October 29, 2022
Good Day to you all,
Recently, many of you have asked me questions about the two Bonds questions on the November 8th ballot: Question 1-General Obligation Bonds for Road and Question 2-General Obligation Bonds for Storm Sewer Improvements.
Here are my answers:
Can the funds from the General Obligation Bonds (GO Bonds) as described in Question 1 and 2 be used to purchase anything the city wants to purchase, construct improvements at City Hall, or pay employee’s salaries? NO. The funds from these GO Bonds can ONLY be used for the purpose of financing the rebuilding of roads and storm sewer improvements. Ballot Question 1 asks for approval to issue up to $30 million of general obligation bonds for rebuilding roads.
Ballot Question 2 asks for approval to issue up to $7.2 million of general obligation bonds for storm sewer improvements. If Raytown voters approve the City to issue GO Bonds, the bonds must be repaid no later than 20 years from the date of issuance.
Why is the City considering the use of General Obligation Bonds to fund the rebuilding of roads and storm sewer improvements instead of using the City transportation sales taxes? The money collected from the City’s transportation sales tax covers about 1% of repairs and reconstruction of roads and infrastructure needs. With the City’s transportation sales tax covering about 1% and more than 40% of the City’s roads are in poor condition, it is estimated it will take approximately 40 years to complete all the road and storm sewer repairs and reconstruction projects on the project list today. Similar to the factors (interest rates, source of repayment, loan term) an individual considers when borrowing money, cities must consider the same factors when financing major public improvement projects. For municipalities, General Obligation Bonds are a good form of debt to finance large municipal public improvements projects. These bonds offer lower interest rates and better debt service terms for the taxpayers.
If the City is given permission to issue General Obligation Bonds, will the City’s portion of my property taxes automatically increase to the full amount necessary to pay debt service on $37.2 million of bonds? It is anticipated the City will issue the general obligation bonds in increments, not all at one time. Therefore, the City’s portion of your property taxes will not automatically increase to the full amount necessary to pay debt service on $37.2 million of bonds. As debt is issued, the City’s portion of the property tax will be incrementally increased.
If Question 1 and 2 pass, how will it financially impact me? GO Bonds will be repaid from a modest incremental increase in the City’s portion of property taxes. For a house with a Jackson County assessed value of $150,000, the maximum estimated increase in property taxes would be less than $219.00 for the life of the bonds.
These bonds have letters of support from the Raytown Chamber of Commerce and also by the Raytown Main Street association
Mayor Mike McDonough