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Understanding Grandview Yard tax revenue

Published August 30, 2016 by justicewg

The city has big plans in store for the future, and unless we are thinking about going to war with Upper Arlington, we will not be funding those plans with more taxable land area. We have some new businesses on Goodale, but that area has about maxed out on value (unless business owners can be convinced to build tall offices). That leaves Grandview Yard as the key to the future increases in finances. The City recently published an overall summary of the financial data available on the Grandview Yard development, let’s dig into the numbers.

Property tax income and TIFs and Pilots

Property value GY

The first chart shows the property market value of the Yard. The TIF value is the additional value that was created by construction, and by agreement with NRI, will mostly be used for infrastructure bonds. The abatements are cuts in taxes given as a lure to build (or what some might say as a give-away to businesses that always have a hand out for corporate welfare).

What you learn from this table – between the TIF and the abatements, the city has not increased tax revenue into the general fund from property tax. If anything, it went down. If the city would have the same reliance on property tax as the school, you would be reading stories in the TVN similar to the “No boon from G.Y.” story that was published this year.

Pilot is the brain of the TIF

We are getting into the complex part of the story when we try to understand PILOTs. I quote from the doc:

Properties in the Grandview Yard TIF pay amounts equal to the property taxes, known as “payments in lieu of taxes (PILOTS)”, as though the TIF had not been established. To the taxpayer in the TIF it is the same amount of money, but behind the scenes it is put into two different “pools”. The entire amount of PILOTs is sent to the City for distribution to the School, Library and Infrastructure Bond Trustee.

While the TIF was being set up, it was an agreed fact that the school and the library could suffer while the old buildings were torn down, and the TIF shuttled money to construction bonds. The PILOT is the brain of the TIF, and sets aside money to help the school and the library. There is complexity in the “Waterfall” of tax money that is diverted in stages to the school first, but I’m not sure if that’s important information. What you learn – the school tax income from G.Y. will be mostly flat.

Employment

According to the doc, there are over 2,000 new employees working at the Yard as of July 31, 2016. That’s not counting construction employees who are building the Yard. We are starting to get into the income tax part of the finances, and it is important to understand who pays income taxes to the city.

(Edit) I had some incorrect info about municipal income taxes, Ohio has some very complex rules. Some cities give 100% credit for income taxes collected outside the city, some 50%, some no credit. So it is possible for some Yard workers to pay taxes both to Grandview and an outside city. There is no breakout of the kind of tax income (personnel or business) in the data shown in this Grandview Finance document.

Business who are located in Grandview do pay income tax here. The 30 new businesses in the Yard will pay significant new income taxes to the city.

Summary of Revenue Created

Summary of Revenue Created

This chart shows a listing of the types of new money at G.Y. Note how much is being sent to the City of Columbus. Also note the size of the hotel tax, which only comes from one hotel, and will soon come from two. The largest non-TIF part of the pie is city income taxes.

Hotel Taxes

I’m working on a new story about how the Hotel taxes are generated and distributed. The only surprise I have at this tax is how well the Grandview Parks and Rec department did with a specific tax slice worth $136,439 last year. It will be something to watch as that number increases.

School Income

School district income from Yard

The school district depends on property taxes for most of their income. As you see in that section of the pie chart, the TIF agreements have held the taxes flat. The only section of the chart that is increasing is the “New Money PILOT”, and that’s only $302K last year, and is not supposed to gain much in the future.

The school can push for even higher property tax, but that will be coming from the rest of the city, not the Yard, which is protected by TIF agreements. The present millage puts us near the top of the chart in property tax rates in F.C., how much more can they expect Grandview residents to pay? Pretty obvious where the school will be going for new taxes in the future.

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What’s wrong with the School Board’s optimism?

Published August 16, 2016 by justicewg
Happy faces

CC Lynn Friedman Flickr

The Grandview Heights school board is about to start a big PR campaign to build new school buildings. August 24, 2016 will be the kickoff of a sustained effort to convince voters to pass high levies in order to replace some or all of our present school buildings. The board will probably be pushing this line – “We are optimistic about the future of the city, and think the children deserve modern buildings” Knowing the way the board works, I think that anyone who brings up complaints about the costs and loss of historic buildings are going to be labeled gloomy downers who should not be listened to.

What’s wrong with optimistic thinking? The problem is that sometimes positive thoughts are used to reject pragmatic thoughts. There should be careful consideration of all negative points that might bring a future Grandview resident to say, “We made a mistake, the school board had a bad idea, they left us with high taxes and we lost the buildings that made us unique, now we have another education factory”. Going on the experience in the past with the board, I think those pragmatic thought which might have prevented the bad decisions will be stripped from the record, and ignored.

Please, if you have ten minutes, please watch this YouTube video that gives Barbara Ehrenreich ‘s take on the down side of optimistic thinking.

https://youtu.be/u5um8QWWRvo

The video is too important to allow a “Too Long; Didn’t watch” summary. Please watch it!

When happy think pushed out realistic thoughts

The Grandview School board has been operating as a group-think, no complaints allowed board for a long time. The professional education community calls this “Policy Governance” it is an intentional policy of “let the experts run the schools”, and ignoring the wishes and complaints from the anyone who has different perceptions. In order to reinforce the message that complaints will not be heard, the board “acts as a collective rather than making individual decisions”. The Columbus school board became a Policy Governance board, and suffered disastrous results.

There was no sudden change in Grandview’s board becoming a PG board, but I have to point out the meeting of October 2014 as a major turning point. In the past, parents would come before the board during the “Hearing of the Public“ part of the meeting and voice concerns, and ask for answers from the board. At this meeting, for the first time, the board president said “we don’t answer questions during this part of the meeting.” The board refused to answer then, and later refused via email follow up. This is exactly how the Columbus school board operates.

A long history of working on facilities policy without parents attending meetings.

How can a school board become an over-optimistic body, and start out on a path that attempts to bring the community on a disastrously expensive mistake? A major error is for the board to hold too many meetings with no parents in attendance. Closing their ears to criticism makes a board insular and over-optimistic.

The present board has a long history of special board meetings, at odd hours of the morning and evening. Almost no parents attend these meetings, and they are often held in inconvenient locations. The one that bears the closest scrutiny is the special meeting of May 13, 2015. The record shows that no parents or reporters attended the 8:40 AM meeting.

It’s Our Turn Now

An over-optimistic board will grab actions that past boards have taken in order to support the present wishes of the board, even when those past actions have little to do with the present.

The board began this meeting with a statement “80-­‐90 years ago the people of Grandview invested in school buildings and infrastructure; it’s our turn now.”

The big difference between now and 90 years ago? The school district was exploding with new residential housing construction in the 1920’s, most of the present housing in Grandview was built during those years. The new students required new buildings.

There is new housing being built in Grandview, but the great majority of the new residents are apartment dwellers with no kids. There are some single family housing on the way, but past experience has shown that retired couples and DINKs will be the new residents.

(Edit – The board ran a study that found there will be little increase in student numbers.)

A MORAL IMPERATIVE to do something

If you are convinced that you are doing the right thing, might as well assert that you are taking the only moral action. That makes those who oppose you immoral. Groupthink and over-optimistic thinking makes this a good idea (the MORAL IMPERATIVE line, in all caps, was taken verbatim from the meeting notes).

Consensus minded” task force

The Facilities Task force that the board created at this May 2015 meeting was given a list of attributes that were wanted. “Professional and smart” were good things. “Consensus minded” was also a pre-selection criteria. They wanted people who would not dig too deep, that would not voice concerns, that would reflect the over-optimistic ideas that the board wanted to propose. Pretty much exactly what Ehrenreich warned about in the video.

The school board insured the isolation of the task force, they declared it a private group, and denied my request to sit in as an observer. Working in secret, unaccountable – no chance this group would do anything except praise and re-enforce the board’s unrealistic ideas.

(One important observation about that May 13, 2015 board meeting, note that there is no record of who said what. It is obvious from reading the minutes that there are people with very different ideas about how the process of facilities upgrade should be done, but it is all recorded in the “we” voice, in keeping with the consensus  rule. It also allows each member to shuck off responsibility onto the “we”, so nothing they say can be pined on them at the next election.)

Why complain about the over-optimistic board?

Some might think, “well, the board will try their best to build new buildings, and probably fail. So what? Isn’t that what boards do?”

School boards are supposed to be acting at the request of the community. The record of this push to build at the schools shows that it all comes from the board members themselves, not any community group.

The board has already wasted many hours in meetings and site visits in anticipation of building new schools. The board empaneled a task force, which might have spent large amounts of money on preparation for the new buildings (we don’t know, so far the task force actions are being kept secret). We do know the school hired an expensive planning firm to give the board a report on the school facilities.

(Update – the board couldn’t work with the first planning firm (HPG), and hired a second firm for the same job, doubling the cost)

We are still waiting to see what the board pulls out at the meeting August 24th, 2016. I’m guessing at the minimum fat stacks of paper, and possibly a slick video presentation. There will be a website created by the school to promote the building of new facilities. All this stuff is expensive and we taxpayers are footing the bill.

What can we expect from Grandview Voters?

I have reason to believe Grandview voters can make some bad decisions. I try to remain hopeful that they will make better decisions in the future.

Those who are like me and see the school board as over-optimistic and out of touch have some history to back up our hope the voters will reject the grandiose plans for new school buildings. During the end of the 90’s and into the 2000’s, the city council wanted to tear down the historic city administration building, and put up a shiny new office. The voters twice told the council, on two separate votes, “no way”.

The school board will be throwing everything they have into an effort to get you to vote some high taxes for building unnecessary new buildings. I’m cautiously optimistic that Grandview voters will recognize over-optimistic folly and vote the construction levies down.

While we are at it, can we bring some realism to the board, and vote these board members out of office too?