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New Mosaic Deal Documents released PLUS, my analysis on why this deal is still not good enough

I have been asked where I got my information regarding the new deal being requested by Mosaic for the Aquia Towne Center project. My supervisor, Wendy Maurer, sent the documents below to me because 1) I am her constituent and she knows that I am interested in disseminating the information to the public and 2) she believes in transparency of governmental proceedings. You should be able to get this information from your supervisor as well, neither document is confidential. If you are unable to do so, then you should ask yourself why.

If you click the images below, you can download the documents for yourself.

Let's look at the documents:

As you can see, the deal has changed. To avoid confusion, there is no record of the $18.25 million request in the staff document above. Mosaic is now asking for $16.5 million from the county instead of $6.25 million which was previously approved in 2015. The new deal still takes 80% of new tax revenue generated annually until the 16.5 is paid off but the maximum time frame allowed now is 20 years instead of 30. The total Net Present Value to be paid to Mosaic over the maximum 20 year period is $26 million.

It is interesting to note that even this new deal does not satisfy either test set forth by the county in determining if it is a good investment.

Let's move on to the projections spreadsheet below:

Ahhhh, the joy of spreadsheets....

First off, let's determine what these numbers mean. The numbers in bold at the bottom signify total new tax revenue generated in the various categories. For example, if you look at the "Sales Tax" column, you will see the total projected new revenue in that category over the projected 20 years is about $14 million. The row with no designation at the top, I don't know why they did it that way, removes the money that is not new revenue, ie Rite Aid revenues, from the new revenue total.

As you can see, the total new revenue projected over 20 years is $38.6 million, the next column over shows that at 80% payback, Mosaic would get $26.7 million back and the county would get almost $12 million in new tax revenues. You guys are all smart so I know you are with me this far. But let's get a bit more down in the weeds of the deal.

My major concern here has to do with the meal tax revenues and the funding of schools. As you may know, meal taxes are required to go to schools by county code. The total meal tax revenue generated in this deal is over $14 million, all of that would go to schools. County staff clarified during the last board meeting that these revenues would definitely go to schools, regardless of the 80% agreement with Mosaic. Sounds great, right?

However, while the county would not remove those monies from school, they would still have to pay Mosaic the 80% on the new revenue that this deal requires. That means that we are creating two separate demands on one revenue stream: for every dollar generated in meal tax revenues that go to schools by mandate, we have to pay an additional .80 cents to cover the deal with Mosaic. That figure for the life of the deal is a little over $10 million (the last 2 years of new revenue do not need to be included because this projection assumes the entire total will have been paid before that point, so the county would keep all of those revenues from 2036 and 37.) That $10 million has to come from somewhere. Just to make a point:

$12 million (estimated county take for new revenues) - $10 million (what we owe Mosaic for the meal revenue tax reimbursement) =$2 million. Over 20 years...but that also includes the 14 million to schools, right? Wait, does it?

Like I said, where will that $10 million come from? It could come from schools.

Why do I say that? The tax revenue generated by the meals taxes are supposed to be a "bonus" to schools, in addition to county funding. However, the BoS has traditionally not utilized these funds this way. Instead, they budget what the anticipated meals tax revenue will be and include that in their county plans for school funding. Meaning they use the anticipated revenue from the meals tax to MITIGATE their funding of schools, not as a bonus. This distinction is more than just semantic. (Shell game alert!)

Here is MY PREDICTION on what will happen if this deal is approved:(based on my own deductions, I could be wrong) the county will estimate what the meals tax will be for a given year. Just for an example, they predict that the new meals tax revenue for 2020 is $619K. That money has to go to schools but we still owe Mosaic $495K for that portion of the year's new revenues. But this deal doesn't give the county enough money to cover this difference, we only get to keep $339K at the end of the year. So, the BoS reduces the amount of funding in the budget for schools by 200K (or more really, whatever they want) and then they have freed up the money to give to Mosaic. They get to say that they fully funded the schools with the meal tax revenue but the schools don't actually see that money. Instead of the schools seeing the projected $14 million, they would see $4 million in this scenario.

This spreadsheet is selling it both ways because it is NOT accounting for the double burden on the single revenue stream of the meal tax revenue. They need to pick an approach: either the schools get the full $14 million and the county number of total new revenue goes down to just under $2 million. OR...the county admits that the funding to pay Mosaic will ultimately be shifted in a shell game manner away from schools and into Mosaic's pockets, with county revenue staying at $12 million but the schools revenue decreasing to only $4 million. I invite anyone who thinks this is wrong to contact me and explain how that is so.

As for those who say that Mosaic is saying there are no other options and this is a last ditch effort I say, don't believe it. They told me the $18 million was required for the deal to move forward, no if's, and's or but's. Now, they are willing to reduce the amount by $2 million. Rite-Aid's deal to merge with Walgreen's just fell through, who knows if the ATC Rite-Aid will even stay open? That would certainly change the game for the future of ATC. Anyone who says this project will sit abandoned for 20 or 30 years is simply preying on the long suffering Aquia residents fears.

Finally, it should be clear that what the county is voting for is Resolution R17-183, which authorizes the county administrator to negotiate a deal with Mosaic. It is unclear if by approving this resolution whether the board would have another vote to agree to terms or if the county administrator would have unilateral authority to sign an agreement. The information contained in the resolution at the link provided does contain the information for the $18.25 million dollar deal, not the new figures listed above.