consultants are sandburs

Wednesday, October 09, 2013

RAMSEY - FRANCHISE FEES - In the immediately prior post, I shot first, and now am asking questions. And so far, I am pissed.

The Country Joe case was fine, but the problem is what I noted at the outset of the post. If there is a statute, how to deal with it becomes the question.

There is a statute. It is very vague, and I am going to do a bit of research.

The statute is online, here.

Unless I err, that's the core of problematic Ramsey council mischief, aka "franchise fee" meandering and dodging a use of the full levy limit's legitimate taxing power, while wasting cash buying and tearing down a porn shop and then admitting the roads are in a serious state.

Really. Direct Money spent for blue-nose fluff stuff, but proposing indirect regressive taxation - for roads. It's Alice in Wonderland logic, or seems so to me.

Those folks thought franchise feeing us would float low-profile under the public's radar, and revenue could be generated for admittedly public purposes, road upkeep, via indirect (and limitless) ability to increase the revenue extracted from Ramsey's citizenry. From you and Ben.

This month the Charter Commission will be looking at how franchise fee handling should be addressed in the city's charter, which is its basic organic document, akin to a constitution at higher government levels, or to the UN charter. It defines basic city powers and, while lacking a bill of rights limiting municipal powers as the charter now stands, it has what we can call a quasi-constitutional role in city government. Calling it that we can move on.

The entire concept of a franchise fee is that it is a backdoor tax, one less apparent than a property tax levy, and a regressive one to boot if done where a flat fee structure is applied to power providing utilities, gas and electric, the fee being charged those firms but under the collective council understanding it will be passed through to us.

It is the worse of taxing powers, that way. It hits the poor proportionally harder than those in Northfork (on council, previously that was McGlone, presently it is Mark Kuzma who apparently favors the franchise fee approach).

Well, the franchise fee did not go under citizen radar because Jason Tossey got on his Paul Revere horse, figuratively, and went about shouting, "The feeing is coming, the feeing is coming." Or something like that as best as I understand things. Revere was not alone in his concern about the British and what they were intending, he had a band of confederates, and Tossey may also be other than alone in his activity.

Quite simply using flat-fee taxation is the precise opposite of "tax the rich" their fair share because they enjoy a better societal status and in principal owe society proportionally more because of that. They owe us a lessening of the burden of government should it weigh disproportionately upon us, vs them.

You can read the statute. In future posts I shall review the entire thing as best as I can online, because I am pissed: There's just short of a million in levy taxation the city hid from using - that slack amount being between what has been budgeted and the levy limit for 2013. Then, three hundred grand and some change to buy and tear down the porn shop. That is then $1.3 million that could have been saved/budgeted/used for roads via only the general levy.

Then the talk is of $1.7 million, roughly, being an annual road upkeep amount. Via rough calculation where Ramsey's city engineer admits his estimates erred on the side of caution, i.e., less might do. $1.3 was on the table. Franchise fee mischief was wholly unneeded.

That is the ordinary and proper way to do things. A general levy matched to spending needs, and if there is a levy limit, then live with it by adjusting spending on needs, postponing what is better postponed - staff expansion, EDA, HRA, whatever - all the additional revenue drain activities that can be subjected to belt tightening. But leaving big-time slack on the levy limit because they'd prefer a less apparent tax, and then franchise feeing, that offends greatly. There is no cap on franchise fee revenue generation, once it becomes an entrenched thing like the HRA now is.

The Charter Commission of Ramsey will consider franchise fee matters, as a concept to be wrestled with at the most fundamental quasi-constitutional level.

I am on the commission, and Joe Field chairs it and has been a strong voice against use of the franchise fee as so far drafted by staff and presented council - something the council collectively last night agreed needed review since it was clearly problematic as things stood going into that meeting. I have not researched it. I will.

However, for now, in anticipation of the Charter Commission meeting, my state of mind is to advocate a provision to Charter Chap. 7:

Section 7.13 Franchise Fee Bill of Rights.

Regardless of any State of Minnesota permissions, City of Ramsey shall not use a franchise fee as a revenue generation process.

That as a starting point of what I believe to be good policy, with, however, a willingness to consider:

Section 7.13 Franchise Fee Bill of Rights.

Regardless of any State of Minnesota permissions, City of Ramsey shall not use a franchise fee as a revenue generation process, unless and until levy limits have been reached in taxing property to support the general fund and a deficit exists between general fund revenue and necessary expenditures. If ever imposed, franchise fee revenue generation shall not be structured in a way proportionately more onerous on the poor and those facing hardship than on those of greater means and greater capacity to pay.

Those two alternatives do express what I believe to be good policy, with the latter being more permissive toward government flexibility than the former.

I have discussed none of this with any others on the Charter Commission, yet I have a feeling that such an approach could, on that body, grow legs. Approaches may differ, but my hope would be that use of a franchise fee, i.e., regressive indirect taxation of the citizenry, would be generally disfavored among Commission members.

As I said at the outset and after learning of $1.3 million levy-slack and porn-store spending mischief, (not pushing levy limits and buying and tearing down the porn store while the city roads south of it may need serious upkeep - censorship hardly being a public function but something that got some judgmental folks' drawers in a bind), all that, and then the staff/council cooks up franchise fee stuff.

I am pissed. It's not quality government. It appears indirect taxation is favored by people who rode onto council as something of a reform group. Not good.

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Hit levy limits, and then and only then ask for more, and justify it at that point. And in the process, why not roll the EDA budget and HRA budget into general fund allocations without resort to separate levy impositions, and as a Bill of Rights matter, disallow separate and independent levies so as to bypass levy limits?

An interesting point to consider: The Charter has "boards and commissions" language, but is silent on "Authorities" while the City under James Norman's administrative tenure gave birth to an EDA and an HRA and there was quelled contemplation afoot even of creating a "Port Authority" while we, after all, have no port. Figure that one out.

That IS history, and I see no cause to face the doom of repeating it. One bug in my bonnet for wanting onto the Charter Commission was to figure an appropriate place in the document to add:

The City shall not create or use a Port Authority.

That can wait. Franchise fee consideration is the issue of the day.


______________UPDATE_______________
A third alternative of a Charter Section 7.13 might read:

Section 7.13 Franchise Fee Bill of Rights.

Regardless of any State of Minnesota permissions, City of Ramsey shall not use a franchise fee as a revenue generation process, unless and until levy limits have been reached in taxing property to support the general fund and a deficit exists between general fund revenue and necessary expenditures. If ever imposed, franchise fee revenue generation shall not be structured in a way proportionately more onerous on the poor and those facing hardship than on those of greater means and greater capacity to pay. Accordingly, in negotiation of franchise grants to energy providers City representatives in negotiation shall mandate as a contract condition of a franchise grant that disproportionate impact on the poor and destitute shall not happen in any franchise fee pass-through from the franchisee to the energy-consuming public.

In that fashion, the City would have flexibility to structure its fee to the franchisee in any manner convenient, but with the utility then obligated to assure fairness.

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