(1) School District #51 General Obligation School Bond Issue
(2) City Police Station, Jail, and Fire Station Sales Tax Revenue Bond Issue

1) School District 51 General Obligation School Bond Issue
Why did both of these issues fail? The reasons are many and not without basis.
For many years I was a bond financial consultant and completed 126 bond issues in New Mexico and Texas. I was hired by the issuing authority to handle the bond issue from the election process through receipt of funds after issuance of the bonds. If a bond issue failed, the consultant received nothing for their services since the fee for handling the issue came from the bond issue proceeds. That means that a simple comprehensive cost effective public education program has to take place prior to the voting date for the bond issue. That did not happen for either of these issues. The #1 and #2 questions a voter asks is what is this going to cost and is the facility really needed. A small chart for a general obligation bond issue that shows the projected cost for a house of a certain value is needed. For example a house with $200,000 Assessed Valuation, would cost the tax payer an additional $50 a year or less than one dollar a week. All that is
needed is a small business card with the answers to the most pressing questions. An intelligent advisor would set the bond issues for a school district up with relatively short term bond issues to save on interest and so future issues can replace existing issues as they are paid off. That way the District can issue new general obligation bonds picking up where the previous issue is paid off and honestly say, “The new bond issue will not increase your property taxes above what they were last year”. Interest rates have declined to such a low level that the demand for short-term bonds has diminished. District 51 has a high bond rating by Moodys so the interest rate should be relatively low compared to previous issues. The District needs to reveal the combined debt schedule year by year for the district to the public so they can see how a new issue would be paid and the resulting tax effect. A newspaper release could accomplish that. The shear
size of the bond issue was enough to scare the voters. The District should not project so far ahead when we have an out of touch Governor that wants a moratorium on drilling each year and a President Elect that wants no drilling and to close coal mines. All that points to a rapidly shrinking economy for the Western Slope in the near future if we allow these two leaders to impose totally unreasonable unwise restraints on the energy industry.

(2) City Police Station, Jail, and Fire Station Sales Tax Revenue Bond Issue
I was the consultant on the first county bond issue in New Mexico implementing a ¼ cent increase in the sales tax for theTaos County courthouse. Based on previous years sales tax collections the projected payout for that issue was twelve years. Since the Town of Taos is a tourist town, the tourists paid a large portion of the issue. The sales tax bond issue was paid off in only seven years and the sales tax went away. It did not need to go 12 years.

Did anyone see a chart in the paper showing current sales tax collections for the current rate and the projected collection of the ¼ cent sales tax to pay for the this revenue bond issue? What was the projected term of the Sales Tax Revenue Bond Issue? Did anyone see an explanation that revenue bond issues are not as highly rated as general obligation bond issues because the full faith and credit of the taxpayers is not pledged, only the sales tax revenue? Did anyone see a clear explanation of what happens to the ¼ cent sales tax after the issue is paid off? I didn’t see the answers to any of these questions in the newspaper. I heard a couple radio broadcasts on AM 1100 answering general questions. I saw people on Patterson and 29 Road waving signs that said Vote Yes regarding the issue. Let’s face it, Chief Gardner came before the City Council and said this is what is needed and if we wait it will cost more and we need it now. The
Council went along with the proposal without fully investigating the need and only gave their half-hearted support . Also they did little or nothing to inform the public so they could make an intelligent decision. The result was a “NO” vote.

I would say $50 million is the maximum the public would have voted for. The City and School District #51 should have determined what which one would go on the ballot in November. Having both issues, both exceeding a reasonable amount, on the ballot at the same time spelled sure defeat for both proposals. Combining fire stations and the police facilities on one ballot proposal was not wise. I would think that a general obligation bond issue a year or two down the line for a minimal amount, for example $20 million would be wise for the fire department needs. The public will usually vote for general obligation issues for city buildings and fire stations. The public has a thing about police stations and jails that do not see the benefit in increasing their property taxes for that purpose or in this case paying an additional sales tax. Helpful information to pass a sales tax bond issue is how much and the percentage of Grand Juntion City
Sales tax is paid by people not living in Grand Junction? That way the taxpaper can see the advantage of using sales tax revenue rather than a General Obligation bond issue that is paid solely by the property owners residing in the City.

HOW TO PROCEED
A huge number of voters in this area need to make it clear to our State representatives and the Salazar brothers that their energy policy going along with the Governor is not reasonable or unacceptable. Also that President Elect Obama is wrong in stopping drilling and closing coal mines in a period when just the opposite is needed. If the Salazar’s sell us out they need to know they are on the way out.

Once that is out of the way, I would recommend the City determine what the most pressing needs are for the Law Enforcement facilities and keep the issue below $50million dollars. At a later date put fire stations on the ballot as a general obligation bond issue. There is a percentage limit for general obligation bond issues , the public needs to know how close the City is to the limit?

District #51 needs to back off and re-think the needs , one high school at a time , not two with this uncertain economic climate , remodeling and better use of present facilities needs to take place. Then in a separate issue in two years keep the issue at a reasonable level that the public will not interpret as extravagant. Fill in annnual debt requirements as bond issues are paid off , do not add to annual debt requirements. . Educate the public. Request a lot of public input before the issue is put on the ballot. Know what the concerns are!

Rick McBride
Grand Junction

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