Is South Ogden budget crisis over.

The Standard Examiner's Gentry Reinhart, South Ogden City Reporter, filed an article regarding the on going South Ogden budget crisis this weekend. (See Here) Finally this one had some good news attached to it. Due to the hard work of the council, department heads and City Manager Matt Dixon, South Ogden now currently has a projected surplus of $5,000.

According to the article, Matt Dixon said:

"Again I want to emphasize that this is preliminary and we're still going to be working on this as we go," City Manager Matt Dixon said. "Right now based on the numbers we put in, we have a balanced budget with a very small $5,000 surplus."

This is great news, the budget is finally balanced.  However according to Mr. Reinhart, Dixon and the council are already asking for people to submit budget requests for capital and one-time money projects.  No, we are not bringing back the all expenses paid Christmas dinner to the Timbermine just yet. However we are asking for people's wish list. This is like opening the flood gates during a tsunami.

With only a projected surplus of $5,000, if revenues actually materialize, I think we are jumping the gun in asking for projects.  Not to mention this was the same team that budget for a 2% sales tax increase in the middle of a recession because CNN said it was over. (See Here)  I wouldn't start looking at projects yet, you can hold surplus for awhile longer until we know we are out of the clear.  

Comments welcome.

Urban Forestry Commission Meeting Tonight

Tonight will be my second Urban Forestry Commission Meeting. The big items on our agenda are the tree inventory, website and Arbor Day.

I am very concerned about the tree inventory. According to the previous minutes, this item has been the commission's #1 benchmark since 2008. Yet it is not even completed yet. Why? Well we have some information from our chairman regarding contractor issues and money. But in the end it still doesn't make sense why it isn't done. I am hoping to get some information on that tonight.

A solid tree inventory would allow our city to more properly budget their money for tree replacement, pruning, watering, etc. We would know exactly what trees we have and why. In the end this could be a great budgetary tool. Yet deadlines have passed and been moved nearly every year for over 3 years.

More to come.

Cheating on Your Spouse with Money

Another Savings Saturday feature, this time brought to you by KSL.com.  They had a great article on Financial Infidelity. See the Article Here.  In my career and life I often talk to people who are struggling financially and with their marriages.  Often the two are connected, where one person is spending the money while the other doesn't know.  When one spouse finds out, the other is most often upset.

KSL's article talked about some of the causes for this infidelity from AAA Fair Credit Foundation President Preston Cochran:

• The one who handles all the finances. Cochrane says when one person has no input into the family's bank account, the other person has a clear path to sneaking away with extra money. He gave an example of one person going to the store to buy groceries, then sneaking $40 out of the account when asked if they want cash back. The person who doesn't look over the bills might not notice the fact that not all of the money they spent actually went to buy groceries.
• The main breadwinner. In some instances, Cochrane says the person who makes the most money for the family feels a sense of entitlement to spend it.

What are my solutions to the problem? Well here are just a few:

1. Stop saying..."my money or your money."  "It is our money," no matter who makes it.  
2. Have a weekly budget meeting.  At the beginning of each week, you must sit down and discuss your finances together. You may still argue about what to do with the money, but at least you know when to do it.  At this meeting discuss every expense and every bill.  Review it weekly to make sure you know where your money is going.
3. FULL DISCLOSURE!  You must talk together about where your money is going and trust each other.  This can not be done if you are not open.  
4. NO SECRET ACCOUNTS!  Nothing hurts people more than to know they have a secret stash.  You are in this together, so join your accounts together and keep each other honest.
5. Set up E-Alerts.  Either through Mint.com or your financial institution. Goldenwest Credit Union offers their E-Alerts for free.  This sends text alerts and balance info to both spouses when ever money is spent.  This REALLY keeps you honest.
6. Be willing to compromise and change.  This new method of thinking will be hard at first, but the rewards are amazing.  You just have to be willing to change and work together.

We personally have gone through this transformation.  My wife and I did not communicate well about money.  But three years ago we made the switch and it has been amazing for our marriage and finances.  I promise you it is worth it.  

I welcome your comments and other tips.

Standard Examiner Follow Up on South Ogden Budget Crisis

The Standard Examiner today had a long awaited follow up to their searing editorial of South Ogden City finances. Reporter Gentry Reinhart reported on an email sent by City Manager Matt Dixon and the December 7th City Council Meeting (even though he came late and left early from the meeting). Mr. Reinhart rehashed information my blog has already brought to light, but since not everyone in the world reads my blog this is good to hear from the Standard. Some of the highlights are the city is really not $700,000 in the hole, but really just over $300,000; also the city has cut its budget dramatically to bring the deficit to $83,000. Read the full article here.


What Reinhart failed to report on, because he left before the conversation was even over, was South Ogden City’s plan for a Sales Tax Increase in 2010-2011. South Ogden has the world’s most optimistic crystal ball. Also interesting to note is the dramatic cut in fleet services; essentially saying South Ogden will stop taking care of their vehicles. This in reality will be like mortgaging our future and will more than likely facilitate a need to buy new cars sooner rather than maintain them over the next few years.

Matt Dixon, city manager, is doing a great job trying to communicate the problems we are facing. This article is direct results of that and those who do not read my blog will have this great information. Even if Mr. Reinhart missed some great opportunities to really report the news.

Hopefully we see some sales tax increases in the coming months or will be likely having this same meeting again.

See Previous Posts:

http://www.fromwhereisitblog.com/2010/12/south-ogden-city-council-meeting-12-7.html
http://www.fromwhereisitblog.com/2010/11/standard-examiner-south-ogden-needs.html


I welcome your comments.

South Ogden City Council Meeting 12-7-2010 - "Recession is Over???"

Tonight's meeting covered the major issues surround the 2010-2011 budget and brought to light even more issues of concern.  What we have learned is South Ogden has been planning this years budget under the assumption the recession and its ill effects are behind us.  In doing so they planned for a 2% sales tax revenue increase for this years budget.  However the exact opposite has occurred causing our city to plunge into a distressed situation.

Most of the issues regarding the $700,000 deficit were cleared up and I have posted Matt Dixon's response in the download section or it can be found here.  He shows we are not as bad as we have been hearing; yet being in debt is still not great.  Mr. Dixon's explanation and proposed cuts help us to see South Ogden really is doing a lot to balance its budget.  Interestingly some of the proposed cuts are to things like $12,500 in 401k matches, changes to insurance benefits, and reduction in staff.  Also of interest is the fact that if we didn't have a $23,000 bill for the gym facility, we could have saved some of those items.  Sorry employee benefits...the gym has priority. Big cuts are coming to our fleet services as well, which I think will hurt is in the long term; but a quick solution for now.

However the question remains, why are we so off?  I asked the city council and Steve Liebersbach, the city Finance Director, how South Ogden calculates its sales tax projections to help get a better understanding of how we became so off this year.  Steve went on to explain he uses historical data from the past five to seven years, he also takes into consideration trend analysis, monthly reports from the state tax commission, and of course he also looks at the local, state and national economic situations. So what has the past years data shown us and what did we estimate? Here is the answer:

The 2008-2009 budgeted sales tax revenues were down 4%. The 2009-2010 revenues were down 5.7%.  Based on this information, how would you budget? Would you project sales tax revenues to be up or down. Well Steve suggested because reports showed the recession had ended in 2009, South Ogden should project a 2% increase in sales tax revenue. Yes, you heard me right, South Ogden City projected for a 2% sales tax increase while during a recession (or in the aftermath of one).

Since we had a delay in the effects from the recession, it would only be safe to say we would have a delay in the recovery, don't you think? But we didn't plan that way, we decided to defy all expectations and expect increased revenue. 

The Result?

The following cuts and then some:

1. Early retirement offers in early 2010
2. Reductions in force
3. Replacing one full-time position with a part-time position
4. Elimination of the employee 401k match program
5. Moving to a HDHP/HSA medical insurance plan
6. Delaying certain capital equipment purchases
7. Cuts in training and travel
8. Reduction in overtime allocations
9. Amending building cleaning contracts to 2 days and 3 days instead of 5 days per week
10. Scaling back community and employee special events - no more Timbermine :(

My last question was how South Ogden would survive with revenues going down every year and not being able to cover expenditures. Remember revenue has gone done $360,000 in the past two years and expenditures have gone down only $160,000 in the same time frame.  I used the analogy, if my household failed to bring in enough revenue to cover expenditures I would lose my home.  Steve replied, 

"We can't make the comparison between a household budget and city budget.  A city has savings it can utilize to cover it's losses. The city doesn't operate like a household checkbook, and that is a good thing. Like all of the funds that come in and out of the city there are multiple checkbooks and it doesn't work like a house." 

Well I am sorry he sees it that way, but I disagree. The profit function is the same for everyone, Profit = Revenue - Cost. Tonights cuts are only a band-aid if sales tax revenue continues in a free fall.  But no worries...South Ogden has savings.

South Ogden's Budget Meeting Tonight

As a reminder, tonight's city council meeting will include a public hearing regarding South Ogden's budget and potential cuts. Our city manager, Matt Dixon, appears to have been working around the clock to put together comprehensive plan to help South Ogden emerge from our current situation. At the same time there appears to be some shock and confusion from our local officials at my concern to our budget crisis. I would ask them to remember my blog is titled "From Where I Sit" and so I am posting my opinion based on the limited information I receive regarding the issues, this includes newspapers, minutes, agendas and (when possible) attendance to city council meetings.   At the same time, the resident's of South Ogden can only do the same.   Therefore I am glad tonight we are having a public meeting to help set the record straight and help us all more fully understand the situation at hand.

Some points of interest that will be brought up:

1. Our 2008-2009, 2009-2010 and 2010-2011 budgets have all be challenged with a city deficit. However each year we have made attempts to balance this but cutting back and using our general fund. 2008-2009 we had too much in our general fund and needed to use that money, however would have either way so you can't really use that as an excuse. We have used general funds to balance each year but not as much as we may have heard. In total it appears to be $148,147 has been used of general funds in the past two years.
2. General Funds revenues have dropped nearly $360,000 and Expenditures have dropped $168,488 over the past two years. (Interesting expenditures have only dropped half of what our revenues are. If I did that in my home, I would lose my home!)
3. Our current budget deficit is really $377,535 not as high as $700,000 as has been previously mentioned. The cuts planned should bring us down to $83,491. The city has a plan to help make this happen by some reductions in work force, elimination of the 401k match, cutting back in travel, etc.

This is not an easy job and I am sorry we have to go through this. Though it is next to impossible to compare us to other cities (since all have different revenue streams and structures). I am seeing a lot of cities who are not dealing with these same issues, for example like Plain City and Farr West who both made early adjustments to prepare for the drop in sales tax revenue.

In the end, I would really like our city to stop spending more than it has. I am glad we have an emergency fund and can cover our deficits. But for three years straight we have been in the hole, it appears (from where I sit) we've just kept spending and hoped it would all work. This is hard because we are counting on sales tax revenue to help us and the money hasn't come.

What I want to know is how do we estimate how much sales tax we will receive and how do we adjust the estimate for the current economy?

What do you want to know?

Public Hearing for South Ogden Tomorrow - Cuts are Coming

Tomorrow, starting at 6 pm, South Ogden City will be having a public hearing to discuss proposed amendments to the 2010-2011 budget.  If you haven't seen past blog posts or the Standard Examiner articles, then you should know South Ogden City is in need of some cuts to break even this year.  Rumor has it around $300,000 will be cut from the budget.  It will be interesting to see where those cuts come from.  I have had a number of city council folks contact me since my first posts assuring me the stories in the Standard Examiner (See Here) are blown out of proportion and cuts do not need to be as severe.  I thank them for their communication and I look forward to the meeting on Tuesday.

Due to my schedule I am not able to attend most Tuesday meetings, but this is one I am hoping to attend.

Here is a previous post to refresh your memory of what has been happening: http://bit.ly/eSbkft 

Need New Glasses - Get some for Free on Thursday.

I am always on the look out for great deals.  After my last Black Friday success, I have really been searching for ways my family could save some more money.  One of the things we are always in the need of us a new pair of glasses.  I recently become aware of this amazing company called CostalContacts.com and learned that they often have a free glasses giveaway.  In fact they have given away over 20,000 pairs of glasses for free!

After emailing the company about their program, I learned they are going to be giving away another 1,000 pairs of glasses this Thursday, December 2nd.  And all 1,000 of these babies goes to Utah!  You can get a free pair of glasses for Christmas on December 2nd.  How do you do it you may ask, this is how:

    To get your free glasses simply enter your email address and click the ‘Sign Up’ button at our giveaway landing page: http://www.coastalcontacts.com/cutah.html  

·         You will then receive a confirmation email with details on how to get your free pair of glasses on the morning of Thursday, December 2, 2010.

·         We recommend picking out 3-5 frames on our website ahead of time so that you have your order all ready to go on Thursday - and so you don’t miss out on any of the 1,000 free pairs.

·         This giveaway differs from our previous giveaways in that you do not have to go to Facebook and ‘Like’ our Facebook page to enter the giveaway.

Terms and Conditions:

·         Valid until the first 1,000 coupons are entered. Standard lenses included. Shipping and handling charges will apply. All lens upgrades including progressives, coatings, transitions and tints extra. Some frames may not be eligible. Previous free glasses recipients are excluded from this offer. Limit one per household*. Web orders within Utah on December 2, 2010. *Please Note: Multiple orders placed from the same household will be canceled, even if the destination address is different.

Still not convinced! Check out this media segment on their previous giveaways:
http://www.myfoxaustin.com/dpp/good_day/Saving-with-Shellie-11-18-20101118-ktbcgd

Also here is their facebook page: http://www.facebook.com/CoastalContacts.com

Standard Examiner - South Ogden Needs a Trim

A nice editorial in the Standard Examiner today is eerily similar to what I mentioned in my blog post last week: See Here.  South Ogden is in desperate need of some financial counseling.  It is the classic tale of spending way more money than you have coming in.  Obviously we are in a tough economy but South Ogden at some point has forgotten this.  What is interesting, is this has been problem for some time and we are now just taking notice...or are we?

In 2008 we were headed in the same direction.  The Standard Examiner reported on December 8, 2008 that South Ogden was in the hole.  See Blog Post and Article here. Our former city manager, was even quoted as saying, "if sales taxes drop we will be in a lot of trouble."  However South Ogden just kept spending like sales taxes were still coming in.  I brought this to our attention also in November 2008 showing we were headed for a negative year to the tune of $300,000 (See Here).  Yet we were then all told that we are back on budget, which was due to using the "Rainy Day Fund." (See Here).  In 2009, once again Mr. Darrington cautioned we were going to maybe break even on the budget, but only if sale tax revenue held strong.  (See Line 322 Here).  But at this time were currently negative and hoping we would balance out.  Don't worry even if we were, South Ogden City balanced their budget with their "Rainy Day Fund."

In June of this year this South Ogden City Finance Manager, Steve Liebersbach, predicted we were headed for a $225,000 deficit, but our budget was balanced due to our so called "Rainy Day Fund".  Yet the city kept spending. (See Minutes Here) Council members called out for cuts and concerns to new hires and promotions; yet the spending continued until now we are headed for a number more like $700,000.

Where do we go from here?  First, I feel sorry Matt Dixon, our new city manager, has start his South Ogden career dealing with this problem; but serious cuts do need to take place.  More than just cutting back on the annual Christmas Dinner, but some serious cuts.  I am saddened by the constant lack of fiscal irresponsibility we have seen for nearly three years now.  Every year we have been negative and then balanced it with emergency funds.  When will we wake up?  If I ran my business or my house this way, I would be living on the streets.

I am eager to hear your feelings on this subject.

South Ogden City - Too Much Spending? Standard Examiner Reports.

I have not been able to attend a city council meeting for sometime due to my schedule; however I wish I had attend this last meeting to have heard the explanation for our current situation.

According to the Standard Examiner and reporter Gentry Reinhart, South Ogden City has some budget issues. South Ogden City has spent a monster $700,000 with no revenue to match it. Brent Litz of Litz & Company, performed the audit and said,

"You're in a challenging position for the general fund. You haven't got a revenue stream that's going to support all of your cost structures you've got in the general fund, and so it's going to be a challenge for you to play that game of balancing revenues and balancing costs and making sure that you keep the equation appropriate."

Some points of concern - Maintaining Facilities and also paying for a new recreation center.  OH WAIT!  If you remember from our previous meetings, the City Council told us this isn't a recreation center it is a gym facility!  Which even back two years ago they predicted we would lose money and few people would use.  See My Posts Here: Gym Facility and Rec Center Meeting (Mayor Garwood admits he will never use it.) 

It will be intersting to hear the cost cutting ideas the city has and how we will get back on budget.  So far, the city has been dipping into their general fund to make things work.  But this is not an endless pool of cash.  We need some better budgeting skills and maybe reconsider how we are going take advantage of our $2.5 Million money pit of a gym facility that we all are paying higher taxes for.

Affordablity of Student Tuition

During yesterday's Higher Education Appropriations Subcommittee we were given a great analysis of the USTAR program and also how tuition compares around the state. Our own Rep. Wallis asked a great question of Dave Buhler from the State Board of Regents. Why is the cost so high at our community colleges in comparison with other western schools? He noticed, though most of our Universities are below the WICHI average, our community colleges are not in comparison. Mr. Buhler explained most states use property tax as well as state appropriations and tuition to lower costs. Since we do not allocate any property tax to community colleges, their costs are much higher.

Mr. Wallis stressed a need to have cheaper options here in Utah. The comment was made a number of times that Utah is above the norm when it comes to number of kids in school. Many families have more than two of their children attending college. This can cause a huge burden on families. Efforts need to be made to bring the cost down to allow more people to attend.

I liked where Rep. Wallis was going with this. Maybe it is time to re-look at how we fund these institutions. I am glad we are making efforts to avoid any cuts this year, but how are we going to be able to fund future growth of Higher Education. If not property tax, then something needs to be looked at to give schools more options of funding.

I smell some new legislation in the future for Mr. Wallis on this issue.

The Economy, South Ogden, Keynes vs. Friedman

South Ogden's economy has been on mind a lot lately. Recently we talked about the deficit spending South Ogden is headed for. Though most people are saying we are headed for better times and it may appear that is true. There is still much debate on the two schools of thoughts in economics. For those who took Econ 202 you will remember the ideas of John Maynard Keynes vs. Milton Friedman. In the previous years we have been attempting to follow the free-market ideas of Friedman. We are now following a Keynesian model of thinking. I have been in support of a mixture of these ideas for sometime but looming in the back of my mind has been the future consequences of our actions today. What will these be?  If what we are doing doesn't work, what will be the result?  The following article was in Bloomberg yesterday and got me thinking:

"Federal Reserve Chairman Ben S. Bernanke is siding with John Maynard Keynes against Milton Friedman by flooding the financial system with money.

If history is any guide, says Allan Meltzer, the effort will end in tears. Inflation "will get higher than it was in the 1970s," says Meltzer, the Fed historian and professor of political economy at Carnegie Mellon University in Pittsburgh. At the end of that decade, consumer prices rose at a year-over- year rate of 13.3 percent.

Bernanke's gamble that the highest jobless rate in 25 years and the most idle factory capacity on record will hold down inflation is straight out of the late British economist Keynes. Should late Nobel-prize-winner Friedman's dictum that "inflation is always and everywhere a monetary phenomenon" prove right, the $1 trillion or more in liquidity Bernanke has pumped into the financial system by expanding the Fed's balance sheet may leave him to cope with surging consumer prices.

So far, investors and economic data both back up the Bernanke-Keynes view. The market in Treasury Inflation-Protected Securities as of April 6 indicated long-term inflation expectations of 2.5 percent, below the 2.8 percent average inflation rate of the past 10 years.

Again, it appears we are headed for success, but I am scared we could go too far and end up worse than before. How will this all turn out? I am personally preparing for the worst and hoping for the best. I am excited that South Ogden city has a lot of reserves left, nearly 18 percent. But the worst may yet have come. Spending our rainy day funds should not be done now. Instead we should trim our budget to balance.

Looking back to nearly five months ago, Councilman Bradley talked about how we are doing well and how we are on budget. Now we are headed for deficit spending. I am scared to death to see inflation of 13+ percent. I am hoping for the best; but now is not the time to spend our rainy day funds.

South Ogden City Council - Working Session

It has been nearly 20 days since I last posted to the blog. We have had a number of crazy things happen with our family, but I am glad to be back and post a little. Tuesday night was the South Ogden City Council Working Session. Olive Garden was offered to all in attendance. Since I was the only one there besides the council, I enjoyed some Alfredo Pasta in the back.

As for the meeting, the discussion of topic was the 2009-2010 fiscal budget. A number of interesting things came out of the preparation of the budget. First of all South Ogden has finally caught up with the recession. Sale Tax Revenue is down 2.8 percent, since a major portion of our budget is Sales Tax, that makes things very hard. Scott Darrington, city manager, commented we are now in uncharted territory. Therefore a number of cuts will need to be made. Here are some of the potential cuts for South Ogden:

• Already South Ogden has cut their budget by 5 percent, but now we are looking at an additional 7 percent cut. Total will be a 12 percent cut to the cities budget starting in July. The goal is not cut personal or services.
• A soft hiring freeze is now in affect, positions that open up will be evaluated and decided if they are needed.
• The average salary increase will probably only be 1 percent this year. But a lengthy discussion took place on whether this should even be paid at all. Instead the idea presented by some would be to forgo any pay increases and instead cut some of the cost to health benefits for city employees. We will see how this goes.
  

Overall we are looking at $444,000 deficit headed into the next fiscal year. When I first heard this I was shocked. Mr. Darrington was then quick to point out our city has a rainy day fund of 18 percent of our budget. In fact we have had too much money in the fund in the past and have been cited by the state auditors. This fund has us nearly $1.6 million to help us in tough times. South Ogden should be just fine for awhile. The one thought I have is if the state legislature didn't dare use their rainy day fund because of a potential fall in the economy. Why are we so quick to use ours?

Finally the Rec Center. Apparently costs are coming in lower than expected. South Ogden Jr. High will now be about $5 Million under budget for a monster amount of $17 Million. Therefore our bond will now only need to be $2.1 Million. The only other good news was the idea of doing a 15 year bond instead of a 20 year bond. The cost would be the same, but we will now pay off the bond faster saving us all $190,000 a year. The cost to the average family will be $36 a year in property taxes. Still way too high of an increase in my mind.

Election year is upon us...who will run?

Lawmakers make tough calls – Now it is our turn – Standard Editorial

Today's Standard Examiner editorial praised the legislature for most of the tough calls it had to make regarding the budget. As I have mentioned numerous times we were facing a 15 percent budget cuts and have now rested at 9 percent. Our beloved Weber State has been spared part of the damage that was foretold in the early days of this legislative session. Yesterday we spent quality time with Sen. Hillyard from Logan, regarding these cuts and how it has affected the state.

I agree with the editorial staff about these tough calls, though I don't agree with all of them, they did a good job none the less. Here are some of the editorials points regarding the tough calls this session have produced:

Lawmakers were able to stave off cuts that would have reduced prison beds as well as a parole violation center.

Education has taken about a 5 percent hit. That's a better result than many were hoping for.

School districts will have a tough responsibility in deciding what to do and what to trim with the smaller funds.

Borrowing $2.2 billion via bonds for road construction and building projects - is another good idea. Utah has boasted a good financial record, and these work projects will keep many people employed in these tough economic times. Lawmakers won't touch the $414 million that is in the state's rainy day fund.

I would like to highlight a simple phrase found near the end of the editorial:

Legislators are concerned that this recession will get worse and Utah will need the cash when the fiscal year ends July 1, 2010, or sooner.

Lawmakers have made tough calls this year. However the reason we didn't see 15 percent cuts is because of one time stimulus money and backfills. As Sen. Killpack made clear in our bloggerpress yesterday, "this is one-time money." Once this money is gone, it is gone! If our economy hasn't rebounded by 2010-2011 we will be faced with the same cuts. 2009 needs to be a year of efficiency in our government. I was impressed during the Higher Education Sub-Committee meetings with Snow College President Scott Wyatt (who is a blogger). He mentioned a process his school had gone through to trim their budget. They had late night meetings, sometimes until midnight, talking with all parties involved in how to trim their budgets and be more efficient. We are currently doing this same thing in my company. Not to find reasons to lay off workers, but to make sure we are doing things efficiently and cost effectively.

Now is not the time to spend as you have in the past. Now is the time review your processes and how you are doing business. Your company can still expand, but only after you have reviewed your efficiency and are sure you have the capital to do so. No one should come to 2010 and be surprised if we have to trim the budget again. Instead you should come prepared to do so with a plan. Protests of shock and awe announcing you were caught unprepared, will not hold water in 2010. If your company can save money, start savings for a 9 percent cut now.

The legislature has made tough calls, now it is our turn.

Read the editorial here

$2.5 Million For a Basketball Court

South Ogden City Council held a public hearing for the proposed rec. center gym space basketball court to be built in connection with the Weber County School District and the New South Ogden Jr. High. As expected the majority of the comments were directed against the proposal. Though a few people did speak out in favor, the general consensus from the comments was we do not want a tax increase and if we must then let's make it worth it.  Finally we learned this gym space will be no more than a glorified basketball court for the bargain price of $2.5 million.

    Mr. Darrington presented an outline of how the facilities would be run, explaining it would closely match the Central Davis Junior High/Layton City Gym Facility. You can see a diagram of the facility here (See Gym Facility). (I have also added the Gym Facility to our download section.) However as the night continued we found out, it will not be as close to this facility as we may have been lead to believe. For instance there will be no pool, no fitness equipment, and no walking track. Once citizens heard no walking track, the whispers in the room quickly turn to the realization this [the gym space] is a $2.5 Million basketball court, nothing more. Granted our kids do have to drive all over Weber County to play basketball, but is this really a smart move with taxes?

Mr. Darrington presented a cost breakdown by property taxes to help us understand how much we would be paying, he used an old salesman approach in explaining the cost:

• If your house assessed for $100,000, you pay $2.19 a month.
  
• If your house assessed for $175,000, you pay $3.83 a month.
  
• If your house assessed for $250,000, you pay $5.47 a month.
  

Most of the attendees saw right through this math and pointed out we don't pay property taxes monthly, we pay them annually. So in reality it should look more like this:

• If your house assessed for $100,000, you pay $26.28 annually.
  
• If your house assessed for $175,000, you pay $45.96 annually.
  
• If your house assessed for $250,000, you pay $65.64 annually.
  

The cities financial planner for the bond answered an interesting question from one of the concerned citizens. This citizen pointed out it would be cheaper to pay a general obligation bond than it is to pay a sales tax bond. The financial planner corrected him by saying thought this is true a sales tax bond allows you to avoid the cost of an election. 

Is the city council looking to avoid an election because they know the citizens of South Ogden would not pay for $2.5 million basketball court? Is that why they are rushing into this bond? This kind of decision should go to the general public.

A few people spoke for it. One in particular was Mike Junk, Ogden City Attorney (and he taught my business law class at Weber); was for the proposal and gave a good lawyerly argument in the gym/rec basketball courts defense. Interestingly most of those who spoke for it also said they thought we should expand this. The resonating theme: Why just build a basketball court for Jr. Jazz and Volleyball? If we are going to spend the money let's do it right.

Conclusion: Though this idea has merit and will be of use, only a small percentage of South Ogden citizens will use this. It is extremely limited in what it can be used for and is a waste of money. If people are going to raise their taxes, then let's do this right. Mayor Garwood himself said he would never use the facility. So why are we raising taxes for everyone if no one is going to use it? In the end as one citizen said, "This is in the bag," and he is probably right; the council has made up its mind regardless of what the majority of those who attended had to say.

On a darker note, right after the council was done explaining how this was the smart thing to do and could afford this, they went ahead and made an announcement they are cuting the city budget by 5%. Ironic, don't you think. If the city can't afford its own budget, how are we going to afford this basketball court?

 

$30 Million Back-fill into Higher Education

The 2009 budget is now balanced. I have to thank all of the legislators who worked hard to make this happen. It was not without pain I am sure. It is interesting to note a number of state agencies received a back-fill to help ease the pain of the cuts. Higher Education and our own Weber State were among the many that received the blessing of a back-fill.

Here is the breakdown for Higher Ed:

School	Cut	Back-fill	Total
University of Utah	$18,340,100	$9,170,100	$9,170,100
Utah State University	$11,299,900	$5,650,000	$5,649,900
Weber State University	$5,024,200	$2,512,100	$2,512,100
Southern Utah University	$2,387,400	$1,193,700	$1,193,700
Utah Valley University	$4,763,400	$2,381,700	$2,381,700
Snow College	$1,547,700	$773,900	$773,800
Dixie State College	$1,652,200	$826,100	$826,100
College of Eastern Utah	$1,328,100	$664,100	$664,100
Salt Lake Community College	$4,903,000	$2,451,500	$2,451,500

As you can see, half of all the cuts were back-filled. Meaning instead of a 7 percent cut now, we received a 3.5 percent. That is not the end, this back-fill is a onetime only situation. 2010 we will see these same 3.5 percent cuts. However, I am please with the legislatures work and I am glad to see Weber State will be getting at least $2.5 million back. Over all Higher Education will be getting $30,488,300 in back-fill.

You can see a full accounting of the budget here - http://www.le.utah.gov/ASP/Interim/Commit.asp?Year=2009&Com=APPEXE

The Senate Site - Higher Education Rally Video

The Senate Site (See Here) has a nice little video from the student rally at the capitol. I have been very impressed with the Senate Site and all they are doing to keep us informed.

Check out the video and site here: http://senatesite.com/blog/2009/01/higher-ed-rally.html

From the looks of the video and the eerily similar Obama sounding speech, the legislature is ready to put back half of the cuts proposed last week.

We will keep you posted.

Higher Education – Which Institution is more important?

Yesterday's Higher Education Appropriations Sub-Committee was filled with additional testimonials of why education should be protected. As the meeting went on, it was obvious battle lines were beginning to be drawn to protect one's own constituent institution of higher education. The two ideas drawn out of the committee now head into today's Executive Appropriation meeting. It will be interesting to see how this plays out.

Rep. Brent Wallis, from our own District 10, was very vocal about returning money back to higher education in a fair and equitable manner. There is a potential of a nearly 3.5 percent (or less) "put back" of funds to higher education before we are done with this legislative session. Rep. Wallis has been encouraging his colleagues to put the money back where it came from pro-rata. If we took 3.5 percent from Weber, give them 3.5 percent back. Everyone's portion would be the same. It appeared he has rallied a lot of support from a number of other legislators on the methodology of giving institutions back what they put in (or gave up). Since the money has been removed pro-rata it should be returned so.

The challenge comes from institutions with smaller budgets or higher enrollment. The 7 percent cut is devastating to small schools like College of Eastern Utah. It is also tough on schools like Dixie and UVU whom have seen huge growth and would need more than 3.5 percent back to fund that growth. A number of legislatures want funds for their institutions based on this rational. Rep. Daw (Orem, R) has argued the institution he represents [UVU] has the most enrollment in the state and deserves extra funds. Essentially he would be against a pro-rata system of putting the money back.

It is easy to see why a pro-rata system would be beneficial and fair to the every institution. Giving money based on certain parameters or priorities would be unfair. Weber State (like other schools) is facing huge layoffs. With a pro-rata system they are cut the same and will get the same back, hence savings jobs and programs. If we went away with the pro-rata system and Weber State is not high on the priority list because enrollment is lower than Dixie, UVU, U of U and Utah State, Weber could get only 1 percent back. That is a loss we cannot afford. Push for the pro-rata "put back: of funds.

I welcome a health discussion and comments on the topic.

How much? Higher Education looks at a 7.5% budget cut.

In a particularly interesting Higher Education appropriation sub-committee meeting, held last week, a budget cut was proposed for 7.5 percent. The original motion was made by our own Rep. Brent Wallis. Though I feel Co-chairman Valentine pushed him into the motion and that was not his original comment, the motion was made. The motion was later substituted and disappeared into thin air. (Gotta love Robert's Rules of Order) Before a new motion was made a 10 minute recess was called. Unfortunately since I listened to the meeting via podcast, we were not blessed to hear what happened. However there were three great things I would like to point out.

1. Besides his motion to cut education, Mr. Wallis had a great comment about our economic times and the future of Higher Education.
   

He said, "We must go forward as a committee and put forward a very very strong case of how important higher education is going to be. These elements that we are trying to save within these cuts will in fact help us stimulate or start the economic revival we are looking forward to. That is the message we need to really get across. We are losing a lot of talent here; this talent can help us turn around the economy"

I couldn't agree with Rep. Wallis more. But can a 7.5 percent cut accomplish this. Wallis was pushed into that motion and should have backed out and let someone else make it. Because that kind of motion doesn't represent what he said in the meeting about fighting for education.

1. Rep. Senator Urquhart had a great idea of prioritizing schools based on enrollment growth. The schools with the most growth would receive less of a cut versus the schools with the least growth would receive the most cuts. Great idea that should be looked at even closer. Some potential problems would be schools like CEU in Price. That could be the nail in the coffin for them. (I don't see why they are still open anyways). As a matter of full disclosure, the good senator was quick to point out the school in his district, my Alma Mater—Dixie State College, has had the highest growth. The fact still remains that his idea has merit.

2. The Governor's budget, though already out of balance to the tune of nearly $100 million, suggests that moneys be pulled from road projects and other state programs to reduce the cut to 3.5 percent. Many people loved this idea, but since the Governor's budget is already out of sync, it would need further debate as the proposals moved on.
   

You have to give credit to the Utah Student Association for coming out to speak their case and to the Commissioner of Higher Education for his "sales pitch" to reduce the cuts. But in the end it wasn't enough. How did the committee vote? Well they never turned the microphones back on after the recess so we are all deprived of the results. I have been checking newspaper feeds and have an email into Rep. Wallis, but I haven't heard.

The Tribune had a "doom and gloom" article on the topic with regards to Weber State, you can see it here, (Weber State's President Battles Deep Cuts)

As always, comments are welcome.

Weber State facing layoffs. 55 faculty members could be cut!

During the recent Higher Education Appropriations Subcommittee meeting last Tuesday, the future of Utah's higher education system took a turn for the worse. Having sat on a board of trustees, I have known a few college presidents and board of regent members; therefore I can imagine the feeling in the room as these cuts were being discussed. Overall, higher education will be taking a major hit with cuts of 7.5 percent (plus the 4 percent from last September) and these could go even higher.

Anne Milner, Weber State President, spoke at the meeting about how this will affect our local university. President Milner laid out her defense starting with the pros of Weber State, mentioning their goal has been to try to make sure programs meet the needs of the community. This reflects the fact that over 20 percent of Weber grads are in health professions with most staying in Utah. However since the September cuts, Weber has had a hiring freeze and as a result has eliminated 38 positions. In addition they have postponed capital projects, like a 55 year old boiler replacement.

President Milner continued by explaining how Weber State would handle the proposed 7.5 percent cut, she said, "This will be very hard." Weber will be looking to eliminate all working capital projects and cancel every capital expenditure including emergency maintenance. (This would cause a problem when the state audits the university every year for maintenance issues.) Next there would be a staff furlough to eliminate costs. However the worst will be a 10 million dollar cut in the Weber State budget, eliminating up to 150 positions. 60 percent of these positions will be eliminated via layoffs! Yes you heard it--layoffs; including 95 staff members and 55 faculty members. In a time with record enrollment numbers, people who need education, and the need for more teachers, we will be cutting teachers. Does this make sense?

President Milner concluded, "We need to balance the needs of the state both in the short term and in the long term. We need to make sure we are not doing things that will cause harm to the long term ability to meet the business needs of the community and increase economic development."

One of the best economic plans people can have at this time is a J-O-B! If higher education is the way to this job keep higher education, ATC's, and public education away from the cuts. According to the subcommittee it is reported Utah schools saw a 12,000 enrollment increase and is expected to see a higher enrollment in 2009. So why are we making it harder for people to go to school? It was mentioned during the 1980's recession, the legislature did everything it could to hold cuts from higher education.

11.5 percent in cuts is too high! The economy of Ogden cannot afford to lose potential accreditation of programs, jobs, and students.

Hold Higher Ed harmless!

Let's put our heads together and find away to avoid such drastic cuts.

You can listen to the entire meeting and future meetings at this link

Higher Education Sub-Committee Hearing Audio

Comments welcome.