Wednesday, October 14, 2009

Standard-Examiner: Tax Increment District Extended

Fine tuning the facts on an otherwise good report on last night's RDA Session

By Dan Schroeder

Some responses to the details of Scott Schwebke's morning story, concerning last night's RDA session:
Tax increment District extended
1. He never says how much money the taxing entities are losing through this deal (and the RDA is gaining). Based on McConkie's estimates, the net amount is over $12 million. Nor does he name any of the taxing entities (Ogden City general fund, Weber County, library, 911 service, paramedic fund, etc.) that will receive no mitigation payments. So I don't think most readers will realize the magnitude of this decision, or understand that their taxes will probably go up as a result.

2. Godfrey's apparent denial that he intends to use this revenue as collateral on additional debt is extremely misleading. I wasn't there to hear everything he said, but the direct quote isn't a denial at all--he's merely pointing out that this particular action doesn't create any new debt. Godfrey wasn't even there when McConkie admitted, repeatedly, that his office intends to pursue a "partnership" with a major hotel, backed by this tax increment. That's just a polite way of saying the city would take on new debt.

3. The article says that "tax increment from The Junction nearly matches projections made when the city bought the mall property", according to McConkie. I don't know what projections he's thinking of, but the actual tax increment is only about 1/3 what the city promised it would be in a newspaper ad and utility bill insert in 2007.

4. The Junction's total bond debt in 2005 was over $36 million, not $22.4 million as Schwebke claims. He's forgetting the two additional bond series for the Salomon Center. As of this year, very little of the principal has been paid off on these bonds, and there have been additional refinancing charges, so the debt currently stands at about $34 million. (These total figures omit the $2 million portion of the $22.4 million that was for the American Can district, not the Junction.)

5. Similarly, the figures that Schwebke gives for the annual bond payments are only for the largest bond series. The payments on the two other bond series totaled an additional $1.1 million (about half from Salomon Center lease payments and half from tax increment from other RDA districts).

6 comments:

Dan S. said...

Rudi,

Thanks for bumping this comment to the front page. But I'm not crazy about your subtitle. Some of these five points are corrections to the paper, some are corrections to what Godfrey and McConkie said (not the paper's fault that they're wrong), and one is an error of omission rather than an actual mistake.

Overall, as I said in the earlier thread, I thought this was a good article considering the complexity of the subject.

RudiZink said...

Hmmmm... Hoping you'll like the new subtitle better

Dan S. said...

Yes, much better. Thanks!

Dorrene Jeske said...

Scott Schwebke's article has his usual slant on any subject. He asked me after the RDA meeting what the purpose of the amendment was, and I replied that "Paying down the debt is a priority of the council." Of course he didn't print it, but chose Doug Stephens comment that the amendment wasn't needed. Apparently, Scott, four members of the Council didn't agree with Doug.

We must always realize that Scott's reporting doesn't give all the facts of an issue or even a true picture, especially if there is a chance that the Mayor could be negatively impacted.

The Mayor told the Council later in our work meeting that he couldn't believe that we had added the wording we had. Mr. McConkie had worked so hard to put together the "deal" with members of the Taxing Entity Commission. I do appreciate Mr. McConkie's work ethic and his dedication to the City. My amendment was not due to the "deal" he had made, but by comments made by the administration that indicated that they did not intend to use the additional tax increment money to pay off the bond debt, but rather for other developments. We felt it our responsibility to taxpayers and citizens to be fiscally responsible and pay the bond off. But Scott chose not to report any of that discussion that might reflect positively on the Council and let the public know that we were doing what we were elected to do.

Stephen M. Cook said...

From a purely practical standpoint, it would seem that the SE subscriptions would benefit from a more balanced editorial slant on local politics.
One wonders just how many skids are being greased in this rail town. Ir's quite easy to discern who is holding the grease bucket.

ozboy said...

There is another significant mistake in Mr. Schwepke's article. It is when he explains where the bonded money went. He said some of it went to - " payment to the Woodbury Corp., the former owner of the mall site which had some legal rights to tax increment."

Woodbury did not own the mall site. It did however own one building there. The mayor in all his hubris unilaterally tore the Woodbury building down without permission of the owner and the city was sued as a result. There was a huge loss to the city that could have been avoided had the mayor been honest and respectful of other's private property rights. But then that is not his style. As I recall the completely un-necessary loss to the tax payers of Ogden was in the neighborhood of $5 million dollars. That's a big pile of money the citizens of Ogden could use today to shore up the failing infrastructure. Once again the fine citizens and tax payers of Ogden lose millions because of Godfrey's arrogance, incompetence and dishonesty.

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