Janet Miller: Wise to pause on library
07/19/2013 6:24 PM
07/19/2013 6:24 PM
After reading The Eagle editorial board’s response to the Wichita City Council’s recent action on the new Central Library, I thought clarification about the city’s debt level as it relates to the project might be helpful (“Library not essential?” July 14 Eagle Editorial).
As recently as this spring, estimates showed the debt level during the bonding for the library reaching a projected high of 79 percent against a benchmark of 66 percent. The “bubble” of time we would remain above the benchmark was four years.
Then just a few weeks ago, Sedgwick County published the official estimate of growth in property valuations for 2014. That estimate was significantly different from previous estimates – leading us to expect slower and much flatter longer-term growth. When these new projections are used, the city’s debt level would reach a high of 92 percent of bonding capacity, and it would remain above the 66 percent benchmark for seven years.
The city has reduced its debt level by $53 million over the past two years. I was very comfortable with the former financial projections of reaching 79 percent of bonding capacity for the library project and being over the benchmark for four years. Although we would have been above the benchmark, I could argue it was a reasonable overage, given such an important community project and the relatively short time of four years. However, the new property valuations and tax estimates were very concerning. Reaching 92 percent of bonding capacity and staying above the benchmark for nearly double the time wouldn’t be fiscally responsible. Borrowing at 92 percent of earning capacity isn’t wise at a personal or municipal level.
So though I remain an ardent advocate for the library and still hope we can find a way to bond a part or all of the library project sooner rather than later, I think we need to take some time to figure out how to do that. That will require adjustments to the capital improvement plan and the consideration of a variety of funding options. With vision, leadership and smart financial planning, we can make it happen.
JANET L. MILLER
Wichita City Council