Riverside Info » About Riverside

Opinions, facts, and the need to move on

(34 posts)
  • Started 2 years ago by TomJacobs
  • Latest reply from ChrisHajer
  1. TomJacobs
    Member

    The late Daniel Patrick Moynihan, New York state senator for 24 years, coined the term “You are entitled to your own opinion, but not to your own facts.” Elected to govern and intent to lead by example, the Village Board of Trustees would be well served to clearly distinguish between fact and opinion in their debates.

    Given the sum of all the evidence presented at last week’s Village Board meeting about the merits of a new parking lot at 61 and 63 Burlington, I believe that any reasonable and independent observer could have concluded to be in support of or against the lot. This was not a clear cut call to be made by the trustees, given the numerous stakeholder interests to be balanced, and with the best interest of Riverside in general as the overriding objective in mind. Ultimately, the party in power decided the outcome, based on the individual opinions the trustees are entitled to. Fair enough.

    As for dealing with the facts, that was a different story. The storm clouds indicative of current Riverside board of trustees culture turned from gray to black during the discussion of the financial impact of the proposal. One trustee said the lot would cost taxpayers over $800,000, while another trustee said it would cost approx. $56,000. Which number was correct? Since the question of cost played an absolutely central role in the debate over the merit of the project ever since the two lots were purchased, the board members’ blunt demonstration that they are unwilling or unable to sit down across the aisle to agree on underlying factual realities is unacceptable. Neither the Village president nor any trustees attempted to offer an explanation to the numerous meeting attendees and all the residents watching on TV, with one trustee even suggesting that all the talk be cut short so that a vote could be taken right away.

    The proverbial elephant in Riverside, which became abundantly obvious during the meeting, is that the trustees don’t trust each other. The election has caused damage from which they have not been able to move on. Trustees are questioning each other’s motives instead of each other’s wisdom. A subtle yet crucial difference.

    At a time when the Village of Riverside faces significant financial and planning challenges, there are few signs on the horizon that inspire confidence in our leaders’ abilities to come and work together. Yet, Riverside needs a vision and a comprehensive plan for the future, one that is based on fiscal, communal, and environmental sustainability. Such a vision should have short, medium, and long term goals, and consider a timeframe of numerous decades to account for future generations, a.k.a. know as our children and grandchildren. Majority and minority status come and go in 2 or 4 year increments, and given the time frame that really counts, one hopes the trustees realize how little this temporary alignment of power means.

    Of course, there is an actual political power reality. President Gorman, the tipping point on the scale of tied votes, has a choice to make. He can attempt to emulate President Lincoln and support the “Team of Rivals” concept of governing and coalescing all six trustees, or he can attempt to go it alone with the Riverside Community Alliance trustees only.

    The campaign is over. What is the vision for Riverside, and how will the Board lead us there?

    Posted Wednesday Sep 30, 2009 20:27 #
  2. spatny
    Member

    Tom - regarding the cost of the parking lot. Let's look at it simply. You need three things - land, engineering, construction, and of course, legal, demolition, staff time all the smaller stuff - but let's just look at the top three. If you don't have all three then you can't have a parking lot. No ifs, and or buts.

    So you spend money top buy the land. If you don't pay the owners, you don't get the land. So it is an expense. It comes from several accounts, but it is Village money in those accounts and you spend it. Same for engineering and construction. You take Village money from somewhere and spend it. If you don't take it from an account that has money in it, then the Village borrows it and has to pay it back, with interest. So the parking lot costs the Village even more. Now, there is an 80% grant to cover the engineering and construction possibly available somewhere, which sounds like a good deal. But of course, there is no free lunch, and the grant has some fine print, and that may or may not restrict what you can do with the lot or who can park there when, or something else. So it may turn out that if you take the "free" money you lose control of the lot that is built on land you paid a lot more for. So, it seems to me, whatever the Village has to write a check for is a part of the cost of this lot. If part of the land was bought with a loan from the parking fund or some such, it is Village money to begin with - as is all fees paid for the parking on other lots - so it is part of the cost. I think it is really a tragedy that we payed what we did for this property when shortly thereafter it fell so much in price, and may still fall further. But that's another story...

    Add up the checks spent for this stuff and that is what it will cost the Village. While we have it it is an asset of the Village. If and when we sell it, it would bring a return that might or might not recoup what we put into it.

    Based on what I know has been spent so far, and based on the fact that many businesses in Riverside are really services that do not generate any or much sales tax revenue for the Village, it hardly seems possible that this will eventually be paid forby that method, and so it will be subsidized by the residential tax payers - as is almost everything else.

    Posted Wednesday Sep 30, 2009 21:57 #
  3. bensells
    Member

    Tom,

    Thank you for your ombudsman efforts. I have thought often of Senator Moynihan's words over the last several months. I agree that the difficulties facing our Village are bad enough without replacing facts with personal opinion and ideology.

    I am the Trustee who sited the $56,000 figure. I thought that I clearly stated at the meeting where that number comes from. For clarity, though, let me restate it.

    First, I rely on an earlier post on this site by you:

    "TomJacobs
    Member

    The industry standard definition for per-space cost of parking includes design fees and construction costs, but it does not include land cost. Following this rule, the rule of thumb is $10,000 per surface space, $20,000 per above ground parking garage space, and $30- 40,000 per below ground space.

    While the Village has purchased the 2 lots at 61 and 63 Burlington for $555,000, it is now simply a real estate asset as opposed to a cash asset. Per the rules above, the per space cost as proposed would be in the $10 to 13,000 range.

    Posted Tuesday Jun 2, 2009 14:05 #"

    I agree with this view and consider it to be the only sensible way to discuss the cost of the parking lot. It is misleading and simplistic to include the cost of the land because it is an asset, not a liability.

    Second, I rely on the September 16, 2009, memorandum by Kevin Wachtel, the Village Finance Director and, to my mind at least, an objective source for the actual cost of the parking lot. His memorandum is available here: http://www.riverside.il.us/vertical/Sites/%7BFF0B0056-4ACF-4890-985A-29B8374E9BEE%7D/uploads/%7BEF8EC826-3AD0-4FF6-B779-CFAD7ADAEA92%7D.PDF at pages 142 and 143.

    This memorandum was made available to the Village Board and residents in the September 21 Board Meeting Packet.

    According to that memorandum, the Demolition and Improvement (i.e. design and construction) Cost for the parking lot was $220,000. Of that amount, $164,000 was covered by grants. That left a total cost to the Village of $56,000, the amount that I sited.

    Per industry practice, then, the Village cost per space (assuming the lowest projected number of 19 spaces) would be approximately $2950/space.

    Mr. Wachtel's memorandum also clearly states that the cost of the parking lot would be paid for by receipts from the parking lot fund -- i.e. not by tax dollars.

    Those are the facts as I understand them, and formed the basis for my comments at the Board Meeting on Sept. 21.

    Posted Thursday Oct 1, 2009 09:09 #
  4. spatny
    Member

    OK - you see a piece of land, say it is priced at $555,000. You think, that would be a good place to have a parking lot. So you just go over and build one, neglecting to take some coin out of your poke and buy it. Obviously, someone else owns it, and says, "Thanks for improving my lot" or "I'm going to sue you for ruining my lot" or something else. You have to pay for the lot before you can do anything to it. Sure, it becomes something you own, an asset, and may be worth more or less in the future - in this case it's probably worth less now and for theimmediate future of perhaps ten years, and then will creep up in value if you want to sell it for another use. Of course, in the meantime, it goes off the tax rolls and requires maintenance, etc.

    The point is - we have a certain amount of money. If, for example, we had decided to not pay the police chief and instead take that money and invest it somewhere, it would still be an asset until we spent it, but the Chief would not like that arrangement. The money is spent. We took it from accounts and spent it. The value of the land is only what someone else will pay for it, and to claim it is worth that much NOW is just nonsense. Home prices, land values, all of it have dropped considerably since we made that wise purchase. So, in the real sense, the land that we took dollars and paid for is part of the cost of building the lot, and hence part of each space's cost.

    It's this other thinking that got us in this mess... I suppose the next thing we will hear is that we made a profit when we charged the VC $5K a space for the parking buy out. We need to start looking at what things actually cost - which is why I have been asking for a couple years now for project accounting - so we know what all the costs of a project are. Purportedly we needed some new software for that, which I was told we acquired. But I haven't seen it yet...

    I don't care what any accountant says, if you don't pay for the lot, you don't own it and have the right to build on it. We took $555K out of the village coffers and gave it to someone else - who then took it away and went somewhere with it. Our money is gone, but we have instead a piece of property. So we bought and paid for it, and that money - in the real world - has to be considered a part of whatever we do there.

    The previous Board wanted development and we got it - and as you drive down Burlington you can judge for yourself the value of what we got. They left a structural deficit behind and wanted to fix it with higher taxes, which the majority soundly rejected. The residents spoke again when they elected the new Board members in total to reverse course and try and find a way to run the village without new taxes. That is what they are doing. But times have gotten much worse, revenue-wise, since the election. There is less coming in than we thought we would have, so while they have managed to hold the line on expenditures we are still falling behind. And there are past programs that were started - like this parking lot - that call for more money to be spent. Knowing we need every dime we have, the new Board members looked for a way to bring more parking - much more - to the CBD at a lower cost. And they did/are doing that. Why don't we see how that works, maybe put up some signage and have the businesses direct their employees and customers there before we spend money we don't really have?

    We have a lot of businesses that on the ground floor of the CBD that contribute very minimally or not all to sales tax revenue. So here is no way to amortize the costs of this lot based on that revenue. The cost of this lot will be paid for primarily by real estate taxes on residences because that's where we get most of our money. I think if you went door-to-door and asked homeowners if they would prefer to try the option of using the commuter lots before paying more taxes for this lot the vast majority would agree to do just that.

    Posted Thursday Oct 1, 2009 09:39 #
  5. CuriousResident
    Member

    It appears that it is all comes down to the designation/debate of "asset" versus "liability".

    I am no accounting expert, but where it gets fuzzy for me is on the "cost per space" point. Even if you consider the lots as assets, how can you not include the purchase price in the "cost per space"? If I am personally buying something I can't disregard the outlay...

    That being said, the lots have been purchased and demo'd. The horse has left the barn~

    What seems to be missing is: "If we don't spend the remaining $56k to make the lot, we will do X with the lots". Indeterminate situations create uneasiness in the ranks. Defined directional options settle the ranks.

    Until the Option B for "what happens if we don't make a parking lot" is answered/communicated, the general public is going to continue to think...we have spent all this money already, just finish it already!

    Now if the Option B looks financially and strategically appealing, the frustrations residents have would likely subside and it can then be boiled back down to "just parking".

    Posted Thursday Oct 1, 2009 09:46 #
  6. TomJacobs
    Member

    Ben:
    Thank you for stating your position. It is helpful.

    Don:
    I believe any mention of the bad economy with regard to this real estate transfer is beside the point. The bad economy is neither the old nor the new adminstration's fault. Thus, it should be kept out of this discussion.

    Of course, the current real estate market makes selling the lots right away a very unattractive option, and I believe CuriousResident is quite accurate with the point about "now what", or what is option B?

    One could summarize the main criticism that people leveled against the old Board that they didn't think things through to the end, because they didn't have a clear enough plan, or didn't champion it agressively enough. As such, they spent money on things that ended up with little tangible benefit to the community.

    The new Board doesn't appear to have a plan either. They certainly haven't shared it with the community, as far as I am aware.

    Posted Thursday Oct 1, 2009 10:29 #
  7. Kelly
    Member

    Tom,

    I agree we need facts. But when somebody actually gives facts, you see what we get in return:

    "I don't care what any accountant says . . ."

    "The previous Board . . . left a structural deficit behind"

    "The cost of this lot will be paid for primarily by real estate taxes"

    This habit of ignoring professionals and experts, and continuing to spread misrepresentations and spin despite a clear and objective recitation of fact is what has gotten us into this mess.

    Posted Thursday Oct 1, 2009 10:31 #
  8. CuriousResident
    Member

    Kelly,

    I struggle with the positioning that calling things facts makes them without reproach.

    Facts are pieces of information presented as having *objective* reality. Which to me means that context is everything. We all know that "facts" can be presented in ways to support any given position (i.e. change the scale on one leg of a chart and growth can look flat).

    I know "Don's way" ruffles some folks feathers, but instead of countering his view of the context with condescension, why not explain why you don't agree? Or simply how you see it.

    For example: Although I tend to agree with a decent amount of the sentiment he just posted, I don't see his last statement as being framed in the way residents I associate with think of this issue.

    I think if you went door-to-door and asked homeowners if they would prefer to try the option of using the commuter lots before paying more taxes for this lot the vast majority would agree to do just that.

    The folks I interact with see it as "only" $56k more. Finish it already. The need for tax increase (or drastic cuts) is going to come regardless of this final expense for the parking lot.

    If there is another angle that we are not aware of...by not doing it we will xyz...then it needs to be brought forward.

    Posted Thursday Oct 1, 2009 11:03 #
  9. spatny
    Member

    The fact is that we spent the money to buy these two lots - in effect we traded it for them. The money is gone. In return, we have this property, which, through no ones fault, is probably worth a lot less than we paid for it. The money was spent, so it is part of the cost. If you didn't spend it, you couldn't have a parking lot.

    Maybe it is a better idea to put these two lots in the CBD - they are now in a residential area - and "cap" the CBD with a PUD development of some kind.

    If someone knows how to buy property without spending any money than that is what we should have done. When any of us go to the store and run our credit or debit card through the machine we get our groceries, but they are not free. I can put them on my shelf and call them an asset, but they are only worth what I can get for them.

    Leaving the fall aside, why is it anathema to some to try and see how the low-cost parking works?

    The thing that got us into this mess is paying out more than we took in. And making commitments to do more of the same. And the residents know it.

    Posted Thursday Oct 1, 2009 11:08 #
  10. CuriousResident
    Member

    Regarding

    why is it anathema to some to try and see how the low-cost parking works?

    Are you familiar with the poker term "pot committed"?

    The issue isn't about trying other parking arrangements. We don't really have a parking problem *today*. We will have a parking problem when/if our CBD becomes "more vibrant"...even with both approaches to parking.

    The root issue is that 61 & 63 Burlington are 90% ($555k/($555k+$56k)) of the way through with the project and leaving them like they are is like hanging dirty laundry in your front yard. I have to think that even the folks that don't want to pave the lot have an issue with leaving it like it is.

    On top of that, what options would recoup any significant portion of the $555k we've spent? At least with a parking lot there is some sense of realized value.

    IMO, it has become a principle battle instead of a common sense effort~

    Posted Thursday Oct 1, 2009 11:37 #

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