Bonding

Dear Readers,
With only one hesitant show of resistance the Public Works Department renovation project got the city council’s go-ahead. And who wouldn’t be hesitant under the collective stare of an audience packed with Public Works employees?
Hard to believe that only a week since their inaugural speeches warning about slashed budgets, tight money, and painful decisions to come, the $3 million bond loan application was approved unanimously and painlessly. The money for this project – if it holds at $3 million – would no longer come partly from a loan and partly from the city’s contingency money reserves, as was previously planned. All of the $3 million would come from the loan.
As though that “painful decision” stuff were all a bad dream, later in the Nov. 23 meeting the council sat placidly through a presentation of the architect’s latest plan. Finally, Councilmember Josh Wright made the attempt to remind everyone that since the project had been approved the state slashed the city’s budget and more economic hardships were on the way. “When are we going to talk about the future of this project?” he asked.

(continued)


Further
The other council members and the mayor said that although the bad economy has created a budget shortfall, it has also created an excellent financial environment for loan interest rates and contract bidding. Councilmember Colleen Clay said she has heard many constituent comments and has given the matter considerable thought. She has decided that the status quo, she says, is not acceptable. “I think we should go forward with it, and I’ll go further!” she said.
She said she doesn’t want to repeat the big mistake made on the city’s community center construction project. The big mistake, in her opinion, was that the city tried to do it piecemeal, which ultimately cost more. She said the city should do as many Public Works Dept. renovations as they can.
Councilmember Rueben Snipper also said “we should go ahead with this project.” Councilmember Terry Seamens, said “I don’t want to borrow more money, this is a bad time to do that.” But, because of the “horrible” working conditions and to support the Public Works labor force, he said he “strongly supports” going ahead with the project. He also said the plan was a good one.
Cuts? Nah!
They did kick around the notion of cutting back services, handing them over to the county. They put some speculative questions to the Public Works director. What would be the renovation cost savings if the city stopped trash collection? The director said that in most cases the buildings are shared by more than one service, intimating that changes to them would have minimal savings. The mayor wondered aloud how much would actually be saved then on small alterations to a building. “Where’s the saving? Positions? Equipment?”
But, as anxiety spread through the audience, the council majority went back to assuring them and each other that they supported the project. There were no votes as this was just a presentation and discussion, but it seems likely that when it is time to vote on the $3 million bond and project, the vote will be “yes.”
The deadline to make the official request for the loan is Jan. 24.
The Curse
The reverberations of the community center debacle continue to vibrate through city politics like the Vietnam War reverberates through the nation’s.
The community center’s design and building was cursed with: unexpected construction delays and costs, a final plan that granted every item in the community’s wish list – except the main one (to have a gym), a downgrading of a grand design to a mediocre eyesore, mismanagement by the former city manager, and a blooming of public resentment and distrust of the council and city staff that still lingers.
Now, even though it was stressed at the time of it’s conception and construction that the community center was NOT being built to improve office space, it was for the citizens. The new office space was just a byproduct, they said. But, it has created facility-envy. The existence of the community center has created an “equity” issue for the Public Works Department staff. It has even been called a “social justice issue” by the city manager.
The public and the council will doubtless see the shadow of the community center on this new renovation. Some residents will say the council is making the same mistakes. The council has set out to avoid making the same mistakes. Either way, the community center curse creeps into everyone’s thoughts, words, and actions on the Public Works Renovation
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– Gilbert
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About the Author

Gilbert
Gilbert is the pseudonym of a hard-bitten, hard-drinking, long-time Takoma Park resident who maintains the granolapark blog. Gilbert and William L. Brown — Granola Park's mild-mannered chief of staff, researcher, and drink pourer — have never been seen in the same place at the same time.

7 Comments on "Bonding"

  1. Bruce Williams | November 24, 2009 at 10:04 am |

    Gilbert
    There hasn’t been any decision on the breakdown of loan/money from reserves. If we do go ahead with $3 million, I think it will probably be at least $1 million from reserves. The discussion during the Annual Financial Report earlier in the evening made it clear that the Council is very interested in seeing how we can reduce the high carry-over, and budget closer to actual expenses so as not to create more carry-over every year.
    Also, the City Manager will be getting the Council more information on the impact of potential changes in the mix of services provided by the Public Works Department, and how that might change what we construct. Both Councilmember Wright and I asked for that information. We both voted yes last night, but said that we wanted more information before we would consider voting yes on January 4.

  2. Tom Gagliardo | November 24, 2009 at 2:54 pm |

    Mr. Schlegel, what is your view of this?

  3. It’s clear to me that the cart is in front of the horse. There is an architechturaland budget/funding proposal, yet the Council is asking if the current array of services should be maintained. In the meantime, the community is largely unaware of this discussion. My vote is to headline this inm the print edition of The Voice.

  4. Hmmmmm! Good conditions for borrowing: low interest rates and good contracting conditions! Where have we heard that before? It seems that whenever the CM gets her mind on borrowing, miraculously the conditions are optimal. Wasn’t that the case for the borrowing for the street repair? In the mean time the debt piles up!
    And by the way, did the CM mention our existing outstanding debt?

  5. Reuben Snipper | November 24, 2009 at 8:38 pm |

    Some things Gilbert did not bring up..
    First, we have to do something about the public works facility, whether it is replacing ancient fuel tanks that could begin leaking any time now, buildings that are about to fall down, pipes that are about to break, heating systems that are about to quit any time now, etc. So doing nothing is not really very wise.
    Second, both interest rates and construction costs are very low, so the cost will be very low. If we wait, costs will be higher. I remember construction costs going up 13% per year before the recession hit.
    Third, we have the money because of very careful management of the City’s finances. The auditors said our debt load is low, since we paid off some bonds recently. The City’s unrestricted reserves are very high. Some extra reserves are good given the uncertain future budget situation, but the size of ours is unnecessary.
    Finally, I think the message to the public works staff is indefensible. We are currently renovating the Auditorium, which will make a nice space for the Council, theater, music, dance, film, etc. If we don’t renovate the public works facility, then the message to staff is that the comfort of the Council, theater goers, dance performers, etc. is more important than the safety and efficiency of those who get up early, rain or shine, to pick up the trash and recycling, fix our police and other vehicles, and maintain our roads and parks.

  6. Tom Gagliardo | November 25, 2009 at 12:05 pm |

    Reuben
    Consider the message that has been sent to the community at large. Despite overwhelmingly support for a gym, we instead renovated offices at a cost of $13-15 million, but we didn’t renovate the council chambers so we are now spending another bunch of money; then somehow we let the Public Works building fall into disrepair, so now we are going to spend another $3 million because those employees think it will be unfair if they don’t get new facilities.
    Two other comments: (1) state and county money is our money, when the city uses it there is less available at the county and state level; and (2) we want to see hard numbers and options. For example, what is the comparative cost for “repairing” rather than “replacing” the Public Works facilities?
    Too often it seems the Mayor and Council opt for the Cadillac when a Buick or even a Chevy will be just fine.

  7. Roger Schlegel | November 28, 2009 at 10:50 am |

    Tom Gagliardo asked for my views … since this was such a key topic of discussion during the mayoral campaign, I think it warrants a detailed response (if you’ll indulge me).
    I still think we should seriously consider deferring the renovation of the Public Works facility. Prior to the November 23 meeting I called Councilmember Robinson to reiterate this position. I watched the meeting online and examined the available documents. Given the concerns so many residents expressed during the mayoral campaign and the statements made by Council members during the Voice candidates’ forum and on inauguration night, I was hoping for, but didn’t get to see, a vigorous, critical examination of these four questions:
    1. How much will the project actually cost?
    2. Does the design meet the needs of city operations and employees without indulging in unnecessary extras?
    3. Are the current functions of Public Works going to continue on that site for the foreseeable future? (What new functions may be called for? Which functions might become County responsibilities?)
    4. Is the design flexible enough to handle changes in city priorities over time?
    1. With respect to cost, all we know is that it’s going to be higher than we think. The Council requested a design that would fit within a $3 million budget. The plans received on Monday, November 23 estimate a cost just under $3 million, but this assumes a “Fall 2009” bid date, which is already impossible. Also, it appears that all parties view three of the four “Alternatives” as essential to the project. These additional items are estimated to add $350,356, or 11.6%, to the bill (again assuming a fall 2009 bid date), so the total cost is already at least $3.35 million. Council members need to be clear about this number in their discussions with residents over the next few weeks.
    Also — mysteriously to me at least — the City Manager characterized all of the above as “Phase One” without further explanation. Residents and Council members must demand to know what further “phases” are intended for the Public Works renovation. (It’s more than a slim possibility that Phase 0.5 is going to involve clean-up of soil that was contaminated long before the modern era of computerized storage tank monitoring.)
    Originally, the Council planned to spend $500,000 in cash and take out a $1.5 million bond. Now we’ve doubled the size of the bond at a time when many taxpayers feel, as Councilmember Seamens has noted, that we shouldn’t be borrowing more money. Nobody wants to see the Public Works expenditures balloon like the Community Center costs did, especially at a time when many residents can ill-afford the inevitable tax increases.
    It’s true that the interest rates associated with a bond are at an historic low and likely to go up soon. But if you’re going to buy something with no money down, regardless of the interest rate, you’d better be certain it’s a good long-term investment. If the goal here is to take advantage of cheap money and low construction costs to fulfill a long-standing community priority, why don’t we buy some cheap land and put up a gym? Or why don’t we buy a parcel in Old Town DC and co-develop it to suit our vision for green space and affordable housing in walking distance of Old Town? (OK, OK, state bonding authority probably wouldn’t cover that.)
    2. In many, but probably not all, ways, the design reflects needs rather than wants. Certainly, as Councilmember Schultz stated, we need to provide City employees with dignified and safe facilities in which to work. It makes long-term sense, as Councilmember Snipper pointed out, to move the truck entrance to Ritchie Avenue, away from Heffner Community Center and away from homes. With respect to the equipment maintenance and storage buildings, most of the design is pretty utilitarian, as several council members pointed out. And the extra costs associated with gaining LEED Silver certification are right in line with our commitment to environmental sustainability.
    The one aspect of the design that no one talks about much is the new, central section of the administration building, which seems larger than necessary. For example, how often is a conference room going to be used (could it double as the break room)? How much of an increase in the size of the reception/lobby area is actually needed? If there is a conference room, do all of the staff offices need space for separate meeting tables? And how much storage is actually needed? In some ways, it looks as though the decision to link the existing administration building with the gardener’s shop led to a new space that was bigger than needed and bound to be filled somehow. When I worked in the Durham Sanitation Department, my office was in the truck storage and maintenance building, and I constantly heard line workers commenting about how much “nicer” the administrative offices (in an adjacent building) were. (They saw the disparity as a social justice issue.)
    3. Low interest rates and low-bidding construction firms notwithstanding, we are on the verge of committing to a public works facility without having agreed upon a long-term vision for how we will provide or obtain necessary and emerging public works services.
    The elephant in the room (which a few brave Council members at least chose to mention) is the question of what City functions may be handed over to the County (or phased out) in the near or not-so-distant future. The other, slightly smaller, elephant trying to get into the room is the question of how the findings of the Environmental Task Force (due in March) might necessitate retrofits to the Public Works facility in the near future. This is our one chance to change the footprints of the buildings for the next fifty years – we had better get it right. We need to talk about those two elephants so we don’t end up with a white elephant.
    If comments I heard from voters during the campaign are any indication, Councilmember Wright (who did quite a bit of campaigning even though he was running unopposed) can be even more forceful in calling for a renewed evaluation of the tradeoffs involved (in terms of costs as well as quality) in handing over various public works functions to the County, particularly garbage/recycling collection and road maintenance. No one seems certain that we are going to continue with the status quo indefinitely. Councilmember Clay, for one, suggested that she is open to hearing a convincing argument that garbage collection or some other function should be handed over to the County.
    Mayor Williams stood next to me on Election Day and told voters about to enter the polls that he favored deferring the Public Works renovation project. My sense is that he hoped to defer the decision until perhaps the late spring so that the design could respond to environmental task force recommendations and so that there would be time to evaluate city programs in light of potentially drastic budget cuts. As it now appears, the end of January is the “drop-dead date” for issuing the go-ahead for the project, as bonds would be sold in early February. Therefore, Mayor Williams has been handed an opportunity to show strong leadership (and concern for taxpayers) by insisting that every possible stone be turned over with respect to programmatic questions prior to the January 4 vote on bonding. This would be a natural first step in the conversation about fiscal priorities that all challengers and incumbents agreed would be necessary in the run-up to the FY 2011 budget process. On Monday, he only went so far as to ask that city staff run the numbers “without putting a lot of work into it.”
    Councilmember Snipper expressed a valid and compassionate concern about the message it could send to public works employees if a project they’ve been “promised” for several years is postponed – although I don’t think that any project can be said to be “promised” until it’s voted upon. Yes, we should be concerned about the message sent to city workers if we postpone the renovation – but we should be at least equally concerned about the message sent to residents if a major spending decision goes forward without the most careful deliberation possible.
    4. What if there’s simply not enough time to make a rational, well-informed calculation about the relative merits of City vs. County provision of various components of Public Works? From the standpoint of cost, there is a compelling argument to be made that we should do renovation this year. Still, we could improve the design before starting construction, thereby saving money in the long run.
    To put it simply, we could make sure that the design is flexible enough to be repurposed in the future to fulfill other community needs, especially if we end up phasing out or handing off major public works functions. For example, it would make sense to consider whether any portion of the facility could be leased out as a green business incubator should it no longer be needed by the City. Another obvious thing we could try is to redesign the large Sanitation building so that it could be reconfigured as a gymnasium in the future. Currently the proposed structure is 41 feet wide by 120+ feet long. A standard basketball court is 50 feet wide and 94 feet long (high school courts are usually smaller). The current plan calls for gutting the existing administration building and converting it mostly to men’s and women’s locker rooms. If we widened the footprint of the Sanitation building and added the new men’s and women’s showers/locker rooms directly onto that structure, we would have the basic makings of a gym — rather than a potential white elephant.
    During the campaign I focused on the Public Works renovation not only because it presented an immediate opportunity to cut the budget but also because it represented the kind of decision that calls for more attentiveness to the bottom line and a sense of the City’s long-term strategy and vision. At this point, it looks as though we are addressing the current budget crisis by putting less money down and borrowing twice as much. But for the most part, we are avoiding the other fundamental question of whether this is the facility we need going forward.
    It’s as if we’re a two-car household with a second car needing major repairs right now and replacement pretty soon. (As a percentage of our annual budget, this purchase is about the same as the cost of a car relative to a typical household budget.) We have the option to buy a particular vehicle that may or may not be the vehicle we need. But the key factors driving the decision are (1) Hurry, hurry — this vehicle is on sale now! For no money down! and (2) We can’t go another day with a second vehicle that’s inferior to the first. That’s not the way most of us would approach an important household decision, particularly in the midst of an historic fiscal crunch.
    Reasonable people can disagree about these questions. City staff have weighed in and shown up at meetings with compelling arguments in favor of going forward with the proposed design. But it looks as though there is a continuing disconnect between the deliberations of the Council and the concerns of taxpayers. The burden of leadership thus falls upon us as residents to examine the project and the bonding question and to communicate our views to neighbors and Council members as clearly as possible.
    – Roger

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