A few years ago then-Ald. Don Crampton (1st Ward) presented a detailed study of the City’s sewer and related infrastructure problems and suggested a $40 million bond issue to address those problems.  That suggestion went nowhere, and since that time our infrastructure has been passively maintained, if not outright neglected.

Now Ald. Don Bach (3rd Ward) wants the City Council to consider adding a referendum question to the November ballot that would ask the voters whether they want the City to issue $50 million in bonds to fund all 41 recommendations of the City’s Flood Control Task Force.

Taking questions such as that to the voters is always a good idea.  Getting 8,000+ “yes” or “no” answers to a fairly-drafted “yes” or “no” question gives our public officials a far better sense of the public’s view than 800 responses to cleverly-worded surveys that seem contrived to produce particular answers.

But with the City already servicing over $38 million of bonded debt – all of it appearing tied to the Uptown TIF, and much of it with many years remaining – we question the wisdom of more than doubling that debt and saddling homeowners with it for 20 years or more. 

Although bonded government debt is sometimes compared to home mortgage debt, that is an apples to oranges comparison.  Unlike home mortgage debt which is tax deductible and is incurred with the expectation that it is funding the purchase of an appreciating asset, municipal debt is not deductible by the City and the assets it funds (e.g., sewers), while essential, only depreciate in value.  So the financial equation is very different from that of a home mortgage.

One of the arguments being made for more bond issues now is the low interest rates.  But low interest rates that produce debt service obligations the taxpayers can’t, or don’t want to, meet are a false economy. 

We think the prudent approach is for the City to complete the sewer study and prioritize the sewers needing repair or replacement, and follow that with a plan for phasing in the work (and the bonding) over a 5, 10 or even 15 year period as the situation warrants.  The City also should look into bonding for a term shorter than the 20-year+ that adds substantial interest costs to the total price.  

The result would likely be a bond issue referendum question for a smaller, more-manageable amount that would not tie the City’s financial hands so tightly in future years while still providing the funding necessary to tackle the most pressing infrastructure needs.  

It would be ideal if this could be done by the late August deadline for the City’s putting a referendum question on the November ballot, as those general elections always seem to have better voter turnouts than the April local elections.  But getting the process right and at the right price is at least as important as getting it done quickly.

We commend Ald. Bach on raising this issue.  Now let’s see his – and the City Council’s – follow through.