Dan S. reports in real time via his wireless mobile device
Well looky here. We're now suddenly getting live blog comments from tonight's council meeting, direct from Dan Schroeder's wireless mobile device. For those casual readers who feel like they're out of the information loop, Dr. Schroeder earlier framed the pertinent issues here. Regular WCF readers as always know exactly what's "going on," of course.
Read Dan's comments below to "listen in."
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Live from the city council chambers: RDA Board (aka City Council) is now considering tax increment extension. Richard McConkie is presenting on behalf of the city, and says the total amount of money involved is approximately $16 million.
All council members are here except Johnson. Mayor Godfrey is not present; John Patterson is. Franke is substituting for Cook. Williams is also seated at dais, as usual.
A few other city staff are here (Benford, Anderson), but hardly anyone else.
McConkie says this proposal will reduce the amount of lease revenue needed from BDO by approximately $12.5 million over the 12-year period.
[So what would that freed-up BDO money be used for--collateral for more debt, or paying for other city projects?]
Now McConkie is reviewing how the Taxing Entity Committee works.
McConkie: School district estimated that this extension would cost them $6.5 to $7 million. That was unacceptable to them so they asked for mitigation payments.
Schwebke has just arrived and his cell phone is audibly ringing so he's stepping out again.
McConkie: School District negotiated with Weber County but didn't offer them a cut of the mitigation payments. However, School District did offer a cut of the mitigation payments to the "smaller taxing entities" [I assume he means sewer district, water district, and mosquito district--not the others]. With this agreement, the TEC approved the tax increment extension by a 6-2 vote (with the two county reps voting against). Mitigation payments total $3.6 million.
Gochnour: If we were to add language limiting the use of the tax increment to debt service, what impact would that have on the project area?
McConkie: It would limit the size and scope of development of the parcel east of the Sal. Center. We may end up with a 7-11 on the corner instead of a 10-story development. The market would not support a major development.
[So he now admits that they want to use this money to provide incentives for a major hotel.]
McConkie: School District negotiated with Weber County but didn't offer them a cut of the mitigation payments. However, School District did offer a cut of the mitigation payments to the "smaller taxing entities" [I assume he means sewer district, water district, and mosquito district--not the others]. With this agreement, the TEC approved the tax increment extension by a 6-2 vote (with the two county reps voting against). Mitigation payments total $3.6 million.
Garcia: Why are we deciding this now, not in 2014?
McConkie: Harmer has lots of financial expertise and this is what he wanted us to do. It allows us to plan for other uses of BDO revenue, including a possible "major project".
Wicks: So the secondary purpose of this is to facilitate future development of the parcel east of the Salomon Center.
McConkie: Yes. And if the city doesn't "partner" with a developer there, you'll see a very different development.
Wick: When are things going to pay for themselves like they're supposed to?
McConkie: It's hard for downtown to compete with the suburbs.
[I love how he uses the word "partnerships" instead of "subsidies".]
Jeske: So how does SLC keep their downtown viable?
McConkie: The LDS Church is putting billions of dollars into SLC, and without that it would be similar to Ogden.
Gochnour: What if the time period were only 7 years, not 12 years?
McConkie: It would increase the demand on BDO lease revenue.
Garcia: Currently how much is coming out of BDO to pay for the mall?
McConkie: About $750,000 last year (uncertain).
Garcia: If this is done, how much will continue to come out of BDO?
McConkie: Until there's new development at the Junction, [doesn't say]; if we could double the value of the Junction, it could eliminate the BDO subsidy.
Stephens: If we change the terms, would we have to go back to the TEC?
McConkie: Yes, it would be problematic to get them to approve anything different. [In other words, my way or the highway.]
[Interesting that Stephenson is the only council member present who hasn't spoken. All the others are asking hard questions.]
Franke: Isn't it true that any other use of the tax increment other than existing debt service would have to be approved by this board?
McConkie: Yes. [The implication is that the Board shouldn't attach any strings.]
Due to an internet glitch, I lost some of what I typed. They took public comment and I spoke briefly. Stephenson spoke against making any changes to the resolution. Jeske moved to adopt the resolution with the addition of intent language saying the money will go toward paying down existing debt.
McConkie asks whether this means they shouldn't pursue any future projects. Williams chimes in and says they'd be telling McConkie to stop working on the Junction.
Wicks: This is a bad deal for the taxpayers of Weber County, and for the Ogden City General Fund. We owe it to the taxpayers to act responsibly and try not to incur any more debt.
Garcia calls for the question.
Stephens still wants to talk--doesn't want the intent language added.
Wicks summarizes motion by Jeske, second by Garcia; Jeske again reads intent language.
Votes: All in favor except Stephens, who states that he objects to the intent language. Done!
Second motion (on mitigation payments) also passes.
Godfrey has arrived! He offers his comments at end of meeting, to spin it. Says in the long run this is a great project.
Dan S. for Mayor!
With each insightful post he does seem to appear more and more like a viable candidate in 2010...but.....will he run?
Kudos to the majority of fiscally conservative councilmembers for passing the measure with strong pay down the debt "intent language."
Giant rasberries to Coumcilman Stephens, who even in the midst of the greatest recession since the 1930's, and even in a situation where he's out of a job, and bagging groceries at Harmons's (or whatever), still thinks it's ok for Boss Godfrey to take on more taxpayer debt.
With Stephens' vote today, I'll be taking a lot closer look at his challenger, Patrick A. Dean, tomorrow.
Dan
I have not been following any of this in the past and I am unfamiliar with what all of this is about.
Could you translate and summarize what this meeting was all about and tell me in simpler terms what happened and what it means to me as a citizen?
Dan S.
Are you saying that Brandon Stephenson DID vote for the language?
And Stephens voted against it?
Sounds weird.
. . . and what WAS the motion on mitigation payments. I understand the payoff that went to the school, but what was tonight's motion that passed?
All--just tuned back in after two hours off-line. I'll try to post a summary later tonight but can't right now.
Everyone needs to give Patrick Dean another look. This guy thinks for himself and is beholding to no one.Plus he has the best interests of Ogden at heart.
Not going to say I agree with all of his positions but he's a real article. Judge for yourself. Get to know the guy.
Mr. Dean seems a solid and decent person, but we are not going to allow the foothills to be developed.
Dan for mayor, you're kidding right?
Our ideal choice for mayor would quickly drain the city treasury and abscond to an unknown biker bar in Tunis.
He would inform us upfront of his plans, but the fine citizens of Ogden would elect him anyway.
Ok I'm back, and here's a summary.
The proposal before the council (technically RDA Board) was to approve an extension of the RDA's collection of property tax increment from the CBD Mall district (which includes the Junction plus the block west of Grant between 22nd and 23rd). This means that nearly all of the property taxes from that area--over $1 million per year--will go to the RDA rather than to the usual taxing entities (school district, city general fund, county, library, sewer district, 911 service, paramedic fund, etc.). The RDA's collection of this tax was scheduled to expire at the end of 2014 but they extended it for 12 more years, through the end of 2026.
However, when Jeske made the motion to approve this proposal, she added an additional "whereas" clause stating that it is the RDA's intent to use this revenue to pay down the existing Junction debt. This clause is nonbinding, but should make it a little harder for the RDA to go even further into debt, which is what the administration wants to do. Specifically, the administration wants to use this additional revenue as collateral to take on more debt so it can subsidize a huge new hotel on the vacant Junction parcel west of the Salomon Center.
Garcia seconded Jeske's motion, and the vote was 5 in favor and 1 opposed (Stephens), with Johnson absent. To be clear, this was a vote on the whole motion, including Jeske's added language. There was no separate vote on Jeske's language by itself.
(I continue to be dumbfounded by the fact that the City Council never follows standard parliamentary procedure. There really should have been two votes: one on Jeske's amendment, and then another on the motion as a whole. By doing it with a single vote, they created quite a bit of confusion so that Jeske, who was fundamentally opposed to the motion, ended up voting for it, while Stephens, who was fundamentally for the motion, voted against it.)
There was also a separate motion, to approve "mitigation payments" to give some of the tax back to the school district and three of the smaller taxing entities.
So the bottom-line effect is a pretty complicated redistribution of tax revenue. The biggest losers are the entities that get no mitigation payments (county, library, 911 service, paramedic fund, etc.); the entities that do get mitigation payments (school district and three others) also lose, but not as much. Ogden City gains a lot of money, projected by McConkie to be $12 million over the 12 years.
All other things being equal, this tax redistribution should cause tax rates to go down for Ogden residents but up for the rest of the county. However, if the city uses this money to subsidize another big Junction project, then (all other things still being equal) Ogden City's tax rates will also have to go up because the city's general fund is one of the taxing entities that loses money in this deal.
Sometimes I think the Godfrey administration intentionally makes things as complicated as possible, just so citizens (and city council members) will be less likely to understand what's really going on. There's sure a lot that I don't yet understand. But I think I mostly understand the Junction, and for those who want to learn more, I've written several articles about it that you may find helpful.
Isn't Godfrey a voting member of the RDA? And for all of those who argue that we need more communication between the mayor and council ... Well, one more opportunity missed by the mayor to communicate, as he essentially missed this RDA member.
wildcat,
No, the mayor isn't a voting member of the RDA Board. Nor does he get a veto. So even though the Board can't remove him as executive director, he still (technically) has less power there than when he wears his "mayor" hat.
Most of today's headlines are now finally up on the Standard-Examiner free site, but Schwebke's writeup of last night's meeting is inexplicably missing.
Here's a link to the digital edition version.
The article isn't bad, considering the complexity of the subject, but I'll still try to pick it apart in a subsequent post.
Schwebke's writeup is now up on the S-E public site.
Skipper Godfrey is once again shifting chairs around on deck of the SMS Petersons Folly in yet another labyrinthine shellgame, just so he can afford the high-explosives to blow more gaping holes in the hull.
He labours under the delusion that a loan is somehow free money, that throwing good money after bad will somehow save our ship.
Hopefully we will sight land in about 20 days.
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