Provoans may see tax cut
City plans to pay off its bond for library early
The recent economic boom and fastidious management of the Provo City Library at Academy Square should allow the city to pay off the library bonds three years early, in 2011. Property-tax payers would pocket the payments they would have made from 2012 to 2014.
Savings for an owner of a $200,000 home? About $57 per year, city finance director John Borget said.
Billings announced the plan on a chartered bus Tuesday when he took a group of city leaders, media representatives and residents on an one-hour tour of the city to illustrate highlights of his proposed 2007-08 budget.
The proposal included some big news. For one, Billings wants to set aside $1 million for a new recreation center.
"In (good economic) times, it's important not to commit to spending you can't support in lean times," Billings said, "but it can be a good time to pick off some one-time needs," like a first installment on a new recreation center.
The mayor's budget proposal includes another $1 million line of credit for iProvo, the city's telecommunications network that has needed loans from the city's energy department to meet its debt payments.
The mayor also proposed adding two police officers to bring the city's total to 100, launching the first in a series of seismic upgrades to the city center and giving city employees a 2 percent cost-of-living raise.
Billings delivered his proposed budget to the City Council later in the day, and Council Chairman George Stewart expressed some concerns despite his enthusiasm for paying off the library bonds early.
"That was news to me today, and it's certainly good news," Stewart said. "The less debt we have with the future economic uncertainties the country is facing, I would be supportive of that."
Preserving the old Brigham Young University Academy Square facade at 555 N. University Ave. and building a new library behind it was a costly project. The $23 million price tag included $6 million in donations and $16.8 million in bonds, which are being repaid by Provo property owners.
The library has managed to save more than $4 million, library director Gene Nelson said. The proposal is to put that money aside and make a balloon principle payment in 2009 that will lead to retirement of the bonds in 2011, three years early.
The city and its taxpayers would save $1 million in interest.
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