We have been researching the pros and cons of doing a bond, and specifics of how a bond works, for many months. After some recent discussions with a bond attorney with some experience and knowledge about this topic, we put together this Q and A sheet to help clarify some of the details, and highlighting the ways in which a bond could WORK for Midway. Ultimately this strategy for open space and rural preservation is a taxpayer decision. We feel it is important for all of us as taxpayers to understand the costs and benefits in order to cast our vote. We also encourage Midway City Council to support the citizens’ right to make this decision for our community.
Q: Is it necessary to decide on exactly what land we want before we do a bond?
A: No. A bond is an authorization from the citizens. The City would have 10 years before the authorization expires to decide what to do with the authorized funds. It is possible to never issue the funds, simply let the authorization expire. In that case, taxes would never be impacted.
Q: Suppose the citizens were to vote, and authorized a maximum of 8 million dollars for rural preservation. Would the city have to find a way to spend 8 million dollars right away?
A: No, the city could spend as much time as needed (up to 10 years) working on how best to spend the authorized money. Perhaps in a year the city might identify a project that would cost the city 2 million dollars. At that time, the city could use the authorization given to issue 2 million dollars of bond funds in order to complete the project. This would leave 6 million of additional authorization to be used at some later date within the 10 year authorization window. Each bond issue would be independent and would have an independent rate and term. Citizens would not see any tax increase until some amount were issued, and they would only be taxed on the amount issued, not the full authorization. The city would be under no obligation to issue bonds at any time. For example, if interest rates became exceptionally unfavorable the city would able to wait for rates to decline or simply let the remaining authorization expire.
Q: Land is expensive in Midway, should the city buy land with bond money? How far will the money go?
A: The city could just go buy land. But there are a lot of other options and many people are in favor of finding better ways to spend authorized bond money. The absolute best thing would be to match funds with grants, donors, and/or partners to get much more bang for the buck. For example, the city might partner with the Utah DNR if there was a project that both had an interest in. Also, there might be opportunities to buy development rights rather than the land itself, which could produce more bang for the buck.
Q: What about a county bond? Is it appropriate to pursue a city bond when a county bond is being discussed? Will residents get a double whammy?
A: First, there is no guarantee that the county bond will get on the ballot, or will pass in a vote. It has been discussed for the past 20 years. If it does go on the ballot soon, there is also no guarantee at this point that Midway will get money from a county bond. By allowing Midway citizens to vote independently, we take our future in our own hands. However, if Midway were able to work out an inter-local agreement with the county that guaranteed some use of the county funds in or near Midway (“west of the river”), that would be ideal. If Midway had already authorized a bond at the city level, the Midway City Council would have the ability to prioritize the use of county funds, leaving the Midway funds for later or simply allowing them to expire in 10 years. The council would also have the ability to analyze in detail the tax impact that the county bond had on Midway citizens, and if needed could issue fewer bonds from the local level to ensure that the overall tax impact on residents was palatable.
Q: If the Midway City Council approves a bond measure on the ballot, does that mean that they support a bond?
A: It only means they support letting the citizens vote on it, rather than dictating that the citizens can’t vote on it. However, the City Council would always have the final say about the way bonds were actually issued. The Council would be able to say how much (up to the limit), when, and for what purpose (bound by the limited uses set forth in the bond language). The City Council could decline to ever issue the bonds if they saw fit to do that.
Q: Could the City Council spend authorized bond funds on other projects like road maintenance?
A: No, the City Council would have to justify that any of the authorized bonds were issued for a purpose that met the bond language requirements. It would be nearly impossible to justify road maintenance as an open space or rural preservation use. In addition, the Council has taken steps to form an Open Space Committee, and this committee should do a lot of the legwork, including taking public input, before recommending any actions to the Council. It is a big job to seek grants and donors and partners, as well as to select appropriate and compelling projects, so a committee is really needed.
Q: Is this an urgent issue? Are we rushing this?
A: Midway is currently subjected to a growth rate that is many times higher than normal for Midway, and in fact is one of the highest in the Nation. All indications are this already high rate will increase in the next few years before coming back down and leveling off. It is fair to say that we are at a new turning point, and if we don’t act now we may miss the chance to act at all. Even if a bond passes there is plenty of opportunity to go slow in deciding the next steps, so it makes sense to allow the voters to speak. Even if voters were to approve a bond, it could take a year or more to put any portion of the authorized funds to the best use. With that understanding it seems fair to say that we aren’t rushing anything, we’re laying groundwork, and it is urgently needed.
Q: Why bond? Why should the city or citizens want to do this?
A: None of us wants to unnecessarily increase taxes. We are all taxpayers and we want to know what we are being taxed for. The citizens should have the right to vote. As citizens given that right, if we look at arguments for doing an open space bond, it may be compelling. Here are some key points:
- Bonding for open space could save the citizens money in the long run. Schools cost money. Roads cost money. Currently the city goes further in the hole with each new residence that is built in almost all cases. The City Planner can supply the dollar figure for how much. If we don’t want to pay to preserve what we have now, we’ll end up paying for what we’ll get later.
- There have been several studies that show that Open Space costs less than other land uses, so over time the choice of having less open space costs more and more. The Wasatch Taxpayer’s Association has referenced a recent study that demonstrates this. You can find that study here: http://wasatchtaxpayersassociation.com/wp-content/uploads/2013/01/Cost-benefit-study-of-land-uses-open-space.pdf
- If nothing else it seems clear that there is a strong public consensus that preserving the rural character of Midway is very urgent, and very important. While there are several different ways to do this, having access to funds which would allow the city to act when the need arises could be a critical toolbox item. If we don’t authorize funds for our toolbox beforehand, it would pretty much always be too late to consider when the time actually came. The population growth rate in Utah is very aggressive. In this situation, Midway may need to be aggressive to protect what we love. It seems the citizens are aware of this trade-off and there is evidence of support for a bond. The citizens deserve the right to vote on it.