Quote:
Originally Posted by DirtyMike
While I'm happy to see the city approve the arena, I have found some of the messages about the deal interesting, specifically the whole capital vs. operating expenditure thing. Capex can certainly get reallocated to opex, so the city absolutely could have avoided a $60M cut by taking money from their capital budget.
Capital expenditures also eventually create ongoing operating expenses, although it sounds like the city will have zero responsibility for the building's operating expenses.
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Yes and no, depending on the source. Most capital sources have strings attached that explicitly prohibit utilizing on operations. “Pay as you go” from priority taxes is the exception, but that is a pretty small portion of the capital budget.
Also, adding one time funds to solve a budget problem just kicks the same problem to the following year. It’s the base that matters on operating.