An old joke of a ghost story had the taleteller, usually in the dark, around the campfire or with flashlight pointed chin up the face, in a quivering spooky voice, with much lead in and expected repetition, recite, "it floats, it floats" to which the planned inquiry is finally, "what floats!?" with the superior answer, "Ivory soap, of course." The story had several situational variations surrounding the basic lines.
The modern day spooky reality for a Texas city may not be so ha ha funny, or clean (99 and 44/100 percent pure) and innocuous, no, innocently useful (it floats!), as a take off on Ivory soap and an ingenius marketing tagline. But then again... What if it were, in simplistic lay terms (not using any words like arbitrage),
"it floats, it floats"
"what floats!!?"
"the city of course!"
"huh?"
"by using interest savings and interest earnings and cash flow from the sale of CO's (certificates of obligation) and GO's (general obligation bonds) and refinancing old bonds! With some slow pay outs on selected slowed projects! And, with a high percent of padding, like 30%! And, the ability to sweep savings from some projects to other projects that may come up or to free up general fund maintenance projects in the same category and put general fund dollars toward economic development agreements that have no budget! And to have included a number of maintenance needs like street striping in the long term capital bond financed category instead of the general operating fund to make it all slide! And raising the tax rate. And, should the need occur, not doing a certain promised bond project or two at this time if it can not be fit in. The bottom line for the upcoming budget review is spoooky sweeeet! Money can always be found to do what we want to do, but what we need to do can slide if need be."
Joke ghost stories and dreams of Cleo nominations aside, I hope float is not playing a substantial role in keeping any Texas city coffer afloat or bottom line looking flush today, in time for annual review, only to look not so rosy before revenue must be raised again. The challenge would be to, somehow, cover the mounted spending, those newly added operational and maintenance needs for what projects were completed, cover the old undone, delayed maintenance and some quantity of deferred promised projects, and point to some obviously unpredictable economic crisis or so as the cause for the need to place one or more already promised (and taxed for) projects and other short term maintenance into just another future long term financed bond debt program. And, to pay for the exisiting debt too, should appraisals not meet estimates. Such senario could seem familiar.
I appreciate wildflowers and gladly pay and work to plant them, but I do not appreciate snookery.
How long can debt and increased spending be racked up higher and higher for a city, outpacing its growth? I do not want to find out.
No city should perpetually consent to a big float trip only to discover that the jump off points grow steeper and steeper as the debt financed float trip continues. It will come to a critical point and there will be less to show for it than if better stewardship had been practiced. Keynesian economics have not panned out well for many small scale governments or households. The ability to essentially (or literally for that matter) print money is not always helpful. Not passing a particular bond package can hardly be blamed for any city's ongoing whoas as some try to purport by pointing their version of a poster child distressed city. And, wise investment means fiscal discipline and good planning, and yes, some calculated risk, but not "to be determined" loosey goosey and poorly formulated sops.
