Where the money is coming from...

UPDATE: Please checkout part II when you're done.

For cities, borrowing to fund investment in economic development is very common and smart—if done right. After all, the money has to come from somewhere to make those kinds of improvements, and it can't all come from the City's main accounts. It's like a business that borrows to expand and pays back the loan with increased revenue from the expansion. When it works, it's a good thing long term.

Our city leaders were using some version of this theory when they borrowed a cool $9 mil in July of 2024 to fund infrastructure investment in the Thermo development (yes, that's a few months before Maxwell supposedly heard of MSB. More on that later.)

But that's not all, they actually borrowed a total of $12 million in that issuance. What did the other $3 million go to? ¯\_(ツ)_/¯

If that weren't enough, they then borrowed another $7 million later in 2025 to fix up City Hall. So yes, that's $19 million of new debt in the last two years. And the payments are pledged from property taxes.

So how did "we" borrow the money?

The City borrowed the money using 2024 Certificates of Obligation (CO's), which is essentially a loan in the form of municipal bonds that are purchased by investors in the market. These are obligations that have to be paid back, and so the debt exists regardless of whether any growth happens or not. There’s no mechanism where the payment schedule slows down if development is delayed, scaled back, or doesn’t materialize the way it was projected.

Assuming the average rate on the borrowing is around 4% with level payments, that's about $1.4 million in new, annual debt service for the next 20 years. Aahhh, good times.

Now, the City is probably banking on the Thermo growth to cover some of the $9 million, which it can if things go well (but that's off to a rough start, because you know... deed restrictions we already knew about and the developer is most likely a fraud).

But keep in mind the tax money machine that's supposed to pay for the debt is set up inside a Tax Increment Reinvestment Zone (TIRZ). The tax revenue on the incremental growth inside the TIRZ doesn't go back into the general fund (at least not for like 30 years) for cool things like fire trucks and a halfway decent road. Instead, it stays within that zone. It can service the debt, but it's not a net benefit to the general fund for a long time.

But this is without considering all the tax abatements and tax incentives the City is throwing around like Oprah. You can bet we'll be paying for a good chunk of it, regardless.

And that's just the $9M. We're on the hook for the remaining $10M to redecorate Marc-mahal and whatever else.

In fact, it looks like we've already started paying for it.

As I said earlier, the issuances are backed by the property taxes, so you know those have gone up. The tax rate has already been increased, and assuming taxable values rose 2-3% through normal appreciation, that means you'll be paying more on a higher value later this year.

However, the debt can also be paid from other non-restricted revenue, like surplus revenue from utilities. Those have already been increased as well.

Even if this is back-of-the-napkin math, this chart does a good job of showing how it allocates out to you eventually. The number might not feel high now, but just wait. I'd imagine this trend will continue, particularly if the data center debacle continues to languish. And again, these bonds are 20 years, so we're probably in for a long ride with this. I also haven't looked at the building and permit fees yet. I would be surprised if it weren't a similar story to the utilities.

If this doesn't shock you yet, look at how it rolls up into the City's forecasted budget for 2026:

Yep, that's a 25.7% increase in total tax and fee revenue the City expects to bring in this year, and you've seen where a lot of it's coming from.

Keep in mind this started in 2024, so the rate hikes and debt issuances appear to have been orchestrated in concert as part of a larger plan no one's really told you about.

These people, y'all.