consultants are sandburs

Thursday, October 10, 2013

RAMSEY - FRANCHISE FEES - What is the status of Flaherty's subsidized adventure, because it's time they carry a share.

At a guess Flaherty might have been allowed a taxbase delay; something I have difficulty understanding because TIF is deliberately made non-transparent, as to how regular detached single family homeowners subsidize extreme growth.

If Flaherty's been granted some tax-delay status, the franchise fee looks better.

Those empty units are metered, and a per meter monthly charge on each is due, given the extreme level of subsidy the McGlone led HRA led Ramsey into yielding the Indiana adventurers.

Is my speculation correct? Am I wrong? You, pin it down with city hall. It is not my place to do your, or Ben's, homework. But do take the possibility into account in weighing a franchise fee situation. And - A franchise fee situation need not have to sting for five to ten years, or in perpetuity as the greatest worry stands. The 2013 budget appears to have been set, with slack, and future budgets can rely more on normal levy procedures instead of kludging up franchise fee mischief. But if road repair needs to begin sooner than not, it has to be funded. A short - make that very, very short term franchise fee situation might not be as disgusting as the thing lingering and becoming entrenched same-old, same-old.

Keep an open mind, and ask suitable questions of city hall leadership. It is how you can reach informed understandings.

Ditto for the banks that might have forced out homeowners unable to avoid mortgage default. They may have vacant homes and be sitting on inventory to avoid a glut on the market and price erosion beyond their wishes, but if those homes have gas and electricty metered in, even if at zero consumption, fee the frigging banks and if they decline to pay promptly make it a lien and foreclose it to show a seriousness of intent. Whack them upside the head, so to speak, to gain their attention. Their sitting on vacant inventory is not a benefit to the community of taxpayers if they are not paying a share for their profit-chasing conduct that way.

These are practical points of concern, in thinking over pros and cons of using franchise fees SHORT TERM if at all.

__________FURTHER UPDATE___________
Here is where the franchise fee thing can get sticky. For the banks. If they simply refuse to pay, what then?

The fiction of the franchise fee indirect and regressive taxation method is that the fee is charged the utility and not the pass-through victim. Works fine, if the victim pays. But if not, the fee is due from Connexus, to the city, and not from the end user to the city.

Bottom line there, as a matter of law, can the city impose a lien and foreclose a franchise fee deficit?

You tell me. I do not believe the question has been litigated to establish any precedent, and courts sometimes favor banks despite better judgment. That one single MS Sect. 216B.36 statute surely avoids getting into the tall grass where the dangerous ticks can attach. It on its face, is stone silent re such nuances while posed as if actually a simple town-utility situation ignoring third party beneficiary/liability questions lurking indirectly behind its simple wording. Courts often say a facially clear statute can be construed without looking at full legislative intent and possibly implied dimensions, a KISS approach, and the Matt Look suit against PACT School is a prime example of it. Matt's suit ran into that wall with the wooden "town" has a statutory definition thinking of Judge Fredrickson in that case.

It happens.

So, if a franchise fee is imposed, regular folks pay, Flaherty does not, then what? It is a fine question. It is something that needs resolution in advance of any imposition of the regressive taxation scheme.

So, city hall, the ball is in your court. You impose a monthly per-meter fee wholly independent of any consumption levels, Flaherty declines to pay, what then?

Do you let Flaherty skate, by making it a per account fee, for "active accounts," where vacant hopefully-to-be-rented units are not "feed" if no active account has been established for them or the account is deemed "inactive" while vacant between rentals; but all Ramsey single family detached homes with active Connexus accounts are hammered with that fee? That's unfair to all the rest of us, isn't it?

And - in case readers miss this, the Flaherty thing is individually metered, at least for electricity. How the building common areas are heated and maintained, is unclear. But if Flaherty on the majority of units which are vacant would refuse paying an imposed franchise fee for them, you cannot shut the entire building down for non-payment of franchise fee impositions. Those individual tenants who pay their franchise fee are entitled to have their utility services. So, is the physical plant there individually metered in a way that Connexus can assert leverage against the vacant units? Or should the city just say, Connexus, you owe us, and how you deal with that is your problem? Will that approach sell in negotiation of the franchise renewal terms, and beyond that is it a wise approach? This franchise fee thing, in its entirety is a thicket of tall weeds where it is hard to guess where all the snakes may be hiding. That is all the more cause to simply not go there.

____________FURTHER UPDATE___________
Another approach it appears Ramsey staff and the present council seems to have ignored. My understanding is a past council, in buying the distressed Ramsey Town Center land out of bank foreclosure at a premium price for the banks "borrowed" long term and interest-free from an existing reserve account to pay the price. Given that this council declined to exploit full levy limits to build general funds up for the clearly general public function of road maintenance, how about a short term loan of that nature to get road upkeep on a good schedule and kick the franchise fee can down the road?

Ramsey could do that via now passing placeholder ordinance language of the kind Hopkins has online, in its city code sections 701.05 and 702.05, but without imposing it [unlike Hopkins' code sections 701.07 and 702.07] that language being online here and here? (Interesting Hopkins-related franchise fee news, here; so, yes once the evil things are put in place by ordinance they can at the drop of a hat be doubled, tripled perhaps, even if consequent debate and dissatisfaction were to ensue.)

If only a placeholder ordinance is passed now and borrowing from a reserve account is done, it will then be that much easier to instigate actual fees later, perhaps to repay a short term raid on reserves, so that approach is not advocated here.

But it would mean at least no franchise fee now, and would work so long as past greater levels of borrowing from Peter to pay Paul mischief has not depleted reserves set aside for other public purposes to dangerous levels.

Nobody on staff has gone on record previously saying such a danger lurks, so it might be strange if such a thing is first said now, in the present situation. However, it might be true, now, that reserves stand dangerously depleted, but with past council head-chopping - staff-contraction activity, nobody on staff wanted in the past to be the nail standing up to get pounded down.

The question of borrowing from reserves to start road work now but delaying or eschewing franchise fees and using future full levy capacity up to the limit to keep fixing roads while paying back the raid on reserves, as an option, is a legitimate question needing a timely answer, now.

Did the earlier council decision making forestall any short-term borrowing from reserves to avoid a franchise fee imposition at this time, or not? Then, if the borrowing-payback via levy is feasible, should it be done, or do we face a situation where the present council's will actually is dead set to impose the thing now (and possibly forever)?

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