Mary Souza’s persuasive and compelling op-ed piece in the March 26, 2009, Idaho Statesman newspaper is aptly titled Changes are needed in Idaho’s urban renewal law. Idaho’s urban renewal laws need to be updated to preserve their value while reducing the opportunities for abuse.
The abuses emphasizing the need for urban renewal law reform have also brought to light the need to ensure Idaho’s ethics in government laws specifically apply to those abuses.
Legislation to prevent and punish intentional abuse of the urban renewal laws needs to meet three objectives.
First, it must ensure that the Idaho Bribery and Corrupt Influence Act, the Idaho Prohibitions Against Contracts with Officers Act, and the Idaho Ethics in Government Act (collectively called the Idaho ethics in government laws) apply to Idaho urban renewal agencies. The laws need to explicitly state they apply to the agencies’ commissioners, agents, employees, volunteer staff, and contractors.
Urban renewal agencies have considerable discretion and influence how millions of Idaho tax dollars are spent or not spent. Urban renewal commissioners are not elected and not directly accountable to voters. Neither are their agents, their employees, their volunteer staff, or their contractors.
Access to millions of dollars while insulated from electorate vetting invites collusion and corruption. A commissioner’s judgment in urban renewal project funding, timing, and location may be unduly influenced by his own, a business partner’s, or a relative’s financial interest.
For example, a land developer serving as an urban renewal agency commissioner could “steer” urban renewal projects toward properties adjoining his or those of others with whom he has a business interest, intending the urban renewal money spent on the project will increase the value of his own holdings. The opportunity to make decisions enriching himself could override his obligation to serve the taxpayers’ best interests.
Even if an urban renewal agency is statutorily accountable to a municipal governing body, the access to millions of dollars in money for urban renewal projects invites manipulating the timing, location, and value of selected projects as political patronage to buy votes for the agency-friendly elected officials supposedly overseeing the urban renewal agency. Thus, the urban renewal agency and the oversight body can become mutually self-sustaining and protective. A mayor and council members can say to the urban renewal commissioners, “You approve urban renewal funding for projects that make us look good to voters and big campaign contributors, and we’ll reappoint you to the urban renewal agency and approve your pet projects without meaningful scrutiny.”
Urban renewal agencies are permitted to use tax dollars to hire lobbyists, attorneys, and public relations specialists for the explicit purpose of self-perpetuation and self promotion. Urban renewal agencies can exercise eminent domain. Urban renewal agency commissioners can have their terms renewed endlessly without voter approval.
Second, reforms to ethics in government laws must include provisions for both enforcement and penalties proportional to the offense’s severity when applied to the urban renewal laws.
Not all public officials, employees, agents, volunteers, and contractors are honest. Some will evade or violate state law knowingly and intentionally simply because they know that official investigation and prosecution are unlikely; private investigation is time-consuming, costly, and limited to publicly available information; and penalties upon conviction are trivial.
With millions of taxpayers’ dollars in play as urban renewal money, enforcement must be diligent, and penalties upon conviction must be meaningful. It is unacceptable that a shoplifter stealing $100 in merchandise at a retail store will receive a more severe punishment than a dishonest public official realizing hundreds of thousands of dollars in profit by “gaming” deficiencies in Idaho’s urban renewal and ethics in government laws and depriving taxpayers of his honest services.
Third, reforms to the ethics in government laws must ensure that any existing penalty provisions in urban renewal statutes do not preclude the application of the ethics in government laws and penalties.
Idaho Code 50-2017 states that a violation of that section constitutes misconduct in office. Idaho Code 50-2006 states, “For inefficiency or neglect of duty or misconduct in office, a commissioner may be removed only after a hearing and after he shall have been given a copy of the charges at least ten (10) days prior to such hearing and have had an opportunity to be heard in person or by counsel.” So if the offending commissioner resigns from the urban renewal agency before the hearing, the need for the hearing is obviated and the offense will likely go unrecognized and unpunished. The concern is that a commissioner who simply resigns before the hearing under the provision of Idaho Code sections 50-2017 and 50-2016 may be able to successfully invoke double jeopardy to thwart prosecution under other applicable sections of the ethics in government laws.
In other words, the ethics in government laws reforms need to ensure that a commissioner, employee, agent, volunteer, and contractor cannot avoid criminal prosecution simply by resigning after being formally presented with a copy of the charges against him.
These three objectives for reform will not make criminals out of parties committing innocent errors. However, they are specifically intended to make it more difficult for dishonest urban renewal commissioners, employees, agents, volunteers, and contractors and those who would collude criminally with them to escape official investigation and prosecution.
Congrats, Bill! Your post on this subject has broken 200! Thanks to all who have participated, there’s even more to discuss…
Comment by mary — April 4, 2009 @ 7:55 pm
John, in comment #194, you described the process of drawing the original Lake District boundaries back in 1997. Your viewpoint is enlightening. It’s obvious that the intention was to encircle as much “tax increment producing” area as allowed by law, not to find areas of deterioration for which specific plans could be made. The fact that you would include the Resort in the first draft is incredible…such “blight”! That was quickly changed because you could get all the way up NW Blvd and the Goodlander land if the Resort was removed from the equation.
Why the mayor then, Al Hassell, and the city council were talked into approving this deal is beyond me. It was a huge land grab without a clear plan.
John, would you please answer my question from Friday evening as to whether you would support taking all the active contracts held by LCDC now, forming 4 or 5 smaller, more specific districts with clear, goal-oriented plans, and releasing the rest of the tax increment back to the appropriate taxing entities?
Comment by mary — April 5, 2009 @ 7:07 am
Mary, I think John is pretty selective about the questions he responds to. Those which have been answered have only punctuated the problems so evident in the LCDC.
If I were to make a broad analysis of the original LCDC plan I would say that it was based not on specifics but trust. Give us control of these properties and ‘trust’ us to cure the problem. It was just an extension of the good old boy mentality. And when it comes to the ‘good old boy’ mentality Al Hassell is the poster boy. He is a nice man but certainly is no brain trust. He can easily be talked into what others think is right.
Will the powers that be and the LCDC change anything now? Not if they can at all avoid it. The gravy train is just getting started. The only way this will end is by bringing honest blood to elected office or a by a motivated prosecutor.
Comment by Wallypog — April 5, 2009 @ 8:42 am
The “affordable housing” stuff is new, mostly because several people (including myself) pointed out that one of the statutory duties of urban renewal is affordable housing and, up until that point, the LCDC wasn’t doing any.Comment by Dan — April 4, 2009 @ 7:26 pm
Certainly, by 2005-06,LCDC must have
known there was an affordability issue with regards to residential housing and the workforces inability
to afford to buy suitable housing for their families.The median price of a home doubled in six short years.
I don’t think anybody on here is against urban renewal itself; some don’t like the way LCDC operates.
I’ve yet to hear any criticism of
PostFalls urban renewal agencys.Why is that? Are they that good or is LCDC taking so much criticism, that
they don’t get any attension?
Comment by kageman — April 5, 2009 @ 9:34 am
John,
Deanna and/or her family had owned that property for many years. She determined the relocation of Appleway and the subdivision of the property. Rumor has it that she personally went to Boise to make sure the freeway entrance/exit was to her specifications. The trailer park was on septic tanks when closed down. As to the old quickstop, I hardly considered it a business that was particularly well maintained.
As to Midtown: I was on Planning and Zoning when Ken Thompson presented the ura concept. I was the one who brought up the issue of the exclusion of Midtown as the one area that could use a little help. After discussion, the commission concurred and, to the best of my recollection, Midtown was included in the council presentation. The action of the property owners came later.
Comment by Susie Snedaker — April 5, 2009 @ 10:35 am
Mary, I answered your question that I believe a large district allows more flexibility. There would be little increment available in midtown, for example, if it were its own district. The improvements there can only be funded by the area being part of a larger district where tax increment is being developed.
And, I’ve also answered that the we tried to select deteriorated properties when we created the boundaries and obviously included vacant properties which are allowed by law. Again, I would not wish to cast aspersions on private residential or commercial properties just because they are in a deteriorated area. That’s why including vacant properties is the right thing to do. Also, Mary, the CDA Resort was not intended to be in the first boundary. There was no deterioration there and to suggest so would be incorrect. When the error was noted, the property was excluded from the second draft of the boundary. It had nothing to do with our wishes to proceed further up NW Boulevard but in the end we were able to include areas that WERE deteriorated by going in that direction.
And, Wally, I’ve answered every question posed to me. If you did not get the answer you wanted, you can always re-phrase the query. I came on to this site volutarily to discuss urban renewal and my role in creating districts in six cities. My support of the concept of URDs will not change. I believe they are crucial, especially as I’ve noted for small cities, if they are to meet their increasing infrastructure needs.
Comment by JohnA — April 5, 2009 @ 12:15 pm
JohnA,
Are you really saying that small towns have NO CHOICE other than URD’s to meet infrastructure needs? If so, how did they survive before? What changed? If not, what other viable options exist for them?
Comment by Pariah — April 5, 2009 @ 12:25 pm
I take strong issue with this. You cannot argue that the growth pays for itself, when you’re obviously stating that the growth is being supported by areas outside the intended area. That fails the “but-for” test.
Further, John you’ve just blown a big hole in the LCDC’s argument that their improvements create a tax-neutral situation. E.g., if they really need a larger district to fund smaller, site-specific projects, then you’re saying that the improvements for that site-specific area are not sufficient to offset the taxes. Therefore, you’ve just agreed with us, and not with the LCDC, that the tax burden created by their large districts exists. Or would you care to restate? 😉
Comment by Dan — April 5, 2009 @ 12:45 pm
Dan, I’ve stated that it is not reasonable to expect the increment from midtown to fully cover the costs to remediate all of its deterioration. But, that is OK because I view midtown as a part of Coeur d’Alene as a whole, not its own city. Another way to view this is to realize that property taxes from some of CDA’s richest areas, like yours, pay for services received outside of your neighborhood.
One can argue the merits of richer households bearing the biggest burden of the cost of city government, but the fact is that those of us in higher-valued homes pay more property taxes than those who do not. We also pay more in income taxes as a percentage of our pay. These are progressive taxes in that the more you own and the more you make, the more you pay.
The third leg of the stool offsets the other two in a big way, as I see it, via the regressive nature of our state sales tax, which places a larger burden on lower income households.
We can discuss the rather obsurd ways that we finance government in another forum but the fact remains that being a part of a larger entity, whether it be a city or a URD, allows for the transfer of tax dollars to the places they are needed. I see nothing whatsoever wrong with that.
Comment by JohnA — April 5, 2009 @ 9:21 pm
Pariah, what has changed are the regulations for the infrastructure, creating an unfunded mandate. The old ways of operating our sewer and water systems is no longer acceptable. Small cities are being faced with enormous challenges never before known to them.
The other issue is that cities built their infrastructure 30-40 years ago. Most did not include depreciation in their utility rates because the burden to finance the facilities in the first place was onerous enough. Now faced with replacing those facilities and with no fund balance to pay for them, plus the dwindling ability to borrow funds, small cities are in dire shape.
Urban renewal works in those small cities, if they are lucky enough to have new development in their midst.
Comment by JohnA — April 5, 2009 @ 9:32 pm
The construction and maintenance of city infrastructure should be a basic and routine consideration in city administration. In CdA, at some juncture, the city decided that private citizens should maintain public sidewalks. Yet, at a more recent juncture, the city decided to put millions of tax dollars into the private Kroc center project. At another juncture the city also accepted the burden of sustaining Riverstone Park that is clearly built for the marketing purposes of the Riverstone development. (And NO it was not donated.) In short the citizens who pay the taxes are getting shorted while the developers are getting quickly and nicely accommodated.
Today we see private developers coming into Post Falls because it has income potential and not due to any URD enticements. That is when the cities require them to install adequate infrastructure within and in the proximity of their projects. A URD can kick start economic recovery then look for it to be sustained on that momentum. But the LCDC sees it self as a perpetual publicly funded private development operation. Do you think that if the LCDC were to dissolve that NO new developments come this way?
So there is more than a single solution to recovering blighted areas. If the city chooses to support is infrastructure it can do so. If the city chooses to slip funds in private hands it has a pathway for that too.
You have not responded to my inquiry about what you know about property ownership with in LCDC. That would be question #192.
Comment by Wallypog — April 6, 2009 @ 7:46 am
As one whose background includes employment in the land planning/architecture/land development/custom residential construction fields, those companies did not utilize public funds for their projects. They were fully capitalized.
The heavy Midtown funding involves only a couple of blocks despite the fact that the area stretches to Harrison. The construction of the so called affordable housing might be delayed until an undetermined date. Will the LCDC properties add additional blight to the Midtown area until construction?
Comment by Susie Snedaker — April 6, 2009 @ 8:21 am
Wally, I have stated that I’m not involved with LCDC and haven’t been for nine years. I have no information about any of the property owners in the URD. You should contact LCDC for that information.
Comment by JohnA — April 7, 2009 @ 10:39 am
I want to thank you all for allowing me to engage in this exhaustive discussion. It has been mostly civil and I appreciate the forum.
With that said, for legal purposes, I want to ensure that any subsequent use of my comments, either written or spoken, reflect the true intent and meaning of my words. Whereas I trust this discussion will be correctly reflected, unlike an elected official, I am a private citizen protected by laws concerning libel and slander. My opinions are my own and not necessarily those of PAC’s clients and I will seek legal remedy against anyone purposefully misconstuing my thoughts on this subject.
Again, thanks Dan, Mary and Bill for the forum. I look forward to future discussions of a civil nature.
Comment by JohnA — April 7, 2009 @ 11:07 am