McMullen: Bond is best option to pay for city projects
Sedalia needs $7.2 million to complete its upcoming slate of projects.
Among them: a new fire station, a repaired bridge and a repaired library ó a library that seems to reveal a little more damage each and every week. If it were less historic, less significant and less grand, we might just see fit to tear it down and build a new one for the price weíll pay ó but weíre not doing that.
Those are precisely the sort of things that cities fund through the issuing of municipal bonds. People and organizations with money are essentially given the chance to become stockholders in the city itself, though these stocks are less risky because they are almost guaranteed to draw profit. Well, unless the city becomes insolvent, but thatís not likely to happen anytime soon.
And theyíre different from normal stocks because you canít buy enough of them to take over the city and you arenít afforded any extra consideration. Itís kind of like being a Green Bay Packers stockholder except you donít get a fancy certificate. Though thatís not a bad idea ó I could see people being motivated by a sufficiently classy Sedalia Stockholder Certificate. Iíd put it on my wall.
But $7.2 million really sounds like a lot of money, right?
Why, thatís less than quarterback Matt Cassel makes annually to lose possession of the football for the Kansas City Chiefs. Countless actors and athletes make that much even faster. There were movies in 2012 that drew two, three, event four times more than that in ticket sales and were still considered massive flops. There are single residences that cost more than that.
But itís certainly a lot to us and it could have been even more because the fire department also needs a new ladder truck. But you can put your mind at ease: Weíre just going to pay for it with cold, hard cash.
ďIíll just fish more than $900,000 out of my pocket like itís nothing, boy.Ē
Just imagine it. 9,000 $100 bills being brought directly to the doorstep of your friendly neighborhood fire truck wholesaler. The big red Sedalia truck just dumps it in the yard. One ladder truck please, post haste.
Or maybe thereís a silver briefcase ó proper etiquette dictates that silver briefcases full of money must be slid across a long table towards the recipient or certain dramatic fees may apply.
All joking aside, I can see how a cash transaction would help save money by cutting through some of the fees, interest and general financial bureaucratic red tape. But it makes me think that we should do it all in cash:
Issue the bonds and turn those drawn zeroes into real cash. Pay for the bridge in cash. Pay for the library in cash. Pay for the new fire station in you guessed it, cash. We might be able to cut some red tape off of the bottom line.
OK, so, big business doesnít really get done in cash these days. We could barter, but I donít think thereís a high demand for empty buildings.
All in all, I think issuing a bond is a fine idea. It locates funding for these much-needed civic improvements without increasing taxes in an increasingly tax-weary age in a traditionally tax-weary nation.
I hope that it goes well and that all of our projects come in under budget.
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