Sunday, May 09, 2010

The $64 Million Question

Today's Enquirer has a "First in Print" story on the decision facing City Council this week: whether to approve the issuance of $64 million in bonds in the hope that this will be sufficient to attract federal funding for the streetcar. There's apparently some division amongst the streetcar supporters on Council, with some wanting to unconditionally approve the bonds, and others (Berding and Bortz) apparently wanting to hedge the City's bet, conditioning bond issuance on the receipt of federal money.

Mayor Mallory has said that the Council should unconditionally approve the bonds, and insists that the bonds wouldn't be issued by the administration until after the federal dollars come in, anyhow. Of course, under our present system of government, this isn't actually the mayor's decision; the City Manager would be solely responsible for the bond issuance once it's approved by the Council. I believe I've heard Milton Dohoney say that the bonds would wait until after federal financing is in place, but I can't find a link to that right now.

An interesting situation is presented. Mayor Mallory has put this on Council's agenda this week because recently, federal officials have told the City that it needs to have "skin in the game" to get federal money. The thought now is that approving the bonds will be enough, and that next month, the feds will reward the City in its next round of TIGER grants. Of course, the feds make it clear that local financing is no guarantee of federal money, but merely a necessary precondition of it.

So here's the question for streetcar supporters: what if Council unconditionally approves the bonds, and next month, the City again gets passed over? And what if a federal official says that merely approving the bonds isn't enough, that the City needs to actually issue them for the feds to know we're serious? Once again, the feds make no guarantees, just tell us we improve our chances if we issue the bonds. Under those circumstances, should the City place a $64 million bet on federal funds becoming available?

And what if we lose the bet?

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