic growth and job creation in the city’s economy. This water rate increase is the equivalent of:

• 50% (or more) of total annual water revenues collected by the city,
• 50% (or more) of annual property tax levy of the city, and,
• approximately three times the city revenues collected from the food and beverage tax (10%).

For more information – see below.

This is not an effective example of open government and community participation in decision making. It was announced in the paper Saturday (8/4/2007) for a final vote Monday night. There have not been any public hearings. There has not been a public discussion of the needs or alternatives to increasing rates 59%. Was this decision hidden behind Celebration Weekend when many will be unlikley to read the newspaper?

The City Council should expect better from unelected officials. The Mayor was quoted as being in favor of this. We don’t know the public position of other Council members. Council person Caulkins is the only one to express concern so far. (The Decatur Tribune won’t be able to tell its readers before the Council votes.)

There is no need for an increase in water rates. Until we decide if the City is building a new lake. That will be the proper time to discuss how to fund the investment in a new lake. (See information below). The water fund is sound and has a huge investment reserve (over $20 million) that should be returned to taxpayers. Rates should not be increased.

Surprise 56% increase in water rates is not good policy if we want to attract industry that relies on water. If water is an essential resource for possible new companies in Decatur, then we should not raise rates by an substantial amount. If we can produce water cost effectively, then that should be our competitive advantage. Raising rates will discourage water based industries, not encourage them to locate here.

Our Suggestions

1. Table this decision until there has been public hearings.
2. Do not raise rates 59%
3. Give $20 million in the water fund back to taxpayers/water users.
4. Defer any "new lake" related funding until a decision has been made regarding the lake project.
5. The City Council should direct the City Manager to provide timely and complete disclosure of this important decision and schedule appropriate public hearings.

Per Available City Financial Statement (see pages 20 – 50 of city annual report posted on City web site)

• Water Funds has $24 million in investments that can be converted to cash
• Water Fund (per most recent city financial statements):
  • Revenues/investment return = $13.2 million
  • Expenditures = $13.0 million
  • Transfers out of water fund were $6.6 million
  • Net additional cash generated in 2006 in water fund = $2.9 million
• Financial statements say “lower water sales [from 2005 to 2006]” (p27 pdf)

City Council Agenda – Monday August 6, 2007

City Presentation on Alternative Water Resources

Herald & Review Article – Water Rate Increase August 6, 2007