DuPont’s Proposition 1 would hold city, public safety as hostages

October 18, 2012 

The mayor and City Council of DuPont will choose a building over the citizens’ public safety services contained within that building. This truth is at the core of DuPont Proposition 1, a ballot measure that seeks a levy lid lift to increase the city’s property tax collections by 84 percent annually.

Last February, Mayor Michael Grayum stated in a memo to the newly formed Community Finance Committee that “Not paying on the Civic Center is not an option.” That mandate was reaffirmed in an Oct. 4 Viewpoint by DuPont Councilman Mike Courts stating, “The civic center decision cannot be undone, and the debt payments will be made.” If there was any doubt that the Civic Center was more important than police and fire protection for its citizens, look no further than the 2013 city budget that will lay off four firefighters and a police officer if the levy fails.

In 2007, DuPont chose to eschew the obvious – bonding the capital facilities project – in favor of a financing plan that bypassed the voters altogether. DuPont issued Certificates of Participation, a “nontraditional financing partnership with a private developer” (TNT, 7-23, 2007), laying a shaky foundation supported by the real estate excise tax (REET).

How realistic was it to leverage REET dollars to finance such a project for 30 years? Simple math check: DuPont collects 0.5 percent of every real estate transaction. To make the annual $1.27 million lease payment, the city would need to sell nearly 847 houses a year with an average selling price of $300,000. That would be a turnover of more than one-third of the city’s total housing units every year until 2039. Even factoring in REET from commercial real estate, it would barely make a dent in the home sales requirements.

DuPont Proposition 1 transfers the cost of the Civic Center into the general fund, where it will remain the only untouchable budget item – regardless of the future economic climate and growth needs of a city with a finite amount of available commercial land and without an economic development plan.

DuPont citizens have a right to know how we got to insolvency regarding Civic Center debt, why we stand to lose public safety and what assurances the citizens will have that such mistakes will not continue.

Proposition 1 bundles the cost of three SAFER-grant firefighters with the Civic Center debt to create a ballot proposition that cynically amplifies the outcome of the citizens’ vote. City Council members knew as early as 2010 that they did not have the revenue to retain the SAFER-grant firefighters, but since that time they have done nothing to secure funding for these positions.

Proposition 1 does not contain binding language that will retain the firefighters, just more generalized assurances from the very people who put citizens in this position in the first place. The only thing assured with the passage of this tax increase is that the out-of-town investors will continue to receive their 6.11 percent rate of return, guaranteed until 2019.

DuPont’s plan for “moving forward” is to place its taxpayers on a treadmill of debt service. It is time for the DuPont mayor and council to stop holding public safety hostage by tying this complicated financing to our general fund for potentially the next 27 years. DuPont citizens deserve a solution that prioritizes public safety and embraces a more traditional approach to funding capital improvements.

There is a window of opportunity for DuPont to negotiate new terms on this debt and then proceed in a manner that prevents continual service crises created by adding massive, long-term debt to our general fund. The city also should segregate any capital expenditures from staffing requirements, placing public safety matters into a separate ballot proposition so that the voter can choose the service levels they desire.

I urge DuPont voters to reject Proposition 1.

Michael Gorski is co-chair of Citizens Against DuPont Proposition 1.

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