As in the past, I’ve objected to these requests for transfers. I did agree with and support, too a degree, those that were meant to reimburse or pay for City services provided by the General Fund (GF) to the Utility Enterprise (i.e. paying for accounting, HR functions, legal advise, etc). This request seems to me to be a disingenuous, underhanded, and lazy attempt to obtain up to $7M (max) into the GF rather than trying to find a more equitable and fair way to make up the difference of those entities that don’t pay franchise and property taxes. Utility users are a captive source.

PURPOSE: By definition, User Fees are paid for the restricted goods and services provided and for the operation, within a small profit margin, for the Utilities (here Water, Sanitary Sewer, Storm Sewer, & Refuse (WSSR)). An implied agreement with the Users is that the City uses the fees for EF activities and nothing else. To my knowledge, when monies go into the GF, they may be used for any legal purpose so decided by the Council. I didn’t want to bond for the replacement water lines in Pineview and down Ogden Canyon but to use the water bill with appropriate increases to pay for this project. I would rather see that above $7M used here for that debt. I, too the degree allowed by my age, strenuously object to the use of my Utility fees for anything other than the basic Utility services provided and related expenses to provide these sources. It just seems blatantly suspect that when you state “are maximum amounts’. This statement shows up no where on my property tax notice/bill nor in my non-city utility bills. Those amounts are usually clearly stated as a percentage of the monthly bill.

BACKGROUND: I don’t say at all that this process is illegal. I don’t question the right or authority of the City to properly make these transfers. The question is “should” the City do it, be it a city council or an administration request. I’m not convinced this is the best, most open and honest way to obtain up to $7M for the budget. It sounds good but some financial person is making a big leap and a long stretch in reasoning that this transfers will act as the collection of franchise and property taxes. Really? I would hope that every graduating senior from OHS and BLHS would know that governments are not taxed. Here you have a City EF (Utilities) now being charged a franchise tax (allowing them to do business in Ogden) and a property tax (for the owners contribution as a share of other City services being provided (salaries, police, fire, development, etc).

Now we come to another issue. Because these taxes “are paid by other businesses or non-city utilities”, why is just the City’s Utilities singled out to pay these taxes? Are all the City’s other 9 EFs being assessed these taxes? Why not also charge the Golden Hours Center, Parks & Recreation, and Parking Enforcement their share of franchise and property taxes. If the UEF really should be paying these taxes, why aren’t they calculated and figured into the user fees on the utility bill as an inherent cost of providing the goods and services? Why is there a max amount limit and not a set assessed rate being used based on the value of the Utilities provided? What’s the difference between the amount raised by utility users and entities paying franchise and property taxes? Why then, is the EF source picked over the other collection sources? If, as I’ve been told, this is an attempt to recover some of the taxes that are not paid by tax exempt entities in Ogden City (governments, non-profits, churches, schools, 501s, etc) than its a blatant attempt lacking transparency. Is this the Ogden Way?

Tax exempt status is authorized for reasons. I’m not aware of any policy that states the lost of this potential tax revenue shall be made up through charging other tax payers a higher tax to make up the difference. Is this lost of revenue taken into account when the City buys real estate and lets it sit idle for years? These pieces of land don’t use utilities (generally nothing but dirt after the buildings are finally demolished) but they also are not paying property taxes. If the City wants to get more in property taxes maybe it should stop buying private property. Please note that the tax exempt entities are at least paying User Fees for the goods, products, and services provided. This $7M seems a small part of a proposed budget of $289M. I find it hard to believe that council and administration can’t come up with a better, more efficient, and transparent way to raise this money.

It just appears to me that the UEF has been used as a Council slush fund or petty cash box, or a piggy bank over the years rather than doing the hard work and making the tough decisions to rectify in the budget process this regular annual shortfall.

Bottom line, I seriously ask the council to find some other source for this up to $7M for the budget and to keep in both the spirit and the letter of the original intent of EFs and use those generated monies for the goods, products, and services provided and the expenses and costs related to providing those services.

JH Thompson

Ogden