Friday, August 13, 2010

Why $.79??

As most of you probably noticed, we had major potholes on Chantacleer Dr up until last week. Truman Loving patched the holes on his own at no charge to the IPOIA. Thank you so much Truman. The association funds are depleted and there is little hope of receiving much more before the end of the year. If it were not for Truman, imagine how that road would be by the end of the year. This is only a small example.

As of the end of July, 2010, $99,870 was spent on roads. Approximately $20,000 of that was the final payment for the repair of Tristan Dam which was actually finished before the end 2009. So subtracting that 20,000, 80,000 dollars has been spent on the road repair as of the end of July. That is the amount that has been proposed for the entire year at a $.65 tax rate. With that budget, the city funds would be depleted and the roads would be tremendously deteriorated by the end of the year and once you allow that level of deterioration, it is much more costly to repair. So the next year you start out way in the hole and on and on it goes.

Granted that we will be able to get somewhat of a break on costs by being able to contract with the county to do repairs, but the difference in cost is not that significant.

The proposed $.79 cent tax rate is based on expenditures for the past four and a half years. What has saved us in the past, was windfalls of money received such as the sale of water for $50,000, the money that CD squirreled away (this means to save or to set aside for a rainy day), when possible, and all of those reserves are gone. Anyone wanting details about finances is welcome to come in and look at the figures. All monies are accounted for in the monthly spreadsheet and an outside auditor audits the figures on a monthly basis.

The big debate right now is 65 cents or 79 cents. Those of us that are supporting the 79 cent rate are the ones who have either studied the real financial situation or have actually been involved in the running of IPOIA.

We understand the emotion with which the others are fighting, and wish there were easy answers but letting Ivanhoe go down the tubes is not the answer.

The financial burden is not so much about whether the rate is 65 or 79 cents. It is about there being a tax at all. 100 or 120 dollars a year was not so bad but having to pay a tax, which will possibly exceed that, is where the financial stress occurs. Ten years ago a group of approximately 20 people sued IPOIA saying that they should only pay $6.00 per year and that the 100 dollars being charged was illegal. Well, they won??? It forced us into HAVING to incorporate. The actions of those few hurt the entire community. We are in the same situation today. If we do not adopt a budget that will support the community because we want to support the few, the entire community goes down. I know that everyone is coming from a place of good intention but I don’t think that the thinking is long range.

If Ivanhoe is not maintained, our property values will plummet. This will affect us all. If we look at the rate comparison which we were given, and figure the difference between the two proposed tax rates on each of our individual budgets, we will find that it is not that significant but for the community as a whole, it can be devastating.

Another argument given for the lower rate is that people will not buy property if the rate is too high. The truth is people will definitely not buy if there is not proper maintenance.

Many of us saw what happened to values when the lakes were gone; and it was not just lakefront property that was affected, it was the entire community. Are we willing to let that happen again?

TCEQ requires that the dams be maintained to their standards. If they are not maintained, we will have to drain the lakes. A good example of this was the closure of Galahad dam because of the problem with the water company. We are faced with periodic caulking of the two concrete dams. TCEQ says it should be done every two years. This has a cost of from $40,000 to $70,000 so we need to be setting aside from $20,000 to $35,000 each year for this expense. In the past four and a half years we have had floods and hurricanes which caused major damage which fortunately we have had reserves to cover, but now we are faced with the need to build up reserves for these unexpected emergencies and for the scheduled maintenance that is necessary.

People who would not buy because the rate is 79 cents would not buy if the rate were 65 cents. They would not buy simply because we are an incorporated area and subject to taxes. There is nothing we can do about that. The people that will buy are those who are interested in a place that is maintained and has a solid future. We can make Ivanhoe a place that is desirable, in spite of the tax rate, not by lowering our standards but by raising them.

At the first budget workshop, all of the city council members, having looked at the figures, came up with a proposed rate of $.85. This was based on the cold hard facts. It was disheartening for all of us when we looked at what it was going to take and the decision we had to make.

After that meeting some of us were obviously swayed by the emotional pleas of some people. Their change of heart came not from looking at sound financial planning but wanting to please people and to honor their word that the rate would be somewhere around 62-65 cents. That is honorable, but perhaps not practical.

The truth is that the candidates, across the board did not do their homework or they would have known how much it would cost to run this community. It may not be the popular thing to do, but setting a rate that will cover the community’s needs is the responsible thing to do and I honor those people that are willing to admit their error.

Comments have been made that we should live within our means. Living outside of your means is when you spend money you do not have on things you do not need. That has not been the case here in Ivanhoe. No extravagant spending has occurred. Even Commissioner Martin Nash has stated that CD Woodrome has done miracles with the money he has had to spend. He has done just what has been necessary and no more. In some cases there has not even been enough to do what really should have been considered as necessary. How can you figure that you can do the bare minimum with so much less money in the budget?

At 79 cents we are establishing a bare bones budget. It is based on facts and figures that do not lie. We are not planning on living beyond our means but establishing the means by which Ivanhoe can be supported. On a personal level, many of us know what it is like not to have enough to live on. It is not pleasant. That is not where Ivanhoe needs to start out.

I hope this is helpful in understanding where we are coming from. There is not a desire to hurt anyone. There is a desire to see our community thrive.

Cathy Bennett

4 comments:

Julie Dietz said...

I voted for incorporating Ivanhoe and am happy to pay the taxes that will come with being a City.
I received my estimated tax statement yesterday. My Ivanhoe City tax is approximately $310 for 2010. I bought my house three years ago which is located on Sir Cedric Dr. My sister-in-law lives on Camelot very close to the Civic Center. Her tax estimate showed no taxes for Ivanhoe City.
Like I said, I voted for incorporation and am more than willing to pay my taxes. But why would some folks pay Ivanhoe City taxes and some not?
I would appreciate a logical answer.
Julie Dietz

Jacquelynn said...

We bought property near Lake Charmaine last November and have loved every minute we have spent in Ivanhoe. We will gladly pay the taxes, especially to fix the potholes in the roads. I am glad they are cracking down on abandoned, unsafe homes and properties. Let's get this neighborhood looking great!

Ivanhoe Land of Lakes IPOIA said...

In response to Julie Dietz:
There is one little stretch along Camelot which was not included in the incorporated area for some unknown reason. That may be the case with your sister-in-law. Call me and maybe we can clear this up or come into the office. My number is:409-429-6752
Cathy Bennett

Monty Chandler said...

We've owned our land in Ivanhoe for 25 years - back when it was first being established. Glad to see it starting to come back around. It used to be a nice place. Perhaps one day it will be nice and safe enough to actually spend some time there.