Kansas City GO Bond

KC topics that don't fit anywhere else.
kboish
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Re: Kansas City GO Bond

Postby kboish » Tue Mar 28, 2017 10:20 pm

beautyfromashes wrote:^ So, is this a way to refinance current city debt?


These two KCStat presentations cover alot of the GO Bond stuff and may be useful to you.

http://kcmo.gov/wp-content/uploads/2013/12/KCStatFinanceGovernancepresentationDec2016.pdf
http://kcmo.gov/wp-content/uploads/2013/12/KCStatInfrastructureTransportationMarch2017.pdf

I think its probably more informative to watch the actual presentations on Ch2 to see the different department heads walk the Mayor through the presentations and engage in a question and answer style meeting. Its very informative and usually posted to the KCStat Page. For some reason the past few meetings aren't up, but I bet if you email or ask the city's twitter account then someone would put them up.

I think the answer to your question is- sort of. The city's plan is to retire $100 million of debt annually and add roughly $40 (-60 net). The goal is to deleverage the city slowly while also improving the city. Remember though, just because the city has less overall debt doesn't mean there is $60 million extra dollars lying around to spend, it just means we owe $60 million dollars less in total debt.

The last time the city did a major infrastructure spending program (early 2000), it was accomplished without an accompanying tax increase. Instead, the program tied up parts (most) of the existing capital improvement sales taxes to pay for those long term investments. Originally, the capital improvement sales tax was meant to be used to do ongoing maintenance...not long term investments. We are still paying off those bonds. What the city manager has stated he is trying to do now is switch the long term infrastructure costs onto a long term, more stable revenue stream (property taxes) and as the early 2000 infrastructure bonds wind down they will be able to use the funds currently paying for those (capital improvement sales tax) for maintenance and resurfacing. Soo, you should be able to get a revenue source for long term investment and a revenue source for short term maintenance.

One hitch is that the capital improvement sales tax expires sometime next year. At first they were going to roll the renewal of the capital improvement sales tax into the bond questions, but then they decided against it because they thought it was confusing. So we will have to vote to renew that existing tax sometime before next year or we may still be in a bit of an infrastructure conundrum.

Its a pretty bold plan with a lot of moving parts. As important as it will be to make sure future councils spend the money appropriately and don't waste it on new roads or something unintended- it will be just as important to make sure they don't add new debt and that we allow our overall debt level to decrease as planned.

aknowledgeableperson
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Re: Kansas City GO Bond

Postby aknowledgeableperson » Tue Mar 28, 2017 11:48 pm

No. As debt is retired it should lower the debt levy portion of the city levy with regards to property taxes. When governments have voting on no-fee tax increases for capital improvements what is actually being done is replacing a retired debt with a new debt without a tax increase.
Governments do refinance current debt to take advantage of lower rates to take advantage of changing favorable terms.

aknowledgeableperson
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Re: Kansas City GO Bond

Postby aknowledgeableperson » Tue Mar 28, 2017 11:57 pm

As I understand it that debt established that was to be paid by sales tax revenue is not General Obligation debt (paid by property taxes) but us more like revenue bond debt. On the city books debt is debt no matter if it is GO Bonds or Revenue Bonds and the city did have a high level of debt that did have rating companies scared.

kboish
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Re: Kansas City GO Bond

Postby kboish » Wed Mar 29, 2017 7:57 am

aknowledgeableperson wrote:No. As debt is retired it should lower the debt levy portion of the city levy with regards to property taxes. When governments have voting on no-fee tax increases for capital improvements what is actually being done is replacing a retired debt with a new debt without a tax increase.
Governments do refinance current debt to take advantage of lower rates to take advantage of changing favorable terms.


Well, I'm not exactly sure if we are in disagreement here and maybe we are speaking past each other, but I am pretty much quoting the city manager. Here is one example of where he describes issuing $40 million and retiring $80 million a year such that our aggregate debt levels are decreasing (i'm pretty sure I subsequently heard him say $100 million retired annually).
http://kansascity.granicus.com/MediaPlayer.php?view_id=4&clip_id=9916

Skip to around 22:30 to hear him begin discussing the GO Bond and skip to 26:40 to hear him talk about the debt issue specifically. Its certainly possible Im not fully stating how it works, but generally, the idea seems to be- lets reduce debt levels while shifting how payment sources work in order to make things more sustainable.

Edit: And just FYI to those that click the link- an agenda auto-downloads for some reason. its kind of annoying.

aknowledgeableperson
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Re: Kansas City GO Bond

Postby aknowledgeableperson » Wed Mar 29, 2017 8:54 am

Maybe this might help. I have an existing home being financed with a 5% home loan. Interest rates are lower so now I will "refinance" with a new loan at a 4% interest rate. Over the course of my ownership of this house I have made improvements. First I tackled the kitchen and I was able to finance that with a $20,000 loan to be paid off in 5 years. After that loan is paid off I made improvements to the bathrooms with a $16,000 loan to be paid off in 5 years.
What the city is doing with this issue is not "refinancing" current debt. Instead as old debt is being paid off new debt is being added at a lower amount. And instead of using sales tax money that caused a shorter pay back period because of the limited term (life) of the sales tax the city will be using property taxes to pay back this newer debt.

kboish
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Re: Kansas City GO Bond

Postby kboish » Wed Mar 29, 2017 10:09 am

I agree that the city is not refinancing debt in this instance- which is why I answered the question by saying- "sort of", but its really more that it is restructuring how it pays for debt. So I think we are saying the same thing on that point.

When you said

aknowledgeableperson wrote: As these bonds are issued other city debt will be retired If $40M in bonds are retired and $40M are issued in the same year it would seem there would be no increase or decrease in the property tax rate for that year.


I don't think that is quite right...because the city is issuing ~$40 a year but paying down ~$80~100/year (of some other current debt unrelated to these infrastructure questions). In your example, there would never be a property tax rate increase. What I'm saying is that each time there is new bonds sold from this authorization- the tax rate will increase to pay for it, irrespective of how much debt is paid down that year. That is part of the restructuring occurring.

aknowledgeableperson
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Re: Kansas City GO Bond

Postby aknowledgeableperson » Wed Mar 29, 2017 11:25 am

Just a minor point. I know the intentions are to retire more debt than new debt is issued but I do not have on hand what the retirement schedule is for the current debt of the city. Nor do I know the funding sources of those debts. Nor what the current debt levy is on the tax bill. As old general bond debt is retired the debt levy will decrease.
We are using words alone. What is needed are some actual numbers to go with those words. Also I could have used some better wording by saying $40M in general bond debt retired and $40M in new general bond debt issued.

kboish
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Re: Kansas City GO Bond

Postby kboish » Wed Mar 29, 2017 11:48 am

I think we are more or less saying the same thing.

I'm just pointing out that one of the stated goals or outcomes in all of this is to reduce the aggregate debt levels of the city and so it is something to which we should hold future councils accountable (in addition to using the money on what has been promised). I think it will be easy for this to point to be lost in ten years.

aknowledgeableperson
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Re: Kansas City GO Bond

Postby aknowledgeableperson » Wed Mar 29, 2017 9:20 pm

kboish wrote:I think we are more or less saying the same thing.

I'm just pointing out that one of the stated goals or outcomes in all of this is to reduce the aggregate debt levels of the city and so it is something to which we should hold future councils accountable (in addition to using the money on what has been promised). I think it will be easy for this to point to be lost in ten years.

Agreement here.

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Re: Kansas City GO Bond

Postby JBmidtown » Tue Apr 04, 2017 11:41 am

GO VOTE FELLOW RAGGERS

kcjak
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Re: Kansas City GO Bond

Postby kcjak » Tue Apr 04, 2017 12:35 pm

Just got done voting at the Westport-Roanoke Community Center and was number 175...was a little busier than I had anticipated. Anxious to see how everything turns out.

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Re: Kansas City GO Bond

Postby KCTOGA » Tue Apr 04, 2017 1:49 pm

voted at Coves North by Zona Rosa (Platte CO.). Very slow @ 10:00. Sure hope all pass.

dnweava
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Re: Kansas City GO Bond

Postby dnweava » Tue Apr 04, 2017 2:28 pm

I'll be voting later today

1. No
2. No
3. No
4. No
5. Yes

JBmidtown
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Re: Kansas City GO Bond

Postby JBmidtown » Tue Apr 04, 2017 2:41 pm

dnweava wrote:I'll be voting later today

1. Yes
2. Yes
3. Yes
4. Yes
5. Yes


Ftfy

shaffe
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Re: Kansas City GO Bond

Postby shaffe » Tue Apr 04, 2017 8:24 pm

I went No, Yes, Yes, Yes, Yes

I thought the Chastain issue was going to be up today?

flyingember
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Re: Kansas City GO Bond

Postby flyingember » Tue Apr 04, 2017 9:53 pm

The two citywide rail items are on the August ballot.


On this election the east side likely came out en mass, need to see precinct data go be sure. Only a third of the total votes came from the northland while that part of the city is normally stronger on voting relatively.

Interestingly, Clay Co was the strongest for 1-3 and the strongest against 4 at the same time as a percentage of votes when looking by county.

This shows that making an effort to get a solid variety of projects serving a large portion of the city people will say yes. It's all about doing something near everyone.
Last edited by flyingember on Tue Apr 04, 2017 9:54 pm, edited 1 time in total.

TheSmokinPun
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Re: Kansas City GO Bond

Postby TheSmokinPun » Tue Apr 04, 2017 9:54 pm

Everything passes, that's a surprise.

earthling
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Re: Kansas City GO Bond

Postby earthling » Wed Apr 05, 2017 1:49 pm

The pot possession fine reduction/no jail time passing is no surprise but didn't expect to win by largest margin. Drug possession can still become a conviction even with new condition if I understand right, which could hurt job hunting. Wonder if most pot users now think it's just a fine and become more careless with possession. They'll be in for a shock that it still goes on record. Is MO ready to legalize recreational pot yet?

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Re: Kansas City GO Bond

Postby DaveKCMO » Wed Apr 05, 2017 7:46 pm

shaffe wrote:I went No, Yes, Yes, Yes, Yes

I thought the Chastain issue was going to be up today?


why the hell would you vote no on sidewalks but yes on flood control?

flyingember
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Re: Kansas City GO Bond

Postby flyingember » Wed Apr 05, 2017 9:11 pm

With the new 1/8 cent tax the highest sales tax in the city will be split between five areas downtown with stacked special sales taxes all at 10.6%
The base without special districts for KC in Jackson County is 8.475
This excludes the special restaurant tax, was just looking at the base rate.

Outside of downtown in KC only the 210 hwy cid and now part of Martin City are over 10%
Liberty looks like it now has a 10.6% rate for one shopping center
Belton appears to have the highest MO side rates at 10.725% in a couple areas



In the KC area the highest tax is in three parts of KCK at 11.125%
Leawood, Leavenworth, Olathe, Overland Park, Mission, Roeland Park all definitely have areas above 10%, several are at 10.6% like KC and several of these cities have more shopping areas above 10% than KC does.

It's easier to spend more on sales taxes in Kansas than Missouri in the metro, the MO suburbs and older areas overall are your best deals for shopping costs.

Parts of urban St. Louis are even higher, there's more places with stacking in that city and with the new tax there's areas soon to be at 11.579%
Junction City has one area with a tax at 11.5%, just below St. Louis City but the record for Kansas.
Last edited by flyingember on Wed Apr 05, 2017 9:28 pm, edited 6 times in total.


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