Back on May 3 of this year, we started off a discussion with an article reporting about the departure from the Godfrey administration of Boss Godfrey's financial guru, Scott Brown.
As discussions are wont to do on this blog, the conversation meandered a wee little bit; and in no time at all our readers were talking about the mountain of public debt which Boss Godfrey has accumulated during his seven-year mayoral tenure. Our reader interest in this topic had been sparked by a Standard-Examiner article published one day earlier, wherein Boss Godfrey had gleefully announced a 9-year plan to pay down Emerald City's "$20 million debt".
Midway through the article comments, one of our helpful and attentive readers sent us a pdf file, entitled Ogden City Comprehensive Annual Financial Report Year Ended June 30, 2006, reporting on Emerald City's audited financial condition as of mid-2006.
We promptly uploaded it to our storage site and linked it in the comments thread, and further reader discussion ensued. Most of us were quite shocked, when we learned -- right there on page 124 of the budget document -- that the lumpentaxpayers were on the hook for at least $93 million in municipal debt, rather than the $20 million which ever-truthful Dear Leader had mentioned only one day earlier. These higher 2006 figures of course did not reflect the cost of the Junction project. We haven't received the final bill for that boondoggle yet.
Shortly thereafter, David Smith, one of our more articulate and conscientious WCF readers, "went public" with this disturbing and dissonant information, in this letter, which appeared in the May 13 Std-Ex edition.
And a little over a month later, the Std-Ex published this stern Boss Godfrey administration retort, penned by none other than Emerald City Financial Manager (and CPA) John Arrington, saying to the good people of our fair city, in essence, that "David Smith doesn't know what he's talking about." "RDA debt really isn't really city debt," Mr. Arrington said (presumably with a completely straight face.)
For those readers who are wondering why we're doing a re-hash of this series of events, we just wanted to refresh your recollections and bring everybody up to speed.
And in this connection we now link the latest letter in this revealing series of correspondence, which appeared this morning in the Std-Ex letters section. Our own gentle reader Dorothy Littrell throws down the gauntlet to her CPA colleague in today's letter; and we provide a short "teaser" excerpt below:
I call his attention to page 50 of the last Ogden City Independent Auditors’ Report as of June 30, 2006 which states:We at Weber County Forum await Mr. Arrington's anticipated public response with abated breath. We love to watch professionals "duking it out," whilst dressed in expensive worsted-woolen suits.
"The accompanying financial statements include all activities of the City and Ogden Redevelopment Agency (RDA).
The RDA was included because the separate governing bodies of both entities are comprised of the same individuals and the City is financially accountable for the RDA."
I challenge him to restate his comments in another Letter with full disclosure of all current Ogden City debt whether General Obligation debt, RDA debt, Lease Revenue Bonds, Tax Increment Revenue Bonds, Special Assessment Bonds, Section 108 debt, Enterprise Fund Revenue Bonds, Defeased Bonds or Lines-of-Credit which totalled $91 million plus as of last June 30th.
I suggest that Ogden City officials read page 50 of the Audit Report signed by Schmitt, Griffiths, Smith & Co. on November 27, 2006 so they will quit insisting that RDA debt is not Ogden taxpayers’ debt."
Editor's special sub-topic note: There's been some discussion in previous threads about the Std-Ex editors' propensity to unilaterally edit readers' submitted letters. We talked to Ms. Littrell earlier this morning; and she's definitely "steamed" that the Std-Ex chopped the "meat" out of her originally-submitted letter. At the request of Ms. Littrell, we publish the full text of Ms. Littrell's letter, in its originally-submitted form.
We'll let our gentle readers be the judges. Did the Std-Ex editors substantially alter the meaning of Ms. Littrell's letter?
What about it, gentle readers?
42 comments:
What impeccable timing Rudi. In my mailbox yesterday I was happy to find my latest GRAMA request information, the City's website does not go back to when pinnoccio first took office. The most interesting fact included was the total RDA debt this Mayor inheritted. $1,212,096.64, thats all. This guy is a frugal as George Bush.
It comes as no surprise, Bill, that Boss Godfrey would not want this disturbing information to appear on the city website.
Perhaps you an I can hook up over the weekend, so I can upload this latest GRAMA information to our storage site, for all the world to see.
I am steamed with the Standard Examiner because they called to ask me the subject of my latest letter and to verify my address.
My response was that it was about Ogden Financial Officer John Arrington and his statements about Ogden City debt. I also gave them my Ogden City address.
At no time did they suggest that my letter would be altered in any way.
The Standard's removal of John Arrington's name from my published letter is inexcusable and reflects their propensity to print news and articles that present the Ogden City administration in the most favorable light.
John Arrington wrote his Letter to the Editor signed in his official capacity as an Ogden City spokes person.
I have the right to reply to those remarks by using his name because he used his official position to give the impression of credibility for his remarks.
I know for a fact that a commentary published in the SE, sent with accompanying URLs linking to another newspaper's articles, documenting names and facts, was edited to remove the name of a convicted felon. I strongly suspect that person would never have sued the SE since they had pled guilty and were in the slammer. I guess they have a silly policy to follow.
Since the Salt Lake Trib is making a pitch for Ogden readers, why not try sending the letter to them, to see if they'll print it in the first place and then whether they're as scissor happy as the Don Porter gang?
This Latrell letter is reminicent of the letter published by the Standard last Saturday by Tom Owens.
Is it a coincidence that the Standard tends to publish letters rebutting other letters written by Godfryeites, on Saturdays, the least read paper of the week. At the same time it appears that they publish pro Godfrey letters on Sunday's and other higher read days.
The Saturday letter written by Owens was a rebuttal to a Sunday letter written by Bob Geiger wherein Mr. Geiger openly attacks Mr. Owens along with Mz. Lattrell, Mz. Beech, and Mr. Shroeder. Geiger calls them by name and accuses them of being "obstructionists" to the mayor's visions and opposed to any progress in Ogden. As an example he used Mr. Owens' $30,000 dollar higher offer for the wall property that the mayor sold to his bestest buddy Chris Peterson!
Bobby goes as far as accusing them of all being SGO conspirators as well, even tho Owens isn't even involved with SGO, and I don't think Littrell and Beach are either!
The Geiger letter seemed to be a direct violation of the Standard's own letter to the editor rule # 5.
Mr. Owens wrote his letter as a response to this untrue and vicious attack by Geiger Junior. In the letter Owens mildly referred to Bob Geiger by name, and he also suggested that the paper had perhaps broken its own rule.
The Standard did publish the Owens letter with the main rebuttal about Godfrey's character deficiencies and criminality intact. They also printed his opinion of Littrell, Beach, and Shroeder being patriots and being proud to be mentioned in the same paragraph as them. Mr. Owens is satisfied that the Standard did not edit the main message of his letter.
However, in the published version the Standard dropped all reference to Mr. Geiger by name, and instead refered to him as the "author" of the previous letter. They also dropped Mr. Owens' suggestion that they broke their own rule by printing Bobby Juniors mean little personal attack!
So yes, I would say that is one more piece of evidence of how the Standard's editorial board protects the Mayor and his cronies. That is why the recent Schwebke re-awakening seems out of place and suspicious.
I believe that just as the Governor will not hold Godfrey accountable for honoring contracts he enters into on behalf of the city, and just like the State Attorney General will not hold Godfrey and his minions accountable to the laws of the land that they routinely violate, the Standard will not seek out and reveal the whole truth about the Godfreyite movement and their corrupt practices. The Standard seems to me to be subscribing to that old concept that the ends do indeed justify the means, regardless of how illegal and sleazy the means are. And as long at they can even remotely believe that the Godfrey fairy tales end will somehow magicaly work in the end, they are willing to protect his perfidious actions in office.
Anticipating comments or at least feelings that will be among the Lift Ogden folks, that Dorothy Littrell and I are doing tag team Godfrey bashing, I want to offer the following.
I have never met Dorothy, nor spoken to her, nor communicated with her in any way.
And I feel Rudi’s review of the history is very useful, because it shows what we have here is not bashing but a very natural sequence of events where a politician, in an effort to cover his own irresponsibility, tried to pass himself off as standing for the opposite of what he has actually done in office. This prompted a concerned letter from a citizen, another attempt at deception from the mayor’s office, then another concerned letter.
There’s nothing coordinated or sinister going on at all, other than the attempt by the mayor to paint himself a different color than the one he is.
People say things are looking better in Ogden, and heck, I think they are looking better too. But the voters need to know it has been paid for by an EIGHTY FOLD INCREASE IN CITY DEBT. If the economy turns down, as it often does, there will be the devil to pay. And as Dorothy has noted, we will be the ones doing the paying.
Here’s what intrigues me. Why did Godfrey raise the issue of city debt in the first place? It’s like a politician saying, “I don’t have a mistress, and I don’t beat my wife,” when at the time, nobody was saying anything like that, but the politician knew that he did, and was.
I don’t understand why Godfrey raised the debt issue, and if somebody can offer an explanation, I would like to read it.
Here's an interesting comparison:
The Std-Ex editors had absolutely no hesitation to name names in this scurrilous Godfreyite hit piece:
Bob Geiger Letter
Yet when one of the four defamed citizens wrote back to set the record straight, the Std-Ex reverted to its "no names" policy:
Tom Owens Retort
The SE's editorial page editor has told readers that the paper's general policy is to remove names in most letters in order to keep the public discussion "focused on issues rather than personalities." If so, it's a policy that has not been consistently followed of late. If ever. I believe Ms. Littrell was mentioned in Mr. Geiger's recent letter, as were several others. Since Ms. Littrell was replying to a previous letter in the SE, eliminating the name makes little sense. [I'm being too gentle. It makes no sense.] Especially since apparently Mr. Arrington wrote to the SE in his capacity as Ogden's Finance Manager. [Though I can certainly understand why Peterson/Godfrey administration officials would not wish to be too frequently identified in the public prints with their statements and actions.]
To be fair, we ought to note that the name of the person who wrote the letter to which Mr. Arrington was replying was not included in SE letter. [ Getting confused with all these references to "the person who wrote the letter" who was replied to by a letter from which the SE removed a name, which in turn was replied to by yet another letter not permitted to name the author of the second letter, etc.... I hope so, because I am. Another by-product of the SE's indefensible "no names" rule is, inevitably, confusion.]
The most honest practice is also the simplest one: the SE should print letters verbatim, or print them revised after notifying the writer and getting consent, or not print them at all. Following that simple practice would eliminate all questions about whether the SE's "letters to the editor" in fact say what the letter-writers said.
If the SE in this case insisted on removing Mr. Arrington's name from Ms. Littrell's letter, it should have called her, told her the reason it was removing his name [I'd love to have been a fly on the wall to hear that explanation, not to mention Ms. Littrell's reply], and then have given her the choice of having her letter appearing as revised, or of withdrawing it from publication. Her choice. It was her letter.
As I just reread Captain Bobby's (head of CP's herd of trained killers,squirrel Patrol)I noticed that he's becoming as dishonest as pinnoccio. His inference to the $900,000.00 being used to ready the CAN building for Amersports arrival. Funny, the City received that money in 2003 or 2004, Amerisports hadn't even purchased the Solomon Brand at that time, and the grant was specifically requested to build a HIGH Tech (computer, information Technology) center. Did I mention that a peccary is a little pig, wwith a white collar.
As an observer from another City I find it very interesting that the Standard-Examiner is not interested in printing a response to statements made publicly in print by them on behalf of the Ogden City Director of Finance, CPA John Arrington.
It may be that the local paper has been largely responsible in creating the local practice of ignoring what elected officials in Ogden actually do vs. what the Ogden officials say they are doing?
Most interesting theory.
Is somebody making book on whether Arrington will respond on this blog or in the Letters to the Editor?
My money says he won't be allowed to by City Hall in his official capacity as Finance Officer.
Ozboy...Saturday is the second most subscribed to day of the paper.
I'm not defending the S-E's wrong-headed "letters to the editor" policy. I agree with Curmudgeon that it's ill-advised.
However, I think I understand the logic behind it.
Some newspapers will not publish rebuttals to Letters to the Editor at all. This is to avoid name-calling and interminable "he said/she said" exchanges.
I think the idea that the S-E's editors had is the same. In the case of the letter that I wrote, the letter writers were misinformed, and I was merely trying to perform an educational function. Still, the names of the letter writers were removed, which made the first paragraph almost unreadable.
I don't understand why the S-E didn't implement this policy when publishing Mr. Geiger's letter. I think we are owed an explanation.
I'm about to write a letter to Don Porter and Dave Greiling, who seems to perform the "public editor" or ombudsman function for the paper. I believe Mr. Greiling's column which explains S-E policy and apologizes for S-E errors runs every Saturday.
Why isn't anyone in power interested not just in cleaning up Ogden City government but in letting us know what is going on?
By in power, I mean the Standard -Examiner with the power of the press -
and the County Attorney DeCaria who never seems to do much except go to lunch with the Mayor from what I hear.
We can forget about Utah Attorney General Shurtliff coming to our aid. In fact - there is no one presently in office in Utah who cares about helping John Q Citizen or his Missus.
Everyone from the Governor on down is interested in giving away more incentives to bring more businesses to come to town when we can't drive down the roads we have now because of congestion.
hmmmm
What is the source of this info? Does the paper do subscriptions for individual days of the week (other than Sunday?)
If Saturday is the second biggest day of the week for the Standard, or any other paper, why does it have the least number of ads?
It has been my understanding that Monday and Saturday are the least read days for any newpaper, with Sunday and Friday being the most read. This would tend to be proven out by the volume of advertising on those days. Please enlighten us if this is not true.
Here is another issue.
When Godfrey bureaucrat Arrington writes a letter, the SE signs it:
“John Arrington, CPA”
… thus giving him the credibility of his professional license.
But when Dorothy Littrell writes a letter, signing it as
“Dorothy E. Littrell, CPA”
The newspaper drops the “CPA” when it prints her letter, just signing it:
“Dorothy E. Littrell”
… thus stripping her of the credibility of her professional license.
Assuming the paper is not a bunch of sexists who don’t believe women should have professional titles, we can only assume this represents total bias on their part.
BTW great letters from Peter Metcalf and Tom Owens.
I do appreciate the SE printing such things.
But the "midnight editing" of letters, including removal of key information, needs to stop.
You know, my doctors are going to be calling me on Monday for doing all these posts.
I want to assure them I am taking my medication.
One other point though, regarding the paper. I remember in the movie, “The President’s Analyst,” with James Coburn, the sinister organization was a group called:
“TPC”
. . . which stood for “The Phone Company.”
Their motto was,
“We don’t care. We don’t have to. We’re the phone company.”
This is similar to the local paper. If it seems like they don’t care, remember, they don’t have to. They’re a monopoly. Or at least, they have been.
Shape up you newspapers boys. We appreciate you. But you could be a little more humble.
I wrote a commentary about two years ago. Don Porter and I exchanged several emails...he wanting all references to Ed Allen removed.
Ed had defamed me in print and I was responding. Porter wanted all reference to Ed and what he had said about me removed from my rebuttal.
Citing the "this is a personal issue between you and Allen', garbage, just as you all are asserting also.
I've sent a letter again to the SE. It was over 250 words. I asked that it run as a 'commentary', as we see Bobby Geiger published so often. Porter responded that I could have the whole thing put on the NET or edit it down to 250 words.
I also had said that rather than 'bloddy his hands buthcering my letter'...just send it back and I would edit it.
I did the editing...and I resent it. It's 247 words, so we'll see if and when it is published and in what form.
I did say to Porter, over my commentary earlier, 'that his hands must be bloody from butchering ' my piece. I knew he'd understood my reference this time.
So, we'll see...and we'll see if the names I used are in the letter.
Does one get the impression we are living in a gulag? Wonder if Curt and Bobby sell fur hats?
Mono:
Greiling's column runs intermittently. Sometimes managing editor Andy Howell does the column in that space... explaining headline wording [or apologizing for it], explaining why something was covered and something else wasn't, dealing with reader complaints about picture choices etc. I rather like it that the SE has the working editorial staff doing these columns rather than a designated "public editor" like the SL Trib has. Her column I find... well, just a tad on the patronizing side, which Howell's and Greiling's columns are not. I may not agree with their take on a particular matter, but they speak plainly, stand by their guns, and they don't talk down to their readers. I like that a lot.
Oz:
So far as I know, the SE does not do subscriptions by the day. But they do keep track of rack and news stand single copy sales by day. It's their way of measuring what readers find most interesting. [If you put a picture of a prize winning rutabega on page one above the fold and single copy sales plummet, and the next day you put a picture of the a gondola on page one, above the fold [visible in newsbox racks] and single copy sales rocket, you have a pretty good idea that you want to keep vegetables off the front page and pix of the gondola on it. At least --- broadly speaking --- that's how they explained it to me when I asked.] Saturday single copy sales are highest for the SE, they said, because people want the free weekly TV section in the Saturday paper and folks who never buy the paper on any other day will buy it on Saturday for that reason+.
Sharon:
Ticked off as you were about your more than 250 word letter and how it was treated, and wrong as I think the 250 word limit is [they cut it from I think 300 or 350 last year, which was a bad idea], I'll give 'em this: they did not just edit your submission down without so much as a by-your-leave and print it over your name. They said "no as it is in the print edition" and gave you a choice: pull it, settle for web-only publication, or take it back and edit it down yourself. That was the right thing to do, the right way to handle your submission given the fact that they impose a 250 word limit on letters and were not going to do it as a commentary.
We could argue over whether they ought to have done it as a print op-ed piece, but once they'd decided not to, from that point on, I think they handled it properly.
I didn't say I was 'ticked off' over the 250 word limit. I didn't like having to take everything out about the PERSON to whom I was replying....and cutting down the size of a commentary to hardly anything. 2 yrs ago.
This time, I think Porter was fair in offering to run as is ( I suppose that was intent) on the Net or I could edit it, which I did, for print.
Ok. Ok. Now we have the full picture here. I think that it is time that we stand up and let the newspaper know that they are the one that create the news and not report it. Is this the way that a newspaper should run there articals? I would think not. There are times that I wonder where such articals come from, when in fact they are the ones that are stiring the pot just to sell the dog gone thing. That is the bottom line in this issue. It is the money and they will take everyone and everything to get that bottom line.
Here is a bill that would have put a tax on the newspaper back in 2003. It would have been nice to have the paper pay their fair share of taxes.
AMENDMENTS TO SALES AND USE TAX
Look at line 392 and read from there. this bill was all about fairness and if some businesses were not paying like others they should be!!!
To add to curms comments, subscriptions for the SE are sold on a Sunday only, Weekend (Friday, Saturday and Sunday) and full Week basis. All subscribers also receive the paper on most holidays and a few other days around certain holidays.
As for the debt issue which was the basis for the original column, obviously Godfrey was talking about GO (General Obligation) debt. This debt is different than most of the other debt that that the City has. GO debt has a provision that says if the city comes up short on being able to make the payments the city MUST raise property taxes to make the payments. This is why GO debt requires approval of the citizens because they are agreeing that their property taxes can be raised to make the payments.
The other types of debt, lease revenue debt or tax increment debt, do not have this provision. These loans (bond sales) are made based on an expectation of a specific future stream of income (lease payments or taxes on increased value of the property in an RDA).
While it is interesting to see people battle over what they consider debt, one question is what debt are ogden citizens responsible for based on property taxes charged on residences. Also I wonder if when Ms. Littrell points to the city audit report which says the city is 'financially accountable' for the RDA, she thinks that means 'financially responsible'.
When I read that the city is 'financially accountable for the RDA' I think that means that the city is responsible for making sure that the RDA accounts for its finances properly. That income are expenses are properly recorded and fairly stated. It seems that Ms. Littrell is implying that the City is responsible for paying the debts of the RDA which is not true.
Another issue seems to be whether companies are paid to come to town. This one is again a bit of semantics. If a developer is paid money by the RDA for city infrastructure he puts in in order to build his development, is every tenent in his development 'paid by the city' to move into the development? (I know the issues in Ogden are probably a little less 2 step than this). This is the point, stating things one way make it seem that way while stating them another way make them seem that way. It is disappointing that people on both sides use definitions and semantics to mislead people who are not as sophisticated.
If you, arcritic, will read (Godfrey bureaucrat) Patterson's letter, you will see he admitted the city has pledged city property to repay RDA debt.
That's about as "on the hook" as it gets. How's that for semantics? Is it unsophisticated enough for your taste?
As far as RDA, yes, they pay people to move here. Most businesses pay their full share of tax. But politicians such as yourself need to be able to point to something you've "done" to get reelected.
So you give some companies "kickbacks" to come to town, and claim it costs taxpayers "nothing." Never mind those companies use the same services as everybody else; they just don't pay for them.
It is disappointing, your use of semantics. So, how do you like mine?
BTW. I love to hear from you, and everyone else. But do try to be better informed when you go after somebody like Dorothy, who is way, way ahead of you on pretty much everything. Or do you usually lecture experts in their field, as a non-CPA amateur yourself? Better yet, lister to her. You could learn a lot.
"...he admitted the city has pledged city property to repay RDA debt."
"That's about as "on the hook" as it gets."
Bingo, Danny!
Oh, how we wish for the modern day diogenes, who would wander the earth with his lamp, seeking one single honest elected politician, uncontaminated by the delusions of the League of Cities and Towns, with even a college freshman's rudimentary knowledge of basic economics and finance.
Danny:
I think he said that the city is on the hook for only two RDA bonds [both having to do with the Junction project because they could not get the financing without having the city guarantee the bonds, like General Obligation bonds]. But he did not say the city is responsible in that way for ALL RDA bonding, just the two.
As for incentives to draw businesses: most states, counties, cities and towns do this. These are not "kickbacks" and calling them such distorts the meaning of the term beyond saving. Kickbacks are illegal and usually work this way: a city councilman/mayor/governor/senator etc arranges for a crony to get a big contract to do public work... say road building by way of example. The contractor then "kicks back" a certain percentage of what he's being paid to the politician who got him the contract. Think Jack Abrahmov. It's a form of bribery in which the company bribes the politician/government official to get the business. You may consider incentives [grants or tax abatements] by state legislatures and city councils to get companies to come in a form of bribery, but the law does not.
There are studies that show that incentive grants to lure companies to a particular state [a huge state subsidy was arranged as part of the package to draw Amer Sports to Utah and Ogden] --- either as outright grants of tax exemptions for a number of years --- do not in the end pay off for the governments granting them. For several reasons. Sometimes for example a company lured to a state by a huge tax exemption for, say, a decade, then leaves at the end of that decade because another state has "bid" more.
But incentive grants, duly approved by state legislatures, are not illegal and not kickbacks. We might both agree they are unwise public policy, but I think we need to avoid confusing poor public policy with criminal conduct. And kickbacks are illegal. Legal incentives to draw business are not.
I just now got around to reading the posted Comprehensive Annual Financial Report.
I can't help but notice that the airport is losing money much faster than the golf course.
A Modest Proposal: Let's sell the airport!
(To the humor-impaired: the preceding is sarcasm. The Jonathan Swift reference is a sure tip-off.)
"These are not "kickbacks" and calling them such distorts the meaning of the term beyond saving."
Kickbacks = Incentives = Legalized Bribes.
The fact that some of them are technically legal doesn't make them right.
Arcritic:
OK, maybe you can clear something up for me then. [I do not understand the distinctions between various forms of city indebtedness and the obligations involved in each]. So let me put the question this way: suppose an RDA project fails. [Not the Junction RDA bonds, which are special, but a regular garden variety RDA bond for some other project that fails.] And so the projected new property tax and business tax revenues do not develop and so the RDA bonds cannot be paid. Is the city responsible then for paying off the RDA bonds that cannot be serviced with expected tax increases because the project failed? If so, I'd say the city is "on the hook" for the bonds. If not, not. [And if not, then I presume those who bought the bonds are SOL and lose their investment? Is that right?]
I suspect we are going to hear a lot about city debt in the coming campaign, and listen to a lot of "are to!" "are not!" rhetoric. I'd like to have a better understanding, particularly of RDA bonds and what happens if the projects they fund fail and the expected tax revenues which were pledged to service and retire the bonds, do not develop. Does the city have any obligation then to make the bondholders whole or not?
Hope you can unravel it for me. I'll real leery of engaging in coffee shoppe discussions on this, much less here, because I don't understand the matter very clearly. And I absolutely agree that playing word games and arguing on the basis of dueling definitions will not be very useful at all.
On golf course fairway view homes, and perpetually broken windows....
An article from the NYT not perhaps entirely unrelated the the Peterson/Godfrey administration's plans for Mt. Ogden Park Golf Course and the adjacent public park lands.... link here.
Curm,
While researching to answer your question, I found this interesting tidbit. This is the Iowa League of Cities and Towns website. While it only applies to Iowa, it was interesting, I don't know what the law is in Utah or if the SC has dealt with it.
15. Does debt payable from incremental taxes count against a city's or county's constitutional debt limit?
Yes, it does. While Section 403.9 of the Code contains language that states that such debt does not count against a constitutional debt limit, the Iowa Supreme Court has overturned that language and has ruled that tax increment debt must be counted against a city's or county's constitutional debt limitation.
But to answer your question, it is my understanding that bondholders of RDA TIF (tax increament funded) bonds do not have recourse to the funds of the city. And as for the 2 in Ogden where city property was pledged, from what I have read and I am not an expert here, I was under the impression that at least one was revenue from the BDO lease. I would understand this to mean that if the tax increment that was expected to pay for the bonds is not enough then that money, which the city would otherwise been able to spend, would go to the bonds.
But remember, this has been portrayed by the administrating as being nessesary to get a lower interest rate. This lower interest rate was obsentibly needed to make the project pencil out. I don't know what the true risk to the BDO lease money is.
So by obligating BDO lease revenue to the RDA bonds, if the RDA revenues were not enough to pay for the bonds then the BDO lease money would go to the bond payments as well but I don't believe that the city would be required to fund the bond payments to any greater extent.
But, of course, if BDO lease revenue did have to be diverted to the RDA then the city would be short that expected income and any projects expecting funding from that money would either go unfunded or would have to be funded via other sources which might include an increase in the city property tax rate.
But again it is my understanding that a city cannot be require to increase its tax rate to pay for RDA bonds. A city can be required to increase its tax rate to pay for GO bonds.
And to respond to Danny, I am not an expert and I hope that I am not implying that I am. But I can read and I feel that I have a reasonable ability at reading comprehension. I also listen to (and am often amused by) people argue about things when one person says one thing with a specific meaning and the other person takes that and twists it to sound like the first person was at best being coy and at worst outright lying.
If you read much of the WCF you see quite quickly that many posters here are looking for a way to say that the Ogden City Mayor and Administration are lying anytime their lips (or fingers on a keyboard) move. Some here are willing to at least leave the door open that some people can make a statement without it begin a lie.
Yes, I am a politician and I am often frustrated when people come in and complain about this or that and either are working with less than all the information or simply twist the information that they do have to feed citizen hatred of public officials and servants. At the same time, I am even more offended at city elected officials and staff that simply dismiss those people. I have found that if you try to understand what those people are complaining about, very often you can enlighten them to the point that they will, at least somewhat, soften their negative view of government.
By the way, does Ms. Littrell live in Ogden or in North Ogden? And I don't mean where does she own property, I mean when she goes home to sleep, where is that? I don't ask this to argue that she has no vested interest in Ogden if she does not actually live there, because that is fine for her to want to keep the city on its toes. But the SE seems to not believe here when she says she lives in Ogden. I wonder why that is.
Danny
As it pertains to "the phone company" I would like to add that this was also part of a Lilly Tomilson routine back on the old Laugh In TeeVee show.
She played an old maid telephone operator in some skits. Very funny stuff. One line she used routinely to customers that she had just caused great frustration to was: "We don't have to care, we are the phone company!" Of course that was when Bell had an exclusive franchise across the entire country, and they truly didn't have to care, although they usually did.
And Curmudgeon, if I may take a crack at the RDA debt question.
The TIF bonding in the middle of most RDA deals is based on issuing a bond to clean up the "blight" that is a necessary element to qualify for an RDA project to begin with. That bond, usually for only a small part of the over all finance package, is paid back by the incrimental increase in the property tax created by the increased valuation of said property because of the improvements made with the bond proceeds (and other investments).
If the company, or individual, that ends up owning the property then goes broke, whoever ends up reposessing the property will still be paying property taxes based on the new evaluation. Therefore the bonds keep getting paid down - usually. If the bond payments are stopped, then the bond owners themselves presumably have a lien on the property and may get paid back out of a foreclosure sale. Of course, there usually are other people that are owed money also and usually have liens on the same property. RDA's across the country have been known to suffer enormous losses, but they are relatively rare and not usually connected directly to the TIF part of the RDA's bag of tricks. They usually lose big money when the RDA is run dangerously and recklessly - like Ogden's has been.
It will be interesting to see what will happen with the numerous over levereged Ogden RDA projects if the house of Cards that Godfrey has built starts to crumble. Every RDA project in town is pledged to the Junction and Boyer. This is in addition to BDO's profits also being on the line with the mall. If the mall fails, every RDA project's profits (if any) will be diverted to make and keep Boyer corporation whole. Boyer cannot lose money any way you cut it in Ogden. They have the most kick butt iron clad contracts with Ogden City that any company could ever dream of. They get half or more of the profits and income and they take absolutely no risk! This is true for both major contracts, the BDO and the Junction.
Boyer is smart and will enrich their owners with Ogden deals they made with Godfrey whether they succeed or not. Godfrey is stupid and will inpoverish the citizens of Ogden with the same deals.
In the case of the Union Station condos on 25th street, that was an RDA project that went bust, the RDA bonds are still being paid on because their are new owners to those properties. The real losers in that case were the tax payers of the city, state and Federal Government. The $4 million dollar project ended up losing $2 million that was put into it by various grants and city funds. The RDA portion was not effected, just the other massive public money that was part of the complicated funding package was lost.
So even tho most RDA bonds are protected because they do not represent the bulk of the financing in the deals, it is still usually the public that takes it in the shorts when things go south with dumb assed ventures entered into by incompetent politicians like Godfrey. Godfrey's response to the Union condo's going broke was "so what, some body will own them and pay the taxes which will repay the RDA bond" He didn't mention the other $2 million that the tax payers lost on the project.
Did any one go to the Junction tonight? I went by in the afternoon and it looked deserted! I didn't stop and go inside, but it sure looked dead from the street.
Arcritic:
Thanks very much for the digging and the explanation. Appreciate it.
Iguess that dorthy is the one standing at the counter and with a loud voice to the standard examiner, where's the beef? How can they do this to an elderly lady with such class, shame on them, shame, shame.
Curm,
Believe me, I am not done digging. I don't understand everything as well as I would like about RDA's. I think that very few understand enough about RDA's and economics to properly use them. And of course, there are those who simply see RDA's as a way to control private property rights and a way to have government 'prime the pump' of capitalism, without fully understanding either of those functions.
arcritic -
There is a recent development in my GRAMA request for RDA documents
pertaining to the American Can property sale.
Ogden City Recorder's office has signed a statement that they do not have a record on the sale and they do not know where to tell me to get them.
I have long said that the RDA is a secret government and this is proof.
If you want to know about RDAs better call Ms. Littrell. She is in the book.
WOW, just WOW. Isn't the City Recorder also the RDA secretary? That is how we work. You might consider submitting it to the Mayor as the Executive Director of the RDA or to the Council as the Board of Directors of the RDA. Getting some information from the County Recorder may also provide you an avenue as to where to submit the request.
Good Luck.
Post a Comment