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Hi Margaret,

Are those amounts the total to pay off the bonds or the amount per year; and if per year, for how many years?

Hello?

Sorry, Roch. I meant give you an answer (or actually give you a non-answer) yesterday.

The (non)answer: I don't know. But I can try to find out for you. My best source, City Manager Mitchell Johnson, is on vacation until Aug. 15. But I should be able to track someone down Monday and post an answer for you (and me).

Hi Margaret,

I've made an attempt to figure this out on my own. I looked at the current property tax rate and compared it to the total annual income generated by the property tax and determined that each penny of the property tax rate accounts for roughly $2.13M in revenue for the city. This may change a little as the assessed value of property subject to the tax grows, but it's close enough to determine if the $59.77 is the "total" cost to the owner of a $200,000 home or not. It is not. Here's the math:

- $59.77 on a $200,000 house represents a $0.03 increase in the tax rate. (59.77/2,000)

- a $0.03 increase in the tax rate equals $6.39M in additional revenue for the city. (3x$2.13M)

The total of all the bonds is $114.95M. Clearly, the $59.77 amount is not the total as it only generates an additional $6.39M towards the $114.95M total of the bonds.

With an additional $6.39M in revenue from the "$59.77" for the owner of a $200,000 house, it will take the city 18 years to generate $114.95M -- and that's just the principle, not counting interest.

The total cost of the bonds for the owner of a $200,000 home is not $59.77. It is $59.77 per year for something more than 18 years; or at least $1,080 and probably closer to $1,500 (with interest).

One could speculate that you were provided the "total" cost of $59.77 as an underhanded attempt to make the bonds more palatable instead of fully informing the public, but I won't do that.

Roch, another thing that is tripping me up is this: Some of the bonds will have significant operating costs attached to them. The new fire stations in particular would mean extra equipment and more fire fighters. So I'm not sure how that affects what we'll pay.

Margaret,

That's a very good point. I hadn't even thought of that. Those ongoing costs are subject to inflation too. I'm sure with interest, the attached costs, inflation and increasing property values an exact total cost is a complicated thing to calculate, but surely we can get something better than an innacurate "total" of $59.77.

At the very least, I should say that the $59.77 figure is an ANNUAL total - not the lifetime total.

I don't know if it's even safe to make that assumption, Margaret. The more I pay attention to this, the more curious the $59.77 becomes. In this weeks Rhino, they report that if all the bonds pass, it would add 5.25 cents to the tax rate. The equates to an annual increase of $105 for the $200,000 home.

I'd be curious to know who prvided you with the $59.77 amount and how they decribed it exaactly.

I was told there would be no math.

When you two figure this all out... let us know.

Roch, you had asked who gave us the numbers ... The formula for figuring it out came from Mitchell Johnson, the city manager. Here's a portion of an internal e-mail he sent to his employees:

"According to the City of Greensboro’s Finance Director, if all of the bonds were approved and the entire debt had to be financed with increases in the tax rate, it would require a total increase of 3 cents per $100 of valuation. In other words, for a house which has a tax value of $200,000, this would represent an increase in the property tax of $60 per year or about $5 per month.

"Given the above you could determine the impact of individual issues by dividing 60/115 ($60 per year cost for a home of $200,000 divided by the total value of the bond debt in millions) which gives you a factor of approximately $0.52 per million dollars of bond indebtedness.

"Thus the $9 million swim facility would represent (9X 0.52) or approximately $4.72 per year for a home worth about $200,000."

Hmm. Interesting. Thanks, Margaret. This contradicts the Rhino report that the total increase would be 5.25 cents on the tax rate (They didn't say where their number came from).

As I noted in my calculations, every penny of the property tax rate currently generates about $2M in annual revenue which I think must be about right since I came to the same 3 cents increase in the tax rate mentioned in the email if the annual cost for a $200,000 home is to be $60.

So, the questions that still remain for me is how long until these bonds are paid off. ($60 a year for how many years?) I am also now interested in knowing the ongoing operational, personel and equipment costs of the projects that you pointed out will require them.

Thanks for discussing this with me. I hope it's helping your reporting.