Or…that flushing sound you hear is your hard-earned money going down the drain.
As Yarmouth prepares to spend well over 200 million dollars in sewer, it is of great importance that we, the taxpayers, get on the same page. Let’s lay some groundwork regarding the Town of Yarmouth and its finances. Recently we balanced our budget by cutting 3 million in services. Capital Budget and Road Repairs were paid from free cash – not from the tax levy. We have sewer, more schools, coastal infrastructure repairs, housing, and water system improvements all in the near future – pushing half a billion dollars in needs.
At the same time, we have managed to reduce our commercial tax revenue from 15% of the levy to less than 5%. What effect does that have? Simply, businesses don’t put children in the school system. That’s anywhere from 50-65 % of the town’s liabilities. More of the businesses tax revenue can be used to offset the residences’ tax burden. Why did this happen? Tough policies and a lack of support for development, lack of public sewer, and a less than stellar streetscape. Most of the new development I’ve seen has been box retails and 40Bs on route 28. Those types of stores are cheap to build and have very low septic demands. Even if those stores tie into the new sewer system, they are not big users and will not help cover operation costs much. With 40bs, we have purchased the land and offer building and tax incentives to make those developments possible. The need for housing is undeniable, but, they are not tax friendly improvements. Typically, they come with increased needs in education and other social services. Actually, 40Bs increase taxes to the residences.
There is no free money for commercial developers to offset their development costs. There are only a few industries that can pay the rent necessary to develop in Yarmouth. It is not financially viable to build speculative developments in Yarmouth. The small retailer chains, medical, gas stations etc. are examples of industries that have enough profit margins and confidence to develop in this environment. You can rent commercially in Yarmouth for approx. $12-18/sq ft. New construction costs are anywhere from $200-400/sq ft. With increases in interest rates, the rent has to be easily $20/sq ft+ just to pay for the construction costs, assuming 100% occupancy without any land or operation costs included. You would like to see rents in the high $20 to be potentially profitable.
We need 100s of millions of dollars in new growth, all on route 28. If we don’t, not only will we the residents pay the burden of new debt, but the operational costs associated with running a sewer system will also have negative cash flow. We will have to increase taxes substantially for possibly decades. We are already in the top 3 for taxes of cape towns. The higher the taxes go the lower our home values.
I hope the town supports the sewer because it’s good for the environment and the tourist business. It may also avoid state penalties for not taking action to improve our nitrogen levels. We need to support new growth in order to pay the cost associated with the new sewer system. If you find any errors, I would appreciate the information and will adjust my statement appropriately.