Recall would cost Fraser Rec District taxpayers a bundle | SkyHiNews.com

Recall would cost Fraser Rec District taxpayers a bundle

To the Editor:This is in response to the recent letter to the editor by Lee Eckhoff.Mr. Eckhoff is one of the concerned citizens who want to recall board members of the Fraser Valley Metropolitan Recreation District. He is on record as saying he wanted to reverse the rec center and the bond vote. Now he says he just wants to attack/remove the board members and sue them. I was at the public meeting he referred to in his letter and the message I carried away from his comments then was that he just didn’t want the rec center built no matter what the voters decided.Armed with money and a lawyer, this group seems intent on carrying out baseless attacks against board members. These are board members who devote many hours to their volunteer jobs on the Board. This work is expended in trying to carry out the mandate of the voters; to provide adequate and readily usable recreation (including, among other venues, the recreation center, ball fields and a golf course) for us, the residents of and our visitors to the Fraser Valley. The Board is not inventing anything new in carrying out this public mandate. This tasking is spelled out in the Rec District’s mission statement.Mr. Eckhoff says his group doesn’t want to stop construction on the rec center, they just want to have someone other than us to pay for it (just forget the bond issue vote), and sue. Sue who? The entire Rec Board and District? That means they’re suing us. As a matter of history, when Pat Rupert, another member of the citizens, sued earlier in contesting the election itself, that lawsuit, based upon a very weak technicality, was not upheld. The technicality: the need to formally request, by the Board, to have the election held outside the Rec District with walk-in voting at the County Seat. That technical formality was considered by all, including the court, as being redundant and trivial since ALL District election preparations were made with County approval and assistance, and in accordance with the preferences of both parties. In fact, now Mr. Eckhoff says the reason for the recall itself is so his group can base the suit itself against the District and its board members over (again arcane and baseless) assertions concerning the tax-exempt bonds that are financing this multi-project effort.Let’s take a quick look at what those tax requirements really are and, while I’m not a tax lawyer, as Mr. Rudis (another citizen) is, I’ve read the code and what I remember from that reading is: For the construction bond money and its interest to be tax exempt, the money raised by the bond issue and interest accrued thereto, is to be used only as was presented to the voters approving the issue construction of the projects PERIOD. That is what is happening.By the way, no monies are, or will be, owed the IRS if our interest collection rate (on the bond money) is less than the arbitrage rate of 4.57 percent. We are at 3 percent. Those funds are tax exempt. That having been said, what could possibly be (non-trivial) grounds for this new lawsuit? You’ve got me. So we’ll have just another trivial suit to be thrown out?BUT AT ANOTHER LARGE COST TO US.Please remember: The earlier lawsuit has been estimated (by investment banker, George K. Baum & Co.) to have cost District taxpayers some $400,000. That number was based upon our loss in value of the bond issue (we lost our AAA financial/credit rating because of the suit), the delay in issuing the bonds (because of the cloud the lawsuit cast upon them), and then the time involved in physically obtaining the bond money and starting to accumulate interest on the banked money (again at a lower rate because of the delay). I still consider that $400K estimate to be low. The time/dollars lost in getting all required pre-building items in order to beat the ’08-’09 winter weather in actual construction should be factored in. For example, we all should keep in mind that just a delay in opening the new clubhouse on-time, in the late spring, at Pole Creek is conservatively estimated to cost us, the taxpayers, up to an additional $150,000 because of lost clubhouse income in 2009. The earlier Rupert lawsuit delayed the start of clubhouse construction significantly.And then they, the citizens, say we are going to force a developer to take or buy our public facility based on what they admit is a stretch of tax law? And they’re going to do this without costing the taxpayers any money? It’ll just be the cost of the election, Mr. Eckhoff claims. Are we all that nave?.If the citizens get someone else to take or buy the rec center (an absurdity in and of itself) and succeed in mounting the tax challenge, we can be absolutely certain the cost to us/the district will more than just a few cents. How about the loss of just the minimum $8 million that will have been invested in the rec center alone by Jan. 1? This mentions (should construction be halted) neither accrued penalties and fines, nor loss of value in building assets left incomplete. Please don’t forget the value of contributed land and infrastructure that will also be lost all in 2008 dollars. The list of extremely expensive possibilities goes on and on. Make no mistake about it, if this recall and accompanying lawsuits were to succeed, the cost to us, the taxpayers, would be extreme and with certainty, extremely expensive countersuits will be born. Could you blame a citizen from for suing if he/she had to continue to pay taxes to pay off the bond issue until 2017 (the call date for bond payoff) and didn’t get any rec center in return?Don’t sign any recall petition unless you really like losing lots of money and having our (the entire District’s) moral and financial/credit reputation dragged further through the mire. Reject the recall.Howard VeneziaWinter Park

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