To the editor:
The proposed Newton Housing Initiative outlined to the Newton Council by City Administrator Knabel stated that the debt service levy would go up from $1.04 to $1.11/1,000 assessed valuation.
This additional $0.07 would add approximately $6.65 per year on the average home valued at $95,000.
I have no idea how anybody in his position would not check the numbers and come to this conclusion.
First of all a house assessed at $95,000 has a taxable value of $50,176 after you use the state mandated rollback of 52.8166 percent. Then you would take this $0.07 times $50,176/1,000 which would be $3.51.
But then I would question the $0.07, it would be true if it were to be done this year on the $1.04 to make it $1.11. The fact is this will not take effect until next year on the 2014-15 budget.
With our current debt next year the debt levy will go from $1.04 to $0.96 so the $1.11 will be an increase of $0.15 the very first year it goes into effect. This is about $7.28 for that $95,000 house.
The real cost of this $3,650,000 bond over the 10 year life for the average $95,000 home will be about $402.90 for an average of $40.29 per year if we use the current home value, rollback and Debt service valuation.
This cost will start at $7.28 the first year and increase until it reaches $55.70 for the last 5 years. This is nowhere near the $6.65 per year stated by our City Administrator.
Our current General Obligation debt service will be a $1,666,802 as of the beginning of the next budget year 2014/2015 and is scheduled to be paid off during 2018/2019.
Debt Levy on Current Debt @ Current Debt Service value
2014-15 = $0.9649
2015-16 = $0.7813
2016-17 = $0.5161
2017-18 = $0.5247
2018-19 = $0.2831
2019-20 = $0.000
If this bond issue is passed the rate will remain at $1.11 through 2023-24 and if we borrow and issue any other bonds during this period the levy rate will increase by whatever is needed to pay them.
Do you really think the city can go for 10 years without issuing a bond for anything?
I’m not sure if I were you I would believe these numbers just because someone says they are correct.
An intelligent person would verify this as they should do with everything.
I just don’t know how the administration would be able to dispute these figures.
I will stand by my figures, but maybe you should ask your City Council member or call city hall, as that is where the $6.65 came from, and ask them if these calculations are correct and if not what is the correct calculation?