Beaufort officials are starting to sound a lot like shoppers with a trunkload of unneeded sale items, eager to tell us about all the money they've saved.
At Tuesday's City Council meeting, staff members suggested Beaufort borrow almost twice as much money as it needs to buy the Beaufort Commerce Park. That purchase is dubious in its own right, but now the city would compound that -- and the interest -- by selling $3.5 million in bonds to pay for the park and other unspecified projects.
Just three weeks ago, Mayor Billy Keyserling first publicly trotted out the idea of purchasing and annexing the park. He assured us that a little over $1 million was in hand and earmarked for land purchases and could be used to minimize the tax impact of the purchase. By April 3, the council had approved a $1.85 million purchase, meaning the city would have to borrow or shift spending to cover more than 40 percent of the expense.
Now, a week after that, city officials are suggesting selling as much as $3.5 million in bonds to pay for the park and pay for other projects it hasn't come up with yet.
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Finance director Kathy Todd said interest on bonds is "very cheap" -- 3 percent -- and proposed the city borrow between $2.5 million and $3.5 million for either 10 or 15 years.
"Wow," Councilman Mike Sutton said. "So you can borrow a million more for ($83,683) a year. So what capital do we need for the next 10 years?"
Indeed, what do we need?
This is the mentality that drove many homebuyers into foreclosure. It's also the mentality Keyserling campaigned against when he ran for mayor four years ago, as the tax bill literally was coming due on a new city complex that he said was overbuilt and over budget.
That led to several years of streamlining, economizing and cutting, which council members have bragged about -- and rightfully so.
But now they would trade prudence for a promise?
The more the commerce park deal is explained, the more it becomes apparent it hasn't been vetted enough.
The city has made annual deposits -- averaging about $250,000 -- into a land-acquisition fund for the past four years, payments that could be redirected to any new bond payments without affecting the city's budget, says city manager Scott Dadson.
But that commits the city to a level of spending for which it has not yet demonstrated a need. It is not free money, as Dadson implies.
Todd noted that another alternative would be to use profits from the sale of property at the commerce park to pay off the bonds.
If that has a familiar ring, perhaps it is because that was precisely the Lowcountry Economic Network's plan when it bought the failing park in 2006. Unfortunately, little land in the park sold, and the debt came due. Attempts to refinance failed, and Beaufort County Council declined to bail out its economic-development partner. The network folded as a result, but a newly reconstituted Lowcountry Economic Alliance is poised to help the city peddle the property.
Even if the city and the alliance fare better at selling the 167 available acres at the park, counting on profits to repay debt is still a flawed plan: "We're not in the business to turn profits here in the tangible means of green dollars. This is about the jobs," Sutton said March 27 in arguing for the purchase.
If you find all this discomforting, the city offers a prescription: Just think of all the money the city will be saving when it borrows the money.