Columbus residents will have several bond issues before them when they vote on Nov. 4, but a vote for those issues won’t mean a dip in bank accounts, according to city officials.
The $1.66 billion, six-issue, 2008 bond package that will greet voters next month will allow Columbus to borrow money through the sale of city bonds. These borrowed funds will help finance capital projects over an extended period of time.
According to a press release from Columbus Mayor Michael Coleman, Columbus is the only large city in the nation that has earned a AAA Bond Rating, the top rating possible, with all three major bond rating agencies.
This superior rating allows Columbus to borrow at a lower interest rate with voter approval, helping to fund more projects with fewer dollars.
If voters approve the package, which has been touted as a “no new taxes” opportunity for residents, Columbus will save over $28 million, according to Coleman.
The no new taxes scenario is possible because the city sets aside a portion of every dollar collected to pay off debts.
“This is a sound investment that strengthens neighborhoods and saves jobs,” said Coleman in the press release.
According to City Auditor Hugh Dorian, Columbus has no intention of levying taxes to repay debts incurred from borrowed funds.
It hasn’t been a secret that Columbus is experiencing trying financial times. Dorian forecast a $75 million gap in the city’s 2009 budget in June. That gloomy forecast has since resulted in several budget cuts, with many more still to come.
Coleman has promised voters that, should the city’s current funding situation not improve, the entire $1.66 billion will not be spent.
The largest portion of the bond package, $1.1 billion, will go towards public utilities projects needed to help the city fall in line with orders from the state of Ohio. Those projects include the reduction of sanitary sewer overflows and combined overflows. These improvements, if approved, are intended not only to help protect Columbus’ drinking water, but also to clean up the city’s rivers and streams.
The city also plans to invest a large portion of the bond money into neighborhood projects. An estimated $432 million will fund road and sidewalk improvements, new health centers, new fire stations and recreation centers, and updates to existing fire stations and recreation centers.
The city also plans to invest $124 million of the bond package in the private sector to help leverage investment.
According to Coleman, this investment will bring new jobs to several areas of the city.
The Greater Columbus Chamber of Commerce (GCCC) has estimated that the 2008 bond package, if passed, would generate $3 billion for Columbus’ economy over that the next five years. For every $100 million Columbus invests, the local economy generates $181 million, says the GCCC.
Voters will not see one large bond issue on the ballot, but rather six, smaller portions to be voted on individually. Those six issues are Sanitary Sewers ($551.9 million, 2.42 mills), Water ($524.7 million, 2.3 mills), Streets and Highways ($345 million, 2.03 mills), Recreation and Parks, ($124.2 million, 0.7 mills), Safety and Health ($86.1 million, 5.6 mills) and Refuse Collection ($32.2 million, 0.48 mills).
Columbus City Finance Director Joel Taylor has previously stated that most of the projects the city hopes to fund through the bond issues will have to be completed whether the issues pass or fail. Completing the projects without the bond issues, however, would be costly to residents.
Taylor explained that without the additional funds from the bond issues, the city would be forced to raise rates for services such as water, sewer and refuse collection in order to fund the projects.
Other less necessary improvements, such as Recreation and Parks, would happen at a much slower pace.
Columbus voters have an impressive track record for passing bond issues. Since the practice began in 1956, Columbus has placed 82 bond issues before voters, 76 of which have passed.
The last bond package put before Columbus voters was passed in 2004. Since then, funds from that package have funded sidewalks in front of schools, new construction of sewers as a solution to flooding problems, new fire stations and other neighborhood projects.