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Though the recession’s effects are ebbing, Roanoke City Council should exercise much caution before yielding to pent-up demand for spending.
Thursday, March 7, 2013
The bulls are running on Wall Street. Investors are keen on Roanoke bonds. And city tax revenue streams are rising. All are signs that Roanoke finally can pay its last respects to the Great Recession, though city council should not bury the memories of hard times brought by its unwelcome visit to the city.
Yet much the same as penny-pinching consumers who carefully weighed the value of each purchase during lean and uneasy years, city council members now are feeling the temptation to yield to the pressure of pent-up demand.
Spurring the desire is the city’s ability now to increase its borrowing capacity, allowing council to consider spending $5 million more for each of the next five years than it already intended to do. This would enable Roanoke to build a culvert over Lick Run to carry a passenger train into the downtown, and help build broadband infrastructure that would provide increased bandwidth at reasonable prices. Both these big-ticket items are believed key to further spurring economic development in the valley.
Yet the moment restraint is eased, other interests will push their key projects. Firefighters believe it’s necessary to replace the Crystal Spring and Memorial Boulevard stations. The school board find it’s crucial to ask for $7 million more to renovate Round Hill Elementary.
Compelling cases could be made for all. So, too, could pleas for better pools, soccer fields and park restrooms. And always in an aging city, a desperate need remains for more funds to improve streets, bridges and storm water systems.
Before council members consider taking on any more debt, they should keep in mind that the increased borrowing capacity could evaporate if tax revenue slips again. Exceeding the city’s debt ceiling would place council in the same precarious position of four years ago — at the height of a capital-spending spree and the depths of the recession. Then, council confronted a downgrade in the city’s bond rating by eviscerating the capital improvement plan and adopting robust, prudent policies to prevent disaster from striking.
While council might be tempted now to stretch those policies, members would do well to remember these policies helped Roanoke rebound from the recession. Council should search out all other ways to pay for pressing projects — grants, matching funds, partnerships — before increasing the debt load beyond what is planned.
Bonds, though, might be the sole option for school improvements. Council has left to the school board the authority to decide how best to spend a $5 million-a-year allocation of capital funds, but a robust conversation on the school system’s priorities and needs seems in order. The additional Round Hill money isn’t needed immediately, allowing time enough to prove the recession indeed has met its end.
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