Wednesday, May 31, 2006

5/30/06 Council Notes

By Dian Woodhouse

The Main Issue: Notes From The Discussion

I attended the Council Meeting tonight because I thought that if any issue would show where the Council Members are coming from, this one would do it. And it did, but in a surprising way given the statements some candidates made during their campaigns. But be that as it may...

Here is the Main Issue, as it appeared on the Agenda for May 30th, 2006:

Mall Office Building Master Lease. Resolution 2006-16 consenting to the City Administration proposal that the City lease 31,500 square feet of a proposed office building to be built by Boyer Ogden Mall LC on the northwest corner of 24th Street and Washington Boulevard. (Adopt/Not adopt resolution -- roll call vote.)

Once again, David Harmer presented, and the opening had changed very little from what it was before. It was the Administration's stance that the leasing of this space by Ogden City and the construction of an extra two stories would be "beneficial to the city overall" because:

  • The six story building would be a Landmark.
  • Our agreement with Boyer has us sharing revenues with them, however:
  • We will recover all our costs before we begin to do so in this instance, and
  • We then share the revenue from this space 50-50 with Boyer.
Here Mr. Harmer illustrated the situation via use of projections. The first projection was entitled Optimistic Case, and said:

City cost: -0-

Meaning that the space would be leased immediately and the city would then be making $80 to $100 thousand a year.

The second, entitled, Pessimistic Case, had rows of figures from which Mr. Harmer concluded that we might run in the red for two years, but after that, probably not, and that the rate of return on this investment would be 14%. Mr. Harmer stated that the vacancy rate for Class A office space in Ogden is currently 5%, thereby providing an answer to one of the Council's previous questions.

Councilman Stephenson asked what the difference was between Class A office space and other kinds. The answer to this was that Mr. Harmer was not really qualified to speak to this, that perhaps Mr. Glasmann was better qualified, but that he assumed it had to do with location, parking, design, etc. Councilman Glasmann said that this was correct.

Councilman Stephens asked when the first payment would be due, and the answer was probably July of next year, when the building was finished.

Councilman Glasmann addressed the option of building a four story building now which would be constructed in such a way as to allow the addition of two more stories later on. Mr. Harmer's response was that this add-on would be a million dollars more. Councilman Glasmann stated that this was two years of $400,000. Mr. Harmer stated that others who have adopted this strategy have had building codes change on them in the interim, making the later addition even more costly.

Councilman Safsten asked about prospective tenants. Mr. Harmer stated that he could not "talk specifically about individual tenants," but perhaps the Mayor would care to address this. Mayor Godfrey stated that interest had been shown by a ski company, "governmental related employees," a title company and related businesses.

Councilman Safsten then asked why did Boyer not want a six story building? Answer here was that at the time this decision was being made, PRI announced its plans to construct office space. Boyer therefore did not want to duplicate these efforts. "We're willing to do that to reclaim a blighted area," Mr. Harmer said, not that this area was blighted, but that the difference between the city and Boyer is that the city will take on more risk for the sake of development. "I'm confident that the City would recover the costs," Mr. Harmer said.

Councilwoman Jeske stated that in the City Center, there are parts there that are never rented. She made it clear that we would be liable for areas that remained vacant. Mr. Harmer said again that this was "premiere office space," inferring that vacancy in such a space was unlikely. Councilwoman Jeske stated again that in the event the space was not filled, we would still be "on the hook" for it. Mr. Harmer said here that there would probably be no problem in "terminating the agreement and turning it over to Boyer," if it were only a matter of one or two thousand square feet.

Councilman Stephens stated that this would be a cash flow for the next 20 or 30 years, and Mr. Harmer agreed that it was compatible with the whole "mixed use" plan for the area. Stephens then said, "We're not competing with Boyer, we're working as a partner with them." Mr. Harmer said here that any time we are trying to work in areas like this, we will be somewhat in competition.

Councilman Glasmann stated that with the lease revenues from BDO, we have the money to do this. "I think it's time not to be timid," he said, "now that I've seen the big picture."

Councilwoman Jeske commented that, although it had been stated that we had the money to do this, Ogden City itself has "an awful lot of needs. Have we got the money to meet the needs that Ogden has?"

Mr. Harmer responded with the anecdote about the unemployed man who needs his house repaired. Does he hire a contractor, or does he go get a job to get money to hire a contractor? Explaining this further, he said that we have been losing revenue, and that currently, "there isn't any way we can get to where we need to get," without exploring options such as this one.

Councilwoman Jeske responded to this by asking rhetorically that weren't we spending money that could be spent on the infrastructure on this? Aren't we taking money away from the infrastructure? The answer was, not all of it. Mr. Harmer went on to say that if we are very successful in this endeavor, we will then have $100,000 more a year to spend on infrastructure, and that in his opinion, this was a case of "reasonable risk and reasonable return."

Councilwoman Wicks remarked that this was using taxpayer funds to make lease payments.

"We are making investments that a private investor won't do," Mr. Harmer said.

"Risk is subjective," Councilman Glasmann said. He went on to speak on favor of the project, stating that it had "location, location, location," and would attract such enterprises as The Gap and Old Navy. It has to be a building that is "majestic" and "eye-catching," and. "We absolutely have to make it a success."

Councilwoman Jeske remarked that the stock market in the last two weeks has not been the most favorable. Mr. Harmer responded that the stock-market fell because of "interest rate concerns," and that actually, performance indicators are good.

Councilman Stephens said that we need to be concerned with the needs of the people of Ogden. This project will be "providing creative revenue for our city."

"This prospective vote is killing me," Councilman Safsten said. "What we have now isn't going to cut it....What do you do?...This is not the catalyst that the rec center was...This is a revenue question...Are we building ourselves a revenue stream or not?

Councilwoman Jeske stated that we will have a revenue stream. Inference from the completed Junction, rec center, etc. "Are we getting greedy?" she asked.

Mr. Harmer stated here that The Junction project has gone on so long that the benefit of the tax increments from it are of not as long a duration as other RDA projects---in fact, they will cease in 2014.

Councilman Stephenson said that he remembered that when the old Ogden City Mall was built, it was seen as a "save all, end all." Whereas actually, creative investment is an ongoing process. Mr. Harmer said here that in investment, diversification was important.

Councilman Stephens said that we do need to create other revenues. We are now reaping the benefits of a previous council's decision to develop BDO--this is the same thing.

"We've invested a lot of money," Councilman Stephenson said. "We don't have a choice." He went on to say that adding two floors to this four story building shows leadership, and that the building would be a symbol, and moved to pass the resolution. There was a second.

Chairman Garcia stated that a previous council had also resolved to use the BDO lease money for infrastructure. If we do this, what will be left for infrastructure?

They ran the vote. There was an agonizing pause before Councilman Safsten's No.

And jumping to the end of the meeting, here are snippets of council comments about the vote:

Councilman Stephens: "We missed a great opportunity to create revenue for our city..."

Councilman Glasmann: "As a realtor, we did indeed miss an opportunity..."

Councilman Safsten: "I am not excited about the vote tonight. The negatives outweigh the positives to me...I just did not like the risk of it...It was an extremely close call for me..."

Chairman Garcia: "I echo what Rick said..."

Councilman Stephenson: "Tonight, we've sent a message that even we are not optimistic..." (about Ogden's future.)

Councilwoman Jeske: "We've sent a message that we care about our citizens and our infrastructure..." She mentioned the long time it took to repair Country Hills Drive because the city didn't have the money to do it, (Dian: I believe the money for those repairs was taken from the snow removal fund,) and ended by saying, "We can't operate that way."

Councilwoman Wicks: "We've sent a friendly message to businesses..." (that we will not compete with them.)

End of Main Issue. Stay tuned. And as always, if there are errors or misinterpretations, please correct them.


You can read Ace reporter Schwebke's Standard-Examiner headline story here.

And even your humble Blogmeister feels compelled to get into the act, by offering his own $.02.


sharon said...

Bravo, Dian!

You got it all down! Good job.

Curmudgeon said...

Thank you, Dian. Sounds like the Council is doing what Councils should. It refused to be stampeded when the Administration demanded an immediate vote a couple of weeks ago [and the fact that the administration was still lobbying for the project last night is proof positive that the "you have to vote right now!" line of a couple of weeks ago was pure blather]. It delayed the vote so members could inform themselves about the merits of the issue before them, it debated the question [evidently vigorously], and reached a conclusion after spirited discussion. And it might easily have gone the other way when the vote came. As I said, seems to me that is how a Council is supposed to act on controversial proposals. Good on 'em all.

Have to wonder if the Administration is ever going to figure out that it's frequent policy of "keep everyone in the dark until the last second, and then demand instant action" is working to its disadvantage. By now, I think, it's increased both public and Council suspicion about Administration proposals and practices, and is making it harder for Mayor Godfrey to get the Council's support rather than easier. Bet the Mayor's grade school report cards all said "Does not play well with others."

Did the Council make any other substnative decisions [yea or nay] last night, besides this one?

dian said...

Absolutely, Curmudgeon. In fact, there are several things I wish to comment on. Even thought of doing two separate pieces, because these other things are as important, if not more important, as The Main Issue, but I wanted to detail that.

First, and most irritatingly, did anyone know that last night was a public hearing for the budget? I didn't. No One from the public was there to speak about the budget.The proposed budget is available on the Ogden City website, and there were hand-outs in the hall concerning it and the "Capital Improvements Program." I try to keep up on things, but I had no idea that last night was also a budget hearing.

Because this evidently slipped by everyone, (I will not go so far as to say that people are not interested in how our tax dollars are spent and that was why they didn't come,) we now only have One More Chance to speak to the proposed budget. The date set for this is June 13th.

Furthermore, this was not the only public hearing for last night. Actually, there were two more. One issue was:

23rd Street Vacation. Proposed Resolution 2006-15 approving the vacation of a portion of 23rd Street between Kiesel and Grant Avenue; quit claiming the property within the vacated portion of said street to the abutting property owners as their interest may appear; reserving a right-of-way for all utilities that may now exist in said portion of such street; and directing the City Recorder to record this resolution in the office of the County Recorder. (Adopt/not adopt resolution---roll call vote.)

No one was there to speak for or against this move, and it passed unanimously.

The other was:

Crestwood Care Development Agreement. Proposed Ordinance 2006-23 amending Ordinance 2004-34 by authorizing certain revisions to the Development Agreement approved for a skilled nursing facility at 1367 Shadow Valley Drive. (Adopt/not adopt ordinance--roll call vote.)

The developer of this project, Brent Jones, was present, as was a representative from the planning commission. Basically, this had to do with a downsizing of the entire project, from two story buildings to one story, and cutting out one entrance to the complex from one street, I believe. We were told several times that "The neighbors are happy," and have no choice but to believe this because none were present to state that they were not, should that have been the case.

Also a unanimous pass here.

Would you believe there's more?

Three issues passed by Common Consent: 916 7th Street Rezone, 10th Street Vacation Amendment, and Employee One Time Bonus. Will write this last out:

1. Proposed Resolution 2006-28 adopting a 2% one-time bonus for all merit and non-merit special employees of the City as of July 1, 2006; and providing that the ordinance will be effective on July 1, 2006. (Set public hearing for June 13th, 2006.)

2. Proposed Ordinance 2006-29 adopting a 2% one-time bonus for all classified, merit and non-merit, special employees of the City as of July 1, 2006; and providing that the ordinance will be effective on July 1, 2006. (Set public hearing for June 13, 2006.)

As this last deals with The Budget, June 13th, again, is one's only chance to comment on this. Will write out the other amendments if anyone is interested.

And finally:

Quint Fire Truck Lease/Purchase Agreement

Justice Court Name Change

(from "Ogden Justice Court" to "Ogden City Justice Court,) and,

Justice Court Security Services
(which are being provided by the Weber County Sheriff and they want to keep it that way.)

All these were unanimously approved.

They also cancelled the Council Meetings for July 4th and July 18th.

Last, but actually first in the meeting, was a presentation of a banner to the Ogden City Council by Randy Watt, representing the Utah National Guard, in appreciation of the Council's support of the Guard, and also in appreciation of the fact that some of those in the Guard, including Mr. Watt, are also members of the Ogden City Police Department, and they appreciate the City's willingness to work with them in the matter of their employment.

Sort of a packed agenda, and Chairman Garcia ran that meeting extremely efficiently, always making sure that there was opportunity for both the council and the public to speak, and yet moving things along very well.

One more thing. Outside the door to the Council Chambers, where the city distributes literature and agendas, there was a stack of pro-gondola brochures, courtesy of Lift Ogden. One would therefore think that distribution of literature on that table by other organizations would also be permitted. Perhaps one will see if this is the case.

Curmudgeon said...


Again, thank you very much.

As for due notice of the Council Agenda [e.g. that this was one of only two public opportunities to comment before the Council on the budget]: I still think we [meaning Ogden] are missing a lot of opportunities for public disclosure that come, or should come, with operating a city-owned cable channel. Website notification and something in the legal notification pages of the newspaper are not enough.

The TV station, seems to me, ought to post regularly a weekly calendar of city and county government meetings of public interest [Council, School Board, Planning Commision, and others as necessary] with their attendant agendas. At a regular time. Like, maybe 5 minutes before the hour. [It could come just before or after an hourly "Community Events" calendar posting of non-governmental events.] If I knew that a full community calendar was available on the channel at a fixed time, say five minutes before the hour, I'd probably [no, almost certainly] check it out a few times a week.

Generally, city [and state] government operates out of sight of the general public [except when a controversial issue arises], and that's how most of the general public seems to like it. But still, City government ought to make it as easy as possible for people to stay informed about city government. Airing the Council meetings and School Board meetings [via tape delay], and posting calendars and agendas on the city owned cable channel seems an easy, inexpensive way to do it to me.

Thanks again for the full reporting, Dian.

Curmudgeon said...


One more thing. Sharon reported that the gondola promotion literature was placed on the table by Mr. C. Geiger. You make a good point: if he can use that table to distribute Lift Ogden material, then Smart Growth Ogden and/or other groups should be able to use the table to make their literature available as well.

This is something that I think needs to be tested at the very next meeting. Either the table is available to all, or it's available only for city-issued material. The courts have ruled on matters like this over and over: it's all or none. There is no middle ground.

In fact, the Godfrey administration lost a costly case on this very point when it claimed in federal court that the City could permit one religious group to erect [at its own expense] a statue in a downtown park while it could prevent other religious groups from doing so. The ruling said, in plain terms, the city could either ban all religious monuments from the park [that would be perfectly constitutional], or it could permit any religious group to erect one, but it could not permit some and ban others.

Same principle applies exactly, I would think, to the distribution of private leaflets, pamphlets, etc. outside of Council meetings.

We shall see. This will be tested. [To be fair, Sharon reports that the Mayor said he was unaware that the Geiger-placed pamphlets were there. It is possible there is a city policy in place, and Geiger simply placed the pamphlets there on his own without checking with the city first or seeking permission. As I said, we shall see.]

Zane said...

I moved back to Ogden recently after living in No. Carolina for the last 20 years. Yesterday afternoon I attended my first city council meeting since my return. I was also given this web site address which I am finding to be quite interesting. It seems that there are a number of people in Ogden with quite strong opinions about the administration. After yesterday, I can see why!

It was an interesting experience to see these apparently rational and educated people discussing the issue of leasing or not leasing space to be built. I was pretty surprised to hear the tall stately gentleman give a list of very simplistic and unrealistic reasons why the city should take such a risk in spite of the professional partners who did not think the risk reasonable. It seemed a little disturbing that this gentleman is apparently the business brains in the city government.

The whole issue reminded me of a text book case from my first year in business school. A case full of obvious reasons to not enter into an agreement.

It is a little disturbing to think that this was even proposed let alone almost passed.

I was also intrigued by Councilman Glasman and his posturing and pronouncements. He seemed intoxicated to me, or very dumb trying to act smart, or maybe all three.

I am enjoying your blog - so far.

dian said...

Having provided all that, I will now write what I really wanted to write, which is my opinion.

I too remembered the campaign statements Glasmann and Stephens had made, as Rudi has linked above. And I found two more:


"City government should serve the needs of the people and take care of the city’s business. It should not become a business entity itself, competing with private enterprise with those very tax dollars that those businesses have paid into the coffers."


"We need to use public money for public programs of the city. Private money needs to be used for the programs in the private sector.
The city council needs to legislate the laws and policy of the city. We need to get out of the private sector."

Those statements are from a WCF Questionaire, which I shall link below.

This all has to do with a difference in political philosophy concerning the proper role of government, which is, by the way, playing itself out all over the country, not just here. I am on the side that Glasmann and Stephens spoke to above. Evidently, they no longer are.

It seems that, once in office, they have been told, and now believe, that if Ogden City is going to have increased revenue, the Ogden City government has to pour public money into certain chosen private enterprises to make that happen.

I believe this to be untrue. I thought they also believed it to be untrue, and this was one of the reasons I voted for them.

This is not only a matter of political philosophy, but a matter of trust. We have seen this so often that we have perhaps accepted it as the status quo. But if we accept as the status quo that candidates run on a platform and then proceed to change their minds once in office, where on earth does that leave us? How are we to vote intelligently on the course we want our local, state and federal governments to take if we cannot believe that the core political beliefs expressed by the candidates will be carried out and used as a foundation upon which they will base their votes?

Which is why I am speaking against this and am drawing attention to it. This is unacceptable. It is unacceptable in the way that any broken human contract or agreement is unacceptable to the injured party, whether it be in matters of money and property, or in something as simple as missing a lunch one has previously committed to.

To put it bluntly, they told us they wouldn't do this. After all, what is taking over a lease responsibility in order to generate revenue if not a commercial, capitalistic enterprise which is widely practiced in the private sector and by businesses? An action such as this is what they said they would not do.

One can speculate as to how their reasoning has gone here. They both probably still stand by their comments above. They probably view this project as an exception to the stance in those comments, an exception brought about by a perceived emergency situation that Ogden desperately needs revenue and the belief that the only remedy for this is through the actions of the local government taking part in “creative investment.” Therefore, they will break their own rules here to respond to that emergency. Many things presented to the Ogden City Council are done so under a perceived state of emergency--even this issue. And you know why this might be? Because in a state of emergency, normal conformance to personal ideals is sometimes thrown out the window, and this might be how the administration was able to turn two gentlemen against their previous statements.

To which I say, How far are they going to go with this? So far that their initial stance becomes meaningless?

After all, stating that one will not do a certain thing unless there's money in it makes those platform statements qualified, at the very least.

And furthermore, what are the causes of Ogden's loss of revenue? The administration says that it's businesses moving out. Could it be that the city's interference in certain markets makes it no longer feasible for those businesses to operate here? If one were the owner of Class A office space rented out to make one's livlihood, one would probably not have been too happy with the city's proposal to cut into that business itself, using, I might add, one's own tax dollars to do so.

For heaven's sake--can't people see how unfair that is?

And thank you Dorrene Jeske, for standing firm and sticking to your guns and continuing to advocate exactly what you stated you would advocate back then.

It does mean something. It means a lot.

WCF Questionaire

ArmySarge said...

If one side of an issue is allowed to have information on this table, then all sides should be afforded the same opportunity. HOWEVER - my
feeling is that it is best NO SIDES should have their information there. That is NOT a appropriate place!!

ArmySarge said...

If one side of an issue is allowed to have information on this table, then all sides should be afforded the same opportunity. HOWEVER - my
feeling is that it is best NO SIDES should have their information there. That is NOT a appropriate place!!

Curmudgeon said...


Right, as usual.

The problem with permitting private group leafletting outside the council room is that there really is no way to limit it and it could, conceivably, become a problem if, say, ten different groups wanted to engage in it at the same time. For the same reason we do not permit electioneering within so many feet of polling places on election day, it would be best to limit distribution outside the Chamber to city-generated matter [like Council agendas, etc.]

Anonymous said...

Concerning the single sided leafletting at the council meeting: A similar and perhaps more insidious instance of this was the gondola propaganda printed in the newsletter which accompanied my water bill. I have the number for the person in charge of the content (I have been unable to actually contact her) 629-8988. Not paying my utility bill out of protest would probably not be in my own best interest, but I (and everyone else, I hope) can call and express our displeasure. My main point is that Mike Vause or some other articulate individual (as a last resort, my humble, grammatically challenged self) be given the opportunity to retort. The main thread of the retort is that all the figures and benefits presented as fact are skewed and biased projections based upon hearsay and propaganda. This fluf does not belong next to such mundane yet important city communications as "May is Adaopt a Dog Month", etc.
My concern is that the unconnected (not blogging, reading the paper, etc.) populace will not understand the intricacies of the project, and the controversy therein.

ozboy said...

Politics do indeed make strange bedfellows! Imagine the likes of Safsten lying down with Garcia, Jeske and Wicks!! Or stranger yet is those two, until recently, libratarian's Glasmann and Stephens shacking up with that little commie Stephenson!!!

I was pretty surprised at Glasmann and Stephens voitng the way they did. I do believe them to be honorable men who meant the promises they made to get elected. I am sure they were sincere in their belief's concerning their votes on this strange little scheme. However, their votes do not seem to be consistent with their campaign positions. It is hard to imagine, but I'm sure they had their reasons as I do not believe either one would actually go over to the dark side. Perhaps, like Greg Ostertag, they were captured by space aliens for the evening?

Thankfully it is academic as the currsed plot failed in the vote. Safsten the hero? Who'd a thought it??

My theory on Comrade Safsten is that he enjoys being a big shot, It matches his big baffoon style. He wants to stay in office, or god forbid advance to mayor.

He showed up at the Smart Growth meeting last month at Wasatch School and was very surprised, as was all Godfreyites, at the very large turn out. He got up in front of this crowd of 400+ upper east siders and layed on a half assed apologetic spiel on behalf of the Godfrey vision. The crowd was polite, quiet, unconvinced and stone faced. He looked into those face's of his constituents and saw that the same old bull shit shuck and jive, and promise the moon, just wasn't gettin any applause any more. He looked into the faces of those constituents and he saw his whole political life pass before his eyes, He saw his political future in the dung heap with yesterday's news.

That is why he voted the way he did. Election time for him is a short 18 months and he knows that a lot of voters know that his finger prints are all over a whole lot of failed deals and squirrley public policy and arrogant public posturing.

Look for the good comrade to do every thing he can to distance himself from the Little Lord in the months to come.

Dorrene Jeske said...

Dian, you make a very good point about the Council Meeting Agendas, and I have another suggestion of where those agendas should be posted besides the newspaper and Channel 17. I think that the City has a responsibility to notify and announce to the residents of Ogden the weekly agendas of the Council's meetings. What better place than the City's own Web Site?! I just checked it, and there is a calendar stating that the Council has a "Study Meeting" at 5:00 PM and the Council Meeting at 6:00 PM, but no mention of items to be discussed.

I am frequently asked, "What is on the agenda tonight?" I think this in a very important item and should be available to everyone, instead of the few that I talk to and those who know Council members because I am sure other members have the same question asked of them.

I will make a suggestion to the Council Thursday night that we add the agenda, and if some items require a brief explanation, that be included with the announcement of the Council Meeting, and should be on the web site no later than the Friday before the meeting by close of business.

People can go to the City's web site to get information about the gondola project, I think that they should also be able to obtain information about the Council's agendas.

dian said...

Dorrene, that would indeed be good to do. Also, isn't there an e-mail list that the Council's PR person sends Council News to? It would be very simple to e-mail agendas to anyone who wanted them.

Dorrene Jeske said...

Dian, that's right. When the Council first started that, we were asked for some names of people who are interested in what is happening in Ogden with their email addresses, so I gave the Staff yours along with a few others. If anyone wants to start receiving these emails, call the Council Office and tell Mavis that you would like to be put on the list that receives the Council's emails. Mavis' phone # is 629-8153, or email her at:

I will also suggest that Linda send the agendas to those on the email list. Thanks for the reminder, Dian.

By the way, you did a great job of reporting the Council meeting. Thanks! That is a big job!

Curmudgeon said...

Ms. Jeske:

Sending out the agendas on the Council's email list is an excellent idea. Particularly good in that it's a virtually no-cost idea, and it gets the information to people most likely to want to receive it [i.e. those who've asked to be put on the Council email list.] Go for it.

Certainly agendas [with enough descriptive detail per item so that ordinary citizens can have a fighting chance to know what in fact the agenda item is about] should be posted on the Council website too. But it should not replace a wider-ranging "Ogden City Calendar" on Channel 17. The problem is, to know what is coming up at the Council meetings, and the School Board meetings and the Planning Commission meetings, a person would have to constantly check three websites. Citizen notice ought to be available by one-stop-shopping, and an Ogden City Calendar posted at set times on Channel 17 would make that possible, seems to me.

You know, there are cynics out there who suspect some city officials may in fact be happier when the public does not have a great deal of information about governmental operations and the decision-making process and timetable. Why, I've even heard it suggested that the Mayor of Our Fair City may be one of them! [Surely that can't be so, can it?] Happy to see Council members think differently.

dian said...

You're welcome, Dorrene. I am one of those people who can better understand a situation from written copy than from a tape or even film. It's easier when the whole thing is in front of you at once--you can go back and forth if you have to. So I think it is worthwhile to do it.

Kristen Moulton had an article in the Trib yesterday about the issue of the extra stories and leasing. Here's her first line:

The City Council may be optimistic about downtown Ogden's future, but it refused Tuesday night to gamble with taxpayer money on future demand for office space.

I agree with Kristen. That was, basically, a gamble. Say yes to it and, worst case scenario, we lose $400,000 a year. Best case scenario, we make $100,000 a year.

Looking solely at this investment, if we do worst case scenario for one year, it would take four years to break even on it.

I realize that this does not take into account the ethos of "creative financing" and might seem a bit simplistic, but that is certainly one way to look at it. Another way to look at it is to consider what would happen if you took your $400,000 and put it into a totally safe investment at 6%, which you could certaily get right now---you could probably get more.

Your return on that no risk investment is $24,000 a year. Interest rates have been going up and it is said that they might hike them again. Roughly, what this means is that in four years, you would make a bit more than your $100,000 and end up with $500,000.

Which is better than the very worst case scenario, which would leave you, at the end of four years at a minus $1,600,000.

This is extremely cautious investing, and, in my opinion, the way investments with Other People's Money, like pension funds and at least a portion of tax dollars should be handled. I've mentioned before when we had the heavy storm here and the Mayor stated that we could not afford the spring clean-up from it because it was over $350,000.

Well, if we as tax payers have a need like that clean-up, our municipality should be able to fill that need and absorb that one time cost. Yet when Country Hills Drive slid away, money had to be taken from the snow removal fund to do it.

What that means is that at that time, we had No Contingency Fund to deal with unexpected necessities, and that to me is bad management.

And yet, the Council was asked to approve a lease deal that had the possibility of losing us $400,000 in one year.

The administration is always stating that we need change, and I agree with this. We need to stop the patterns of borrowing money and gambling with what we have, (because we sometimes lose, obviously,) and instead, have our million dollar management team figure out a way to get out from under that debt that is not a gamble, but a reasonably sure thing. With interest rates going up, this might be possible now. It might be a bit boring for them to approach things from this standpoint instead of the gambling one, but we are, after all, in this for the long term, and we might want to think about a few long term investments that are lower yield but much more sure than the real estate market.

I mean, look at that Junction site. How long has that been going on? How much money has been poured into that? How much have we had to borrow? Where would we be if, instead, we had invested that money wisely?

There are better financial minds out there than mine, I know. Does anyone else have any suggestions as to how to improve Ogden's current financial situation other than the false logic of the "If...then" rhetoric we have been subjected to lately? Investment of our monies that is a bit more sure than the people on I-15 stopping off to ride the gondola? A way to get on the other side of that line and make money with our money without having to gamble with it?

If so, our City Council needs to hear them, I think.

Here's a link to Kristen's article:

Ogden Turns Down Office Space Funding

dian said...

KSL has picked this story up now, again with reporters contrasting the statements of Stephenson and Jeske:

Stephenson said the vote sends a message to business prospects that the City Council isn't confident in efforts to revitalize downtown. "It sends a signal ... that even we're not optimistic about what's happening in Ogden," he said.

Jeske disagreed, saying the vote shows that the City Council is committed to spending taxpayer dollars wisely.

"It sends a message that we care about citizens and are concerned about the needs the community has," she said.

Ogden Council Rejects Mayor's Expansion Plan

Curmudgeon said...


Ah, we disagree.

Your alternative investment idea [putting city money in CDs to generate revenue] is not, I think, a realistic one. For one thing, rates are rising because inflation is rising. The buying power of the payout on CDs needs to be reduced by the inflation rate annually, so you will not be getting the full percentage return on the investment. You will be getting, at most, a point or two over inflation.

The argument for "investments" [and I agree with the SLT and you that "gamble" is at least as accurate a term in this instance] is that the two extra floors will generate more business in town, more payroll, more purchases by the businesses [hence more sales taxes], that there is a multiplier effect at play and the ultimate return to the city will be far more than the city's share of the rent. But as you note it is a gamble, a risk, and one the Council opted, probably wisely, not to take. My only point here is, the comparison you make between rent return vs. CD return on city funds is not, I think, in real-world terms a realistic one.

But there's something else. If history shows us anything about elected legislative bodies [national, state and local]in the US it is, I think, this: If there is money in the till, they will spend it. They will not invest it over time or save it. They absolutely will not. [We had a massive surplus in the federal budget when Clinton left office. Look what happened to it. We had a huge state surplus in the budget this year in Utah. Look what happened to it. Did significant amounts go into what used to be called a "rainy day" fund to tap when the business cycle swings again and revenues fall?] If we had 400K invested in long term CDs, I think they would be cashed in and spent in within a year, max. Perhaps for very good, and even essential purposes. But the money would be spent. Long term investment of city funds is not, I think, on the historical evidence, a reasonable alternative.

dian said...

It has occurred to me that I had forgotten a very important thing regarding this, which is that Dave Harmer, a few meetings ago, actually suggested something very similar to what I was proposing.

This was to put the BDO lease revenues in what he called a "Financial Clearinghouse." This would be an interest bearing account, and money for Junction construction costs could be taken out of it when needed, while the rest would at least continue to generate a bit of interest.

I thought this an excellent idea at the time and still do. It was presented at the same time the two extra story/lease agreement was presented, and I am hoping it was not part of a package deal and died along with that. It really is the best thing to do with those revenues when they first come in, and I'm sort of surprised they weren't doing it all along.

If that part of the BDO lease revenue idea was jettisoned along with the two story proposal, I hope the Council can bring it forward again and implement it, because really, why not take an opportunity to make some money on this?

My apologies to Mr. Harmer for neglecting this very important point. Evidently there's a bit of prudence at work there after all.

Dorrene Jeske said...

I brought up putting the Council agendas: on Channel 17, and was told that it is already being announced from Friday through Tuesday, but they will look at having the meeting agendas announced at SPECIFIC TIMES. They are supposedly on the City's web site. Go to, go down the sidebar to red bar that says Agendas and Actions, click on that bar and it will take you to a page where you find info about regular meetings, work sessions, Listen to Council, RDA and MBa meeting minutes. WHERE TO GO TO GET INFORMATION ON THE COUNCIL AGENDA, and they suggested the best place is the AGENDA HOTLINE: 629-8159. (I didn't find the agenda posted any where.) You will learn how to get a Discussion Item put on the agenda; the policies that govern City Council meetings. At the bottom of the page there's a link to "Minutes and Upcoming Agenda." I was told that the agenda for the Tuesday Council meeting would be available the Friday afternoon before the meeting.

There were suggestions to include the agenda in the emails Council that are sent out, but some people were concerned that the majority of the people wouldn't want them so that suggestion was shot down. If you would like to have the agenda included in the emails, you can call Mavis at 629-8153 and tell her you want the agenda in the email she sounds out.

I hope this helps you.

dian said...

Thank you for looking into that, Dorrene!

I have a suggestion.

If the agendas are really going to be posted the Friday before the Council Meetings, our beloved Blogmeister might be able to post that link on the sidebar. That way, at least all of us who check in here would be able to get right to it whenever we wanted to.


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