The letter below is my response to a question posed to me by Winter Park City Commissioner Beth Dillaha related to the downgrade of the City’s debt by one (not all) of the rating agencies. This one question and my response get to the heart of our problems as a city.
November 9, 2008
Ms. Beth Dillaha
Winter Park, Florida
Dear Ms. Dillaha,
I expressed frustration when the Fitch company downgraded Winter Park’s municipal debt in early September. This letter responds to your email of September 11th where you asked if I could clarify my comments. You asked, “I am interested to know which ‘policies adopted by our City Commission contribute to this weakness’ to cover our debt obligations? I would be interested to know what you are referring to.”
Thank-you for the opportunity to respond. Sorry for the delay getting back to you.
Here is the relevant portion of an Orlando Business Journal article dated September 10, 2008 addressing the Fitch downgrade of Winter Park bonds: “Fitch said the downgrade reflects ‘a continued decrease in liquidity and a notable decline in overall financial flexibility.’ While city management maintains that reserves in other city funds, including the general fund, are available to supplement the system, Fitch said the ‘overall unrestricted cash position across all funds is weak,’ leaving the system with ‘a slim amount of accessible liquidity.’”
Let’s start with the $4,000,000 decision to make the developers of the former post office redevelopment project “whole” at the expense of Winter Park taxpayers. As a founding Director of the One Winter Park advocacy group you were instrumental in working to kill this project and thereby expose our City to unnecessary risk and the related burden to our taxpayers.
We come to Fall 2008 with the housing bubble burst, state mandated budget reduction requirements, a costly structural problem with $50MM of our utility debt (Edit December 7, 2008: actually the entire $100,000,000 of city utility debt has a structural problem), and declining City revenues, among other challenges. Our general fund reserves are insufficient to address these challenges as a direct result of policies that you, Margie Bridges, and David Strong insisted be imposed on the city. Please re-read the statement from Fitch above.
Since establishing your majority in March 2008, you, Margie Bridges, and David Strong have promoted, embraced and approved policies that will increase the shortfall of revenues required to cover ever increasing expenditures. Your policies will require continuing tax increases to balance the budget and keep the City’s balance sheet clean. This is confirmed by the tax increase you recently voted for.
The policies you and your majority have embraced and approved do nothing to address the spread between revenues and expenditures that will be required over the long term to avoid significant tax and or utility rate increases, let alone provide funds to replace, renew, or create civic resources, or buy park land. Your policies and priorities instead decrease the City’s financial prospects and flexibility to adapt to inevitable changes.
Let me give you some examples.
* You and your majority forced through the immediate conversion of Parking Lot B to green space (removing over 80 parking spaces) with the justification that retailers should tell their employees to park in the City owned spaces at the top of the Park Place Parking garage. The problem is that public parking spaces are exactly that, public, and retailers have no right to tell their employees which public parking spaces to use. Your actions threaten the economic livelihood of people who work in our City, many of whom also live here. The forced conversion of these parking lots to green space in the absence of real mitigation diminishes the City’s financial strength. We all want to enlarge the park but you did this the wrong way at the wrong time for the wrong reasons.
* You and your majority have approved a Comprehensive Plan that requires a super majority vote to create or expand any Community Development Area. As a practical matter the inclusion of this order in the Comprehensive Plan makes it impossible for any City Commission to approve a self sustaining development area designed to address the priorities such as work force housing and diversity that are stated goals of the Comprehensive Plan. Your policy here is to assure nothing is done, diminishing the City’s financial strength and removing flexibility to address future needs.
* You and your majority have set limitations on the Planned Development Zoning District spelled out in the Comprehensive Plan that require a Comprehensive Plan amendment to change, even before the actual definition of the Planned Development Zoning District is decided upon. Why do you create this obstacle before you understand what the implications are? Planned Development Zoning Districts provide the greatest opportunity our City has to realize commercial ratables outside the current CRA that can be used to offset the costs of City services to our residential community. Yet, you paralyze the opportunity to even address this potential. Your policy here is to assure nothing is done. Your action diminishes the City’s opportunity to build commercial ratables that can offset the costs of delivering residential services. You again diminish the City’s financial strength and remove flexibility to address future needs.
* You and your majority have approved a Comprehensive Plan that requires a super majority vote to approve designation of a Planned Development Zoning District. As a practical matter the inclusion of this order in the Comprehensive Plan makes it impossible for any City Commission to approve a Planned Development Zoning District not already included in this specific Comprehensive Plan. Your policy here is to assure nothing is done. Your action diminishes the City’s opportunity to build commercial ratables that can offset the costs of delivering residential services and potentially address stated priorities of work force housing and diversity. You again diminish the City’s financial strength and remove flexibility to address future needs.
* You and Margie Bridges are on record as wanting to make any future change to the land use element of the Comprehensive Plan subject to a super majority vote and you hope to have a third vote to impose this restriction by the final approval in March 2009. I am not sure you understand the extreme consequences of super majority voting requirements. You seek to paralyze the City, to institutionalize the dogma of the day for generations to come. This action would make it impossible to build commercial ratables to offset the costs of delivering residential services for years to come. You again diminish the City’s financial strength and remove flexibility to address future needs.
* [Edited November 19, 2008 for clarity] You and your majority defined a roll back of the maximum single family residential Floor Area Ratio (FAR) from 43% to 38% in the submitted Comprehensive Plan. It is noted that the existing FAR up to a maximum of 43% is only available for lots less than 13,600 square feet in size so as to encourage single story residences and to incent increasing second story setbacks to reduce the visual mass of a residence. This action of limiting the floor area ratio to 38% will have a negative effect on the resale value of every residential property in Winter Park of 13,600 square feet or less because it reduces the owner’s flexibility and because it reduces the buildable square footage. This action will cause a long run reduction in property tax revenue to the City.
I could go on with a litany of related issues pertaining to controls you wish to impose on residential redevelopment but let’s go back to the top. Your question again: “I am interested to know which ‘policies adopted by our City Commission contribute to this weakness’ to cover our debt obligations? I would be interested to know what you are referring to.”
I am referring to the policies noted above and to your aversion to redevelopment that would strengthen our commercial core and contribute to the tax base of our City.
I am referring to your using the Comprehensive Plan as a tool to deny future democratic process at the local level, as if your current policy preferences will reflect realities faced by the voters in future decades. If these super majority voting requirements stand the taxpayers of Winter Park can look forward to years of tax increases with no hope of relief.
You have chosen to simply lock out any possible redevelopment rather than undertake the hard work of reconciling what is economic with what compliments the character and quality of Winter Park. These two realities are not mutually exclusive and further, they must be reconciled to avoid dumping an ever-larger tax and utility burden on our residents.
You and your majority killed funding for completion of the form based codes project, our best opportunity to reconcile developer and citizen redevelopment conflicts.
As it stands now, all that will happen under your policies is that costs of running the City and utilities will increase and the only source of funds will come from millage and utility rates, fees, and taxes on existing, unimproved properties.
While I hope our local economy rebounds soon, what happens if revenues continue to decline? What happens if valuations decline? What happens if our bond rating is downgraded by another agency? What happens when the state imposes environmental and other mandates?
Your policies obstruct opportunities to increase property values and increase revenue while guarantee ongoing increases in taxes and fees for existing residents.
Your policies and priorities continue, and seek to institutionalize, the factionalism that distract us from real opportunities for this City.
I hope I have answered your question.
Peter J. Weldon