Hello Tonka Bay.
It’s great to see the high level of passion and engagement from the community on issues being discussed at City Hall. If I’m being perfectly honest, though, I have to admit it I think it would be even better if everyone were working from the same set of facts when forming those passionate opinions. Having been through a couple of council meetings where passionate arguments were presented based on misinformation, I’ve decided rather than being quietly frustrated and losing sleep I’m going to have to speak up where I see opinions going off the rails due to incorrect or insufficient information.
So let’s talk city docks. First, as I’m sure you’re all aware, the Tonka Bay City Council on Tuesday night decided not to even vote on the Doran proposal and instead move forward with spending as much as $300,000+ in city dock funds to self-fund additional docks (should 28 be the magic number). Okay, so that’s done. A lot of people are happy. But should they be?
Was the Doran proposal a “terrible deal” for the city? Would we “lose a lot of money,” as was stated in the meeting? You decide.
Under the Doran proposal: Doran pays $300,000+ to build 28 docks. Doran gives the city 14 docks to rent to homeowners during the 10 years of the deal. The city rents those docks at $2,000 per season (today’s rate). $2,000 x 14 = $28,000 x 10 years = $280,000. (Add $280,000 to the $300,000 construction cost = city gets $600,000 in cash and in-kind). Here’s the big AND: the city now has the $300,000 it did not spend on self-funding the dock expansion to spend on the Manitou Park project or other city amenities. So let’s do math: $600,000 + $300,000 = the city is $900,000 to the good after 10 years under the Doran proposal, AND we instantly put one-third of Tonka Bay residents on the dock waiting list in the water. What is the city’s investment in this scenario? Zero. Nothing. Nada. Yes, Doran gets 14 docks. Is that trade-off worth $900,000 to the city? How would you vote?
Under self-funding (the adopted direction): City pays $300,000 to fund dock construction (again, using 28 as the magic number, which it ultimately may or may not be). City rents all 28 for 10 years at $2,000 (today’s rate). $2,000 x 28 = $56,000 x 10 years = $560,000. Now, in order to be accurate, you have to back construction costs out of your profit. $560,000 – $300,000 = $260,000 after 10 years. What did the city invest to get this $260,000? $300,000. And what do you have to spend on parks from the $300K you spent to build docks? Zero. Nothing. Nada.
In the previous discussion, I said I wanted to break the decision down to Option A vs. Option B. Here it is:
Option A: City invests $0 … receives $900,000 in cash and value over 10 years, puts 14 residents in the water year one.
Option B: City invests $300,000 … receives $260,000 in cash over 10 years, puts 28 residents in the water year one (assuming we can open docks next Spring).
No doubt, there are smart finance-minded people on this thread. Would you make this deal with your personal finances? With your business? If you say no, I’m just going to say I don’t believe you. Do you think Mayor Jennings should be excoriated for bringing the proposal forward for discussion? Are you shocked the council would even consider it? Do you think it’s a terrible deal for the city?
So let’s talk bottom line: The decision was made to self-fund dock construction for the simple reason that we can pull as many as 28 people off the dock waiting list instead of 14. It was said in the meeting we would “really piss people off” if we moved the Doran residents in front of people who had been on the waiting list for a while. Decision therefore made. Option B adopted.
But again I have to ask: If you were a member of the city council who takes seriously your responsibility to be a good steward of the city’s finances, what would you decide? Seriously, given actual facts, tell me how you’d vote and why.
What lesson do I hope we can all learn from this? When someone begins agitating against something and tells you something is a terrible deal, check it out. Ask questions. Is the argument backed by data or science or is it purely emotional (e.g. big, bad developer doing bad things)? Get numbers and decide for yourself.
Misinformation is bad for democracy. Those agitating in our neighborhoods and presenting misleading information as fact should cease and desist.
Please direct responses, questions and comments to my Twitter feed: @tonkabaytim