By Yael T. Abouhalkah, Kansas City Star Editorial Page columnist
The Kansas City Public Library plans to use some surplus TIF revenues to help pay for the renovation of the L.H. Bluford Library at 3050 Prospect Avenue. It's a good call.
The money is available thanks to the proper decision earlier this year to finally end the 43rd and Main TIF project. That freed up $1.6 million to be distributed to different taxing jurisdictions, including more than $30,000 for the library. (Kansas City got the biggest chunk: $790,000.)
Library CEO R. Crosby Kemper III told me Monday that he thought it was particularly appropriate to use revenues freed up from a TIF project in one of the wealthier areas of KC (near the Country Club Plaza) for a building project in an economically depressed area on the East Side.
The budget for the Bluford renovation is $1.4 million; the library has raised about $1.15 million, leaving it about $250,000 short of the goal.
The $30,000 or so from the 43rd and Main TIF project will narrow that gap, but not close it. Kemper and the library continue to seek other funds.
Delicious
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43rd & Main TIF Not Financed by Bonds
The surplus money associated with the termination of the 43rd & Main TIF is apppropriately returned to the taxing jurisdictions because the projects in the plan were all financed on a pay-as-you-go method -- not utilizing bonds.
The return of the excess revenue to the jurisdictions follows the full reimbursement of all eligible project costs, as required by state statute.
Bondholders get shafted again!
Typically, excess revenues are used to redeem or pre-pay principal on the bonds. Assuming that is the case here, it appears they are spending the money on something that the bonds were not supposed to finance. That would mean that the folks that bought the bonds are at higher risk because, if the money was used to redeem bonds, from that point on, the debt service would be lower. Lower debt service reduces future risk that the bonds go into default. Someone has to buy these type of bonds, and if bondholders keep getting hosed, they may decide to exit the market, which makes it difficult to issue future bonds. But hey, let's not worry about the future!
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I think Crosby Kemper III is a great guy and has done good things for the KC Library, and I doubt Yael understands these transactions, but Yael doesn't need to understand something to be FOR it.