Residents should vote down waste of money
by Larry Wills
November 05, 2013 12:00 AM | 1133 views | 4 4 comments | 34 34 recommendations | email to a friend | print
2-02-09  --WILLS Larry--  Larry Wills.  PHOTO BY LAURA MOON.
2-02-09 --WILLS Larry-- Larry Wills. PHOTO BY LAURA MOON.
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Who: On one side are low income families that live in 3,412 housing units on Franklin Road. They live there because they want to send their children to the Marietta School System; it is housing they can afford; and they have one or no car and can walk to a major mass transit station and Wal-Mart. The men work as laborers all over north Atlanta and carpool to their jobs, while the women stay home with the children.

On the other side are commercial property owners still suffering from the recession, seeking the use of tax dollars to improve their depressed situation. They are supported by Marietta school officials desperate to find ways to increase test scores and graduation rates, and county officials who desperately want a bus rapid transit system along the I-75 corridor. This side is willing to sacrifice the affordable private housing.

What: City officials are going to use bond money to pay a premium price for this affordable housing. The city has agreed to pay $7.9 million for the Woodlands Apartments to an individual who purchased it from Fannie Mae for $3 million in April of 2012. That is a really good flip. City documents reveal this complex is currently 88 percent occupied, pays $11,725 a year in city taxes, $55,516 a year in school taxes and has an annual utility bill of $803,409. This loss of $870,650 will have to be made up by utility customers and taxpayers because the city, the school system and the utility cannot afford to lose any more revenues.

It will cost $1.5 million to demolish Woodridge and $57,900 to relocate the occupants. The value of the cleared land will range between $2.5 million and $3.7 million. The city thinks it will own the property for five years, by which time total costs to the tax payer will exceed $14 million. If the city sells the property for $3 million, this cost will drop to $11 million, but you have to add back a portion of the bonding fees and interest. A private developer might hang on to the property for a long time, waiting for more favorable market conditions. In this case the school system and city will continue to lose revenues until development occurs.

A similar analysis for the other complexes over the same time frame results in a serious financial loss for the city and the school system. According to the city, the current tax value of the 13 Franklin Road apartments is approximately $85 million. Current and future generations of taxpayers and utility rate payers will have to make up this loss.

What happens after the destruction of this affordable housing? No one knows or is willing to say. There is no urban redevelopment plan and no clear vision is expressed in a drawing, fact sheet, or anything a city official has said other than “Trust me.” No Urban Redevelopment Authority has been established to provide citizen oversight, and the risk for misuse of $68 million is high with a loosey-goosey government like Marietta.

When: This is the wrong time for massive deficit spending by Marietta. More millage rate increases are just around the corner. School enrollment is up necessitating another grammar school. Eventually city employees will have to be adequately compensated and more teachers hired. The city-operated utility is raising rates at a steady and continuous pace.

The tax digest has dropped like a rock. The school system reports a 1 percent drop in the tax digest costs them approximately $500,000 in revenues. The city tax digest declined by 18 percent since 2009. The three primary reasons are adjusted property values, the city’s aggressive private property purchasing program and failed Tax Allocation Districts. Now is a bad time to reduce school revenues. Austerity reductions between FY08 and FY13 were $32 million with an additional $5 million projected for FY14.

Where: We are talking about a huge bond issue for a city the size of Marietta. All this money will be spent within half of one square mile of the city’s 22-square mile service area.

This bond was hasty and ill-conceived, the timing is absolutely awful and the problem is the city’s own making. If the Franklin Road apartments are truly a “slum,” it is the fault of city officials. They have failed to enforce health and building codes, but it is not too late to begin code enforcement and save $100 million tax dollars. The only thing to do is vote down this waste of money.

Larry Wills is a retired environmental designer and a lifelong resident of Marietta.
Comments
(4)
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equa...
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November 05, 2013
You try so hard to make a sound financial analysis but you do not complete the equation. There are several variables that you leave out.

Is it an expensive solution? Yes. Will it be a good investment? Maybe. But based on your work above, you are not the right person to ask.
Guido Sarducci
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November 05, 2013
And we are just supposed to take your word for it that it is a good deal?

Mr. Wills put a lot of thought and effort into the letter he wrote.

Do him the courtesy of expending at least half that amount of time and energy in formulating a response. The one you wrote is totally unacceptable.
on balance
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November 05, 2013
equa...

I found the information in Mr Wills article to be enlightening and detailed. I suggest that Mr Wills address of the situation i far more helpful than your curt knock without solutions.
anonymous
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November 09, 2013
I agree- Mr. Wills has already been proven WRONG by the BOE Chair. He gave every detail and Mr. Wills was WAY off base.

How can anyone take him seriously again?
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