By Jon A. Brake
About this time you really don’t understand do you?
Tuesday night the Manhattan City Commission conducted another workshop on the 2003 Budget. The Commissioners talk cuts, the staff talk cuts, the Mercury reports cuts but you know you taxes will go up.
The three men in white hats are Mayor Ed Klimek, and Commissioners Mark Taussig and Brad Everett. They want the City staff to cut spending and it looks like that will happen. We will know for sure next Tuesday when the Commission votes on the Budget.
Commissioner Roger Reitz (black hat) has been having a hard time because he is one the losing side of all spending votes. Reitz ran the campaign three years ago to spend a million dollars on the depot and another million on the dog and cat hotel.
After Taussig and Everett were elected to office Reitz has not been able to get his social agenda financed. Last year when the Commission voted 3-2 to cut the Budget from $57 million to $55 million, Reitz wanted the City to stop cutting the grass along the streets so the citizens could see what the other Commissioners had done.
Tuesday night Reitz said "These are Draconian measures we’re looking at. If we’re going to move in this direction, let’s get going."
In other words Reitz does not want to cut spending but if the others want to go in that direction he wants them to make larger cuts. Of course he hopes citizens would rebel at the next election and bring in Commissioners with his spending ideas.
But, Commissioners Klimek, Taussig and Everett along with Finance Director Bernie Hayen realize the City is deep in debt and the future does not look good if the City continues to spend money like they did between 1998 and 2001.
From 1999 to 2001 the City of Manhattan’s Budget went from $52.1 million to $59.3 million.
During that same time the City Debt went from $55.3 million to $64.7 million.
To sell the Bonds the uses Moody’s Investors Service to give the Bonds a rating. If the bonds receive a good rating the interest on those bonds will be lower. If the rating company sees problems with the Citys ability to repay the ratings will show that concern and the interest rate will be higher.
When the City of Manhattan sold their latest bonds last spring they received a warning from Moody’s Investors Service.
Among other things Moody’s said:
"Moody’s anticipates that the city’s debt burden will moderate over time due to the city’s resolve to maintain a level amount of debt outstanding, while the tax base continues to experience moderate growth."
Now you can understand why the Commissioners what to cut the Budget.
In 2003 the City must pay $7,610,676 of principal and interest on the
$64.7 million debt.