City Council Work Session 22 April 2008

Budget Matters

By Curmudgeon

[This work session with the Mayor was requested by the Council to have the Administration discuss mostly budget matters involving expenditures from general fund surpluses, RAMP funds and BDO revenues.]

The budget discussion began with Mr. Bill Cook, of the Council staff, summarizing the issues the Council wanted the Mayor to discuss. First up was the surplus in the General Fund... about $4 million. The city is required to keep $2.7 million of that as a reserve fund, leaving $1.2 million available to appropriate at this time. The Administration requests that the $1.2 million be spent as follows: $800K to cover a shortfall in anticipated sales taxes [attributed to the general decline in the overall economy], and $450K to be spent on various capital improvement projects [road projects, Union station repair, etc.]

The city also received $375K in RAMP Funds, allocated to the Ogden Canyon trail project [bridge and overpass], the existing Ogden River Kayak Park [$78 K] and Paddlefest [$13K].

Mr. Patterson reported that the City’s 50% share of BDO revenues came to $2,745,000, which was about $800K more than had been expected. A sign, he said, that things are going very well at BDO. There followed a long involved discussion of several ordinances the city has adopted regarding spending of BDO funds, amendments thereto, all of which ended up this way: half of the BDO money can be used for any purpose, the other half must be used for capital improvement projects --- unless the money is needed for paying interest and principle on the construction bonds issued for The Junction. And, Mr. Patterson noted, the money is needed for that purpose this year, since tax revenues from The Junction have not come in as expected due to construction delays, slowness of Weber County to add finished elements of the project to the tax rolls, etc. So the city must pay, this year, $1,568,850, which is about twice what it anticipated paying.

Much discussion ensued. Councilwoman Wicks asked whether the Junction would be able to pay its expected share next year. Mr. Cook replied that there was “the potential we will have to pay the major portion, if not all of it, again next year,” depending on when portions of Phase One get finished, and go on the tax rolls. Councilman Garcia noted that we, apparently, have no guarantees when the various projects will be finished. Mayor Godfrey said the people building requested changes, all of which delayed construction longer than anyone had anticipated. Another administrative spokesman noted that to go on the tax roles, a project has to be completed by January 1. If it’s completed, say, March 1, Weber County won’t get it onto the tax roles until the following year. In a nutshell: the city has to pay the money to service the bonds, and the ordinances require it to do so.

That left $513K of BDO money for capital improvements projects, and $513K available for other spending. Mayor Godfrey said the Administration used the CP money to fund what the Council told it were its top CP priorities. But, he added, the Administration has a dual role. It must maintain the city, which it did by funding the Council’s CP priorities. But it must also engage in “forward thinking and strategic thinking,” and look for ways to “take the city to the next level.” And that second responsibility is what informed his decisions about how to spend the rest of the BDO funds, those available for any use. He wants to use them to help fund projects that will make Ogden “unique” rather than projects that would make Ogden “anyplace USA.”

The Administration is asking to spend $200K on the Outdoor Recreation Companies Assistance [ORCA] programs. Mayor Godfrey explained that there are unlikely to be any major ski companies [meaning large numbers of employees] movable to Ogden in the foreseeable future, but there are many small companies that are badly located [in Florida or Los Angeles], companies with from 5 to 30 employees, who are very interested in coming here. No state aid is available for them [it kicks in only with 50 employees or more]. These companies do not have the resources to fund a move on their own, but if we help with the move, make the move cost-neutral for them, they will come. No more than $60K per grant.

Councilwoman Wicks asked what substantial benefit “a company with five employees” would bring to Ogden besides occupying a vacant office downtown? Mayor Godfrey replied that such companies bring in their sales forces for meetings, they bring in their vendors... in short, they bring in a lot of people who eat in town, stay in the hotels. Notes occupancy rates have gone up since the smaller ski companies have arrived, and suggested talking to 25th Street restaurant operators would make clear the business even the small firms bring to town. Plus the salaries they pay are generally twice the average pay in Ogden.

Councilwoman Wicks asked how much money was available to help out existing small businesses in Ogden? Bill Cook replied last year it was about $600K for loans, with the maximum allowable loan being $90K. Loans, not grants. Councilwoman Jeske wondered if offering the smaller companies loans, or combinations of loans/grants might be more cost effective. Mayor Godfrey said the city is a tough negotiator and always prefers to loan rather than grant, and tries to, but sometimes a grant is all that will work. Councilman Stephens said he like Councilwoman Jeske’s suggestion about combining loans and grants. Bill Cook noted that the Administration had originally asked for $300K to assist small outdoor company relocation, but the Council was considering only $200K. Councilwoman Wicks asked if the Administration had made any commitments to companies about the money, any promises. Mayor Godfrey replied that the Council had approved of the plan last year, it just had not appropriated any funds at that time. And that his administration had gone to trade shows, invited company heads here, and discussed what might be available to assist them moving here. Since the Council had approved the plan, the Mayor said, we proceeded on the assumption that the funding would be forthcoming. But no contracts have been signed.

Brief discussion of the General Fund Debt Elimination program, which is continuing.

Next, the Mayor addressed the Ice Tower. He called it “a strategic piece of planning,” which is why the city gave it a high priority in RAMP fund request last year. A private company has agreed to operate it... which includes all maintenance work, utility payments, and assuming all liability for operation. The company is Ogden Climbing Parks [OCP]. OCP has committed to raising $200K, and the Mayor said Ogden has a foundation willing to contribute $400K but they insist Ogden City pony up $200K first as a sign of commitment and Council support. “This is a really important project. It will distinguish Ogden because it’s unique.” Councilwoman Jeske said all her email from constituents has been against spending city money on the ice tower. The Mayor replied that’s always the case: you rarely hear from those in support. “It’ll be like the Eiffel Tower downtown. Some will hate it. Some will love it.” Mr. Patterson noted that in the third “Climbfest” held just this week, there were 240 very enthusiastic supporters of the tower project.

Mr. Stephens said a constituent asked him why the money couldn’t be spent on the golf course instead. The Mayor replied that if $200K would solve the golf course’s problems, he’d have spent it long ago, and in fact he has spent more than that trying to fix the course’s problems. The ice tower, he said, is what will make Ogden a unique sports venue.

Councilwoman Jeske: “Have we given up on the gondola, then?”

Mayor Godfrey: “I hope not.”

In response to questions from Ms. Jeske, the Mayor indicated that he expected 5% to 7% of the city’s residents to try the facility at least once. That OCP had already formed partnerships with youth groups to introduce young people to the sport via the tower. That Mr. Lowe expected to organize four major and four local fests or tourneys a year using the tower, and that he anticipated significant numbers of prominent climbers would attend those events.

In response to another question, Mr. Patterson said that one third of the construction money [presuming the city paid its $200K] would come from public sources, the rest from private ones. Ms. Jeske pointed out that on several other projects, the Council had been assured a project would be built entirely with private money, only to have the City have to pony up considerable money later. In fact, Councilwoman Jeske noted, this very ice tower was originally proposed as an entirely privately funded project. The Mayor agreed that that had been so, but repeated again that the uniqueness of the tower and what it could do for Ogden justified this one time seed-grant of $200K to entice twice that from the unnamed foundation he discussed earlier, along with other contributors already committed, or about to be so, so the project could be swiftly completed. Ms. Wicks noted that when originally proposed, $200K would have paid for one third of the original estimated cost. The Mayor said he appreciated that, but that this was a “really important” and “central” project to establish Ogden as an outdoors adventure sports Mecca.

The Mayor briefly addressed the SE report that he had made funding the ice tower a quid pro quo for using UTA money to fund a transit study. He said his staff had drafted the language that led Mr. Cook and the Council staff to conclude that. That the Mayor had not seen the language of the his staff memo and he had not intended to suggest one was a quid pro quo for the other. The staff had been looking for ways to find money to do both a transit corridor study and the ice tower and using UTA funds for the former looked like a good way to do it, that’s all.

Ms. Jeske reminded Mayor Godfrey that the Council had proposed funding an “alternatives analysis” [for the trolley or BRT route downtown to WSU and McKay Dee] not a “transit corridor study.” Mayor Godfrey replied: “You really don’t want to do that.” Ms. Jeske replied: “Yes, we do.” Mayor Godfrey said once the Council learned the true facts of the situation, it would not want to fund an alternatives analysis, but would want to fund a transit corridor analysis instead. He said he wanted to have a work session with the Council to discuss the matter quickly.

Ms. Wicks pointed out that the city needed to move fast on transit projects or all the money from the recently passed transportation tax would be allocated by Weber County to projects that would not help Ogden, even though Ogden people were paying the tax. That would, she said, "be tragic." The Mayor concurred, and said he thought the city could have a “rubber tire” downtown shuttle system ready to go very quickly, and he wanted to meet with the Council to discuss it, and to convince them that an alternatives analysis [necessary step to federal funding for a trolley or bus line downtown to WSU] would not be a wise use of city funds at this point. [Note: the “rubber tire” system the Mayor envisions is a bus tricked out to look like an old timey trolley, not unlike the ones plying the main street of Park City or the bus “trolley” tour vehicles in San Francisco.]

Councilman Stephenson reminded the Council that the Ice Tower was but one part of an over all plan, with many parts, to make Ogden into an outdoor recreation center, and so should not be considered in isolation.

There followed brief discussions of the city’s plans [ongoing] to save neighborhoods in east central by buying up homes, rehabbing them, and then selling to single family owners, with the idea of converting rental neighborhoods into owner-occupied ones. Also involved buying up duplexes and triplexes and converting them back to single family homes. Suggestion made that a tour for the Council to see what had already been accomplished might be a good idea. Some discussion then of the Colors of Success program, a anti-gang initiative. Councilman Garcia particularly concerned that the contracts and program not slated to formally begin until July. It was important to have something going in the neighborhoods before summer began. Very important. Brief discussion of some other matters likely to come up on future budgets, but not this year’s [Old Post Road project, etc.]. And the meeting adjourned.

[NB: It was a long and detailed meeting. Far more detail than I have summarized above. But this was the gist of it. I think. Should anyone else who was there read the above and spot an error or an impression wrongly conveyed, I’d be happy to be corrected. Also, the meeting began with a discussion — a very interesting one — about the recent purging of citizen volunteer advisory committees of all who had served over ten years. I’ll summarize that later in another post for those who are interested. Further deponent sayeth not.]