VIEWPOINT A general obligation bond makes sense to finance police station
by Jim Keith
As a member of the Police Facility Ad Hoc Committee, we questioned all expenditures for the new police station so that we could minimize the overall cost to Claremont.
We overwhelmingly agreed that regardless of how it would be financed, we saw the urgent need and we would vote for the new police station.
Two options were presented to fund the required $23.5 million. The first was the familiar GO bond, which the majority of our ad hoc committee favored. Our most-recently approved GO bond was for the Claremont schools. The new taxes can be used only to repay the bond. This method of financing reduces the cost for seniors who bought their home at a lower price in the past, but who must now live on very low incomes.
The second proposed way to raise the money was a new-concept parcel tax. This method had never been used anywhere to finance a building. The new approach would have required everyone to pay based on the square footage of the improvements on their property.
Unfortunately, public records of square footage improvements on some properties were found to be incorrect. Because a parcel tax generates money for the city general fund, we would have to trust future city councils to use the funds for paying off only this loan. With this insecurity, banks would charge a higher interest rate.
By the end of 25 years, Claremont would have paid $2.3 million more in interest to a bank when compared to a GO bond. My fear is that any legal challenge to this precedent-setting financing method would increase our city’s cost further.
Who would pay more with the parcel tax? Nonprofits including churches and retirement communities, not including the Colleges, would pay an extra $667,000 over 25 years. Commercial property owners would pay an additional $2.9 million, much of which would be passed on to our small businesses. The Colleges would pay an extra $4.5 million.
Our committee learned that the Colleges already pay for their own security force of 20 full time members and 16 reserves. The Colleges had previously offered $1 million toward the police station in the first parcel tax proposal. Therefore, our city council is again asking for a donation toward the new station.
New presidents at the Colleges have slowed the college response. However, some residents want to force the Colleges to pay more for police services. Using the parcel tax tool, we would be throwing half of the college money away on higher interest rates.
I think if asking the Colleges for a donation does not work, then it would be financially more beneficial to charge the Colleges for each police service call.
For those of you still resisting the GO bond, I urge you to calculate what your actual payment for this bond will be. I have heard people over-estimating their tax bill by a lot. Remember that your assessed value is not your current resale value. It is based on slow increases per year over what you paid for your home, which each of us remembers.
Your official assessed value after exemption is on your tax statement. Please check it. If your home has an assessed value of $100,000, you will pay $31.08 for the full year. If it is assessed at $300,000, then you will pay $93.24 per year for the new station.
We now have a plan for a right-sized new station in the right location. The cost has been cut by more than half. Regardless of which type of financing you would have preferred, the council has decided on a GO bond and the vote will happen on June 5. Let’s step up and vote at least 67 percent “yes” for a safe and efficient police station for our citizens and officers.
Delaying this further will make this station even more expensive, and will risk a possible earthquake catastrophe.