Putting this project on ice

I’m a hockey fan. I grew up with a Rangers fan father, saw the short-lived Kansas City Scouts lose many games, watched the Flyers on (black and white) TV with my husband before we were married, received Flyers season tickets as a wedding present, had a subscription to the Hockey News for a decade, shivered in the Northfield arena while my daughter played Mite and U10 hockey, and now go to Gophers Womens Hockey games. No matter how much I like the game, I think the proposed referendum to finance the new ice arena via a sales tax and $17.8 million in new debt is not a responsible choice for the City no matter how great a game it is.

The issue on the table and the ballot.

On Tuesday, June 19, 2018, the City Council will vote to approve this ballot question:

Or, in plainer terms, the City will

  • Sell $17.8 million in bonds (debt financing) to raise the cash to finance construction of the arena.
  • Pay annual principal & interest of approximately $1.5 million for the 20 year life of the bonds (that’s about $30 million in debt service payments).
  • Create a new sales tax plus a motor vehicle excise tax to offset about 30% of the debt service payments. 
  • Bottom line: Property taxes will need to rise to pay for the $1 million of debt service not offset by the sales tax; the cost of buying things will rise as business owners pass the cost of the sales tax on to consumers.

Dundas is also planning on asking its residents to approve the sales tax; the Northfield Council will choose between two resolutions – one which makes the project dependent upon Dundas voters’ approval and the other which is silent on that issue.

One view is to relax and let the voters decide; if a majority of Northfield (and maybe Dundas) voters decide they want to pay for this project, then so be it. If they agree with me, then it will be voted down.

I’d like to argue, however, that putting the issue on the ballot at all presumes the city is prepared to follow through on the results and being willing to take on a significant financial obligation (risk) that is disproportionate relative to other important city projects, benefits relatively few people, and does not appear to support the city’s declared policies on equity, inclusion, and good fiscal management.

This is a huge amount of money

Not only is $17.8 million siginificant on its own, it is also near or more than many other important projects, so compare this to:

Schools: The 2017 Referendum asked for $23.5 million for replacing Greenvale Park Elementary School; the bond levy which also included a new high school failed. The Greenvale Park replacement may be on the November ballot along with the ice arena. So, the proposed ice arena will cost about as much as an elementary school.

NCRC (1999): Approved by (a tiny proportion of) voters in a special election in 1999, the NCRC cost was $2.7 million. Being approved by voters does not make a project a good deal; the facility was intended to be largely self-supporting, yet the City has been subsidizing the facility and looking for ways to decrease its obligations from renegotiating leases to selling the building to tenants.

Soccer (2002): The Spring Creek Soccer fields were budgeted at $150,000; the Northfield Soccer Association developed and paid for the fields on land donated by the City. The NSA also pays for field maintenance. Between the in-house and traveling teams, soccer dwarfs hockey participation, includes many more from usually underserved groups.

Outdoor Pool (2006): The new pool cost between $2-3 million financed by EDA lease revenue bonds (no referendum required). The pool is intended to be revenue neutral, but income from pool fees and concessions does not cover operating costs.

Safety Center (2012): $6.28 million financed with lease-revenue bonds + approx. $6.25 K land purchase. A similar .5% sales tax was briefly considered to offset debt service payments, but met with swift, negative responses from the Chamber of Commerce and business owners.

Northfield Public Library expansion (2015): The addition and remodeling of the Northfield Public Library cost approximately $3 million. $1 million was allocated from the City General Fund, additional money from the Library Gift Fund, but about 1/3 was raised privately by the Friends and Foundation of the NPL.

These are not apples to apples comparisons. Like the ice arena, the pool has use charges intended to offset costs, but Northfield has multiple pools which extend the swimming season year-round. The Safety Center and Library are core public services which do not charge fees at the point of use and are intended to be funded by taxes. The soccer (and baseball) facilities are both city parks, but the sports organization pays on-going costs and passes costs along to players. However, such a large bonding request plus instituting a new sales tax makes me pause to ask what else Northfield can do for the same amount of money and how does this recreation project serve Northfield better than others, like the soccer fields, which cost so much less (but serve more people)?

What else could we spend $17.8 million on?

Northfield has other needs it has identified where $17.8 million could be very useful and, I’d say, are either significantly more important to the community than an ice arena or yield a higher return on investment. Here are three:

246/Jefferson Parkway intersection (and related transportation connections): Northfield has studied this intersection and tentatively planned a roundabout at this location. The City applied to MnDOT for funding, but did not receive it in the last round of funding. The City has long recognized the street network in this area does not work. Driving to the Middle School, Bridgewater and High School is bad; walking and biking are almost impossible yet it serves three schools (thousands of children), the NCRC (seniors), and soccer fields (500 youth soccer players. I’ve already had much (critical) to say about this intersection and the history of planning decisions which have put much pressure on this link. From choices made when planning the Middle School (Schools and where to put them) to more recent efforts to improve safety (Still Not a Safe Route to School), to looking to change the conversation about streets from vehicle traffic to community connections (Reimagining Woodley).

Jefferson Parkway/TH 246 intersection

Mill Towns Trail through Northfield (and fixing the segment to Dundas): Building the Mill Towns Trail has been inching along for decades, but Northfield could kickstart things by completing the segment through town from the Cannon River to the east and with a better connection into the heart of downtown. The trail is planned to cross 246 at Jefferson Parkway so it dovetails with that improvement. There is a whole subdivision of economic development literature devoted to “trail-based economic development” recognizing the impact a trail can have (like the Root River Trail). Would the tourism impact of a trail be a better deal?

Mill Towns Trail proposed alignment

 

Flood control through downtown and river enhancement: Recent flooding has highlighted how vulnerable downtown is. The Cannon River and the riverfront are prized assets cited for defining Northfield’s sense of place (and its place in history), as economic drivers, as recreational delights, and in need of enhancement, protection, and redevelopment (like in the Strategic Plan).

Questions the Council has not asked

Perhaps most surprising of the Council discussion to date is how few questions have been asked about the project. Councilors who are usually vocal when it comes to spending money have said little. Here are questions I’m still hoping will be asked at tonight’s meeting:

How much debt is too much? This project asks Northfield to issue a large amount of debt; I have not yet heard a discussion of how this fits into the overall financial plan for the city.

Has Northfield developed a plan and budget for maintaining and replacing facilities as they age?  Northfield has waited for facilities to nearly or completely fail, then made decisions in haste. The current arena has been inadequate for years, the swimming pool was leaking and had to be shut down for a season forcing quick replacement decisions, and the Safety Center was overcrowded and subject to flooding requiring quick action.

What happens if the naming rights and fundraising aren’t as successful as planned? Current financial planning depends on advertising, naming rights, and private fundraising. Will the project depend on a certain amount of money being raised before ground is broken like the skatepark?

What happens if the projected revenue does not cover costs? Will the City subsidize the arena as it does the pool? How much is it willing to pay?

Who pays for the Riverview Drive street extension to the arena?  An extension of Riverview Drive to reach the service area for the arena is on the plans, but not in the budget.

Are the additional spending and lodging tax revenue projected a good return on investment? The economic boost projected because of the increased ability to host tournaments and other events is not being compared to other economic development efforts the city might make, the amount generated by other city attractions (like bike trails, for example) nor does it directly help pay for the debt.

Why should we pay this much money to improve our other parks? There is a red herring in the logic of this project where the ice arena is being touted as being a way we can pay for on-going park maintenance because 30% of the funds may be used for other recreation spending. There are other, much cheaper, ways to manage our park and trail system without spending the 70% on an ice arena. If funding parks is a priority, there are better ways.

November

Obviously, I’m voting no and urge fellow taxpayers to think hard about how our City government allocates our tax dollars.

2004 Jamboree – I bought warmer clothes to watch U10 hockey because the arena was delapidated 15 years ago; Northfield could have planned better for improvement or replacement.