Petition drive for referendum on borrowing for Crestpointe
Well, if you have been paying attention, you know that on Monday evening the City Council passed a resolution authorizing the issuance of up to $6 million in general obligation bonds for the Crestpointe project.
Actually, the bond resolution doesn’t name Crestpointe; instead, it says the bonds would pay for various types of generic civic improvements (which are listed in the resolution). This vagueness is necessary because a municipality can’t borrow funds backed by the full faith and credit of the municipality (that’s what “general obligation” means) to benefit a private entity, but it can borrow funds for public purposes such as road improvements, electrical lines, and other civic improvements that happen to benefit a particular project. This resolution calls for public improvements that are intended specifically to benefit Crestpointe.
Some city informational materials and press reports have generated a misconception that the developers would be responsible for paying back the loan. For example, today’s Oak Ridger says “The proposed 60-acre Crestpointe project would require a $10.5 million repayable city contribution.” Don’t be misled — the city would be responsible for paying off the debt using tax revenues. All that means is that the city is counting on future tax revenues from the project (mostly sales taxes) being more than enough to compensate the city for its “contribution.”
The publication of a legal notice on Wednesday that announced the bond resolution started the clock on a 20-day period during which Oak Ridge voters can petition to force a referendum on the proposed borrowing. Petitioning is under way. If 10% of the city’s voters sign the petition, the city’s voters will be the ones to decide whether to issue $6 million in bonds. Conveniently, I expect that the referendum could be held in June at the same time as the city election, avoiding the costs that the city would incur if it were necessary to call a special election.
We’ll all know the outcome of the petition process well before March 19, which is the date set for City Council to consider a development contract with GBT. If the petition drive is successful, the City Council will not be in a position to make any contractual commitments on March 19.
There’s a website for the petition process — click to download blank petitions, register as a petition volunteer, or find out where to drop off your signed petitions.
I had to laugh when I heard that some project opponents are signing another petition that’s circulating around town — a petition with no legal significance that states support for the project — because they heard “SuperTarget petition” and they assumed it’s the referendum petition they’ve heard about in the news. Whatever your views are, pay attention to what you’re signing, folks!!
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