Council to consider 2020 capital budget Monday
Despite a record downturn in city income-tax revenue due to COVID-19, Columbus Mayor Andrew J. Ginther’s administration feels confident in going further into debt to pay for most of the 2020 capital improvement projects and economic development deals.
But the city council on Monday tabled action on the $1.4 billion spending plan until next week to give members more time to review the proposal. Ginther announced only last Thursday that he had resurrected the massive annual spending plan, usually unveiled in the spring, after revenue projections rebounded. The council could have approved the budget on consent or as second reading on Monday since it was presented as an emergency measure.
During a virtual public hearing on the capital budget earlier Monday, Joe Lombardi, the city’s budget director, said that 84% of the city’s general obligation debt is “voted.” That means that if the city ever lacked the funds to pay it, the city would automatically place a levy on property to raise the cash, he said.
The levy is something “which we have never had to do, and I don’t want to speak for the (city) auditor, but I don’t think we have any plans to do so” in the future, Lombardi said.
Of the total $1.4 billion capital spending plan, nearly $1 billion is new funding, according to the budget, including nearly $661 million in utilities work that will be funded through low interest loans from the state The rest would be carried over from the previous year’s capital budget. It was unclear what the annual
debt service to raise $1 billion would be, as that would be determined later this year when the city went to the bond market for funding.
The bulk of the spending, $991 million, would be repaid by utility fees for projects such as water mains and sewers. Another $53 million would come from special internal funds.
About $205 million of the 2020 capital spending plan is new money from bonds, according to Ginther spokeswoman Robin Davis. The remaining $144 million is carryover from previous bond sales that would be would be paid for by the city’s longtime practice of taking 25% of all city income tax revenues to put toward debt service.
Those revenues are already down due to Covid-triggered unemployment, and now the Republican-controlled state legislature is threatening to not extend a measure that allows Columbus and other cities to keep collecting income taxes from those now working from homes outside cities.
Councilwoman Elizabeth Brown, noting that this was the fastest the council has been asked to consider a capital budget in modern history — last year it held four neighborhood meetings over two weeks — asked Lombardi during
Monday’s hearing to explain the rush.
Lombardi replied that earlier this year it wasn’t certain there even would be any capital budget this year, and now the speed is needed to seal a bond issue before the end of the year.
“With the markets the way they are, it’s going to come down to timing,” Lombardi said.
In May 2019, Columbus voters approved the city’s first-ever $50 million bond package dedicated entirely to affordable housing. Yet only $11.5 million of that bonding authority is used in Ginther’s proposed budget, which proposes a total of $18.2 million for affordable housing projects.
In the 2021 capital budget, “we’re going to put a plan together to activate as much of that (remaining) $38.5 million as feasible, considering the current economic environment that we’re in,” city Economic Development Director Michael Stevens said during the hearing.
Even with $50 million available, the amount going to affordable housing is less than the $28.2 million the capital budget proposes for “public-private partnership” deals with developers, including to support high-priced office space and housing.
The proposed capital budget includes $13 million to be given to the Confluence Village Authority for the city’s redevelopment of the Mapfre Stadium area. $4 million for public improvements around the new North Market Tower high-rise, and $2 million each to support a new parking garage at the Gravity development in Franklinton and the White Castle corporate headquarters west of Downtown.
The Ginther capital budget also includes $3 million for a new wellness center to meet the mental-health needs of city first responders, and $300,000 to complete the design of a new driving track to train police officers.
In other business Monday, the council approved $30.7 million for a new cityowned 1,400-car parking garage to support the Scioto Peninsula mixed-use development currently under construction just west of COSI.
The council also approved a deal with the Columbus Partnership, the group that represents the leaders of the city’s largest corporations and organizations, to provide it with $500,000 in federal COVID-19 relief funds to provide broadband internet connections for up to 200 households with K-12 students who need the connections for online instruction. The award includes $40,000 to cover “project management and digital literacy outreach.”
Public education is “in the midst of a teaching and learning paradigm shift” that will lead to more digital learning, the memorandum of understanding between the city and the partnership states. The city will award the federal money in two payments between now and 2022.