CHICAGO - Despite a listless economy, voters in Michigan approved a slew of bond proposals and levy increases in Tuesday's elections, while St. Louis voters approved a $275 million revenue bond proposal to fund a multibillion sewer capital program.
Bond proposals on Ohio's special election ballots did not fare as well, with voters rejecting most of the 15 school bond proposals. Voters also defeated a number of tax increase proposals that would have funded local school districts' capital projects and helped some districts avoid operating deficits.
Separately, a push to allow casino gambling in Ohio - and establish a $600 million casino resort - moved forward as a group of proponents turned in petitions to meet yesterday's deadline to get the issue on the November ballot.
In the Detroit area, voters overwhelming passed a three-county initiative to raise property taxes to fund the struggling Detroit Zoo, the state's top paid tourist attraction. The new tax works out to about $10 a year on a $200,000 house and will raise an additional $12 million annually for the zoo.
The measure allows the zoo to become financially self-sufficient a few years after it lost annual funding from the city of Detroit, its chief funding source at the time. Under the measure, which was approved earlier by state lawmakers, Detroit will still own the zoo and it will continue to be run by the Detroit Zoological Society.
The Metropolitan St. Louis Sewer District won approval from voters to issue $275 million of revenue bonds amid a promise that it would help keep down the level of rate increases needed to fund a multi-billion capital program.
With approval in hand, the district has said it would look to issue roughly $90 million of bonds as soon as October. Proceeds would go to fund the second phase of projects under a long-term $3.7 billion capital improvement program to expand and rehabilitate the utility's entire wastewater collection and treatment capabilities. The plan calls for upgrades to treatment plants, the construction of new plants, repairs, and new sewer line construction.
Officials succeeded in swaying voters that borrowing provides the best method for financing ongoing capital projects because it would require significantly smaller rate increases than under a pay-as-you-go financing scheme. The balance of the $275 million would not be sold until after July 2009.
The sewer commission has proposed a series of rate increases into fiscal 2012 that would result in a 64% increase for residential and business users to finance about $660 million in spending over the next few years. In January, one rate hike took effect but future increases will be cut by more than a half because of the referendum's approval.
The district's debt carries ratings in the double-A category from all three rating agencies. While the coverage ratios are solid, analysts have said the district's challenges include the size of its capital needs and managing such a large program.
The district recently adopted a fiscal 2009 budget of nearly $388 million. It represents a 7% increase in spending over the current budget that runs through June 30. It relies on a rate increase and on voter approval of the bond referendum.
In Michigan, voters approved a $19.5 million sewer bond proposal for Allen Park, a measure that will allow the city to comply with an order from state environmental regulators that it must update its sewer system.
Ohio's ballots included 15 bond issues - all of which were school issues, and many of which were rejected, including the largest proposal, a $34.7 million proposal for a district in Clermont County. Many of the school districts with bond proposals in Ohio were returning to the voters after earlier rejections, and some will return to try again in November.
