As expected, four members of the Village of Lake Orion council voted for the $5 million bond that the Downtown Development Authority (DDA) wanted. They also handed off future decisions to the village manager because it seems four members of the village council do not want to be bothered with the debt village taxpayers will be burdened with how those funds are used.
Per the preliminary budget information, about one-third of the village’s total annual property tax collection of $1,282,734 will go to pay this bond debt.
Why a $5 million bond that will cost the taxpayers almost $7 million, possibly more, over the next 18 years? Because that is the maximum the DDA could ask for. There is no accounting for how that money will be spent and what it will cost to do whatever it is the DDA wants to do with the Lumberyard property.
Four members of the village council seem to think this is okay, that this is the best use of taxpayer’s money for the next 18 years and they want nothing more to do with it.
Let’s do the numbers based on the information provided to the village council for the April 24 council meeting and preliminary budget information:
The DDA’s anticipated taxpayer funded revenue for next year is $903,236. Subtract the DDA debt payment of $402,500 and operating expenses of $431,946. The remaining funds for DDA programs and services is $68,790.
The approximate cost of the $5 million bond over 18 years is $7 million (with interest). Subtract $480,000 (sale of 20 percent of the $2.4 million property to be held privately) and $375,000 (22,000 square feet of private construction with an annual new tax revenue of around $25,000). Assume at best 15 years of the 18-year bond debt leaves $6,145,000 – the net cost to the taxpayers as other proposed uses provide no documented additional tax revenue to the village.
Cory Johnston
Lake Orion