City Budget Confusion

August 6, 2008

City Budget Confusion

Filed under: General — mary @ 11:58 am

The Press article about the City budget workshop yesterday left more questions than answers. Magically, the city will be able to afford most of the positions and amenities they stated last month they did not have the money fund.

I especially disliked Councilman Mike Kennedy’s logic, which was to spend the money now because these projects are just going to cost more later. And he had the nerve to call it “fiscally responsible”.

This is the attitude some public officials develop when they are spending OUR money. If we can’t afford something, we just have to wait. But if they can’t afford it, they just say it’s going to cost more later, so we should just do it now. (Most spouses would not love to hear that argument: “Honey, that new bedroom set will only cost more next year, so we should buy it now even though we don’t have enough money and it will drain our savings and then we won’t have any more rainy day money to fall back on.”)

Dan and Bill just posted these thoughts about the council budget on another thread, so I’ll copy them here as well:

Explain this to me: To fix the sidewalks, which I argue is a basic function of City government, the Mayor and Council decide to go after $200,000 in foregone taxes. Staff said that it just can’t be done any other way; that they need to hire 3 new people for the job. That was the argument made to Council.Yesterday, it’s presented that those three new people, for which we’re paying foregone (e.g., higher) taxes for, are going to be folded into the Street Dept. budget to help save money. Additionally, the Street. Dept. budget is being “cut” by $300,000. The end effect is that we have the people we need to fix the sidewalks AND we have a $100,000 budget cut in the same Dept.
Am I wrong on this, or did staff misrepresent the situation to Council? If, in fact, the money was there in the first place, did they lie to Woody when he asked them if there wasn’t any other way they could do this without going into foregone?

Comment by Dan — August 6, 2008 @ 11:11 am |Edit This
Dan,I had a similar question after watching last night’s Council Meeting. They, and particulaly Hassell, were discussing the impact fees set aside for capital improvements in parks, police stations, fire stations, some streets. Here’s an audio clip of part of what Hassell said.
If there were sufficient impact fees set aside, and it appears there were, why did the City beg LCDC for the $50K to $60K for the as-yet-to-be-built public safety building in the park? Tymesen and Childers told the Council and the LCDC that if LCDC didn’t fund it, it wouldn’t get done this year. So, what happened to the impact fees.

There may be a reasonable explanation, and I’d really like to hear it.

Comment by Bill — August 6, 2008 @ 11:54 am |Edit This

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Comments (13)

13 Comments

Mary,

They were discussing the Landings Park. The City was over a barrel, because it had allowed the developer and the builders to market various “concepts” (Doug Eastwood’s term) for the Park as if any or all of them would become a reality. In other words, the City accepted the responsibility to build a park in the Landings without knowing it would have the money to fulfill its promise. Here’s the problem: That would make the City complicit in fraud if mortgage loans values were inflated by the promised presence of a park. If the City didn’t deliver the Park, homeowners would rightly have accused the City, the realtors, and the developer in using the promised park in a bait-and-switch tactic. The City had to make good on its promise and deliver a park.

It isn’t the first time the City has made questionable promises about a park and has failed to act to correct misunderstandings or misrepresentations. Sunshine Meadows homebuyers went through the same wringer. Just as in the Landings, homebuyers in Sunshine Meadows were told by (?) the park would be completed far earlier than the City was saying. And the City did nothing to stop that misrepresentation.

Eastwood mentioned this obliquely in his rah-rah speech last night. He said early this year (after Sunshine Meadows almost blew up in their faces), the City contact every real estate agent south of Rathdrum and told them to call the City with questions about city property involvement in issues like this. In other words, no, the City will not forbid developers and realtors to represent prematurely the final design of parks.

Comment by Bill — August 6, 2008 @ 12:17 pm
Code enforcement. Respect for the average citizen. Accountability for finances. New concepts coming soon, as soon as the public removes certain elected officials from City Hall.

Comment by Dan — August 6, 2008 @ 12:33 pm
Mary, I do not think that new single family dwelling values itemize community impact fees into their determinations. They maybe hidden in other costs but they would not be a line item cost factor (as in, the purchaser of this house pays $3,000.00 towards the park). As such the mortgages delivered based on those values would not relate to the value of a community improvement not yet installed. Appraisals would have been done based on existing neighborhood conditions (as I understand the lovely mortgage industry). Since no park existed it was not included in valuation and no mortgage holder could pursue redress for the improvement not being installed at a later date. But that would not preclude the homeowner from doing so as a clear promise was made, fees somehow collected and property values impacted.

That said it sounds as though those impact fees were collected. As I recall they were used for another park leaving these residents shorted. How they suddenly reappeared is another question altogether. Any homeowner having sold in the interim still my have lost money due to the delay. They paid for the improvement. It was not delivered when and how promised. They may have lost equity due to that situation.

Comment by Wallypog — August 6, 2008 @ 1:16 pm
I’m not arguing that the Landings has waited far too long for their park. They were in line way before Mill River, Riverstone and possibly even CdA Place II. My argument is with the city’s irresponsible spending on frivolous items then ending up not able to fulfil their commitments. The “buy it now” attitude seems prevalent on city council.

I’m glad they’re going forward with the Landings, which should have been done long ago, but their idea of “fiscal responsibility” is scary.

Comment by mary — August 6, 2008 @ 1:25 pm
Wallypog,

What you said makes sense. But, in a Council meeting some time ago, one of the Council members or Doug Eastwood said that when the City first proposed the developers include land for parks, the developers were rightly concerned that they were losing buildable lots. The City’s pitch to them was that the park increased the value of the surrounding homes, thus allowing the developer/realtor to charge a higher price for certain lots than if the park wasn’t there or going to be there. In my mind, that is associating the valuation of a piece of property to the promised presense of a park.

My point was that it was wrong for the City to allow developers and real estate agents to use “concept” drawings of the park to represent (or misrepresent) what the park would look like. My opinion is the City could and should have imposed a condition that prohibited marketing anything other than the land. The sellers could say “We’ve given this land to the City to develop as a park, but we can’t tell you if the park will really be built or what it will look like.” That would have been honest.

Comment by Bill — August 6, 2008 @ 1:31 pm
Bill,

We agree. I am just noting that the lenders (those holding the mortgages) have no recourse. There was no mortgage fraud per se. The homeowners certainly have a shot at it especially if abuse of funds or negligence can be shown. Home owners might pursue the builder and the builder then takes recourse against the city.

I suspect that this is why the city started having the builders install the parks first then purchasing them with tax credits after the fact. It makes the developers look good to their investors/buyers and gives them the appearance of donating the park. The parks get built and paid with using tomorrows tax dollars.

Still the council said the money was there “all along”. They are either lying or incompetent. How exceptional is that?

Comment by Wallypog — August 6, 2008 @ 3:04 pm
Wallypog, What parks were installed by developers/builders?

Comment by Susie Snedaker — August 6, 2008 @ 8:41 pm
I am referring to Mill River and Riverstone…………

Comment by Wallypog — August 7, 2008 @ 4:49 am
Wallypog, the developers for Mill River and Riverstone donated the land for the parks and got significant IRS tax deductions for doing so. Then LCDC funded the creation of the parks with tax incentives. The developers got double wins on those deals.

Comment by mary — August 7, 2008 @ 10:32 am
Because Sunshine Meadows and the Landings subdivision have parks that will be developed at the expense of the city, it seems that only those parks located within the urban renewal district are treated differently.

Comment by Susie Snedaker — August 7, 2008 @ 12:04 pm
From Dans post #2 above “code enforcement”. HA HA HA! That is SOOOO funny. Does the city even know what those words mean? They can’t even be trusted with open meeting law. What makes you think they can OR will enforce code?

Comment by concerned citizen — August 8, 2008 @ 6:13 am
Having addressed the council in February regarding the issue of code enforcement of known non-compliant group homes, the city has yet to enforce its adopted zoning ordinances. The city asked me for a list of known homes over a year ago. Arbitrary code enforcement is unacceptable. The council seems to be stonewalling once again.

Comment by Susie Snedaker — August 8, 2008 @ 8:28 am
Was the Riverstone pond developed before Mike Tilford asked the city to accept the site? Was there extensive oversight of filling either the pond or the old Central Premix site by the city or county or any governmental agency? If not, what oversight occurred?

Comment by Susie Snedaker — August 8, 2008 @ 8:31 am

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