Andy Wang wrote of my post about the Select Board’s November 16 mailing: “Not
going to argue on the 'prominence' of the presentation, just pointing out that
the values seem to be properly labeled and consistent. "
But the PROMINENCE with which the various numbers are presented to the voters
is the ENTIRE point of my post. Why are the most important numbers buried, or
not included at all, and an extraneous number highlighted?
In fuller detail:
1. The information most critical to town citizens about the tax effects of each
of the three proposals they are being asked to vote upon, which have proposed
costs of $12.5M, $18.75M and $25M respectively, is presumably what percentage
increases in their taxes are estimated for each price point. That is certainly
the first thing I would want to know. These percentages are nowhere disclosed
in the mailing. Why were these numbers not the numbers most prominently set
forth? Why were they not included at all?
2. Yes, a useful way of illustrating these percentage increases would be to
translate them into dollar amounts for a Lincoln home of median value. But the
fourth page merely says “TAX IMPACT: Up to $773 increase,” “TAX IMPACT: Up to
$541 increase,” and “TAX IMPACT: Up to $387 increase” without saying that these
numbers are for a median home and that for half the town residents the dollar
amount would necessarily be larger than the “Up to” amount. Also it is not
disclosed there that the increase would be in effect for decades, not for a
single year. Why was not clearer language such as “ANNUAL TAX IMPACT FOR MEDIAN
HOME” used instead of “TAX IMPACT: Up to $773 increase”? Doesn’t that wording
imply that nobody would have an increase greater than $773?
3. Later on, you can find a reference that the tax impact number is per median
home if you read the tiny type on the fifth page. This illustrates my point
about prominence of disclosure.
4. Later on, the sixth page sets forth tables of numbers for hypothetical
amounts of borrowings at price points that bear no relation to the proposed
costs for the project, so that voters must calculate the necessary adjustments
to the real numbers for themselves, assuming that the entire cost of the
project is to be bonded and the debt service paid entirely by future taxes. How
does using hypothetical amounts rather than the actual proposed amounts aid the
readers’ understanding? And why is the hypothetical dollar amount, which is far
less than any of the proposed project costs, the one that gets highlighted by
itself in the left hand column? Voters don’t need to know the dollar amount for
a hypothetical $10M, they need to know the actual dollar amounts for the actual
price points they are voting on.
5. There is a reference to a "Stabilization balance" of $5.5M but no
explanation is provided as to what this term means or how it relates to the
cost of the project. If it is meant to imply that some portion of the project
cost may be paid out of existing town funds, it should also be pointed out that
those funds came from past taxes and that any other uses to which they would
otherwise have been put would need to be funded from future taxes.
6. One would expect that the most important information for voters would be
highlighted by presenting it (for example) in the largest type size, in
boldface, on the stand-alone page with lots of white space that is captioned
“ESTIMATED TAX IMPACT.” Instead, the “ESTIMATED TAX IMPACT” page does not
mention either the estimated percentage increases in everybody’s tax bill or
the estimated dollar amounts for a median home; instead, the dollar amount most
prominently displayed on the “ESTIMATED TAX IMPACT” page is a number for the
tax impact of servicing a hypothetical amount of debt ($10M) that is lower than
any of the costs proposed for the project ($12.5M. $18.75M and $25M). Please
explain why that number is highlighted while some (but not all) of the numbers
corresponding to the actual proposed costs are set forth elsewhere in smaller
non-bold type on densely packed pages and without any of the necessary
explanation provided on the later pages.
Those are the kinds of questions that I know the Securities and Exchange
Commission staff would raise if a company presented numbers in a draft of a
document in the manner presented in the November 16 mailing. The SEC folks
definitely recognize that the prominence with which data catches the reader’s
eye, and the orderliness with which the information is presented, is every bit
as important as whether everything gets printed in small print somewhere in the
document. (And of course the estimated percentage increases in everybody’s tax
bill are not presented at all).
--
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