April 20, 2015
John Morris presentation to Town Council public hearing on Ephesus-Fordham zoning adjustments
Bolstering the Town’s budget has been an important motive for Ephesus-Fordham (E-F) rezoning: to get more tax revenues from the new development than the Town’s added costs to serve the new development.
However, the Town greatly underestimated Town costs at E-F by assuming that the projected 3000 new residents of this area would require only a few specific additions to the budget, mainly for police and fire. In fact, E - F is a large permanent addition to the Town. Unless the new taxes from E-F can cover the full proportionate share of the whole budget – parks, library, debt service, Town salaries, transit, and the rest – this new burden will not be covered by new E-F taxes, but will fall on all Town taxpayers.
Transit costs are one of the biggest omissions from the cost estimates for E-F. Mr. Pennoyer’s report to the Council explained that no costs, zero, were included for transit service to E-F because the Transit Fund will not have funds in the foreseeable future to do this. Add to this the need for $80 million in the next 10 years for bus replacement, just to maintain existing levels of service. We don’t know where that is coming from either. All the gauzy talk about dense, transit-friendly development may just produce a traffic nightmare because we can’t afford the transit part.
The Town’s plan for E-F includes $10 million for road improvements. The Town proposes to borrow this money and repay it with new taxes from E-F development. The Town is asking the County to return half of the county’s tax increment from E-F to help retire the Town’s debt.
There are successful examples of city-county cooperation for tax increment financing, where the partner governments seal the deal up front, before the money is borrowed and the work is done. But in this case, the Town is proceeding without an agreement with the County. At a March 26 joint meeting, the County Commissioners showed no enthusiasm for this deal. After the Town has already made a commitment to repay the loan, what incentive does the County have to donate its revenues, given its own pressing budget needs?
Without County participation, a greater burden will fall on Town taxpayers.
The Council has relied on unrealistic hopes and assumptions at E-F. The taxpayers are at risk. The Town should go back to replan and redo E-F zoning to give more assurance that the result will actually benefit the Town’s budget and taxpayers.