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HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

City assurance falls one vote short

Written May 27th, 2015 by Hasso Hering

 

Councilors Olsen and Kopczynski in a photo from 2014. On Wednesday they were on opposite sides of a vote.

Councilors Olsen and Kopczynski in a photo from February 2014. On Wednesday they were on opposite sides of a vote proposed by Kopczynski.

So what happens to Albany’s police station on Jackson Street once the city completes — probably in about two years — construction of a new cop shop on Pacific Boulevard? Everybody assumes the old building will be sold. If so, what happens to the proceeds?

Councilman Ray Kopczynski wants to give the public an assurance that the money will be applied to reduce the cost to taxpayers of the new building. But with two members absent on Wednesday, he could not muster the four votes required to get that message adopted by the council. Councilors Bessie Johnson and Rich Kellum voted with him, but Dick Olsen wasn’t so sure and voted no. What happens, Olsen wondered, if someone wants to buy the property but offers the city not cash but another property the city wants or needs?

The discussion is not over, though. Mayor Sharon Konopa said the question will be brought back in two weeks when the council meets again, on June 10. It’s kind of academic, though. Even if all six councilors vote to adopt Kopczynski’s proposal, any four votes can make a different decision when the time comes. Kopczynski knows that, of course, but he nevertheless wants to give voters and taxpayers a signal of the council’s intent.

No one has offered to buy the old police station, but City Manager Wes Hare said there had been some expressions of interest — how recent he didn’t say — from both private and public parties. Over the years, there has been vague talk that Linn County might buy the property, adajcent to the sheriff’s office and county jail. The county has long wanted to open a courtroom in or near the jail building for arraignments, though in recent years the use of closed-circuit TV has made that seem less urgent.

In the election that ended May 19, Albany voters approved an $18 million bond issue to pay for most of the cost of building the new police headquarters and replacing the downtown fire station. From now on, Konopa announced, she wants to have a public progress report on both projects every time the council meets. (hh)



16 responses to “City assurance falls one vote short”

  1. Gordon L. Shadle says:

    “Even if all six councilors vote to adopt Kopczynski’s proposal, any four votes can make a different decision when the time comes.”

    Instead of a Resolution, which can be changed according to the whims of the Council, a more effective solution may be a citizen-led initiative petition to amend the recently approved bond language in the City Charter.

    A successful petition and ballot measure would take the decision out of the council’s hands.

    We were able to transfer decision-making power from the council to the voters on city borrowing and urban renewal plans. Voters should have the same power to reduce the burden of the police/fire debt.

    All that is needed is a motivated resident willing to organize and lead the effort. I will not be an Albany resident much longer, otherwise it would be me.

    Is there a resident willing to step up and make this happen in service to every Albany property taxpayer?

  2. Bill Kapaun says:

    “What happens, Olsen wondered, if someone wants to buy the property but offers the city not cash but another property the city wants or needs?”

    What’s the odds that another property would be exactly what the city NEEDS?
    IF the city NEEDS another property, let them submit a levy and have the taxpayers decide.
    IF the city WANTS another property, make them justify the NEED.
    We all want things we can’t afford. Those of us that are prudent, go without.

  3. Theodore Lee Salmons says:

    What????? Take the money from the sale of the old building to reduce the taxpayer’s cost of the new one? Don’t you realize the way this government works? Don’t reduce debt when you can spend any semi-unexpected revenue on some new pet project and keep kicking the can full of snowballing debt down the road.

    • Relax, guys. The council will certainly do what Kopczynski, Kellum and Johnson are advocating. It’s the sensible thing to do, and they’ll do it, if only to make sure that the next police and fire option levy passes again when it comes up in a couple of years. (hh)

      • Ray Kopczynski says:

        Thanks Hasso –
        Guarantee it *would* have passed last night had Floyd been back from vacation. We’ll give it a go at next meeting. It will happen.

      • Gordon L. Shadle says:

        Your comment “any four votes can make a different decision when the time comes” is key.

        Yes, a Resolution will no doubt pass in a couple of weeks. But what does the future hold in terms of actual follow-thru?

        In the very near future the Carousel folks will be begging for millions of taxpayer dollars. And there are lots of pet projects that each councilor and the Mayor are dying to fund.

        What easier pot of money to tap than the proceeds from the sale of the old PD property?

        I wouldn’t assume that a Resolution passed by today’s council will receive serious consideration by a future council, especially when competing pet projects enter the political ring.

        • Gary Richards says:

          What in the world makes you think “the carousel folks will be begging for millions of taxpayer dollars?” What an odd comment to make.

          If you would take the time to go down and speak with “the carousel people” you would realize that the project is mostly funded already, and done so PRIMARILY through private donations to boot! Their current building is paid for and the funds needed for the new building (including architectural fees and demolition/construction permits) are mostly raised.

          I spoke with one of the “carousel folk” just the other afternoon – it was their board president. I am confident that the information she relayed, and that I just shared, is accurate. Information that leaves one with the clear impression that CARA monies are not high on the carousel’s wish list.

          And again, you attempt to make our council members (and anything CARA) look as bad as humanly possible when in fact they are hard working individuals with a heart for Albany’s best interests at the forefront. Sure, you don’t like CARA – your call. That doesn’t mean CARA has not worked to benefit Albany as a whole – even you Gordon!

          It sure would be nice if you would take the time to sit back and make an honest evaluation of the benefits CARA has brought to our community – then openly admit them. Imagine what such an honest and openly stated recognition of CARA’s benefits would do to your tarnished reputation – tarnished because of your constant attacks on CARA when most Albany residents appreciate the wholesale positive transformative changes it has brought to our community. Benefits that has made Albany stronger during economic conditions that made many Oregon communities weaker, and where many others remained stagnant at best.

  4. Bob Woods says:

    So maybe these folks out to have a clue before they urge the people to follow an unknown path..

    The first thing to remember is that you can’t sell the existing building until after the new one is built and occupied. That’s a couple of years off.

    When you sell a bond (take out a loan) you can’t reduce the debt. That’s right, you can’t send in a million and have the debt go down. A 20 year bond/loan runs for 20 years with prescribed payments that pay interest first and principal second.

    If you want to reduce the debt, you have to refinance or pay off the entire amount in cash.

    Refinancing means that you have to get a new bond/loan for the lesser amount. That also means that you have to pay bond counsel, investment agents and all the fees that go along with issuing a new bond. That costs money.

    But the biggest thing is that you also need to get an interest rate that makes the new bond work out to cost less.

    Now most folks know that interest rates have been at the lowest levels in our lifetimes. THEY WILL NOT BE GOING LOWER. Even if there is a major financial collapse such as in 2008, they can’t be any lower. The Federal Reserve Board has been telling everyone for months that rates are going to be going up. That means that there is a high probability that any refinancing two years after the initial bond was sold could easily cost MORE than the bond you’re trying to pay off.

    So people of Albany, keep your hands on your wallet before jumping on a bandwagon before anyone has worked out the financial implications. You will be the ones paying.

    You would think that Shadle, Salmons, and Kapaun would have bought a house with a loan sometime in their life and would understand this. But I guess not.

    And a bon voyage to Gordon for moving away.

    • What the councilors have in mind, I think, is not to monkey with the bond obligation but to use the proceeds from the future sale of the old building to make, or help make, payments on the debt, thus relieving the burden on the taxpayers. (hh)

      • Bob Woods says:

        What others opined is not that approach. But even with that approach there are other things to consider before committing to a policy.

        First, how much can the city expect to make from the existing property? A private developer would probably be looking at a teardown and new construction. The county would like a low cost since it’s a public benefit for them to use the site. So how much for either, no one knows yet. Hopefully they get a lot.

        So pick number for the income, and then see how much that offsets the annual cost over the life of the bonds for the average property owner. My guess would be not very much. You can only do that estimate when you have a good sales income estimate.

        Then there is the lost use of the money.

        So two years from now some other need appears. A bridge over one of the creeks is damaged in a flood. The Carnegie Library is damaged in a quake. Structural problems hit the senior center. It’s time to do another Street Bond to fix more roads.

        Ben Franklin said “A penny saved is a penny earned.”

        Instead of pre-judging the best way to spend some potential future income now, wait until you know the future needs. It might buy you some political capital now, but you can lose that political capital (and more) in the future if circumstances cause you to backtrack on a promise that couldn’t be fulfilled..

        Folks like some of the other bloggers here do not believe any future needs really exist, or they believe that any future spending is automatically “wasted.” Reasonable people understand that none of us have a perfect knowledge of what the future brings.

      • Ray Kopczynski says:

        Bingo!

      • Gordon L. Shadle says:

        Hasso, using the proceeds to help service the debt is one approach that should be considered. Exercising a call or redemption provision to allow for retiring a bond early is another.

        Bob Woods makes my point perfectly with his statement, “So two years from now some other need appears.” Of course, other competing pet projects will appear. That is why the objective is to set aside the proceeds for a specific purpose (debt reduction or servicing) to insure against stupid spending in the future. Look at what happened to the Pepsi fund for stupid spending behavior.

        • Bob Woods says:

          Gordon, anything government does is a “pet project” to you. That kind of logic is no logic at all.

          • Gordon L. Shadle says:

            Not true, Bob. You create a caricature of my position and then criticize the caricature. That is intellectually dishonest.

            All government spending is a matter of priorities. In this case, is reducing the burden on property taxpayers a priority for the city? I say yes, it should be the highest priority now and in the future. If you want a rainy day fund for “emergencies”, then convince the council to create one for that specific purpose. Good luck.

    • Bill Kapaun says:

      “When you sell a bond (take out a loan) you can’t reduce the debt. That’s right, you can’t send in a million and have the debt go down. A 20 year bond/loan runs for 20 years with prescribed payments that pay interest first and principal second.”

      Then how did I pay off my house 9 years early??

      • Bob Woods says:

        Because you didn’t have a municipal bond. Different rules.

        A bond can be callable, meaning you can pay it f off early, and you do that by redeeming the full value of the bonds. That takes cash. A lot. And most of the money is paid to interest in the early years.

        Often many muni bonds can only be called after a certain period of time. 10 years is a not uncommon.

        Now for your mortgage going early, you did it either because:1 You made additional payments to principal I each payment; or 2 You got a load of cash and paid off the principal in full.

        If it’s #2, Congratulations! It happened to me when my parents passed, and I was able to pay off my 15 year mortgage after 5 years.

        If it’s # 1 then thank the Federal Government for having put in requirements that homeowners be allowed to make advance payments on principal on their mortgages.

 

 
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