Saturday, October 28, 2006

Carmany clears up Bonds question.

Dear Councilwoman Carmany:

I am attaching a post from a local blog that talks about the bonds that will be on ballot in November. I understand the concerns from both sides and have been reading as much information about them so that when I go to the polls, I can make well-educated vote.

I read something in one of the blogs that disturbs me. I am attaching the link to the entire post so that you can read it for yourself. http://guarino.typepad.com/guarino/2006/10/skepticism_on_t.html

The part that surprised me was this, "Another point: even tho the public approves a bond for a certain item is no guarantee the city council will use the funds for that item. Legally they can use the money for anything with no strings attached, and believe me they have in the past and will in the future." Posted by: Brenda Bowers October 26, 2006 at 10:34 AM

IS THIS TRUE? If so, I am absolutely shocked and dismayed by this. I thought you were legally bound to spend the money for the item on the ballot. Wow! This seems to be a total breach of the public's trust. "...no strings attached..." Then why designate the money for particular projects? Why not just say, "We need 27 million for any 'ole reason?" And you've done this in the past? Really? You mean I voted for parks and you used it on roads? Could that be?

Please clear this up for me so that I know what I'm doing on November 7.

Sincerely,
A Concerned Voter
jw

Dear Concerned Voter,

Thank you for bringing Ms. Bowers statement to my attention.

The city MUST spend the money approved in a bond referendum on the items included in the language that appears on the official ballot. Money approved in a library bond can only be used for libraries, not for fire stations. Money approved in a fire station bond can only be used for fire stations, not parks and recreation projects. Money approved in a parks and recreation bond can only be used for recreational projects, not for street construction. Ms. Bowers' confusion may be caused by the deliberate non-specificity of explanatory wording that often accompanies the official bond language. It's much easier to give you a specific example than try to explain this outright.

Example: The specific language for the fire station bonds on the upcoming referendum on November 7 reads "The Fire Station Bonds will provide funds for constructing, equipping and furnishing additional fire stations, including acquisition of firefighting apparatus and land acquisition, if needed." That means that if the voters approve this request, this $24,500,000 can ONLY BE SPENT TO BUILD AND EQUIP FIRE STATIONS AND ABSOLUTELY NOTHING ELSE.

There is an explanation that accompanies this bond question that does NOT appear on the ballot that says "Five new fire stations are proposed at Willow Road, Reedy Fork Creek, Old Randleman Road, South Elm-Eugene Street, and near the intersection of Painter Boulevard and I-40/85." This describes more specifically how many stations we hope to build and where we would like to put them. However, if the price to construct them is higher than current estimates, we may be able to build only four (or if we get fantastic bids for construction, maybe six). Or perhaps we cannot find suitable, affordable land in one of the listed areas and decide to construct a station in a different needed location other than one of the five listed here. That would be entirely legal since the number and specific locations will not be approved by the voters. But no matter the number or location, of the stations, that bond money can be spent ONLY on fire stations.

Changes like I described in my example have happened in the past with other bonds. One example I can cite is the transportation bond that was approved in 1988. "Those were the days" when the city got excellent construction prices on proposed street projects that were listed as potential projects for information, and the city was able to complete several additional street projects with the savings from the originally-intended projects. Another example of a perceived change was the bond to expand the Special Events Center at the coliseum back in the early '90s -- the bond language called for renovation and expansion of the then-called exhibition hall. Explanatory language listed an ice skating facility as a possibility in the expanded space, but once the bond was approved and design work began, it quickly became apparent that it would be foolhardy to put an ice rink (i.e., water) on a floor where numerous electrical outlets to supply power for the exhibitors' booths and displays would have to be placed.

Looking at the other bond questions on the upcoming referendum, all are very specific about how the bond money will be used:

Public Building Renovation -- to renovate and improve city-owned buildings, period!

Economic Development -- to support job creation, industrial park development, and other listed uses, period!

Library Facilities -- to construct and equip libraries, period!

Greensboro Historical Museum -- to renovate the Historical Museum, period!

War Memorial Auditorium -- to renovate War Memorial Auditorium, period!

Neighborhood Redevelopment -- to acquire and improve land primarily in the Ole Asheboro neighborhood, period!

War Memorial Stadium -- to renovate War Memorial Stadium, period!

Swimming Center -- to construct and equip a swim center, period!

International Civil Rights Museum -- to help complete the renovation of the International Civil Rights Museum, period!

To summarize, the city MUST use the money as stated on the bond ballot (for fire stations, libraries, public building renovation, etc.) but does have the flexibility to construct other projects within that same bond category.

Sandy Carmany

3 Comments:

Blogger bubba said...

And who audits how the bond money is spent? Where can the public verify that?

October 28, 2006 5:41 PM  
Blogger Sandy Carmany said...

Bubba,

The city is required to undergo a yearly independent audit resulting in a document called the CAFR -- Comprehensive Annual Financial Report. Cherry, Bekaert & Holland have performed this task for the past several years.

You can access the 2001-2005 CAFRs at

http://www.greensboro-nc.gov/Departments/finance1/FinServices/FinancialReporting/cafr.htm

I warn you they take forever to load they are slightly less than 200 pages each.

The bond expenditures accounting in the 2005 CAFR can be found on pp. 88-100.

October 28, 2006 8:32 PM  
Blogger Sandy Carmany said...

Bubba,
You might also want to check out Chip Hagan's op ed about the business side of bonds in today's News & Record (not posted on line or at least I couldn't find it). Those bond houses that gave Greensboro our AAA bond rating also keep a close watch on how those bonds are spent.

October 29, 2006 3:56 PM  

Post a Comment

Links to this post:

Create a Link

<< Home