I often chuckle when people in government start comparing your personal finances to government finances. They are different. Why? Because it really doesn’t matter what you spend personally because it is your money. When government spends money, it is OUR money collectively and we have the RIGHT to know.
While the School District has finally admitted what principal and interest will cost if the loan goes to full maturity, they still are playing games with that figure;
“There’s a $110 million of interest on that over time, unless we pay it off early like we did in 1997,” Morrison said. “But it’s kind of the way you think about it. We’re only going to get $190 million in bond proceeds that we have to spend on the project.”
It is a proposed 25 year loan, so that would be $110 million over the term of the loan, that is what needs to be told to taxpayers. We have NO idea if they will pay it off early because they have NOT presented a plan to pay it off early and have NO idea how they would. Comparing it to the 1997 bond is unfair, that loan was $30 million, this bond is over 6x more. It needs to be stated to taxpayers, ‘If the loan goes to full maturity it COULD cost the taxpayers $110 million in interest and principal.’ That is the only FACT here, because they have no idea if it will be paid off early. If they have a plan or scenario, please show us, otherwise stick to the facts.
Grimmond called the $300 million number a “scare-tactic” by naysayers, and compared the process to how home buyers talk about buying a new home with their friends and family.
It is NOT a scare-tactic, it is a FACT.
“Nobody goes out there and says, ‘I bought a $200,000 house, but in interest it’s going to cost me $400,000 over 40 years,'” Grimmond said. “…They don’t look at that final number. Should they? Maybe.
“But if you ask the naysayers, ‘How much are you paying on your house with principal and interest included in it?’ I know they don’t know that number. It would be like crickets going off, but they want to hold the school district to that same standard.”
Like I said above, it is up to me if I want to know what that number is, it’s my personal expenditure, but this is public money and the taxpayers have the right to know what that payoff amount would be if it went to maturity. It’s similar to how Federal Law was changed a few years ago that requires credit card companies to show on your statement what it will cost you if you make the minimum payment. Taxpayers have a right to know what that will be if the school district makes the minimum payment on the bonds, that is $110 million. And while that is NOT a scare-tactic, it certainly is a scary number, and that is why they are trying really hard to hoodwink us into thinking they would pay it off early. The only way they will be able to pay it off early is if they increase our taxes, which brings us to their other snow job;
“As the value of a home goes up, your taxes go up proportionately,” Morrison said. “Let’s say your home went up 10 percent over the next 10 years. Then yes, that $2 will be $2.20, but you’re enjoying the value of your home that just went up $20,000, too. But it’s the same thing. It’s that time value of money. That $2 won’t go the same distance in 10 years.”
Than why do you continue to tell people if they own a $185K house they will be paying $2 a month through the life of the bonds? Your home value WILL go up and LEVEES will go up, that means the $2 a month WILL go up. In other words my $185K house won’t be a $185K next year, so I will be paying more that $2 a month, and that of course will continue to go up.
While I appreciate the school district addressing these issues, it doesn’t change the fact that they are facts, and facts seem to be getting in the way of their propaganda.
I think the architects (Maher, Morrison and Vik) of the 190m bond issue had no intention of ever making voters aware of the true cost (capital costs/190m, financing/110m) of the loan.
They’ve been pressured into publicly discussing it because of the local newspaper (thank you) and local bloggers.
Doesn’t say too much for integrity, does it?
At least, when Mike Huether and Team were out selling the events center to voters they were very clear FROM THE BEGINNING that the EC would cost 180m, not just 115m for the capital costs.
no one thinks about the interest they have to pay when they buy a house. yeah, right.
“As the value of a home goes up, your taxes go up proportionately,†Morrison said. “Let’s say your home went up 10 percent over the next 10 years. Then yes, that $2 will be $2.20, but you’re enjoying the value of your home that just went up $20,000, too. But it’s the same thing. It’s that time value of money. That $2 won’t go the same distance in 10 years.â€
This statement is a joke to anybody who owns a home, or is even remotely paying attention. My home’s assessed value is two and a half times what it was when we purchased it 23 years ago. It has been accelerating even faster the last 5 years. 38% to be exact. As far as I’m concerned our assessed value is already more than what I can expect to get for our home when we decide to sell. OK, so we decide to sell. So what? In a sellers market, we still need to replace that home. For what? A slab on grade 1300 square foot cookie cutter “villa” for $200 a square foot? With taxes accelerating through the roof? With water and sewer bills sky high. Sorry SF. Time to go elsewhere.
Mr. Morrison. I was born at night, but not last night.
When I bought my condominium in Dallas, TX in 1983 (!), the mortgage papers had a large print box on the first page with the loan principal, interest rate, loan term, and total cost of the property. That way, I knew my $46,000 condo would cost me $186,000 in principal and interest payments over 30 years.
Yeah, when Bucktooth & Bowlcut is more transparent than the school district, that’s saying something!
So, someone who is a former CFO of one of the world’s largest banks (Citi) and a former executive member of the Federal Reserve Bank is trying to sell SF taxpayers on the idea that they should only consider the CAPITAL COSTS involved in this bond issue.
Never mind the cost of financing 190m, it’s only potentially a MERE 110m!!
I am a faithful voter and I am NOT drinking the koolaid!
My vote on September 18th will be a resounding ‘NO’.
They can then return to the drawing board and come back to voters with something more plausible.
And, in the process the SFSD administration and school board might be wise to take a close look at the suggestion made by SF Director of Public Works (and SFSD Task Force member), Mark Cotter, at the third of the four TF meetings.
My home went up in value 25% in two years. What are we doing with all of that tax windfall anyhow?