BOONDOGGLE LIGHT
I’m one of those annoying parents who takes photos of stories and sends them to my eldest daughter with pithy commentary.
There was a story in the Journal about the latest data on credit card debt, entitled “Credit Card Balances Have Become Costlier.”
The story reported that the average card balance that people carry is approximately $6,300. And the average interest rate? A whopping 21.5%.
I’m a fierce proponent of financial literacy. The accompanying text to my daughter: “If you ever carry a balance at 21.5%, I may threaten to disown you. Carrying a balance … is a sign of profligacy and lack of discipline.”
My daughter reined me in on the reply:
“Some of it may be profligacy and lack of discipline … but I think others are genuinely struggling in this economy and have to survive off putting things on their credit card.”
With that as prologue …
We often hear people say (particularly aspiring politicians) that they want government to be run like a business. Message being, they’re gonna spend money responsibly.
But we know government. We know that with prevailing wage laws and union rules, it’s not going to be that efficient. The general hope is for Boondoggle Light – which strikes me as a good name for a beer. JLB and Distant take note.
In regard to the Town’s housing program, it’s taken me awhile to wrap my head around what Boondoggle Light might represent.
And now that I understand the numbers, I sure wish we’d had more of a conversation about it.
You see, the Town is operating on the premise that every unit of housing in the 100-150% AMI range will cost approximately $150,000-$250,000 to provide.
Take the four-unit complex the Town is building at 60 Joaquin Street.
The Town spent about $250,000 on the land. And will spend another $2.75 million on the construction.
So $3 million in the deal.
According to Town Manager Rob Patterson, the Town will then sell those units (with deed restrictions) at prices in the $500,000 range – targeting those who make between 120-150% of AMI (Area Median Income).
That’s a recoup of $2 million.
3-2 = 1 (math wiz!). So, establishing those four new households costs $1 million to the taxpayer.
Now take Phase III of the Parcel, which is targeted as an ownership phase consisting of about 43 units.
Patterson said the Town is willing to spend about $7 million bridging the gap between cost of construction and cost of selling units at a 100-150% AMI deed restriction.
$7m divided by 43 = approx. $163,000/unit.
*If you want to buy friends, that sure sounds like a good starting number.
A philosophical question we’ve never even addressed is … geez, if the Town has experienced a great TOT windfall over the past decade (see numbers on the jump page – 11), would we better off paying down debt versus finding new ways to accrue it?
And I know I appear like an alien in saying this, given that the federal government added another $1.8 trillion in debt this year and now pays more in interest serving that debt than it pays for the entire defense budget, but … stay with me here.
The Town lost a lawsuit and incurred a $23.9 million airport litigation judgment in the 2000s. It was ordered to pay $2 million/year for 23 years, from 2012-2013 through 2035-2036.
We still owe $19.8 million in principal on this judgment. After twelve years!
Given the above chart detailing the TOT overage realized over the past nine years, how come paying off this debt never even rose to a level of consideration?
Instead, we exponentially pile on debt in the form of rec centers and art centers and civic centers – not to mention underfunded pension liabilities.
As I wrote my daughter, “Banks make the most money when you make the minimum payment. They salivate over minimum payments.”
Not only are we as a Town making minimum payments on multiple credit cards, but we’re looking into new credit card applications.
You just get a feeling about it … that nagging 2008 feeling.
They are making new mountains …
From an October 4 story in SnowBrains.com from Brent Thomas …
Peter Christodoulo is trying to build a new ski resort outside Elko, Nevada.
Originally from Boston, he grew up skiing all over New England and now works in the technology industry in San Francisco.
About a year ago he purchased property that covers nearly 2,300 acres that stretch up the Ruby Mountains starting from around 6,100 feet in elevation and going to about 9,400 feet. He is currently working with the Forest Service to get a land swap, easement, or lease to get the land to the top of the mountain at 10,350 feet.
The plan is to put in at least three lifts to access the bowls and upper mountain.
The prospective land is about 20 minutes from the town of Elko, with a population of 20,756 as of the 2022 census, and is the gold mining capital of North America. So far this year, 82% of the gold mined in North America has been mined here. The ski resort is being pitched as economic diversification. “What’s really interesting is when you drive into Elko, there is a sign that says ‘Elko, Nevada, gateway to the Ruby Mountains,’” Christodoulo said. “Except there is no ski resort. Elko and Spring Creek residents drive to Utah to go skiing and they have amazing mountains and terrain right in front of their noses.”
Currently, Christodoulo is trying to rezone the land from Open Space to Agricultural Recreation. Based on surveys, there is a small minority of people in the area who oppose the project.
*Here’s the key paragraph. Begs a John Mellencamp lyric. I fight exploitation/exploitations always wins (oh no)
“If we do get the Agriculture Recreation designation then we can bring in real capital partners and building something more substantial becomes in play. I could bring in some proper real estate investors and we could have more institutional capital to build something much more comparable to some of the best resorts out West.”
