Property Tax Series: Capital replacement fund in serious troubleMarch 29, 2018 12:38 pm
Imagine contributing to your retirement portfolio at such a low rate that you could never retire. Nobody would ever dream of being in that kind of financial insecurity when they want to retire, which is why many retirees take a look at sites like www.keyadvice.co.uk when they are in need of financial advice in their retirement.
The reserve and replacement funding for the Town of Fountain Hills is so low, there is very little to take care of impending maintenance, replacement and improvement.
With only $2.5M, up from almost nothing in 2016-17, the Town cannot sustain a tear in the fountain’s liner without exhausting all funds as the cost is estimated to be $2.4M.
According to an independent 2016 study by Capital Analysts, the Town must contribute $1M plus per year for the foreseeable future to prepare for replacement of aging equipment and facilities.
The principal difference between the capital reserve fund and your retirement is the Town will draw on these funds for continuous upkeep and replacement while simultaneously contributing to the account.
Even after the May 15 property tax passes (yes, I’m being optimistic), the Town’s capital replacement program will only be rated as “FAIR” until 2035. That’s another 17 years from now. Just look at the chart and see for yourself.
The study includes the expected lifespan of Town owned assets such as parking lots, community center tile flooring, park equipment, air conditioning units and much more.
For example, community center carpet replacement for 16,000 square feet is estimated at $75,000, epoxy re-coat kitchen area in 5 years is $14,000 and ceramic tile replacement in 10 years is $121,000.
The list goes on to show pump overhaul and replacement ($45,000 and $130,000 per pump), asphalt sealing, light fixtures, park play structures ($80,000 for just one park), irrigation at Desert Vista ($70,000), scoreboards (ball fields ($60,000), tennis court replacement ($120,000) and hundreds of other items.
Many of these items are not this year or next but eventually they will start to show significant signs of wear and need replacement, refurbishment or overhaul.
The Town of Fountain Hills cannot continue to defer maintenance due to unfunded budget items. The building fees of the 1980’s and 1990’s allowed for enough revenue to support the Town’s on-going upkeep. Those days are gone.
This is a pivotal time in the history of this Town to change the government’s revenue base from completely on fees, state shared revenues and sales tax. A property tax levy is equitable, sustainable and viable.
If we’re not going to have a substantial increase in revenue, then a property tax is the only sustainable solution for the future.
Just like funding your retirement, if you allow too many years to pass before contributing enough, then you will need to catch-up when its time to make your end of career decisions.
Vote YES on May 15 and let’s all pay our share to Save Our Town.