The Fiscal Implosion Of Manassas Park
By Greg L | 8 January 2009 | Manassas Park | 19 Comments
In order to offset a 38% drop in tax revenues in the next fiscal year, the residential tax rate in Manassas Park would have to rise from $1.24 to $2.00 per $100 of assessed value. Years of fiscal mismanagement and bad policy in the Park, abetted by indifference from the electorate crashing down on city residents and hitting them square in the wallet. Yet the only answer so far by the city is for Vice Mayor Brian Polk to make joking references to the assassination of Abraham Lincoln. Folks, you earn the government you get, and did these unfortunate people get themselves a whopper.
Sure, times are tough all over, so let’s put this into perspective. Prince William County may have to close a roughly 20% gap in the 2010 budget and the tax rate would go from $1.00 to $1.25 to cover that if spending was kept flat, which won’t happen. In Manassas City, the tax rate might marginally rise from the current rate of $1.015 to offset a revenue reduction of $3.4 million. Manassas Park stands out in stark contrast as a truly fiscally embattled jurisdiction. What’s going to explain how Manassas Park’s tax rate may end up almost twice that of nearby jurisdictions other than the approach of “other than that Mrs. Lincoln, how was the play?”
There are lots of answers.
One was the utter neglect of the rule of law in Manassas Park, which became a safe haven for illegal aliens overcrowding residences during the real estate boom, many of which had been remodeled into multi-family dwellings in defiance of the building code. Now that the bubble has burst, 82-85% all residential property sales in the Park were of homes in foreclosure, and last year bank-owned properties amounted to nearly half of all sales. The Park bet on having a bunch of “undocumented citizens” as one member of the Governing Board described them, and ended up rolling snake eyes, leaving them with the most concentrated implosion of real estate bubble-popping carnage in the Commonwealth.
Another reason is that Manassas Park has been spending public money on capital improvement projects at a completely unsustainable level. Plasma screen televisions in the new police station, $22 million for a Parks & Recreation Center, $33 million for an expansion of Cougar Elementary School and then the whopper of Town Center all in the past few years have saddled Manassas Park with a huge debt load right when they needed to be exercising fiscal discipline. The past few years were hardly a time to go on a debt-financed spending spree. Bad bet.
Yet another reason why Manassas Park is facing such trouble is the huge imbalance between the commercial and residential tax bases, which only got worse once elected officials and senior public employees tried to dabble in commercial redevelopments. Anyone would be chased, bullied and harassed out of business if they might potentially have gotten in the way of the grand plans of public officials standing to handsomely profit with the insider information they had. Instead of building their commercial tax base, they significantly undermined it hoping that if their grand designs succeeded not only would they become wealthy, but the boom in commercial tax revenues would significantly help the city. It didn’t work out that way. The powers that be in the Park gambled that they could engineer the kind of commercial tax base they desired, and again came up with snake eyes.
Readers might notice right now that police have been scarce on the streets of Manassas Park over the past month or so leading to speculation about layoffs and forced time off from residents, and that municipal construction projects such as Town Center are strangely quiet. The city seems shut down. Here’s where the tragic comedy in Manassas Park really gets interesting, while it seems that spending is being slashed far beyond what the public has been told.
When a city such as Manassas Park wants to build something, they sell a bunch of bonds up front, and invest the proceeds to generate some offsetting interest revenue until the money is actually needed on the project. Some companies catered to this market, selling specialized investment programs to municipalities so they could safely and easily invest capital funds until they were needed, and one of the bigger ones was AIG. Yeah, those guys, who went belly-up in the credit default swap scandals. They had a special arbitrage fund and actually came down to the Park to sell them on it, and you know what? The Governing Board loved it.
Manassas Park has bond-financed capital improvement projects underway at Town Center, Cougar Elementary School, and Costello Park. Now all these capital improvement projects seem to have been halted. You gotta wonder whether those two things might have some connection. I sure do. I also wonder if any of the money Manassas Park raised for these projects through bond sales is there any more, and the degree to which General Fund revenues might have been used to pay capital improvement project obligations when checks written on AIG arbitrage fund accounts suddenly became as valuable as used toilet paper.
That gamble sure didn’t pay off.
Brian Polk may joke that what’s happening in Manassas Park is comparable to effect the assassination of the sixteenth President of the United States had on our nation, but it’s possible he’s not far from the truth here. Residents and the local media should have been keeping a much closer eye on the doings of the Frank “Dear Leader” Jones administration as they keep rolling the dice with the future of this community.
The opinions expressed here are solely the views of the author, and not representative of the position of any organization, political party, doughnut shop, knitting guild, or waste recycling facility, but may be correctly attributed to the Vast Right-Wing Conspiracy. If anything in the above article has offended you, please click here to receive an immediate apology.
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19 Comments
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Hopefully if we shine the light on this problem, voters will get outraged. Thank God I live in Lakeridge.
Unless a miracle turn-around in the housing market happens in the next 24 months (it won’t, not on the scale required), I believe that MP will fold up, de-incorporate, and rejoin PWC.
They will go buy all new “led” Christmas lights for Manassas Drive this year. We will save a few pennies that way.
Flavius Maximus said on 9 Jan 2009 at 9:19 am: Flag comment
I believe that MP will fold up, de-incorporate, and rejoin PWC.
Oh nooooooooooooo! Heaven forbid!
Way off topic but I was so sorry to hear this I felt I needed to post it.
Police: missing girl’s body found
http://www.insidenova.com/isn/news/local/article/childs_body_found/27636/
“Oh nooooooooooooo! Heaven forbid!”
What’s so bad about that? You’ll get a new police station, fire station, elementary school, a newer high school, middle school, and possibly a new rec center as well.
You’ll get those projects only if the bond proceeds obtained in order to finance them haven’t gone up in smoke when AIG’s credit default arbitrage fund collapsed. What Manassas Park residents may get are twenty years of bond repayments and a handful of partially completed and crumbling construction projects, as well as tax bills that are about twice as high as everyone else’s.
Maybe the Park can plan a new town hall while there at it, invest the bond proceeds in mortgage insurance guarantees through 48WorkFromHome.com, and end up holding Governing Board meetings on a roofless concrete slab for the next ten years. It’ll only add $250 a year to everyone’s tax bill…
Think it depends on the type bond issued. Some are backed (for what it’s worth) by the State.
Minor correction: Lincoln was the 16th President, not the 13th. The 13th President was Millard Fillmore
“What Manassas Park residents may get are twenty years of bond repayments and a handful of partially completed and crumbling construction projects”
Sounds like Detroit.
Camden NJ. It’s worse.
The Cougar and Costello construction projects are both very active. Clark seems be going very slowly on the Park Center thing.
me-n-u said on 9 Jan 2009 at 3:43 pm:
Thanks for the link. I hadn’t heard that she had been found. What a horrible shame. What in the hell is happening to this area? This country? This world?
“You’ll get those projects only if the bond proceeds obtained in order to finance them haven’t gone up in smoke when AIG’s credit default arbitrage fund collapsed. ”
Greg, I have been searching for AIG and Manassas Park and bonds and can’t find anything on the web. Where should I be looking? What’s the source for this information? I would really like to see it. Thanks!!!
A year ago when I frequented this blog, I wrote heavily about this approaching fiscal crisis and how the rate would have to be raised to between 1.75-2% just to maintain flat revenue. Some thought I was crazy if I recall. I even wrote the treasurer a 2 page letter explaining my thoughts for what I saw as an approaching crisis last March as I was refuting my assessment. Citizens would beg the council at meetings years ago to do something about all of these illegal aliens and flop houses because we knew it would end badly, but were called xenophobes for their trouble and the status quo was allowed to continue which leads us to where we are now.
My home value is down 60% from peak so I’m not sure where they get this 30% number from either? It is unreasonable in this economy to ask the citizens here to pay any rate beyond 1.4% under ANY circumstances and even that is an ABSURD number considering the VAST majority of municipalities in the surrounding area are in the neighborhood of 1%. I can not sell the house now, I am under-water, can’t refi into a fixed loan, have a neighborhood full of section 8 renters, have trash all over the development because the city flat out REFUSES to give us larger dumpsters and so the cretins just drop their trash next to the dumpsters where the animals and elements rip open the bags. Many homes here still hold 5-10 people when they were built for a family of 4. Any rate beyond 1.4% will be the final nail for me at this point since I have an ARM resetting in April with no way to refi out of it. I have spent $2500 this year alone on home repairs which I will never recoup. I am a renter that has to pay to fix things at this point. I assume many others here feel the same way.
Unfortunately, Very few people wanted to run for office here last year other than Brian and Suhas, myself included, because I knew what was coming and didn’t want my name associated with it. This is playing out exactly like I said it would. The scary part about this folks is that there are probably literally thousands of other municipalities in the same boat right now around the country. We simply taxed and spent our way into the poor house in this country. Allowing millions of illegal invaders in to do our dirty work, putting them on the welfare dole, schooling their children, incarcerating them when they got rowdy and allowing them to destroy whole neighborhoods where they settled certainly did NOT help. All was fine for the liberals, businesses and politicians at the top as long as they got the cheap labor and the ‘help’ stayed in their own areas (read Manassas Park). Now the bill is due and the chickens are home to roost.
I pray the council does the right thing and does not try to tax their way out of this by putting an essentially back-breaking burden on those of us stuck in the park with no way out other than foreclosure and bankruptcy. April should be very interesting. Maybe Manassas Park could apply for TARP funds when the messiah’s stimulus plan is ratified into law ;P
How about going after the people that owe back taxes? Why isn’t anything being done about them? The people that live next door to me, I don’t call them neighbors, because they aren’t neighborly, owe $12,328.54 in back taxes going back to 2006. They have been in the house over 20 years and have 4 generations of families living there. Their house is also assesed the same as mine (an unrenovated Cape Cod) because it has been in permanent renovation for 4 years and is not finished, so MP is unable to assess it properly. But this house is 4 times the size of mine and has 2 seperate living areas, with kitchens, bathrooms and bedrooms. Why do I have to pay for those that are somehow figuring out how to beat the system?
Mr. Polk making light of the assassination of a President is a silly attempt to fend off critisizism and is in the poorest of taste. This is such a nice way to lift up Manassas Park.
I don’t think the Park will fold. They have there problems but to the credit of the Park, albeit on the backs of bonds of hopeful property taxes, they at least spent most of that money for the benefit of all and better facilities. Now the timing and progression is certainly a question to deal with but clearly the Park has needed some of these improvements for some time. Keep in mind the Park watches other areas do the same and has to offer its residents some of those perks as well. The police department and fire departments have needed as serious overhaul for a decade, especially that old joke of a police office.Remember the old “municipal buildings” before city hall? The school system was the pits! Old clap-board wooden “sheds” damn near compared to what they have today. I am not happy with the money spent on Cougar right now though. I think that improvement could have waited. The new rec center is long, long overdue and has a benefit of returning some revenue. Again, the Park and its residents see the surrounding areas. Was it wise to spend up so much, so soon? Maybe and maybe not. For the Parks sake, I hope they don’t fold. The county is fine but licenses, permits and building construction is a long drawn out process that the Park and the City of Manassas do not have. The City of Manassas had their growing pains as well.
I suggest to all to attend the monthly meetings and have some input. Avoid talking to Mr. Polk. His shoe fits his mouth well and may cause mumbling.
The root cause of the Park’s problem isn’t declining assessments. The root cause is increased budgets due to increasing assessments. That game works somewhat OK as long as those assessments keep rising. When they stopped rising and started declining that’s when the problem became painfully obvious.
I knew there were big problems brewing over two years ago when I saw their 5-year budget plan, with a 10% increase year over year.
It begs the question as to whether they really thought assessments were going to continue rising.
On the other hand, there was the guy from GMU who made some off-the-wall prediction about how much houses in this area would cost by 2025. If a GMU economist can make that error, certainly the MP City Council could. I imagine that comes from the same sort of thinking that heads of lettuce would cost $10/each if we didn’t have low cost labor to pick them..or the same sort of thinking that says that this area will have 24×7 gridlock if X millions of dollars aren’t spent on transportation.
That 5-year-budget plan, by the way, is NOT zero-based budgeting by any stretch of the imagination.
Greg, If you can please post a new header with recent news.
MP to cut 61 of 131 city jobs by July 1 in addition to the assesment increase ..It is only prolonging the ineveitable return to PWC. No onw lisetened when I spoke time and time again and now it doesn’t matter . I want to know if our new council members are wishing they had not gotten in at this point.
I sure as hell would not want to be in that bunch.
p.s. some of us voters did speak up but if no one listens it does not matter much does it?