Many people wonder where is the rest of the money coming from to pay for the $120 million dollar ART Bus project that the $69 million federal grant will not be giving to the city.
We now know the answer and it’s sneaky to say the least.
Berry and the Albuquerque City Council so far have used $13 million dollars in revenue bonds to pay for the ART Bus project that was not voted upon by the public.
It was reported that Mayor Berry and the Albuquerque City Council have borrowed over $63 million dollars over the past two years to build pickle ball courts, baseball fields and the ART bus project down central by bypassing the voters.
(For full story see January 2, 2017 Albuquerque Journal “BYPASSING the Voters” page A-1).
The $65 million dollars was borrowed with the Albuquerque City Councilors voting to use revenue bonds as the financing mechanism to pay for big capital projects.
Revenue bonds are repaid with gross receipts tax revenues.
The Mayor and City Council have become enamored with revenue bonds because they can literally pick and choose what projects they want to fund and build without any public input or vote whatsoever, so long as they have seven votes on the city council.
Normally, multi-million dollar capital projects are funded by using general obligation bonds which require voter approval.
What the Mayor and City Council do not like are the complicated requirements associated with general obligation bonds and the fact that they must be voted upon by the public.
General obligation bonds have major safeguards to protect the public with restrictions in place on how the bond funding must be dedicated and used.
General obligation bonds also include public budget hearings while revenue bonds do not.
General obligation bonds usually have shorter payoff period than revenue bonds.
Using revenue bonds for major capital projects that are repaid with gross receipts tax revenue cuts into revenues that should be used for essential services such as police protection, fire protection and government operations and personnel.
Some argue with a straight face that revenue bonds for government capital projects is like taking out a home mortgage that is paid off oveer 30 years.
Government capital improvement projects do no appreciate in value like a residential home and the projects actually depreciate in value and eventually need to be replaced.
Albuquerque has a general fund operating budget of close to $500 million dollars and the overwhelming majority of that funding comes from gross receipt tax revenues.
When there is a shortfall in gross receipt tax revenues, budget cuts and personnel cuts are usually the solution.
The City Council authorized $18 million dollars in revenue bonds this year for financing a variety of their pet projects and the city will be making annual payments for the next 22 years until 2038 which is beyond the useful life of many of the projects being funded.
At a public forum, city officials disclosed that the ART Bus project has only a 19 year projected use life and that the dedicated bus lanes will have to be removed to allow for increases in traffic.
Mayor Berry makes the outrageous claim that he likes the “agility” that revenue bonds provide and that have enable the city to build “game changing projects”.
Berry feels that a $42 million dollar freeway flyover, a $21 million dollar baseball complex, the ART Bus project that is destroying historic Route 66, a $2 million dollar swimming pool, a $2 million dollar library, a $1.5 million dollar “pickle ball” court and a $1.5 visitors center are “game changing projects”.
Short term construction projects are not game changers.
A game changing project would be a “multi billion dollar” investment that would transform the entire city and its image and that creates tens of thousands of jobs such has been done in Denver, El Paso, and Phoenix and Oklahoma City.
The the voting public need to demand that candidates for Mayor disclose their positions on the use of revenue bonds and if they are in favor of public votes on capital improvement projects.
City Councilors Ken Sanchez and Dan Lewis who are said to be running for Mayor have voted to use revenue bonds for their own pet projects in their city council districts.
City Councilors running for reelection like Diane Gibson an Don Harris have also voted for the ART bus project and for the use of revenue bonds to fund capitol improvement projects.