Monday, July 16, 2012

ZAP! #93: Mea 'Millions' Culpa

ZAP! #93
     The staff of the CCR would like to apologize to the readership for this first ever “Correction” to one of our reports.  Yes, we unintentionally screwed up, but you can be assured that no attempt was made to mislead the readership!

     For the past year or so, the CCR has been noting that the McDougalville (Heritage Crossing) financial debacle would only cost the city around $34 million bucks when all was said and done.  And when that amount was recently documented in ZAP! #92 ( July 15, 2012, ), we asked the serious question of where all the bucks would come from to cover this cost as the city council had issued $29+ million in Garbage Fund bonds.  Of course, we are still waiting on that response.

     While the CCR is not prone to digging through reports or other materials to gather actual facts, we did scan a few documents and would like to correct the total amount that the failed McDougalville fiasco will probably end up costing the city.  The amount we will now use for reference purposes -- until corrected by the city manager or proven that our calculator needs a new battery -- is: $57.5+ million. 

     How was this amount determined?  The following numbers assist in providing a trail for the total of what the city has spent, invested, paid, or will ultimately pay for the unbelievable McDougalville blunder since its inception:
$29,095,000 Bonds issued to pay for the inventory of McDougal property* 
$17,537,249 Interest cost on the $29,095,000 bond issue
$  7,625,790 McDougal loan forgiveness amounts and property purchases, plus Vista bank note
$  1,517,000 Consulting contract, housing/expense payments for the McDougal agreement
$     477,000 Interest on McDougal’s Vista loan for property they purchased in their name
$     128,000 Payment to McDougal for a Grant issued to McDougal to purchase property
$  1,219,000 Purchase of seven additional parcels of land from McDougal
$57,599,039 TOTAL
     Even without considering all the possible tax increases, bond refinancing flips, or budget ‘smoke and mirrors’ that will seep from the city manager’s office, one has to really wonder: Who is the council going to hold accountable for this financial farce that has been perpetrated on Irving tax payers?

  Another question should also be asked: Will the members of the council, who consistently voted to approve all of these shadowy dealings regarding McDougalville, continue to reflect this as a ‘gold star‘ on their political resume?

     Readers are now advised to start holding their breath in anticipation of hearing from either the city manager or city council.  
The property (about 48 acres per the DMN on January 28,2012) included in this figure is currently appraised at between $9-13 million.  Is there any actual belief that the city will ever be able to fully utilize, sell or recoup $57.5+ million to wash this transaction, or the odious aroma that permeates the old downtown area?  What 6-Sigma goal should the city manager classify this significant snafu under?  (Here’s one clue: George W. Bush didn’t have anything to do with this!)