The City’s Pulse Newsletter
By Mary Souza, Sept 13, 2009
Dear Newsletter Readers,
Our warm summer weather has returned for awhile, thank goodness, but the local political scene is heating up even higher as we move toward the November city elections. My column appeared in last Friday’s CdA Press and, not surprisingly, it has caused a strong flashback from City Hall. (You can read a copy of my column below)
In response to my column, City Administrator, Wendy Gabriel, put a post up on the city’s “blog” site. This is a funny name for the site because the word “blog” infers that the readers can actually give feedback and participate in a discussion, but there is no such possibility on the city’s site. All the reader can do is accept whatever the city writes. It must be easier that way, but don’t call it a “blog” and then brag about “increasing communication” with the citizens!
In her “Fact Check” about my column, Wendy addresses my information on the 5% city franchise fees added to all cable, gas and electric bills. Wendy says the utility companies should pay for the use of the city right-of-ways in our front yards to run their wires and cables. But the reality is that these companies don’t absorb that cost. They pass it directly to the customer in a line-item on our bills called “Franchise fee”, which is sent straight to the city. So cut the run-around, Wendy, it’s basically a TAX, and an obscure, almost hidden one at that.
The city doesn’t DO anything to earn the franchise fees. And they do NOT have to impose the fees. Here are the current Franchise Fees listed on Avista’s web site:
City of Coeur d’Alene, from 1993, 5% fee
City of Hayden Lake, from 1998, 1% fee
City of Post Falls, from 2002, 1% fee
City of Hayden, from 2005, 1% fee
City of Dalton Gardens, from 2005, 1% fee
My thanks to the alert reader who sent me this info. Notice the obvious, that CdA is the only city to take a 5% fee, everyone else keeps it at only 1%. And CdA has been taking the maximum for a long time.
Troy Tymeson bragged at the meeting that CdA jumped on the new fees as soon as they were made legal by the state and took the maximum 5% allowed. He then continued to boast that the state quickly reduced the maximum to 3%, but CdA got to keep the higher 5% rate because they signed up early. (See how good they are at grabbing our money?) City Councilman Al Hassel remembered it differently and said it was 3% until the voters approved the increase to 5% to pay off the street improvements. Either way, much or all of these obscure tax-like fees were meant for the roads that are now paid off. But the city is continuing to take our money and will put it into their general fund. And it’s no small potatoes.
The city will net TWO AND A QUARTER MILLION DOLLARS from these fees next year alone, according to the direct words of Troy Tymeson. So what was with the budget happy dance by the city council and mayor when they announced with a flourish that they’ll hold the budget to a zero percent increase this year? That was only about $300,000 dollars, which is peanuts compared to the money from the little-known Franchise Fees that they will continue to take even though the street bonds are paid off!
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And a quick word on the other topic in my Friday column, which was the city’s garbage service contract that has not been put out for competitive bid for 22 years: I have heard that Council woman Deanna Goodlander announced at a meeting Friday morning, as she referred to my column, that she is on the General Services committee and voted against bypassing the open bid process. That is true. Ron Edinger and John Bruning were the two who voted to give the contract to the current provider without an open bid requirement.
Deanna is close family friends with the gentleman who stood to repudiate the council for this decision. I’m glad she voted in favor of the open bid for the garbage contract, but I also wish she had been working, during her past eight years, for a consistent, fair, transparent policy for ALL city contracts.
During her time on city council, Deanna has voted in favor of many, many tax increases, the use of major public money for private projects without of vote of the people, and she sits on the board of LCDC, our urban renewal agency, which gives rise to tax increases throughout Kootenai County.
Deanna is up for re-election this November 3rd, along with Mike Kennedy, Woody McEvers and Mayor Bloem.
Can you imagine what would happen if the City opened its propaganda site to public comment and response? The City would have to create another position and hire a Minister of Propaganda at some outrageously inflated salary. Now, that would be an interesting job announcement. “Must be a former newspaper columnist or reporter. Must be able to lie and deceive with a straight face. Must not be able to think clearly or speak effectively. Must never let facts get in the way of a good attack piece.”
What other professional qualifications should the City’s Minister of Propaganda possess?
Comment by Bill — September 13, 2009 @ 3:39 pm
What is sadder still is that there is a readily available avenue for our elected officials to discourse on any issue of controversy and that is on their local town’s newspapers website. People like Dr. Bell and others will gladly write articles for the paper but will not follow through with any dialogue about their own contributions. These are supposed to be educated people capable of making intelligent decisions which I presume would have intelligent arguments behind them. But, we will never know because we are just ‘told’ what has been done and are not worthy of anything beyond that (or so it seems).
Wasn’t it Mayor Bloem who was calling for more transparency? Didn’t the LCDC’s expensive PR consulting firm advise better communications?
Comment by Wallypog — September 14, 2009 @ 8:00 am
Yes, Wallypog, taxpayer money was used for the Public Relations firm that LCDC hired to make the community like them more. That didn’t seem to work very well! LCDC also uses taxpayer dollars to hire a lobbyist down in Boise to fight against ANY changes the public and legislators might try to make to the old, antiquated urban renewal laws. They like to keep the laws vague and the loopholes large.
In fact, “Fight against any changes to the urban renewal laws” was one of LCDC’s top yearly goals almost every year since they started in 1997. (They stopped putting that in the top 10 when citizens brought it to the attention of the public. Maybe their PR firm suggested that move.) Our tax dollars at work!
Comment by mary — September 14, 2009 @ 2:20 pm
I touched on this again – put my 2 cents in- over at my place.
Comment by Stebbijo — September 15, 2009 @ 11:44 am
Nicely done, Stebbijo, thanks for watching our backs!
Comment by mary — September 15, 2009 @ 12:04 pm
As I see it, this is the issue: the city increased the franchise fees by 2% to pay for G.O. bonds for street improvement. Ken Thompson and John Austin essentially sold the public on this payment option in order to obtain voter approval for the bonds. The bonds will be retired this year. Because the original purpose for the additional fee has been satisfied, perhaps it is time for the council to vote to rescind the ordinance and return the percentage to 3%.
I believe this fee is as regressive as a grocery tax.
Comment by Susie Snedaker — September 16, 2009 @ 7:25 am
Susie: “Ken Thompson and John Austin essentially sold the public on this payment option in order to obtain voter approval for the bonds.”
Actually, Susie, the Council raised the fee to the maximum allowed by law to 5% because they recognized the impact utility companies had on our streets. The city agreed to use the fees for street projects because of those impacts.
It was after the increase that Ken and I came up with the idea to use the additional 2% to fund the street bonds, along with new highway user fees coming to the city. On that last issue, I had to work with the legislature to allow highway user fees to be used for debt service on bonds. It was in a way an early version of the GARVEE funding we see being utilized by ITD today.
We got 82% approval in Feb. 1994 from voters and began construction on Ramsey Road. This was crucial because the new Lake City High was opening that fall and everyone was concerned about adding 2,000 students and staff to the two-lane goat trail in place at that time. Remarkably, we constructed the road in just seven months to four lanes and the potential carnage of Ramsey was averted.
My guess is that with the bonds being paid off the city will consider new street projects on which to commit the funds. I wouldn’t recommend changing the amount of the franchise fees paid by Avista, KEC and Time Warner until all the city’s street needs are met.
Comment by JohnA — September 17, 2009 @ 10:17 am
Why should we have to guess, John? Why doesn’t City Hall just say it?
When I pointed out the “missing” GO Bond franchise fees to Mr. Tymeson, he said that they were being moved to the general fund. That’s where they sit for the 2010 budget.
Comment by Dan — September 17, 2009 @ 10:26 am
Dan, the general fund has always received the franchise fees, as well as the highway user fees (since the street department is in the general fund), although a portion of those funds were obviously moved to the debt service fund to pay for the bonds.
I would be interested to know how those funds will be utilized in the 2010 budget if the bonds are paid off. If the franchise agreements with Avista, KEC and Time Warner still call for 2% of the 5% fees to be used for streets, as they did when the bonds were issued, I’d imagine the city would identify the use of those funds for their streets projects.
Comment by JohnA — September 17, 2009 @ 11:10 am
John, Thanks for the clarification and additions. I know that you and Ken were instrumental in addressing the issue of the bonds. Was there an ordinance pertaining to the application of the 2% franchise fees to the satisfaction of the bonded indebtedness? So the information regarding the percentage lies in the franchise agreements?
Comment by Susie Snedaker — September 17, 2009 @ 1:04 pm
Me too! Franchise fees appear twice in the Financial Plan: General Fund Revenues and GO Bonds. Under GO Bonds the amount for 2010 is $0. Oddly enough, the Franchise Fees in the General Fund Revenues does not increase by the ~$900K that should have appeared under GO Bonds. I don’t know where that money went, though a “Beginning Cash” line in the GO Bond budget states $1,200,000.
If you have time, John, I’d love to pour over the Budget with you. I bet you could answer some puzzling questions I have.
Comment by Dan — September 17, 2009 @ 1:38 pm
Susie, the franchise agreements should contain the information you need on the use of the 2% of the fees. I urge you to ask that question of the legal department.
Dan, I’ve been removed from the CDA budget process for nine years. Whereas I’m always interested in helping others to understand government issues, unless your queries were fairly routine concerning governmental accounting, I’d think Troy would be the one to answer your specific budget questions. He has been a very forthright source of information for me since the day he arrived there, so I see no reason for him to be anything else but that with you now.
As far as the $1.2 million starting balance of the G.O. Bond fund, that could be the amount of the debt service reserve. It’s not uncommon to have a 10% reserve in order to assure bondholders that debt service can be paid. Again, Troy could answer that.
It appears you have a great head start on understanding the budget process, especially considering its complexity and the fact you saw the payoff of the bonds and knew enough to question where the funds went.
Finally, let me state that I appreciate that you and Susie want to get the facts right before commenting publicly on City issues. That lends credibility to your debate of those issues.
Comment by JohnA — September 17, 2009 @ 2:24 pm
Thank you, John. For your information, this was my statement read to the council:
Page 6, Franchise fees have now been included in the General Fund. If I remember correctly, the voters approved the addition of franchise fees to pay bonds for improvements, Ramsey Road comes to mind. Inasmuch as the bonds will be paid off this year and the franchise fees continue, is it time to sunset those fees of perhaps a new vote should take place?
Comment by Susie Snedaker — September 17, 2009 @ 5:30 pm