I have to admit that I am quite gullible when it comes to politicians. I was pleased to see such a good attendance at the Orem City council meeting on Tuesday night where it was going to be decided if taxes would be raised. The sad irony about it is that most citizens I talked to felt the council had already made their decision and their actions proved it.
The meeting started at 6 pm and lasted up until 2 am where one items remained on the agenda after the budget discussion. By this way, this will be a lengthy blog entry of my notes, so be ready or skip to the juicy parts. Today’s entry is divided into three segments.
1. Statements made by the city council.
2. Feedback about higher taxes and Utopia from the citizens of Utah and
3. Council’s discussion about raising taxes after citizen input.
The announcements went out that the city council planned to raise the city’s expenses 47% and about $100 per household. There was the announcement in the city bill as well as robo calls. To see the reasons for the raise of taxes, see my Vent blog for May for details. http://www.melvagifford.com/2012/05/08/presenting-the-orem-city-budget-2012/
Most citizens felt the council had already made their decision before listening to feedback. Near the end of the meeting the Mayor talked about wanting to listen to the people and proposed that the city reduce percent of tax increase and cut more from the budget and access a little from the savings account. The word compromised was referenced a lot. In my nativity I was thinking well a 25% tax increase is better than a 50% increase. It took some snide comments from several of my Peers to put a sinister twist on what may be happening, let me explain.
As I learned more about politics I learned of a phrase called ‘The Overton Window’. OW is the principal that someone will propose an over-the-top/excessive idea to the community that is received very badly. A federal example is giving rights to animals). Anyway, once the idea is proposed there is a big outrage by the people of the government going too far. The persons making the outrageous claim then back pedal and provides a less outrageous suggestion and the opponents agree to the lesser proposal because it is as bad as the original. But that was what was planned from the beginning.
Orem City council may have just done this to the citizens i.e.: propose an excessive taxes rise of 50%. A lot of people get mad so it’s decided to raise taxes ONLY up to 25% instead.
My two peers made the suggestions that maybe the city council considered wanting to do 25% in the first place and by suggestions a higher tax and then lowering it they look good. This is how they could be using the Overton window technique and gets less flack by the citizens.
Would they admit that such a technique was employed? Maybe it wasn’t… Maybe it was. It is my hope that the integrity of the people on the council would resist such manipulation (see reference to manipulate in previous blog entry in may).
The meeting had a very good turn-out. I went a little early and was one of the late-comers. I later heard the meeting started at 6 pm rather than 6:30 so that may be why I was in the over flow of the over flow. The city council room was filled, the over flow area was filled and the main door area was filling.
The following are some of the things I learned from citizens and one or two comments from the city council members. Prior to the decision, citizens have three minutes to give feedback and no person can go more than once. One woman counted about 82 people who commented. About six-eight people of that 82 liked Utopia (internet/ fiber optics service offered through the city or felt the taxes were justified) and of those 6/8, three still didn’t like raised taxes.
The following comments are paraphrased from my frantic pen scratching. Any errors of the text below are my fault due to not hearing properly or not catching all the data. No misrepresentation was intended.
Things learned from the city council:
– None of the tax increase will be used for Center for Story. That funding will come from donations but the maintenance of story for center would be financed by city. I believe this will be financed by some of the Cares funding already used for other city entertainment services.
– Property taxes go to the state and each city gets a certain allotment of that money.
– Utopia is not an internet company but rather the fiber optics infrastructure that is laid in the ground of the city streets and other internet companies can pay for access of the fiber optics.
– The collection of cities combined to do Utopia and we are one of the founders.
– Council says that building the Center For Story is not paid by taxes but maintenance will be handled by the city. How much cost per year? 40K a year, though a private company is discussing managing it in place of the city.
– City council meeting in June (12?) it was decided to go forward for the increase of two smaller fees water and
– Council responded to suggestion of declaring bankruptcy: that the bad thing about bankruptcy or chapter 11 to get rid of the 20 yr. bond with Utopia is that the city relies upon a good credit in order to accomplish different deals and bad credit would not allow the city to do that.
– Only one council member still here who voted for Utopia.
– Midtown village (complex on State street I believe.) has addressed the debtors and has received a bond from the city. If they fall through on the payment the city will take over responsibility over the center. Construction will begin again.
– UIA is what manages Utopia. Sounds like this got created when it was rebonded. It’s like a second mortgage.
– It’s either state or Federal law that says that there must be at least 5% amount of city budget in a savings account. It is currently at 9%
Citizen feedback:
– Past politician liked Utopia and voted for it but now regrets voting for it.
– Baskim: Utopia is financial bondage. Suggest the city do a class action suit against Utopia and not do another phone co. mayor says that if city did sue, it would be against ourselves
– Gary Anderson: Council says center for story is not paid by taxes but maintenance will be how much cost per year? Answer: 40K a year.
– VP of US Tax payers association: says $1 million of Orem city money goes to a tax exemption to the owners of University mall.
– First time I will not support a tax increase because I was told that when the city council agreed to be a part of Utopia that they would keep a close eye on the management of Utopia. They didn’t.
– Blackston: I had to reduce my employees because I’m a struggling business.
– Should have had certain conditions that should have been made before paying Utopia bond. Sounds like no conditions were defined.
– Brown: June 19th meeting discussed of taking other sources to earn money. What became of that discussion? Eight employees earn over $100K. Concerned that the city is getting involved with private business. Suggest chapter 11
– Utopia Audit = reports that there are no records of how the money was used or to explain the bad mismanagement of the organization. Suggest forcing Utopia to liquidate. Of all their years in business their revenues have never been higher than expenses.
– Ten years ago city spent 8 mill. to fix roads. Subcontractors were gloating about how they were fleecing money from the job. When the government runs lean they get smart.
– No city councilman but one accept budget cuts that Hans Anderson proposed. Find a way to pay on current budget as is and maybe pay penalties and just get out for utopia.
– Johnson: Increased business taxes make it hard for business to pay bills.
– Small business owner: Four years ago state doubled property taxes. Business climate is bad in Orem. Citizens don’t dare spend much.
– Dave: make document
+ Very few citizens showed up when voting on Utopia though there were a lot of requests for people to do so. Now a bunch of people show up and complain about the decision.
– Orem citizens did not agree to Utopia and shouldn’t have to carry the burden. Wife goes to Provo Macys since they have less city taxes that become part of grocery bill.
– Observation of last council meeting: When Hans Anderson gave suggestions on how to help budget, it looked like other council members were not listening.
– Head Orem librarian makes $160K a year. Maybe review the benefits of high salary employees. Hans Anderson previously gave suggestions to address Utopia without raising taxes
+ Basken Sterling: Likes that Utopia was geared for far reaching use such as the water storage building build in the past gives the city water. Thinks Utopia is a good idea.
– Swensen: 80% of tax hike is going to utopia. Reference and quoted newspaper article by Kevin Stratton. Suggest move Utopia to the private sector. City council says majority of Utopia money is going to bond holders.
– Dick: $185 million lost in past ten years. 2007 utopia had about 6000 subscribers. 2012 they have about 9000 subscribers at the cost of over $100 million. That is about $5,000 per subscriber.
– Johnson: suggest for employees to have a pay cut.
+ Feels that Utopia is good thing. Still not happy about the tax increase.
+ Lee: City let people know about Utopia and wanted to tell about it. People
did not come. Very few people came.
– Sharon: only one council member still here who voted for Utopia.
– I have to live within my budget, live within my means. I expect the city council to live within your budget.
+ I get good speed on utopia. Feel like council has already made their decision.
– Karen: when government becomes involved in private business sounds like communism.
– On Utopia see no oversight, no deadlines. Government shouldn’t choose who is the winner or who the loser.
– Dale young: not raise taxes for years but did get increase or revenue.
– David Spender: referenced newspaper utopia article.
– Suggest that City stop giving Toyota dealership money.
– Mark: seems like paying for Utopia is like paying for a dead horse.
– Erin: 90,000 people in Orem. Corporation of Orem is not Orem. Not serving the needs of people.
– See no evidence of problem being fixed.
– Linda: tax increase unnecessary. CA did not cut their budget and you can now see how bad things are down there. It’s time to liquidate Utopia. One/Third of Utopia subscribers have dropped it.
– If you’re digging into a bad hole than stop digging.
– James Faucet: thought Orem was conservative. 28% of city has utopia.
– Merlyn: Is Utopia living up to their contract? No accountability.
– Martha Clark: 9% (of 28% installed of city) have access to Utopia. Utopia is competing with private companies that are providing the same service at a lower cost. Is there ever going to be a time when Utopia will be profitable?
– Robert Boards: Orem city is anti-development. My income is down by 75% compared to four years ago. Why pay Utopia if the job is not done?
– Mary: I am a micro-biologist. I get ½ (maybe 1/3) of the pay the head Liberian gets. Suggests city council meeting announcements are put up in school announcement boards.
– Judy Cox: referenced that Michael Kenney is a lobbyist. And is paid $8K a month to lobby for Utopia. $2100 paid by federal government to put in Nelson Park.
– Afton Miller: feels bankruptcy should be considered.
– 20 year lean on my house. Referenced CA’s state propositioned 13. (didn’t catch what 13 meant or referenced)
– Don’t see you’re interested in small government. 9 proposals were given by Councilman Hans Anderson and there was no second vote offered by any other member of the council. Now is not the time to raise taxes.
– Alan Christenson: referenced how Germany took people’s freedoms away little by little.
– Christian Much: Fixed income with multiple cities involved. Expect Utopia to end up costing 500 Million.
+ Police Officer: Officers are not getting rich from Orem citizens. Appreciates how city looks for ways to save money. Officers vacuum city office room after meeting etc. Appreciate about you being serious.
– Utopia service has been bad. Went to most Utopia meetings. Expressed concern felt like was shuffled to the side.
– It’s wrong to make people pay for a service they didn’t get the benefits. New customs pay for connection fees.
– Provo got out of Utopia and created Iprovo. Utopia has not broken even $119 mill. Cost to Orem so far.
– Socialism doesn’t work
+ Lesley Nelson: some of the talked tonight is silly. Have a business here for 27 years. I’m in favor of tax and pay increase for employees. Likes forward thinking technology.
– Melva Gifford: Went around community to get signatures against taxes. Of three dozen signs four people didn’t want to sign. Most people I talked to thought what was the use of telling the council what we want, they don’t listen, good job. Concerned about millions of dollars not being accounted for or disappearing. Glad center for story is not paid by taxes but cares. Glad you advertised the meeting and thanks for robo calls and such.
– Combine with other cities that are part of Utopia and restructure payments.
– Tom Over: Feel like I’m talking to a brick wall in meetings I’ve attended.
– There is mismanagement in the management of Utopia
+ Dennis Clark: Good service in Utopia and agree with tax increase. Korea
provides a similar service and they see it as a utility.
– Allen Owens: enjoyed Utopia but principal behind it is wrong. People should have to pay for something that isn’t working. Do see proof that council sees Utopia as good
+ Police Officer: Then years in law enforcement. Orem is known as having a
lot better police department than other cities. Has seen city take steps to save
money.
City council discussion and relaying of information:
– To answer what was done by restructuring Utopia’s loan? In December Utopia refinanced existing debt and locked in the rates up to 2040.
– What is the model for joining Utopia? Upfront fee is onerous. Now have three ways to join.
1. Pay upfront $2700
2. Finance as an interest.
3. Do a lese that include a notice of interest that can be transferred to a new home buyer. New home owner will need to be notified of this arrangement when they buy the home.
– What is the percent of interest for Utopia? That is the Orem portion of utopia and is not the responsibility of the school or district or Utah County.
– What is the $30 mill in City Council’s account used for? Bulk pays for the paychecks and cash flow needs of the city. Not all money is accessible. Some is set aside for emergencies. Or future projects. Such as updated water lines.
– Explaining council woman Mary’s involvement in utopia. When Councilwoman Mary joined the council she was asked in Sept 2010 to be on the board of Utopia to help manage it on Orem’s behalf. She does this willingly with no pay. She believes in Utopia and does not feel that this should compromise her in being able to vote toward Utopia. Utopia is a private company.
– Reasons why Orem does not declare bankruptcy: Cities need a good credit rating in order to function and to access money for functions. Utopia requires a lot of front loading finances as it needs to be installed
– Citizen committee feedback on Utopia: says we need to finish development.
– Some council members feel that robo calls give erroneous info such as Utopia going bankrupt.
– Utopia performs the function of providing fiber optics on the streets of Orem city. It will be public owned. Orem has a responsibility to pay toward the Bond for Utopia.
– Four Options for paying for Utopia:
1. Services
2. Budget cut,
3. Tax increase
4.a mix.
Some monthly costs are taken from the general fund reserves. We have a 29 year responsibility.
– Center for story is financed by voter’s approval of the Care project.
– Utopia was decided in yr 2004.
– When property taxes go up, the city does not automatically get additional funding. State determines what the cities get.
– When council is accused of not listen to Councilman Han’s Anderson council member says they do listen.
– 1980 it was decided to not have Orem employees be a part of the social security program but to be separate.
– University mall pays back more in sales tax to the city then what the city gives them. They also encourage growth for small business that surround the mall as it draws customers to them.
– Mayor says:
need to reconsider budget items #5 (employee pay increase) and consider revising the amount of increase for the property tax. Need to do what is right which involves compromise wants to establish a sustainable path.
If you stop a service such as stopping the watering of the lawns you will lose infrastructure.
If we don’t increase taxes will come from the police and services such as the fire station.
City has not increased taxes for 34 years.
Mayor suggests postpone employee salary increase, do more budget cuts, and less increase of the property tax.
– What were some of the response to the suggestions given by Councilman Hans Anderson: June 12th cut some subsidies, cut credit card fee, delay purchase of cars, and reduce city’s part of paying insurance for the higher paid employees. (Instead of them only having to pay $50 a month they pay $250 a month etc.)
– By default, state employees get matched of retirement benefits. It was discussed to add an additional 6%. 2% go toward organizational dues.
– It was discussed of how to do a memorandum against raised taxes. I believe there is a 45 day window and 3000 signatures are needed in order for the tax increase to be frozen and the increase proposal goes to the vote of the people.
– Ongoing funding for Utopia will be done by more subscribers to pay off the debt.
– At about 1:30 am council began debating how to rearrange a mix of budget cuts, tapping into savings account. Proposed $2 mill. property tax (thus still a 25% tax increase instead of 50%) cut s toward budget and use of some savings to address the other $1.35 mill. Needed from budget cuts and savings. No employee pays increase. Provide incentives to employees that if they come up with good money saving ideas they get bonuses.
– Once they voted on the above they and one more item at it was about 1:50 am. I decided that maybe I won’t get up at my expected 4:30 am. But I did leave at that point after they made that particular vote.
If you would like to be participate in the collection of 3000 signatures on the ballet, please contact me.
