{"id":9542,"date":"2013-09-09T06:32:19","date_gmt":"2013-09-09T11:32:19","guid":{"rendered":"http:\/\/lincolndemocrat.com\/?p=9542"},"modified":"2017-02-27T05:57:07","modified_gmt":"2017-02-27T10:57:07","slug":"i-endorse-this-editorial","status":"publish","type":"post","link":"https:\/\/lincolndemocrat.com\/?p=9542","title":{"rendered":"I endorse this editorial"},"content":{"rendered":"

As one of the nine School Board members who created and or protected the “ten percent reserve” which ended up at about $23 million in 2007 I endorse this DNT Editorial<\/a> about how the City of Duluth should handle its unobligated reserves:<\/p>\n

There are two obvious sources of cash to pay the bill. One is the $21 million sitting in reserve in the city\u2019s Community Investment Trust, the source for making such payments in the past. The trust was built over the years with the city\u2019s share of revenues from the Fond-du-Luth Casino downtown. But the city\u2019s share of those revenues has been cut off, as has been well-publicized, and the trust has dwindled from about $50 million. While some of the drawdown has been by design (too much cash in such a reserve isn\u2019t financially healthy, either, as it can crimp a city\u2019s ability to borrow and win state and federal aid), a trio of city councilors has stated clearly, they don\u2019t want the fund to be drawn down any further, certainly not below a healthy $20 million.<\/p>\n

The other source the city could tap to pay the bill is an unobligated reserve in the city\u2019s general fund. But that\u2019s an option that has Montgomery waving red flags at the City Council and at anyone else who\u2019ll listen. Tapping that fund just to pay a bill is precisely the sort of action that could get the city\u2019s AA bond rating downgraded to A. Those who determine bond ratings specifically have told Montgomery that. It\u2019s on the list of ways to be downgraded.<\/p>\n

Tapping the general fund reserve for an emergency like last summer\u2019s flood is one thing. Bonding companies understand having to do that. But using it to pay a bill that comes around every year is quite another thing.<\/p><\/blockquote>\n

The Duluth School Board has, since Dr. Dixon encouraged the School Board to open a vein, been drawing down the School District’s reserve to the tune of three million a year to pay off the lenders of Red Plan Bonds or to put in operations. The bonds will be repaid over a course of twenty years. This is the last year bond payments can be paid from the fund before even more has to be pulled from school operations (the classroom) to do the job. After Dixon’s run on the reserve is over we will have to take three million out of the classroom to pay the bondholders. <\/p>\n

The City Council would be wise to avoid the School Board’s example.<\/p>\n","protected":false},"excerpt":{"rendered":"

As one of the nine School Board members who created and or protected the “ten percent reserve” which ended up at about $23 million…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[116,7,82,81],"tags":[],"_links":{"self":[{"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=\/wp\/v2\/posts\/9542"}],"collection":[{"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9542"}],"version-history":[{"count":4,"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=\/wp\/v2\/posts\/9542\/revisions"}],"predecessor-version":[{"id":20022,"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=\/wp\/v2\/posts\/9542\/revisions\/20022"}],"wp:attachment":[{"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lincolndemocrat.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}